December 11, 2006, 12:00 - 2:00 PM - Hudson Institute, Washington, D.C. Headquarters
Transcript Now Available - Click Here! (PDF Format, 29 pages, 778 KB)
A complete, edited transcript is now available of a panel discussion co-hosted by Hudson Institute's Bradley Center for Philanthropy and Civic Renewal and the Center for Global Prosperity, entitled
Development Economists to Debate Foreign Aid Approaches
Monday, December 11, 2006, Noon to 2:00 p.m.
Program and Panel
Registration, lunch buffet
Welcome by Hudson Institute's WILLIAM SCHAMBRA
WILLIAM EASTERLY, New York University
CAROL LANCASTER, Georgetown University
ALEXANDER PREKER, World Bank
CAROL ADELMAN, Hudson Institute's Center for Global Prosperity
When it comes to helping the developing world, there are far too many well-intentioned Westerners planning grandiose schemes and far too few searching for what already works on the ground, says William Easterly in his controversial book The White Man's Burden: Why the West's Efforts to Aid the Rest Have Done So Much Ill and So Little Good (The Penguin Press, 2006). States Easterly: "In foreign aid, Planners announce good intentions but don't motivate anyone to carry them out; Searchers find things that work and get some reward.... Planners apply global blueprints; Searchers adapt to local conditions. Planners at the top lack knowledge of the bottom; Searchers find out what the reality is at the bottom. Planners never hear whether the planned got what it needed; Searchers find out whether the customer is satisfied."
How accurately does Easterly's searchers-versus-planners dichotomy portray the challenges, successes, and failures of international development assistance? What are the implications for private philanthropy, which makes up the bulk of US giving abroad? What lessons can today's megafoundations, such as the Bill & Melinda Gates Foundation, learn from this analysis of the efforts of the World Bank, the IMF, USAID, and others before it?
On December 11, 2006, two of Hudson Institute's policy centers, the Bradley Center for Philanthropy and Civic Renewal and the Center for Global Philanthropy, co-hosted author William Easterly of New York University as well as Georgetown University's Carol Lancaster, lead economist Alexander Preker of the World Bank, and the Center for Global Prosperity's Carol Adelman to discuss these and other questions. The Bradley Center's William Schambra moderated the discussion.
In his opening remarks, Bill Schambra introduced the crowd to the story of Cordelia Taylor (click here for Schambra's version as told elsewhere) and the "great mantra of philanthropy," root causes. American foundations are "by their own most-cherished explanation of their purpose, root cause planners, not piecemeal searchers," Schambra explained, alluding to two categories of aid workers presented in William Easterly's book.
In his presentation, Bill Easterly described the "planner" approach – the status quo in international development, best exemplified in the work of Jeffrey Sachs – and called for a "searchers" approach. "It's so sad that we have to go over again the defects of central plans, and the defects in general of the big plan approach…. Collective responsibility doesn't work…. Nobody can be held individually accountable." Moreover, there is a "tremendous knowledge problem," Easterly said, quoting Hayek: "The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design." Turning to "searchers," Easterly gave several examples: Muhammad Yunus, Santiago Levy, and Michael Kremer. He concluded by noting that the question to ask when considering aid is NOT, how do we achieve development, but rather, "what can outside philanthropy, both official and private, do to help the poor?" It's the humble searchers who have come closest to the answer to that question.
Georgetown University's Carol Lancaster began by suggesting that we're all planners, actually. One can't NOT plan. Then Lancaster went about redefining the problems that lead to the situation – ineffective aid – that Easterly criticizes. Aid doesn't reach the poor, so the policy environment needs to be improved. Institutions are weak, so we need to build capacity. "It seems to me what we're dealing with here is not 'planners versus searchers' but a whole lot of other issues that we ought to get on the table." She added, "I very much fear that the planners versus searchers categories will be seen and are seen as proxies for government versus the private sector." Lancaster went on to praise searchers – commercial entrepreneurs, social entrepreneurs, technical entrepreneurs, policy entrepreneurs. But with an increasing number of actors on the development stage, Lancaster concluded by calling for transparency and evaluation. "If we're going to have useful debates on how we use our money, private or public, to promote the betterment of the poor abroad or at home, we really need to have a way of evaluating what we do that is transparent and independent and rigorous."
The World Bank's Alexander Preker described the case of Liberia to illustrate why planning is necessary. In short, uncoordinated, emergency relief aid to Liberia brought in about $30 to $40 million to fortify the health care system, but Liberia's national budget is only $120 million. It became very lopsided in an unsustainable way. And while Preker agrees with Easterly's diagnosis, he is not sure that the problem is "one of planning versus non-planning." Rather, it's a problem of assistance – "the same kind of problem you have in domestic policy with welfare dependency and welfare aid." Careful planning is necessary sometimes; where it doesn't work so well, innovative approaches may work much better. Preker concluded by calling for research into why Africa has been such a failure when other regions have prospered. China, for example. "It's not planning versus non-planning. It's something else driving that."
The final speaker was Carol Adelman, who criticized aid agencies for the unresponsiveness and lack of innovation, and put forward private aid as the solution. She suggested that private aid drives innovation, and for this reason public and private aid should go hand in hand.
Audience questions came from Gerald Anderson, U.S. State Department; Ian Wilhelm, Chronicle of Philanthropy; Frank Lusby, Action for Enterprise; Dennis Whittle, Global Giving; and Jill Lacey, Capital Research Center.
Susan Herr of the blog Philanthromedia (http://www.philanthromedia.org/) included a lengthy quote of Schambra's introduction to the panel as well as a link to the audio recording in her December 14 entry ("Poking Sticks at the Big Foundations"). Herr wrote: "As for Mr. Schambra and his contention that big foundations have it all wrong and the emerging army of mega-philanthropists are poised for mad success? Sounds like a perspective Philanthromedia will be bringing you more of in the new year."
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