Haiti and three kinds of development aid

Haiti was hit by an earthquake of magnitude 7.0 last week.  The death toll estimate in this morning’s newspaper stands at 200,000.  We can only hope that the estimate cycle is at its peak, and it will be revised down later.

Earthquakes registering on the Richter Scale at 7.0 are rare but not unheard of.  There were 16 Earthquakes of this magnitude or more in 2009.  Six people died in Japan when an earthquake measuring 6.8 hit there recently.  The  disaster is as much the poverty and ill-rule in Haiti.


Haiti is complicated.  The current President (Rene Preval) served before, between 1996 and 2001.  Preval was also Prime Minister for the eight months between election and coup in 1991, under then-president, Jean Bertrand Aristide.

After Preval left office in 2001 (as only the second President in 140 years to have a term in office expire naturally) Jean Bertrand Aristide was elected again.  He promoted killing his political opponents, and is accused of embezzling the national telecom’s revenues.  He was ousted in a 2004 coup that the Americans (allegedly) organised, featuring a rebel movement comprised of members of the Cannibal Army, a Haitian street gang.  Aristide claims his departure in a US Government aircraft was a kidnapping.  A UN peace-keeping force was in situ until 2006, when Preval was again elected.


On average, Haitians have nearly 2 dollars a day at their disposal. Given that Haiti has more NGOs per capita than any other country, it’s clear that the first world feels a moral imperative to help.

So, does Haiti need more aid? And how?

First, I would like to mention the most influential argument in current development aid scholarship – development aid does not cause development. The aid people have been slow and reluctant to concede this point.  But the inexorable rise of China alongside the persistent stagnation of most of Africa have illustrated it vividly.

The reaction to this argument is varied.  One suggestion, by David Brooks of the New York Times, is “intrusive paternalism“.  This means “replace parts of the local culture with a highly demanding, highly intensive culture of achievement”.  The concept is based on charter schools and anti-poverty programs that have worked domestically in the US.  Whether Mr Brooks is idly pondering or has a grand plan is not clear from his article…

But changes to culture and practice are necessary.  One of the worst kinds of aid is budget support – giving money that a country can spend as it wishes.  It feels like a fair, non-culturally-hegemonic, low-cost way to deliver aid.  But it doesn’t shape priorities, doesn’t address underlying issues, doesn’t create public ownership of Government, doesn’t have an exit strategy, and can lead to corruption.

Technical assistance in lieu of Budget Support is growing in popularity.  This involves putting people on the ground in developing countries to work alongside locals.  Whether their focus should be teaching and mentoring or getting things done is very ambiguous.  Often, technical assistance personnel that are supposed to be focused on teaching and learning are captured by the difference they could make in the here and now of a failing state, and the long-run focus is lost.

Outcome-based aid is being trialled.  This uses conditionality to motivate better government outcomes. For example, A donor will increase the aid budget if the partner government gets 50 percent of those eligible enrolled in high school.  So far, the conditional proportions of the aid budget have been so small they are unlikely to be very powerful.  In the long-run I fear that the measurement of the relevant statistics will be undertaken by local aid officials who want ‘their’ country to get all the aid it can.  The more significant the conditional payments, the greater this tendency might be.

Perhaps the best kind of aid is not development aid at all.  No person, government or country can be adequately prepared for grand-scale natural disasters.   In times of disaster, the Red Cross or Oxfam can keep people alive who would otherwise die.  Click the links to donate now.

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Thomas the Think Engine is the blog of a trained economist. It comes to you from Melbourne Australia.

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