Waylaid Dialectic

April 3, 2011

Helen Hughes — much more harm than good

Filed under: Aid — terence @ 11:49 am

After I wrote my article for the Sydney Morning Herald’s debate on whether aid does more harm than good I spent some time agonising whether I’d qualified my claims enough, and whether I’d done justice to the complexity of aid. Having read Helen Hughes’ contribution to the same debate (scroll down and you will find it) I rather suspect she suffered no such doubts.

Her arguments are put with such force it’s clear she holds them with the uttermost conviction. They are also so comprehensively wrong it is hard to believe she holds them at all.

In her piece she makes the following arguments:

1. That African’s are pleading with us to stop aid (”’FOR God’s sake, please stop the aid.” This is the cry from Africa.’)

This is misleading. It’s true that some well off Africans, working for conservative think tanks and investment banks claim to believe that aid harms Africa, but when the average African is surveyed in Afrobarometer surveys the vast majority of them express the belief that aid helps rather than hinders in Africa.

2. That aid keeps despots in power.

This, on average, is wrong. As I summarise in some detail here, the best available research suggests that aid donors do try and route their aid away from dictators (through civil society etc) and that aid tends to be coupled with positive governance reforms if not actual outright democratisation. There is no evidence that I am aware of that aid lengthens dictators’ tenures or that the withdrawal of aid precipitates the demise of dictatorships.

3. That the Pacific is less developed than it was in James Cooks’ time. (“When first discovered by Europeans, the standard of living in the Pacific was so enviable that James Cook had difficulty keeping his sailors from absconding. After 40 years of the highest per capita aid flows in the world – totaling more than $100 billion – social indicators such as maternal and child health and literacy are among the worst in the world.”)

This is simply nonsense – the reason why Cook had to prevent his sailors from absconding had little to do with the high quality of life of Pacific Islanders in the 1700s (vis a vis today) and much to do with the difficult lives of sailors in that era. According to Gapminder life expectancy in the UK in 1800 was 40 years. Life expectancy today in Solomon Islands, one of the Pacific’s least developed states is, according to the UNDP, 67 years. This is not only higher than the life expectancy of the UK in the 1700s, it’s almost certainly higher than Solomon Islands’ life expectancy from that time, and it’s higher than the country’s life expectancy at independence (which was 58 years, according to the World Bank’s world Development Indicators.) It’s also more than twice as high as the current life expectancy of Swaziland (the world’s lowest) which is 32 years (ref). For most of the rest of the Pacific development stats are, today, better than those of Solomon Islands.

There’s no doubting that the Pacific has development challenges. But to paint the region as a hell-hole, on par with the worst countries on Earth, and rapidly regressing, as Hughes does is simply wrong. It’s also wrong to lay the problems of the Pacific at the feet of aid. The problems experienced actually mostly stem from geography, and post colonial challenges associated with creating functioning nation states where none had previously existed. I think it’s fair to say that aid hasn’t been wonderfully successful in helping tackle these problems. But it’s wrong to say that it’s left the region worse off. In fact, without it, it’s very likely that, in terms of Human Development at least, the countries of the Pacific would have experienced worse outcomes.

4. Hughes claims that, while there are a few studies of aid effectiveness that show that aid has a positive impact on development if accompanied by pro-development policies, there are many more studies of aid that show a negative impact.

This is simply incorrect. It is true that there are relatively few studies showing a positive impact of aid conditional on good policies. But there are also many other studies that show aid to have a positive impact regardless of policy environment. And taken together these two groups of findings almost certainly outnumber those papers that show aid to have no impact or a negative impact. They definitely outnumber those papers that show aid to have a negative impact. (If you’re an enthusiast you can go through the Paldam and Doucouliagos meta-reviews and count the results to double check). This isn’t wholesale evidence that aid works. Probably the main thing we learn from aid growth regressions is that aid growth regressions themselves are limited tools. But the main point here is clear: Hughes either can’t count or has deliberately chosen to misrepresent the literature.

All things told her comment is utterly misleading. Aid isn’t perfect. It isn’t a panacea. And it doesn’t always work. Sometimes it really does do more harm than good. But the balance of evidence suggests that, on average, this isn’t what happens; aid, on average, appears to have done more good than harm. To argue otherwise, Hughes has to torture and misrepresent the evidence.

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