| Eamonn Butler: Throwing good money after bad |
[Nov. 17th, 2009|06:28 pm] |
Promoting economic development in poorer countries is not a matter of just throwing money at the problem. That is why all the posturing from the G20, the United Nations, and other international bodies, about how much member countries should contribute in aid is wide of the mark. It is urging people to throw money at a barn door in the hope that a few coins will go through the knot-holes and reach their target. More money would reach the target if instead we were urged to throw somewhat less, but learnt how to throw it a lot more accurately.
There are already a huge number of simple, proven initiatives that can do a vast amount of good without breaking the bank. Getting clean water to people who do not presently have it is probably the most cost-effective way there is of saving lives, improving health, and transforming the lives of the world's poorest people. Simple things like giving people mosquito nets can end the situation where up to a third of a local population is unable to work effectively due to continued bouts of malaria. Simple nutrition supplements give life and self-reliance to more people than any state-sponsored steelworks or construction project. Finding alternatives to people burning dung on their poorly-ventilated fires can prevent infections and lung diseases. So many deaths, and so much continuing illness and disability, are in fact easily – and cheaply – preventable. These are simple things, items of nutrition, healthcare and hygiene that people in rich countries, and particularly the wealthy political classes in rich countries, simply assume exist the world over.
To that extent, World Vision is correct. It is not all about spending money on big projects, but applying some simple solutions that have been known to work. Somehow the Coca-Cola company manages to get its product out to the most far-flung places: so why do government agencies find medicines, supplement, and clean water so hard to distribute? Maybe they should hitch a ride in Coke's cases.
And a little money can seed growing businesses. The Grameen Bank, a microfinance body in Bangladesh lends money to women to buy mobile phones, which they then rent out to users. It gives them independence, and gives the latest communications to the local community. Farmers, for example, can use the phones to find out where to get the best price for their products, so they – and their family, and everyone they trade with – prosper.
It is also about creating the conditions in which that prosperity can expand. Where the government owns all the farmland, for example, there is no point in people working hard to grow crops from which they will get little or no benefit. So the whole nation remains underfed. Where there is no security and bandits can take your crops – or for that matter, the police and politicians can confiscate them – there is likewise no reward for effort. Where routine functions are done by government agencies rather than individuals, they are more likely to serve the interests of the producers than of the general public. If we are to bring growth and eventual prosperity to much of the world, we need also to be urging governments to allow people to hold private property and enforce their right to use it without fear of being robbed; and we need to convince those in power that the whole nation, including they themselves, would be better off if they did not try to control so much but let people live and trade freely as they chose.
Dr Eamonn Butler is director of the Adam Smith Institute, an influential think-tank which for more than twenty years has designed and promoted practical policies to promote choice and competition in the delivery of essential services. |
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