REVIEW OF 'WHITE MAN'S BURDEN'

EXCERPTS FROM ‘THE WHITE MAN’S BURDEN’: Why the West’s efforts to Aid The Rest have Done So Much Ill And So Little Good
WILLIAM EASTERLY

This book is a must read for development economists or anyone seriously concerned about the plight of the million of people living in absolute poverty. Of course many factors contribute to why poor countries are poor. Easterly focuses on analyzing the effect of aid, which goes by various names “foreign assistance, Overseas Development Assistance, Poverty Reduction Strategies, Donor assistance and the works.

What this book did for me was really drive some point home, the major one being, why markets are the answer. It was also a thought provoking read. Some issues such as why charity fails, why poor people behave recklessly, why preaching institutional reforms is not so easy, and how the colonial history of African countries is partly to blame for present day instability.

Whereas easterly in no way suggests that he has the answer, he does offer some insightful and interesting solutions to the problem of aid ineffectiveness. The one that impressed me the most was that of issuing development vouchers to the poor. The poor could then redeem these at any NGO or aid agency for any good or service they want- food, books, bed nets and so. In this way demand and supply mechanism would come into play and the poor would have a say in what they require most. NGOs too would feel competitive pressure to deliver because the poor would choose where to get the goods from.

Below are just a few excerpts from a 400 page book. My intention is that it will whet your appetite to learn more

Examples of why the price mechanism is the best way of delivering services to the poor

1) Selling treated bed nets to the poor

PSI sells bed nets for 50cents to mothers through antenatal clinics in rural Malawi, which. The nurse who distributes the nets gets nine cents per net to keep for herself, so the nets are always in stock. PSI also sells nets to richer urban Malawians through the private sector channels for $5. The profits from this are used to pay for the subsidized nets sold at the clinics, so the program is self sustaining. PSI’s bed net program increased the nationwide average of children under five sleeping under nets from 8% in 2000 to 55% in 2004, with a similar increase for pregnant women.
By contrast, a study of a program to handout free nets in Zambia to people, whether they wanted them or not, found that 70% of the recipients didn’t use the nets.

2) Gonoshasthaya Kendra (GK)- the ‘Peoples Health center’, in rural Bangladesh.
GK is the brainchild of Dr. Zafrullah Chowdhury, a Bangladeshi doctor who returned from Britain after Bangladesh won independence in 1971. Dr Zaf trained teenage girls to treat common ailments, deliver prenatal and postnatal care to pregnant women and to refer any emergencies to the hospital that he built. Foreign donors and the Bangladeshi government gave Dr. Zaf money but he also charged the poor modest fees to expand services further. He found that even the poor were willing to pay for good service. Charging the poor modest fees for health care -a notion that outrages anti-globalization activists and ‘planners’ is a way to increase accountability for delivering health services. If the villagers don’t get good service after they have sacrificed to pay for it, they loudly complain. “If a woman dies, the worker has to face the whole village. Accountability is here”, says Dr. Zaf. GK has been successful in lowering maternal deaths in childbirth, infant mortality, and also the number of children that women choose to have. Maternal mortality in the area covered by GK is one fourth the national average.


On free market reforms
Free markets work but free market reforms often don’t. Introducing free markets from the top down is not so simple. It overlooks the long sequence of choice, institutions, and innovations that have allowed free markets to develop in the rich Western economies. It also overlooks the bottom-up perspective on how markets often don’t function well in the low-income societies of Africa, Latin America, Asia and the former Communist bloc. Markets everywhere emerge in an unplanned, spontaneous way, adapting to loyal traditions and circumstances, and not through reforms designed by outsiders. The free market depends on the bottom-up emergence of complex institutions and social norms that are difficult for outsiders to understand, much less change.
Paradoxically, the West tried to plan how to achieve a market. Even after evidence accumulated that these outsider-imposed free markets were not working, unfortunately, the interests of the poor did not have enough weight to force a change in Western policy. Planners underestimated how difficult it is to get markets working in a socially beneficial way. People everywhere have to explore with piecemeal, experimental steps how to move towards free markets.

On ethnic networks
Ethic societies or ‘closed’ groups, in many cultures and societies help solve the problem of cheating. Easterly gives examples of Indians in Kenya, the American entrepreneurs in the 19th century all served together in the Civil war and hence trusted one another. However, he goes on to say that such networks are far from a perfect solution in making markets work. The networks exclude as well as include, missing many entrepreneurs and suppliers when they limit trade to a minority. The gains from trade through personalized exchange are much less than through the impersonal exchange made possible by formal institutions.

On colonialism and forced tribal divides
Given administrative limitations, the colonizers in Africa often relied on ‘chiefs’ to rule for them. But many societies in Africa had no chiefs. The British appointed chiefs anyway, sometimes choosing a village head to rule another village. And in this way Europeans increased despotism in Africa. They left behind a legacy of mistrust between the educated class and the traditional rulers. A rare exception was Botswana where the British left largely intact the traditional structures of the Tswana tribes.

Easterly concludes by saying that Western interference during colonization and at present has been unhelpful. The West should learn from its colonial history when it indulges in neo-imperialist fantasies. They didn’t work then and won’t work now.