Jun 12, 2009

Aid did not bring development, therefore it has failed

Lant Pritchett explains on Aid Watch why development and assistance are not the same thing and why USAID, or any other development agency, should maybe focus on the former. "Being an agency for international development implies more than that the agency provides assistance to improve the well-being of individuals in countries that are not developed, but that the central goal of the organization is to promote development."
He then subtilly criticizes those who say aid works and also "lab development economics": "One reaction to the critics of aid effectiveness who point to failures in development despite historically high and sustained levels of foreign assistance is to circle the wagons by arguing the goal of aid is just assistance, full stop. In this case the debate is only about whether aid is assistance: “Did this aid support an activity that has some positive benefit to human well-being?” This makes the question easy to address with available methods, likely to often produce a positive answer, and almost certainly irrelevant to development.
As he points out, development is what happened in 19th century Europe, and then in Japan, then in South Korea, and now in India and China.
This figure is from the new Acemoglu book on economic growth.

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