Liberals, Conservatives and Aid

New York Times' David Brooks takes on Jeffrey Sachs in Liberals, Conservatives and Aid, where he reacts to Sachs' new book, "The End of Poverty." On June 26, Brooks wrote:

The Bush folks, like most conservatives, tend to emphasize nonmaterial causes of poverty: corrupt governments, perverse incentives, institutions that crush freedom. Conservatives appreciate the crooked timber of humanity - that human beings are not simply organisms within systems, but have minds and inclinations of their own that usually defy planners. You can give people mosquito nets to prevent malaria, but they might use them instead to catch fish.

Instead of Sachs's monumental grand push to end poverty, the Bush administration has devised the Millennium Challenge Account, which is not dismissed by Sachs, but not heralded either. This program is built upon the assumption that aid works only where there is good governance and good governance exists only where the local folks originate and believe in the programs. M.C.A. directs aid to countries that have taken responsibility for their own reform.

It has the faults of its gradualist virtues. I recently sat in on a meeting in Mozambique between local and American officials. It was clear that the program, while well conceived, has been horribly executed. The locals had been given only the vaguest notions of what sort of projects the U.S. is willing to finance. After two years of trying they had received nothing.

We should all applaud Tony Blair for making Africa the centrepiece of the July G8 summit at Gleneagles Hotel, Scotland - and for moving other world leaders to the cause. However, the chief proposal being offered to address African needs is suspect. Gordon Brown is pushing for an "International Finance Facility", or IFF, that would use international bond markets to raise $50 billion in development funds for each of the next few years, with donors committing future aid budgets to pay off the bonds in the out-years.

...The IFF undermines the spirit of the Monterrey Consensus by focusing on the tin-cupping of financing the enterprise rather than crafting a strategy for achieving the desperately needed outcomes the enterprise is intended to provide. Given the servicing on borrowed funds, paying interest to investors, and the likelihood of decreased funding by donors after the big push, Africa will actually experience a net loss of aid flows in the long term.