Is Bono noble but misdirected?

I’ve got a post up at Views from the Center – the Center for Global Development blog on development issues, taking issue with Jagdish Bhagwati in today’s Financial Times who says that Bono is noble but misdirected.

11 thoughts on “Is Bono noble but misdirected?”

  1. The purpose of development assistance is, in part, to increase
    consumption by desperately poor people, both today and in the future.

    This statement claims that poor people need more consumption than investment (for example more bottles of milk and less milk producing livestock.) Why is it that you think poor people are too stupid to know for themselves the optimum amout of consumption vs investment? Obviously they lack a lot of information, but they do possess other forms (local knowledge, and also knowledge of their own preferences) which aid donors or government officials do not possess. Do you think that such people, given a choice, would outsource their spending to an aid agency? Perhaps they already do. It just seems a little imperialistic to assume that even if the right ratio exists, we’d know what it was.Do you know what the ratio is for most African cities/regions/nations/the continent as a whole? And which boundary do you suggest we use?

    It is doubtless true that governments face pressures to redirect money from aid to domestic programs.  But that is an argument for why we should push harder, not less hard, for increases in government aid, to offset these pressures. 

    Surely it’s an argument for changing the structure of aid, rather than the amount?You’re saying that the more corrupt a recipient government is, the more aid they should get to offset the corruption. Wouldn’t it be better to end the corruption – and this may well be best served by reducing the wealth linked to government office?If the domestic spending is considered valid and necessary, then we’d expect the citizens to be living in a more stable and optimistic country than one where such domestic spending is uneccessary and corrupt. Does this mean that aid only works in the countries that (relative to other developing nations) least need our help?

  2. Anthony,

    This statement claims that poor people need more consumption than investment

    Absolute nonsense: it claims no such thing.  It says that not all the additional aid need go into investment to be useful. It is Bhagwati who worries that the recipients might choose to take some of the benefit of aid as consumption.  My point is the opposite: that as we increase resources available to the poor, they will sensibly choose to consume some of the additional resources now.  (Don’t forget that the purpose of investment is future consumption.)  So it is not me that is trying to target a particular national savings ratio, it is those who say that aid should be spent on investment and not consumption.  So your entire diatribe about imperialism, needing to know the savings ratio, information we don’t possess etc should be aimed at the Bhagwati camp, not mine.

    On your other point – you seem to have misunderstood Bhagwati’s point, and my response to it.  This is a point about political pressures in donor, not recipient, countries. 

  3. 1. but you were talking about nurses salaries – since when do you advocate privatised hospitals in developing countries? You clearly make a distinction between spending aid on consumption versus investment, and i’m not arguing about what the ratio should be, but the soundness of having one in the first place. My diatribe is therefore aimed at any camp who advocates managed aid – including yourself. 2. you’re right – i misunderstood, my mistake. But out of curiosity if it were a point about recipient countries would you agree with what i said?
    Owen replies:   I am not making a judgement about levels of consumption and investment, nor for trying to manage this balance.  Bhagwati is drawing this distinction when he argues that aid which leads to consumption is less valuable than if it leads to investment. I am disagreeing with him, and saying that we should not be deterred from giving aid if the result is higher consumption.  It is fantasy to say that I am advocating a target ratio for spending aid on consumption vs investment.  My point is that aid is properly spent on both, either directly or because the citizens make offsetting adjustments in their own behaviour, and that is how it should be. 

    Furthermore, I am not opposed to private provision of health care or education in developing countries.  However, I believe that it is properly a decision for the citizens of developing countries to decide how they want to manage the balance between public and private provision of these services, and not donors. So I do not "advocate" for, or against, private provision of hospitals.

    As it happens, I am a big believer in providing budget support where possible: that is, providing funding to recipient governments to allow them to allocate resources through their budget process, and being held to account for their decisions by their own parliaments, media and civil society. Far from having an imperialistic view that we should impose our priorities and plans from outside, or advocating "managed aid", I think we should focus on strengthening systems for financial and political accountability – including by being more transparent and predictable ourselves – to enable recipient governments to be held to account by their own citizens. That, rather than making governments accountable to donors, seems to me to be an important investment in the institutions of governance, democracy and accountability which will be in the long run interests of developing countries.

    I cannot imagine how you reached the conclusion that I think that we should increase aid to more corrupt governments.  There are plenty of governments – from Mali to Mozambique – that demonstrably use aid effectively to reduce poverty and which could achieve more with more resources.   We should increase aid to those countries, not to corrupt governments.

    But you put your finger on a genuine problem for effective aid allocation when you ask "Does this mean that aid only works in the countries that (relative to other developing nations) least need our help?".  It is very difficult to know what to do about badly governed countries, such as Zimbabwe, in which there are many desperately poor people.  I would not advocate providing budget support to these countries, of course; and I am sceptical about the efficacy of providing assistance through NGOs and grass-roots organizations, which are typically very expensive, frequently corrupt, hardly ever sustainable, totally unaccountable and often a complete waste of money.  I don’t have a succinct answer to this problem.

  4. Wow — Owen — You have a lot more patience than I do in responding to simplistic, troll-like comments. It really takes a special person to conclude from what you wrote that you support aid to corrupt governments.

  5. thanks for the lengthy response

    my claim that you support aid to corrupt governments – as i openly admitted – was based on my misunderstanding of the original Bhagwati quote. But as you accept it’s a valid wider point, and there’s no current solution to this unfortunate paradox – those countries most in need of aid are least likely to receive it.

    my own thoughts are that this strengthens the emphasis on endogenous solutions – sustainable change can only come about if it’s pushed by those who need it, and not something that can really be bestowed by outsiders. sadly, freedom (and rights) must be fought for. the lessons from Eastern Europe are that sometimes bloodshed is necessary for a revolution to occur, and to overthrow tyrants and monsters. however there’s also examples of non-violent "refolutions(?)" that give hope that this isn’t always the case. the key point is that the diffusion of ideas and intellectual support can be more important than transfering liquid capital or infrastructure.

    your points on improving the accountability of donor countries – you’re the expert, i follow what you say. i know i somethimes present things a little black and white. but sometimes i don’t understand and starkness can bring clarity.

    if you genuinely believe individuals should make a voluntary decision about what type of healthcare to receive, do you advocate vouchers? if you geniunely believe individuals should be free to choose how they spend charitable contributions, then you’d be a classical liberal/libertarian – but you’re not are you? you want donor countries to spend money using their budgets.

    does this come down to our differing views on the efficiency of democracy? are you assuming that government spending does reflect the choice of individuals? i.e. if the NHS increases spending then an American might conclude that the British people have decided they want more public spending than private? I think that’s why i’ve misunderstod you – again, it comes down to this notion of "social welfare" which you’ve yet to define in a satisfactory way. to me,

    providing funding to recipient governments to allow them to allocate resources through their budget process. I believe that it is properly a decision for the citizens of
    developing countries to decide how they want to manage the balance
    between public and private provision of these services, and not donors

    these contradict each other, unless you’re assuming that political choice is exactly the same as market choice. On this matter, i’ll refer you to Political vs Market Value, as being one componant on why i don’t think that they’re the same.  H

    [snip – comments about another blogger removed]

    Owen replies:  You are now officially off-topic, Anthony.  For what it is worth, I do have more faith in democracy than it appears you have.  One role of democracy is to define the limits of markets – for example, it is for society to decide collectively if they wish to allow people to trade in heroin, sell their own kidneys, or require food to be labelled. I am not against healthcare vouchers – but this is for the community to decide, not donors.

    One option for a government that receives aid is to reduce the level of domestic taxation- ie to transfer the benefits of aid to its taxpayers, to enable them to choose how to spend the benefits.  Governments could also choose to issue health or education vouchers.  If that is what the country chooses to do with the resources it receives in aid, through a democratic process, I would support that.  I am against any donor requirements that the aid should be spent by governments instead of transferred to the citizens.   

    Please limit any further responses to this thread to a dicussion of Bhagwati’s criticism of Bono. 

  6. Point taken, but I think you’ll find more relevent commentary about international aid in my comment than in the one that prompted me to go off-topic. Providing your request is equally levied at others than I have no problem abiding by it.

    I take it that you agree with me though – the preceeding comments were at crossed-purposes because you’ve been equating "what the people want" with "what their domestic government does". It’s easy to say collective decision making is required to define the boundaries of the market, but it’s important to realise that civil society and debate (of the kind I referred to regarding Eastern Europe) is "market-based" in the sense that it’s voluntary. Hence deciding cultural boundaries does not necessitate collective decision making through the political process – there’s such a thing as "Birkenhead Justice" after all.Secondly, which voting rule delivers the "collective choice"? One African country might elect a politician wanting to cut taxes, another may vote one who wants to raise them. Their people could have the exact same preferences, but if the voting rule differs then the results will differ. There is no "collective preference" so any policy that relies on one won’t be sound.

    Obviously it is going a little off-topic but there’s a geniune problem here. It strikes me that if you give an elected President £30bn in aid to spend on the country, the spending will be different compared to if you’d given the citizens £30bn/(population) each. The latter is what I mean by being "spent on what the people want", but you’d also say that the former accomplishes this as well. Surely, you’d admit that the spending would be different?

    Bhagwati finishes by arguing for personal (rather than government) flows, and I just want to question your underlying assumption that there’s no difference between the two.

    I respect your impartiality and saying that we should leave it up to the recipient governments to decide what to do, but that is different from leaving it to their citizens. I also think a more combative approach delivers us from the paradox mentioned previously – if you’re a liberal democracy we’ll give you aid, if not then take to the streets and become one, and we’ll send you copies of The Road to Serfdom to encourage and inspire you!! 

    Owen replies: I don’t think giving them copies of the Road to Serfdom would do them any favours!

    The fact that there is no uniquely well-defined way to make collective decisions does not mean that there are no decisions that should be made collectively.

    Your argument is flawed when you make the jump from "if the voting rule differs then the results will differ" (which is true) to "There is no collective preference" (which is false, or at least does not follow from the absence of a unique voting mechanism).  

    There are some (I would say many) decisions that we want to take collectively – from the provision of security and enforcement of contracts, to redistribution of income and wealth, the provision of public goods, and decisions about values and laws.  Just because there is no unique way these choices should be decided does not mean that there are no collective choices to be made.

  7. Your argument is flawed when you make the jump from "if the voting
    rule differs then the results will differ" (which is true) to "There is
    no collective preference" (which is false, or at least does not follow
    from the absence of a unique voting mechanism). 

    But it does mean that there is no objective "collective preference".i.e. we can say that Tanzanian’s have a collective preference for X, and Ugandans have a collective preference for Y, but it may well be true that Tanzanian’s have FPTP, and Ugandans have PR, and if we swapped those systems over, then Tanzanian’s would end up with Y and Ugandan’s with X. Right?If that’s true, then government to government aid  – with spending controlled by the donor country – will not reflect the wishes of the citizens (the abstract term "collective preference"), but will reflect the literal "collective preference as defined by the voting rule".It seems you’re using the two types interchangeable (as you do with "social welfare") and I object – saying that we can’t measure or observe it, doesn’t mean that i’m denying it exists as an abtract term. Since voting rules differ (i’m sure you’re aware that different systems lead to different results on a consistant basis – i.e its not random deviations) then we could well end up with a brand new bridge being built in a country where 9/10 alternative voting rules would have delivered a hospital.As you know, I think that the market is a better way to aggregate information that democracy (this is the field of Public Choice, Donald Wittman notwithstanding), and so as long as we all accept that the voting rule delivers alternative results, I don’t see why "collective preference" should be responded to – it’s arbitrary. I’m saying that since our means of uncovering "collective preference" is arbitrary, there’s no objective way to say that any of the multiple "collective preferences" that exist is "better" than the other.

    Owen replies: Arrow’s Impossiblity Theorem applies as much to the market as it does to any other decision procedure.  The market does not solve the public choice problem.  And you are way off topic, so no more on this, please.   

  8. I am sceptical about the efficacy of providing assistance through
    NGOs and grass-roots organizations, which are typically very expensive,
    frequently corrupt, hardly ever sustainable, totally unaccountable and
    often a complete waste of money. 

    Surely an exaggeration? Typically very expensive? Hardly ever sustainable? Totally unaccountable? Often a complete waste of money?I have no doubt that all of these obtain some of the time, but that they represent the rule to which cost-effective, sustainable, and accountable NGO activity is the exception doesn’t ring true to me.Disclosure: of course as someone who works for a funding NGO partnering local NGOs, I have some bias here, but that certainly hasn’t been my experience of the groups we work with.

    Owen replies: Ben – you are right.  That was an exaggeration and a grotesque over-generalisation. Sorry about that, and thanks for pointing it out.

  9. Cheers. I thought your observations about the need to improve donor behaviour and maintain or increase pressure for donors to live up to their aid volume commitments are spot on. 

  10. I think that’s a little sweeping and harsh, Owen. I don’t think it is off-topic, because the justification for your position is based on an assumption that there’s no difference between giving money to a democratic government, and giving money to the people themselves. I think it’s a valid issue to question, and unless you’re working for a private charity you have a responsibility to engage in the debate. An abstract "collective preference" exists, but please define it objectively. "It’s the best we’ve got to go on" is not only false, but not good enough.My comments have been full of geniune questions, but you’ve largely ignored them and made increasingly general responses. I’ve responded in
    kind, but if you think it’s become too general then scroll back to the top and deal with the specific points
    I make.

  11. bono is ruining the world apart from making shit music live 8 etc has all been a sham i cant believe they were allowed to do, aid doesnt help infact it keeps the developing world right where we want it-not developed. but to be honest i cant really think of another solution-its so horrible to see more people dying in africa as a result of something like a drought when we’re swimming in food and water over here, aid is generally tied so that just enables us to make more money off of the poorer countries so thats not a solution, of course we should get rid of the debts but how much will that help? i should really research this topic a lot more before i leave messages about it on forums, but i just hate bono and his patronising of africa so much and i think that too many people think he’s a great guy who’s saving the world. bet he still has a well big house, and i bet his stupid sunglasses are designer, and i bet he gets driven everywhere and gets private planes to places. bono is single handedly responsible for every problem the world is facing right now.

    Owen replies: Naomi, with respect, that is utter rubbish.  You may not think that Bono’s efforts to keep these issues in the public eye do any good. But it is nonsense to claim that Bono is part of the problem.

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