Rossputin
07/05/08

Karol Boudreaux sacks Sachs

Here's a great note from Karol Boudreaux about what really works in efforts to reduce poverty in developing nations:

July 3, 2008

Editor, The New York Times
229 West 43rd St.
New York, NY 10036

To the Editor:

I work routinely in Africa and was heartened by Nicholas Kristof's account of Beatrice Biira's success at escaping poverty in Africa ("The Luckiest Girl," July 3). But his account needs clarification. Contrary to what readers might infer from Mr. Kristof's favorable mention of Jeffrey Sachs's encounter with Beatrice, this young woman's experience does not support Mr. Sachs's approach to ending world poverty. Mr. Sachs famously calls for large-scale, collective action by international organizations - for a "big push" based on big plans designed by big brains.

In contrast, an anonymous private donor started Beatrice on her path to success. A private charitable organization delivered a goat to her family and other private donors brought her to the US. Beatrice's success, far from supporting the Sachs model of development, instead supports William Easterly's contrary thesis - namely, that escaping poverty requires a multitude of small-scale, mostly private efforts.

Sincerely,

Karol Boudreaux
Senior Research Fellow, Mercatus Center
George Mason University
and
Lead Researcher, Enterprise Africa

1 comment

# Kevan McNaught on 07/05/08 at 16:46
My son & a close friend just returned from a short term mission trip to Guatemala. While there, they witnessed the kind of systemic, multi-generational poverty that Americans only read about in far away places. There may be a lesson or two that applies to the African aid issue.

About an hour out of Guatemala City, in a place called Balcones de Palin, a family of five like ours routinely lives in a one room tin shack smaller than our living room. Plumbing is a metal pipe that transports human waste a few feet, from inside the shack onto the street. Part of the missionaries' assignments were to fix roofs on homes like these, so at least the locals could stay dry while indoors during the rainy season.

Thousands of Guatemalans were displaced in the aftermath of Hurricane Mitch several years ago. The Guatemalan gov't moved them here temporarily. They had lived in relatively decent housing, but the government owned the land, so when the houses were destroyed, they had no place to go, no incentive to rebuild where they were, & no right to stay. Clear title to land is extraordinarily difficult to get in Guatemala, compared to the U.S., while the legal system is arbitrary, expensive, & time-consuming.

On top of that, basic police protection is uncertain. In this region, Pepsi trucks & most other delivery vehicles typically have a man sitting next to the driver with a pistol-handled shotgun. They literally "ride shotgun" to make sure the valuable cans of carbonated water, cigarettes, or any other supplies can be delivered to their destination. CSI doesn't exactly operate here, either, as only about 2% of crimes are ever solved.

With no certainty of title, no assurance of police protection, and the possibility of biased courts, there is no incentive to invest in property. What little they have is too easily taken away, and there is always someone with a bigger gun or more men. Thus, the skilled carpenter is not hired, because the family who needs a second room is afraid of losing their home - and possibly their lives - if the home becomes more valuable to their neighbor. Even if they could be assured of keeping it safe from their neighbor, there is no assurance that the gov't itself won't confiscate it. Legal recourse is out of reach for the majority of citizens.

In Guatemala at least, the effective lack of private property and a uniform rule of law has set a domino effect in motion. People who might invest don't, those who might work can't, and people who might improve their lot in life choose not to. I suspect this paradigm is repeated elsewhere, perhaps part of the African problem that some believe can only be solved by massive subsidies. Before embarking on an int'l welfare program, however, int'l leaders might want to reform the incentives & disincentives that encourage or discourage the affected people from taking care of themselves. They might find that these people are every bit as able to provide for themselves as those in the Northern Hemisphere.

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