John Wood on foreign aid
As with the Aldermaston march, the foreign aid crusade has lost its former glory and prestige. Each year the followers are fewer, and today's slogans lack yesterday's assur- ance. It used to be all so easy: the West was morally responsible for the foreign poor, and therefore must give them what they need, as a penance, and without strings, too. So the West did, to the tune of about $100,000 million, and the foreign poor are still with us. Disenchantment, spreading for years, is now general; the ranks are dis- pirited, the banners droop.
Here, however, are three books from old faithfuls and new hopefuls to try to rally the troops. On Mr Jacoby's pennant is pain- ted the cry 'Land to the Landless'; Miss Hayter carries a device which reads, ellip- tically, 'Leverage is Sin': while the banner from the collectivity of the Falmer Institute of Development Studies says, simply, 'Equal- ity for All'.
With the disenchantment and the collapse of the consensus about aid, however, has come some gain in understanding of what the debate is really all about. It is about power and equality, rather than the allevia- tion of poverty. There are those, including most of the dozen writers in these books, who would prefer the poor countries to become centralised economies, egalitarian in income and social structure (and indeed everything except political power. which would be strongly unequal). Their opponents want the poor countries to remember some- thing the West itself is in danger of forget- ting—that wherever living standards of ordinary people have improved, it has been through the working of a spontaneous society, not in one dominated by egalitarian doctrines.
Though the conflict is similar to the choice between two opposite ideals of society in the West, too many Western experts forget that most poor countries are now politically independent, and. cannot just be told to adopt this or that policy without violating their political independence. Politicians in Africa, Asia and Latin America may well ask what exactly is the standing of expert advice from the international agencies. Western universities and development insti- tutes (particularly if they are, as Falmer is, state-supported). And the question becomes all the more pertinent as development studies move further away from attempts to enlarge our knowledge and understanding of these countries, towards prescribing policies for thenv, in short. from economics to Politics.
Mr Jacoby, for instance, has written a Polemic advocating land redistribution. with- out which many countries, he feels, will face revolution. But there is surely little that, say, America or Britain can do to insist on other sovereign countries making reforms in such a complex and political a matter as land tenure? Mr Jacoby has some useful criti- cisms of technical assistance, and pro- grammes for family planning. But his priorities seem to be 'international social Justice' and egalitarianism rather than pros- perity, particularly if the latter were to
allow the 'emergence of new privileged groups', the probable outcome in his view, if 'the unrestrained play of economic forces' were to operate. Better, he says, to substi- tute 'dynamic socio-economic policies' to end 'the entrenched monopolies of land ownership, education and the control of credit and labour markets by the privileged few'. Land ownership is an important matter, but no economist is going to perse- vere with a study which demands funda- mental changes in it to 'establish an income distribution pattern that will put an end to the prevailing rationing of food by the purse'.
This retreat from economic analysis per- vades many of the thirteen short essays from the Falmer Institute. There is a useful summary of the history of aid by Mr Caustin, and of the role of trade and invest- ment by Mr Braun. But the title indicates the flavour of the book. The world is divided between rich and poor, and the gap between them is all the time becoming wider—the theme is elaborated by Mr Seers. This is nonsense. No one has yet defined how this gap is measured, nor in what way it is sup- posed to be widening. The idea has come to be accepted only because it has been so fre- quently repeated. Mr Seers has only to look at the contribution in this book from Mr Streeten to see that there is no sharp division between rich and poor, but a gradual spec- trum from America and Kuwait (sic) at an income of about $3,500 per head, through about a hundred countries, to Burundi and Upper Volta at fifty dollars. But these inter- national comparisons are barely worth re- peating unless you think it is useful to say that the average man in Upper Volta can live for a year on what he could buy in America for fifty dollars (and many Upper Voltans are supposedly living on even less, since the figure is an average). If you test any page of this book and ask how it is going to improve the standard of living of the below-average income groups in Upper Volta you get a dusty answer. For we are here in the world of blue books and paper plans and development strategies and the United Nations apparat with its many regional offices full of apparatchiki.
To move to Miss Hayter is to leave the classroom and join the battle. She knows the world of the aid bureaucracy and is un- impressed. For her, aid is not, as some used to think, a disinterested and generous im- pulse of the West—but simply a plot to per- petuate imperialism Its contribution to the wellbeing of poor peoples is 'negative': aid can even be used for 'projects which im- poverish the mass of the population'. The conspiracy is carried out by the international agencies whose function is to safeguard the--- remittances of private profits, dividends and the interest on past debts which the Third World countries have been tricked into incurring.
The international agencies may be vul- nerable to her charge that they are now using their position to exert 'leverage' on the general economic policies of poor countries. The World Bank probably wishes it had stuck to the banking business and resisted attempts to make it underwrite the welfare of the peoples of the Third World. But Miss Hayter's attack would have been more con- vincing if she had gone for the West's sins of omission and commission, such as tying aid to exports, maintaining strong tariff and other businesses against goods from develop- ing countries, which justify the taunt of aid as a 'soft option'.
Miss Hayter states quite clearly that the realistic alternative to existing 'politically determined policies of the international agencies' is the abolition of aid. If aid is even half as damaging as she suggests per- haps that will have to be the answer. At least it will restore to these countries their full independence, which won't happen with her concluding threat that 'under socialism, with the principles of international solidarity operating in full vigour, things will be differ- ent'. The worst menace to the economic and political future of the poor countries is the intellectual imperialism of so many western 'experts'.
John Wood is Deputy Director of the Insti- tute of Economic Affairs
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