13 Lessons 2013 Taught Us About [Aid and Development]

I recently wrote an essay and sent it in to RELEVANT Magazine. I enjoy doing this for several reasons. (1) It kinda makes me feel like I’m still in college–meaning somebody is actually going to read and critique my writing. (Sorry to all those who think it is “fun” to read my blog, I love you, but I enjoy more criticism.) (2) It challenges me to continue to improve the quality of my writing. (3) It is fun to actually have a professional editor edit my writing. (4) It just seems cool (I concede this last reason is totally vain.)

Anyway, I wrote about some of the lessons we have learned from the books, academic studies, and events of 2013. The first draft was nice and consisted of flowing prose forming well formed paragraphs. Since RELEVANT Magazine is what it is, the editor wanted the ideas in the form of a list. I agreed to rework the article. 

When my article was finally published I was a bit disappointed as to how much substance had been stripped away. Apparently the word limit is strictly enforced. 20-somethings must lack enough attention to read anything longer than 1000 words. (A platitude I and many of my friends reject.) Here is the article published by RELEVANT. But for the benefit of my readers, the deeper and meatier (Chicago style) version is below. 

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“The goal should not be to turn New Delhi into New York”, a friend recently said to me. The statement was striking and the question it presented hit hard. Surely we want a future where there is no poverty. But what does that actually mean? What is the goal?

Let’s ask 2013.

(1) The world is making positive progress. This year has introduced optimism to this subject. Reputable magazines and newspapers, such as The Economist, The New York Times, and Business Week have published feature articles outlining the facts about the significant reduction of those living in extreme poverty around the world. In the last twenty years the number of people living on the local equivalent to $1.25 per day in the United States has been cut in half.

(2) The world still has a long way to go. Needless to say, “enjoying” an average daily expenditure of over $1.25 is not flourishing by anyone’s definition. Ensuring all people of the world live above the line of extreme poverty is an admirable goal, but it is not enough. Living on $1.26 is still difficult and still restricts the freedoms of a flourishing life.

On a more macro level the world has heard reports of the collapse of a garment factory in Bangladesh, which killed thousands of workers. An upscale mall in Nairobi, Kenya was terrorized and held under siege for almost three days by militants associated with Al-Shabob, a terror cell that runs the failed state of Somalia. The once glamorous automobile capital of the world, Detroit, filed for bankruptcy several months ago.

(3) Economic growth reduces poverty and (4) Economic growth doesn’t always reduce poverty. These two lessons are explained nicely by the juxtaposition of two important books about India published in 2013. Why Growth Matters: How Economic Growth in India Reduced Poverty and Lessons for Other Developing Countries by Jagdish Bhagwati and Arvind Panagariya and An Uncertain Glory: India and Its Contradictions by Jean Drèze and Amartya Sen encapsulate the essence of the debate about the effects of globalization on poverty.

Recent history has dictated more trade will occur regardless of whether development experts want it. The main issue is now; does the increasingly egalitarian global economy create increasingly egalitarian societies? Bhagwati and Panagariya unequivocally say, “Yes!” while Drèze and Sen say, “Well, it depends”.

The arguments on both sides are meticulous and fair. Bhagwati and Panagariva state, “Economic growth is not a zero-sum game, growing GDP means growing incomes and increased livelihoods”. Drèze and Sen counter saying, “Despite growth of Indian GDP, poverty numbers are declining relatively slowly, and the poor in India are actually consuming less calories compared to years before”. Bhagwati and Panagariva then boldly claim, “The decrease in calorie intake may indicate a dietary shift from coarse grains to more rice and fruits”.

(5) Child sponsorship works. Good news! That warm feeling you feel when you walk by your refrigerator and see the picture of a child you sponsor halfway around the world is not in vain. A very comprehensive and statistically head spinning analysis of Compassion International’s Child Sponsorship program found both large and significant impacts on education for sponsored children. Even when the impacts were compared to other programs targeted at improving returns on education, Compassion’s program tested with greater effectiveness.

(6) “Child sponsorship” might not “work”. Here is the catch. When someone says, “Child sponsorship works”. It depends on what they mean by “child sponsorship” and what they mean by “works”. Compassion International’s method of child sponsorship differs a great deal from the way World Vision or Save the Children do child sponsorship. The major difference is when you sponsor a child through Compassion your money goes directly to that child and to no one else. When you sponsor a child through World Vision your money goes to support projects that target the entire community where your sponsored child lives.

Many share a feeling that community driven programs have a slightly higher long-term impact than programs focusing on individuals. When a child becomes educated and has aspirations beyond his peers, what prevents that young person from leaving his or her hometown in rural Brazil to find a job in Sao Paulo? Now the rural community is no better off, except for maybe the remittance money from the individual’s white-collar job in the city, and the rural-urban development gap is widened.

(7) Just giving money actually helps. When the study of Compassion International’s child sponsorship program is viewed more generally, the results are kind of obvious. It is a lesson embedded in any Economics 101 syllabus. When somebody has more stuff (money, books, livestock, fertilizer) they have more choices and greater opportunity.

A recent study attempted to understand this theory better; they just gave money to poor farmers in rural Western Kenya and observed the effects. Would the farmers waste the money or would the money be used for productive purposes? As it turns out when you give poor farmers in Western Kenya cash, they tend to invest in productive ways. In general the farmers either invested in their home (replacing the thatch roof) or in their business (purchasing inventory or a motorbike). Giving to the poor may be easier than previously thought. Just give cash.

(8) Just giving money might only help in Western Kenya. Unfortunately the conclusion of this study may not be true for the world at large. A similar program was evaluated in both Liberia and Bolivia and found that the recipients of these cash grants ended up using the money for unproductive activities, i.e. celebrations or alcohol. It seems Western Kenya was really the perfect place to just give people money. Kenya is peaceful. People generally know what activities will be productive. Even casual alcohol consumption is considered taboo. It seems just giving people money works, but only in carefully selected regions of the world with a particular set of values and opportunities. In other places where social norms are different giving a cow or fertilizer may be better.

This leads to more general lessons: (9) Foreign aid is good and (10) Foreign aid is bad. It really all depends on what is meant by foreign aid. Aid can come from governments, non-profit organizations, businesses, and individuals. It can go towards health, education, water access, infrastructure, governance, businesses, families, or children. The pitfalls of aid are well known. It can prevent capable people from solving their own problems. It often creates dependency. It almost certainly undermines and distorts the incentives of local political and economic institutions. Just because these side effects are known does not mean that all aid is bad. Some aid is absolutely necessary and is very beneficial.

(11) The world is learning how to do good better. Years ago the idea of evidence based medicine swept through universities and hospitals. Fighting disease with actual evidence lead to many new treatments and medications, which saved and improved countless lives. This same idea is now taking hold in the field of poverty alleviation and development. Rather than make policy decisions and strategic organizational plans based on hunches and textbook theories, policy makers and practitioners are beginning to see the benefit of fighting poverty with actual evidence. Instead of just assuming whatever they learned in school is correct, researchers are working around the world trying to figure out what works and what doesn’t, what helps and what hurts.

(12) Learning what helps and what hurts is still really hard. Gathering actual evidence to fight poverty sounds really great! The major challenge, however, is evaluations of this nature are often expensive and always challenging to execute well. Studying human beings in real life is much more challenging than studying a medical drug in a controlled laboratory environment. Human behavior, achievement, and success are dependent on seemingly endless factors. The best evaluations control for as many of these factors as possible, but to do this completely in a real world setting is extremely challenging. It is impossible to say, “Lets run 2008 over again and this time there is no global economic crisis”.

(13) Our goal, our vision needs to be the New Jerusalem. The final lesson, given the previous twelve; is we need to recalibrate our goals. The goals of those who want to modernize every inch of this planet through freer trade have failed (see the garment factory in Bangladesh and the bankruptcy of Detroit). Similarly the goals of those who want to restrict trade and global interactions between countries have also failed (see Somalia and the Nairobi mall attack).

The path, while rocky, is clear. A Christian voice and a Biblical vision are now needed more than ever. The goals of secular experts are fleeting. Even the most modernized countries have experienced civic hardship and economic decay.  As my friend told me, “The goal should not be to turn New Delhi into New York”. Continuing he said, “The goal should be to turn both into the New Jerusalem”.

If 2013 has told us anything, it is this; positive change is possible for countries and regions all around the world. Through the increase of experimentation and rigorous testing of projects and policies we are beginning to understand what actually helps people flourish and what doesn’t. Unless we want to repeat the events of 2013 we need a new goal. We need a new vision. 2013 made it clear; this goal, this vision needs to be God’s Kingdom.

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