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cover of The Great Escape: Health, Wealth, and the Origins of Inequality
The more you learn about it, the more intriguing — and terrifying — becomes the role of the aid industry in keeping power with the people who already have it. A lot of money, with a lot of power and hidden interests, determines the destinies of the world's poorest people.

On these pages we can only scratch the surface of this issue, and offer our perspective: The aspects of aid which "don't make sense" when we view it as aid, do make sense once we think of it as financial aid for the rich, and a karma boost for everyone else. The first section suggests books that are most focused on the aid industry, followed by other relevant works.

The Aid Industry

The Great Escape: Health, Wealth, and the Origins of Inequality, by Angus Deaton, 2013
Through most of his book, Deaton shows how the world is escaping from poverty. In the final chapter, he thoroughly summarizes why foreign aid hurts, rather than helps, this process. Because of his stature as an economist, we feel The Great Escape is worth special attention. Deaton writes:

"One reason why today's aid does not eliminate global poverty is that it rarely tries to do so." –The Great Escape

One reason why today's aid does not eliminate global poverty is that it rarely tries to do so. The World Bank flies under the flag of eliminating poverty, but most aid flows come not through multilateral organizations like the Bank but as "bilateral" aid, from one country to another, and different countries use aid for different purposes....
Governments that accept [targets for international aid giving] are those with strong domestic constituencies for helping the poor, and those constituencies can only monitor the amount spent, not the results. In such cases, aid is more about satisfying our own need to help, and less about improving the lot of the poor.

Deaton received the Nobel Prize in Economics in 2015.

cover of The White Man's Burden: Why the West's Efforts to Aid the Rest Have Done So Much Ill and So Little Good

The White Man's Burden: Why the West's Efforts to Aid the Rest Have Done So Much Ill and So Little Good, by William Easterly, 2007
After working as a World Bank economist for many years, Easterly concluded that the big money-approach to "ending poverty" was wrong on many counts. He particularly highlights the arrogance of Western "experts" who think they know best, and the lack of any accountability for themselves, and the programs they put into place. He describes two approaches to aid: The Planners, who believe they already know what to do before they first visit a country and think more money will get more results; and The Searchers, who prefer smaller, locally-based approaches and often adapt as they go.

The Tyranny of Experts: Economists, Dictators, and the Forgotten Rights of the Poor, by William Easterly, 2014
The development world has a particularly weak track record on the issue of human rights. Foreign aid props up dictators, and so-called experts make a mess of other people's lives, because they simply don't know what they're doing, and never bear any accountability for their mistakes.

"In a world of aid, there is no need or incentive to trust your neighbour, and no need for your neighbour to trust you. Thus aid erodes the essential fabric of trust that is needed between people in any functioning society." –Dead Aid

Dead Aid: Why aid is not working and how there is another way for Africa, by Dambisa Moyo, 2010
Moyo is the Zambian-born economist that Bill Gates is afraid of. If she has her way, Gates and Bono won't get to set the agenda for Africa. He can't refute her, so he tries to marginalize her. She is right on the money in her description of how aid hurts:

Foreign aid does not strengthen the social capital – it weakens it. By thwarting accountability mechanisms, encouraging rent-seeking behaviour, siphoning off scarce talent from the employment pool, and removing pressures to reform inefficient policies and institutions, aid guarantees that in the most aid-dependent regimes social capital remains weak and the countries themselves poor. In a world of aid, there is no need or incentive to trust your neighbour, and no need for your neighbour to trust you. Thus aid erodes the essential fabric of trust that is needed between people in any functioning society.

The Road to Hell: The Ravaging Effects of Foreign Aid and International Charity, by Michael Maren, 1997
Maren went to Somalia expecting to help people by working with an NGO. Instead, he discovered that aid money was destroying the indigenous methods that had developed for dealing with food shortages:

Today, after huge infusions of international aid, Somalia and all its formerly self-sufficient neighbors are chronically hungry and dependent on foreign food.... Those who spend the time to study the local economies see that the people have now geared their own activities not to returning to their old lives but to getting their hands on aid

He worked for CARE and Save the Children, and is scathing about both organizations. Of the latter, he writes, "There was one practical thing taught in Westport [where Save the Children trained new staff]: They were shown how to pose children for photographs to go into brochures and ads."

The Crisis Caravan: What's Wrong with Humanitarian Aid? (Published in some countries under the title War Games), by Linda Polman, 2010
Polman presents a scathing indictment of the aid industry, and backs it up with her 15 years experience, reporting in war zones. Aid money not only ends up supporting dictators, it encourages them to make a bad situation worse, because that brings in more money. She gives particular attention to ways that the media feeds this phenomenon, by searching for the heart-breaking story, even as charities, in turn, exploit the media:

The more horrific the photos, the bigger the payout for aid organizations, and also for the media. The piece de resistance for each and every tour of the camp was a little girl who had been only three months old when rebels hacked off her arm. For each foreign visitor the mother rolled up her daughter's sleeve. Like a professional child star, the toddler would pose with her naked stump thrust forward, her little face a picture of misery. The endless stream of visitors meant that MSF France was unable to fulfill its task of "protecting human dignity" in the camp. The organization declined to accept responsibility for the consequences. 'Even the amputees' recovery process is jeopardized by the sheer number of visitors,' it wrote.
Even organizations that were not there specifically to help amputees used photos of people in Murray Town Camp in their fund-raising campaigns. "It's never been so easy to collect money as it is with the pictures of these poor devils," said an INGO staff member in Freetown.

"We fly off on mission trips to poverty-stricken villages, hearts full of pity and suitcases bulging with giveaway goods, trips that one Nicaraguan leader describes as effective only in 'turning my people into beggars.'" –Toxic Charity

Toxic Charity: How the Church Hurts Those They Help and How to Reverse It, by Robert D. Lupton, 2011
"Aid agencies tend to prolong the 'emergency' status of a crisis when a rebuilding strategy should be well under way," writes Lupton. Most of his experience comes from domestic work, but he also has international experience: He tells of U.S. mission teams that spent $30,000 to rebuild homes after a hurricane swept through Honduras, when locals could have done it for $3,000 each. While Lupton approaches the issue as a Christian, those with a different perspective can also learn much from his thoughtful insights and analysis. He writes:

We fly off on mission trips to poverty-stricken villages, hearts full of pity and suitcases bulging with giveaway goods, trips that one Nicaraguan leader describes as effective only in "turning my people into beggars." Giving to those in need what they could be gaining from their own initiative may well be the kindest way to destroy people.
cover of Three Cups of Deceit: How Greg Mortenson, Humanitarian Hero, Lost His Way

Three Cups of Deceit: How Greg Mortenson, Humanitarian Hero, Lost His Way, by Jon Krakauer, 2011
If you're thinking of climbing Mt. Everest because a guide service says, "with modern technology, we've made that so easy, practically anybody can bag it," read Jon Krakeuer's Into Thin Air before you pay your deposit. If you're thinking of giving money to a man that the New York Times calls a hero, because he has built so many schools for poor children, read Krakauer's Three Cups of Deceit.

Greg Mortenson regaled the world with a story about how he had been kidnapped by the Taliban as he struggled to build schools in remote Afghanistan and Pakistan. His book Three Cups of Tea and glowing coverage by New York Times columnist Nicholas Kristof built his reputation as a hero... but it was all lies and self-promotion. Fellow climber Jon Krakauer sniffed something funny and — in sharp contrast to the journalists who had fawned over Mortenson — got some facts. The result is this short ebook expose, which serves as a case history of how easily good intentions (we're giving Mortenson the benefit of the doubt here) can turn to sham, and how eager the media is to swallow a feel-good story.

Lords of Poverty: The Power, Prestige, and Corruption of the International Aid Business, by Graham Hancock, 1994
This book's strength, and weakness, is that it's more than two decades old and covers many events from the 1980s. Those who don't like the message can say, "It's out of date." Those who continue to see precisely the hubris, lack of accountability, and corruption that Hancock documents with great passion can take away an important lesson: Simply exposing all of this isn't enough. Too many people in power get direct benefits; the people being hurt are powerless. It's up to those of us with a much less influence to work together, and stop it.

cover of The Idealist

The Idealist: Jeffrey Sachs and the Quest to End Poverty, by Nina Munk, 2013
Nina Munk tells the story of an economist who believed that a giant dose of money, plus a giant dose of media coverage for a certain economist, could end poverty. It didn't. The economist's name was — oh, never mind, read the book. Sachs got a great deal of attention in the first decade of the century for his book The End of Poverty, which laid out his plan. Nina Munk wrote a flattering story about him in, appropriately enough, Vanity Fair, and then, with his cooperation, wrote a book about his Millennium Villages project in Africa. The plan was that each selected village would be a demonstration project, showing what great progress could be made if they closely followed a 147-page, single-spaced document written primarily by academics at Columbia University. It did not work; that anyone thought it could work is a story in itself. Munk focuses on Sachs rather than herself, but reading between the lines it appears that she went from being a fervent believer to a skeptic, and in doing so, she demonstrates the difference between short-term and long-term. It's easy to get everyone enthused, show results, and paint a happy picture of the future, with a lot of money and a short-term horizon. But the long-term is another story.

No Such Thing as a Free Gift: The Gates Foundation and the Price of Philanthropy by Linsey McGoey, 2015
A century ago Andrew Carnegie was the great American philanthropist, building libraries and winning fame. And when his employees went on strike, Carnegie's security forces shot them dead. Linsey McGoey sees the same contradictions at work today, as the Gates Foundation, the biggest in the world, gains enormous and unchecked control over policy decisions in health, education, and other areas — often at the same time benefitting Microsoft, the source of its wealth, and never challenging fundamental sources of inequality.

The Reproach of Hunger: Food, Justice, and Money in the Twenty-First Century, by David Rieff, 2015
Can the world end extreme poverty and widespread hunger? Is it willing to do what that takes? David Rieff weaves together several threads as he explores these questions. "Philanthrocapitalists" such as Bill Gates want us to believe that technology and big business, such as Monsanto, are necessary to end hunger, and that they have the ability and desire to do so. Food rights activists say that's precisely the wrong approach; multinational corporations are making the problem worse. And if the world won't take effective action on climate change, then very possibly nothing else will matter. Rieff packs a lot of insights and facts into his book; he also packs a lot of words and ideas into each sentence. It's an absorbing book, eloquent but not a light read.

Give a Man a Fish: Reflections on the New Politics of Distribution, by James Ferguson, 2015
Cash transfers are a system in which a government (or, possibly, an NGO, though this is rare) doesn't try to decide what poor people need and provide it for them; it gives them the cash and lets them decide for themselves. Where it's been tried, it has shown far more success than the standard aid model, in which little of value actually reaches the target population. Ferguson gives a thorough, thoughtful picture of cash transfers, in a style which is readable but tends toward the academic.

Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty, by Abhijit Banerjee and Esther Duflo, 2012
Poor Economics been widely hailed as one of the most thoughtful books to date about aid. Though they work at a university, the authors are grounded in reality. They have looked at development programs and have had in-depth conversations with people affected, with a goal of figuring out what works, rather than supporting whatever they had already decided. We've learned a great deal from reading their insights.

That said, we disagree on one fundamental point: The authors address the question: If we really want to provide effective aid, how do we do it, and assess our actions? We've looked at the evidence too, and have concluded that those who control the money do not want to provide effective aid, and as long as they're in control, the best that the rest of us can do is to reduce the considerable harm that they do under the guise of "aid."

Related Topics

cover of Africa's Odious Debts: How Foreign Loans and Capital Flight Bled a Continent

Africa's Odious Debts: How Foreign Loans and Capital Flight Bled a Continent, by Leonce Ndikumana and James K. Boyce, 2012
Most of us are reluctant to borrow money without good reason, because we know that one day we'll have to repay it, with interest. But there are two groups who love loans: Those who make a fat fee by authorizing a loan of someone else's money even if it's for an illegitimate purpose; and those who borrow money which they can spend (or stash away) as they wish and somebody else will have to repay it. That's a thumbnail description of "odious debt." Today, odious debt is one of the great burdens on developing countries. In this short, powerful book, Professors Ndikumana and Boyce show how Western countries and agencies, including major private banks and the World Bank, created what a Brookings Institution scholar calls "the ugliest chapter in international commerce since slavery."

"The West, despite the endless rhetoric about 'development,' has no interest in the development of the rest of the world and is in fact in a relentless 'war' against it." –Trade Is War

Trade Is War: The West's War Against the World, by Yash Tandon, 2015
Tandon has represented his own country, Uganda, as well as Kenya and Tanzania in meetings of the World Trade Organization. From his decades of experience, he argues that globalization, far from being the path to development for poorer countries, makes them poorer. "The West, he writes, "despite the endless rhetoric about 'development,' has no interest in the development of the rest of the world and is in fact in a relentless 'war' against it."

cover of King Leopold's Ghost: A Story of Greed, Terror, and Heroism in Colonial Africa

King Leopold's Ghost: A Story of Greed, Terror, and Heroism in Colonial Africa and Bury the Chains: Prophets and Rebels in the Fight to Free an Empire's Slaves, by Adam Hochschild, 1998 and 2005
Two gripping accounts of how, in the not-so-distant past, ordinary people confronted slavery and colonialism, with remarkable if not complete success. We can do it again; you'll pick up inspiration here, and also see remarkable parallels between past and present. He writes, for example, of an officer in the colonial army in the Congo who decorated his yard with the heads of executed Africans, while also portraying himself back home as a swashbuckling hero:

One of the benefits of service as a Force Publique officer was that the nearest journalist was usually thousands of kilometers away, so you and a few friends could largely shape the record of your exploits.

Bad Samaritans: The Guilty Secrets of Rich Nations and the Threat to Global Prosperity, by Ha-Joon Chang, 2008
Europe and the United States had protectionist trade policies as their economies developed. Once they were dominant on the world stage, they tried to impose free trade policies on poorer countries. Ha-Joon Chang, an economics professor at Cambridge University, exposes the hypocrisy of this attitude. As he does so, he isn't shy about taking some unexpected and controversial positions: Corruption, while not good, may not be as bad as generally assumed; and democracy may not be all that good. While you may not agree with much of what he says, his is a thoughtful and iconoclastic voice that is worth hearing. Some of this book is a more popularized version of the arguments he makes in his earlier work, Kicking Away the Ladder.

Kicking Away the Ladder: Development Strategy in Historical Perspective, by Ha-Joon Chang, 2002
In the nineteenth century, England was a world power, a position it had achieved by tightly controlling international trade as its home industries developed. Having reached the economic pinnacle, England tried to impose free trade policies on countries that threatened its advantage. The German economist Frederich List described this as "kicking away the ladder." Ha-Joon Chang is a Korean-born economist at Cambridge, describes how the more powerful nations today are doing the same, using free trade policies to prevent poorer countries from developing.

cover of Irresistible: The Rise of Addictive Technology and the Business of Keeping Us Hooked

Irresistible: The Rise of Addictive Technology and the Business of Keeping Us Hooked, by Adam Alter, 2017
Cellphones bring benefits and harm, communication and addiction; and they are doing it rapidly in richer and poorer countries alike. The difference is that wealthier countries have an infrastructure which offers some protection. Parents, at some point, will hear that unlimited screen time isn't a good thing for toddlers, pre-teens may have a parent, teacher, or mentor who helps them break or avoid an addictive habit. Typically these safeguards are weaker in developing countries, where growing numbers of young people center their lives around their cellphone, to the detriment of all else. "Foriegn governments, businesses, and NGOs want to run my country? Hmm, they're not going to take away my cellphone, are they?" Several recent books look at the addictive nature of new technology; Alter's is among the best.

cover of Soda Politics: Taking on Big Soda and Winning

Soda Politics: Taking on Big Soda and Winning, by Marion Nestle, 2015
Nestle, a long-time professor of health and nutrition, has worked for years to reveal how food conglomerates undermine public health as they clear obstacles to a highly profitable product: Soft drinks. Coke and Pepsi give research grants that whitewash their products; they indirectly channel money to the media to get better coverage; they donate to both legitimate organizations, and create phony front organizations, to build goodwill. As junk food sales flatten out in the West, these companies are turning the same techniques to poorer regions. But the West has some institutions that energetically fight back; poor countries often do not. In fact, the very forces that claim to be promoting health in these regions are failing them: The Bill & Melinda Gates Foundation has partnered with Coke to help it get a foothold in developing countries.

Salt Sugar Fat: How the Food Giants Hooked Us, by Michael Moss, 2013
Sugar isn't the only health hazard that's showing up in more and more food. Salt and fat also go down easily, and cause their problems later. Moss is a talented writer and tireless researcher, who weaves stories of people on both sides of the nutrition wars, to show how the food corporations have expanded their marked in the West; now they're using the same tactics throughout the world. Our story about the Coke executive who quit rather than help the company's aggressive expansion into Brazil (see Warren Buffett's Coke), is from this book.