Effective foreign aid

[mtbc]

Poor countries have many people who lead relatively miserable lives. Naively one might imagine that the best bang for the buck is to buy those people bicycles or goats or somesuch. However, I wonder how political considerations impinge upon that. For example, the European Union funds infrastructure projects in the Occupied Territories only for the Israelis to turn them to rubble. I can imagine that in some regions food aid tends not to ultimately reach the population who need it the most though I would guess that it is sent with a priori expectation of some loss.

I suspect that the basic values of a functional free society are critical: rule of law, lack of corruption, representation for minority groups, etc. These might allow aid to offer maximum benefit to those who need it the most. Perhaps, then, resources are better spent addressing those fundamental enablers directly than on other aid that is frustrated by lack thereof, not that I am sure how those enablers may be addressed. For instance, maybe in international trade it irresistibly brings social doom for a poor country to be rich in some valuable natural resource. Maybe functional free societies tend not to be viable when there are significant impoverished subgroups.

So, I wonder if many of the problems of the developing world are significantly exacerbated by governance issues and the extent to which those issues can or should be addressed first. Also, if we can address them without seeming to impose a cultural raft of liberal values.

Comments

[mindstalk]

I think markets and trade are cool and essential; Sen does too, defending a right to trade as a human right, not just instrumental toward wealth. "Capitalism", well, depends how you define it; I'm theoretically friendly to much tighter limits on how much any one person can own at once.

I think Krugman has said he went into economics as the closest thing to real world psychohistory.

[mtbc]

Given sufficient regulation to price in significant externalities and to counter natural dysfunctions in certain kinds of market I'd probably agree: it is good if people can find and use ways to climb out of poverty.