In The American Spectator, Acton Institute’s Michael Matheson Miller throws his hat into the ring as he launches a tongue-in-cheek candidacy for World Bank president, but also raises serious questions about the institution’s poverty fighting programs. Miller is a research fellow at Acton, where he directs PovertyCure, an initiative that promotes enterprise solutions to poverty. Jeffrey Sachs — are you listening?
Here are some planks from Miller’s campaign platform:
I don’t believe that foreign aid is the solution — or even a solution. It has subsidized corruption and delayed the development of local business. In short, it is generally part of the problem. And I’m not alone in thinking so. There are growing numbers of Africans, Latin Americans, and Asians who are saying no to aid and instead want the chance to have free and fair competition.
I also don’t believe the developing world is a lab for Western scientists and technocrats to test out their various utopian theories on others. When I am president of the World Bank, none of these people would be given support to experiment with the lives of others.
In this connection, I should mention that I don’t believe in a “scientific” solution to poverty. Nor do I believe that I or anyone else can end poverty “forever.” There will always be some poverty because there will always be human weakness, human error. There will always be a need for human love and caring.
Read “Here I Come to Save the Day — How I would lead the World Bank” by Michael Matheson Miller on The American Spectator.
Last summer, Acton’s PovertyCure team traveled to Ghana to meet with its economists and entrepreneurs — the men and women who are helping the country develop. It just so happens that they also met briefly with Peter Cardinal Turkson, president of the Vatican’s Pontifical Council for Peace and Justice and co-author of the note released yesterday that has stirred up a global controversy.
Cardinal Turkson, a native of Ghana, calls for the establishment of a central world bank in his note to the G-20, published in anticipation of next month’s summit in Cannes. Drawing from the first world’s obligation in solidarity to the developing world, he says:
Specific attention should be paid to the reform of the international monetary system and, in particular, the commitment to create some form of global monetary management, something that is already implicit in the Statues of the International Monetary Fund. It is obvious that to some extent this is equivalent to putting the existing exchange systems up for discussion in order to find effective means of coordination and supervision. This process must also involve the emerging and developing countries in defining the stages of a gradual adaptation of the existing instruments.
On that trip to Ghana, PovertyCure sat down for an interview with entrepreneur Herman Chinery-Hesse, a Ghanaian software developer who writes programs that can handle frequent power outages and primitive technology. (“Everybody builds Rolls Royces, but we’re in Africa; we build Land Rovers,” he explains.) His experience with a heavily nationalized economy that is dependent on foreign aid has taught him much:
I have never heard of a country that developed on aid. If you have heard of one, let me know! I know about countries that developed on trade, and innovation, and business. I don’t know of any country that got so much aid that it suddenly became a first world country. I have never heard of such a country.
Chinery-Hesse has plenty of experience with engines of economic progress created by well-meaning Western nations:
You cannot imagine how petty the political parties could get [in Ghana]… and they can do this because they are not depending on tax revenue. They are more interested in a smile on the World Bank country director’s face than the success of my business.
A truly human program of development must take into account the fallen nature of developing countries’ rulers — they’re human too, after all. The World Bank is disruptive enough as it is: ask Herman Chinery-Hesse whether Ghana would improve if we merged it into a behemoth financial overlord.
Coverage of the drought in the Horn of Africa has fixated on the amount of aid going into the region and humanitarians’ estimates of how much more will be needed. According to the U.N. Coordination of Human Affairs office, the $1 billion already committed to assistance is less than half of what will be needed—but who knows whether the final figure will be anywhere near the stated $2.3 billion.
Hundreds of thousands of Somalis are flooding out of their country into neighboring Kenya and Ethiopia because massive refugee camps and daily high-energy rations are better than the situation at home. This migration is no different than that of the Israelites in Exodus or Ruth: surely 3500 years and half-a-dozen moon landings later we ought to have a better way of doing things?
Well we do, but the U.N. and the rest of the humanitarian establishment have lost the patrimony of Moses, and so have been wandering around the desert, dispersing aid to no effect, for a good deal more than 40 years. There is, thank goodness, a growing realization that U.N.’s materialistic solution is not working, as Ian Ernest, the chairman of the Council of Anglican Provinces of Africa, said last week:
We would not only want to work on the immediate needs, but we are thinking, because this is becoming a chronic problem, we have got to see the root causes and fight it.
World leaders cannot help developing Africa, of course, unless they understand developing Africa, and that is hopeless if they do not understand human nature. There can be no to help for the world’s poor that does not come from a correct understanding of the human person. Modern humanitarian efforts undermine the dignity of the human person by treating the people of developing nations as mouths to be fed rather than the entrepreneurs who will pull their countries out of poverty.
We begin to say no to poverty and begin to redeem the dignity of the citizens by virtue of creating business opportunity.
My biggest asset, I will say without a doubt, is the people who have worked with me, have worked alongside me.
As long as the U.N.’s mission in the Horn of Africa is unchanged, progress made by Somalia and other countries will be despite mainstream humanitarian efforts, not because of them.
Bread for the World CEO David Beckmann once said, “We can’t food-bank our way to the end of hunger.” As I said then, if “changing the politics of hunger” means that more people are getting food assistance from the government rather than food banks and community efforts, count me out.
But on a more hopeful note, this story from NPR tracking how Walmart has partnered with Feeding America, the largest food bank network in the nation, to get food that would otherwise be wasted into the hands of those that need it most. Last year Walmart announced a plan to contribute $2 billion to food banks in the form of direct cash assistance as well as material donations. You can see more at Walmart’s “Fighting Hunger Together” page.
And be sure to check out Feeding America to find out what food banks really can do.
Last week in Rome the Acton Institute presented a promotional video for the PovertyCure initiative before an international audience of businessmen, scholars, journalists, graduate students and missionaries in attendance at the Institute’s May 18 development economics conference: “Family-Enterprise, Market Economies, and Poverty: The Asian Transformation.” The Acton Institute is one of many partners in this new initiative made up of a network of individuals and organizations looking for free-enterprise solutions to poverty.
The video caused quite a stir in the hearts and minds of the attendees. So I solicited some feedback from the audience, a great percentage of whom hailed from countries with developing and emerging markets.
A missionary Ph.D. student at the Pontifical Gregorian University told me after the presentation: “This brief trailer has already brought to my clear attention the real hindrances to economic growth in South America and throughout (other) developing and emerging markets. And more importantly, what impressed me was what we have to do — through our own pastoral outreach — to begin changing the pervasive dependency on government hand-outs.”
One of the Vatican beat journalists present at the showing, Edward Pentin (who contributes to the National Catholic Register and Zenit, among others) had the chance to interview Acton’s president, Rev. Robert Sirico, about the video’s purpose and potential impact on changing common opinions on failing aid-based development economic systems.
In responding to Pentin’s questions, Rev. Sirico said the video’s aim is “to challenge the development community to really focus on developing, that is, opening spheres of economic productivity and cooperation … allowing the others to contribute to their own prosperity.”
Below you can find the May 19 Zenit article (or go here) and the Poverty Cure video.
by Edward Pentin
Vast amounts of state aid and governments imposing endless regulations are not the way to solve global poverty; rather it will be done through trade, private enterprise and helping populations in poor countries to contribute to their own prosperity.
This is the view shared by members of PovertyCure — an international network of individuals and NGOs who are seeking to encourage anti-poverty solutions through fostering opportunity and unleashing the entrepreneurial spirit in the developing world.
A leading partner and one of the main organizers of the network is the Grand Rapids-based Acton Institute for the Study of Religion and Liberty. Its president and co-founder, Father Robert Sirico, told ZENIT there is “plenty of data across the board” that has long been known to create prosperity — namely low taxation, low regulation and increased market globalization. “This doesn’t come without some problems as the Pope and others have indicated, but this is the first time in human history where we know how to solve poverty.”
Father Sirico said one of the overarching aims of PovertyCure is “to challenge the development community to really focus on developing, that is opening spheres of economic productivity and cooperation,” allowing the others to “contribute to their own prosperity.” “When I put it like that it sounds so clear and simple,” he said, “but it is and that’s what’s frustrating.”
The American priest noted the challenges of overcoming a static mindset that believes government aid is the only real solution to global poverty. But he also highlighted a “perhaps more sinister” problem which is a “huge institutional vested interest in leaving the situation as it is.” He was referring to the thousands of people employed through aid program bureaucracies that are averse to change for fear it will put them out of a job. Father Sirico said it is “ridiculous to spend significant proportions of development money on supporting bureaucracies to administer programs.”
Instead he prefers what, in Caritas in Veritate, Benedict XVI calls “fiscal subsidiarity” — a form of creating credits in various nations not for foreign governments to invest in developing nations but for the citizens to invest in businesses in poor countries, and to have their tax burden lightened with respect to the investment that they give. “That’s one approach,” he said. “The other is to obviously drop the scandalous trade barriers that separate people and create pockets of interest in maintaining unfair portions of the market.”
When put to him that some aid agencies believe international aid should be a mix of private entrepreneurship and state aid, Father Sirico said governments should be “the last in and not be the most dominant” in a development situation which tends to always be very delicate. “The problem is that government is very heavy handed and bureaucrats develop self interest in justifying their existence,” he said. “So it sounds very reasonable to say you want to have a partnership but when the partner is a huge gorilla, and the other partners are small little enterprises, the gorilla has the say.”
He therefore prefers to approach the issue “through the lens of subsidiarity.” Otherwise, he said, there’s a tendency on the part of government to “suck all the air out of the room” and not allow scope for enterprise.
He readily concedes, however, that what he is advocating is not a panacea, nor that the free market is naturally moral. “People caricature my approach, saying [I believe] the market is virtuous,” he said. “But the market will reflect all of the vices and virtues that people will reflect in their own private life because that’s in fact what the market is.”
For this reason, he calls “for a more robust form of evangelization.” It’s evangelization, he said, that “really shows us what we need to do rather than covering it over with regulations and giving the impression that if we made regulations then we’ve solved the problem. That’s simply not the truth in terms of human misery.”
Father Sirico was speaking on the sidelines of a May 18 Acton conference in Rome on the transformation of the Asian economy through the expansion of trade, commerce, and entrepreneurship. He said that Asia is one of the “great examples” that “really underscores our point.”
In its vision statement, PovertyCure states that Christ calls us to solidarity with the poor, but this means more than just material assistance. “It means seeing the poor not as objects or experiments, but as partners and brothers and sisters, as fellow creatures made in the image of God with the capacity to solve problems and create new wealth for themselves and their families. At a practical level, it means integrating them into our networks of exchange and productivity.”
The Acton Institute and its co-members of PovertyCure are inviting other partners and NGOs to join the network. More details can be found on its Web site at: www.povertycure.org
International aid has come in for a lot of criticism recently and with the debate on the federal budget just beginning, U.S. funding for aid is on the chopping block. With a rising deficit, and a struggling economy, many are asking why the United States chooses to continue funding international, or foreign, aid. People of faith are often caught in the middle of the debate on whether international aid should or shouldn’t be cut, along with the role the state should play.
In International Aid and Integral Human Development, Philip Booth, Editorial and Programme Director at the Institute of Economic Affairs, addresses the problems with international aid, the role the state should play in funding it, and how international aid should be funded to most effectively benefit those who receive it along with ensuring that the aid is founded on the correct moral principles.
Booth articulates that aid needs to focus on true development, which can be understood as a more well-rounded development. Aid that fosters true development will encourage moral development, will ensure that those benefiting from the aid will not become slaves to consumer goods, presents an opportunity to own property and save, respects openness to God, the natural world and human rights.
In this new monograph, Booth explains why he thinks that our current structure of international aid is failing. He offers a timely example:
Estimates of the size of the fall in the number of very poor in China over the last two decades or so range from 50 to 400 million, and other Asian countries such as Vietnam have also seen astonishing declines in absolute poverty. Such Asian countries account for the greats share of the reduction in absolute poverty in recent years, yet they are not among the top thirty recipients of U.S. foreign aid between 1996 and 2006.
Later in his monograph, Booth discusses the problems with the current top-down process of international aid. He conveys how aid currently benefits the governing elite who have used their power to keep their people poor. Corrupt governments prevent the aid from going to those who need it the most. Booth also says that, “Aid changes the lines of accountability in government. Governments become accountable to those from whom they receive aid—either through other government or institutions—and not to their own people.” From his evaluation, Booth explains history has proven poor countries can develop without aid, and countries that receive aid do not tend to develop.
In a recent article appearing in The Telegraph, Booth further expands upon his ideas laid out in International Aid and Integral Human Development by showing that fair trade is not the answer to solving poverty. Instead, we should be looking towards free trade. In order to truly help a country, he argues, we must make sure they develop a sound economy that does not rely on aid. Booth explains in his column that fair trade is not the answer and is counter productive to its goals:
Fair trade is supposed to bring better working conditions to poor producers, together with higher prices and better social infrastructure. Questions have been asked about whether monitoring in the supply chain is sufficiently robust, and examples of unsatisfactory practice have been found. Furthermore, there are costs for producers. Poor farmers have to pay considerable sums to join up and often have to organise their businesses in particular ways: it is not suitable for all producers, especially in the poorest countries.
Booth later demonstrates how “fair trade is not capable of pulling 400 million people out of absolute poverty as free trade has done.”
In his monograph, Booth goes on to explain basic preconditions that are necessary for countries to develop, and where direct aid is appropriate. He brings in principles from Catholic social teaching, and explains that the common good requires basic conditions for humans to be able to flourish. In International Aid and Integral Human Development, Booth gives very timely advice, and provides insightful recommendations for international aid while still abiding by the principles founded in Catholic social teaching.
Bill Easterly has a brief reflection on the role of religion in global societies, a role that must be taken into account by development ‘experts.’ Speaking of his experience at an Anglican worship service in Ghana:
I think it’s something about how to understand people’s behavior, you need to understand how they see themselves. A good guess is that the people in the congregation this morning, in one of the poorest regions of Ghana, do NOT see themselves primarily as “poor” or “developing”, they see themselves as Christians. Another guess is that similar feelings about religious faith would apply to other Ghanaians in other religious services, like Muslims, Catholics, traditional religions, etc.)
Development efforts must take into account broader cultural, non-material concerns, and religion plays an enormous constitutive role in the formation of cultural worldviews. More important than how those in developed nations see those in the developing world is how those in the developing world see themselves. And as Easterly notes, most often they see themselves primarily as “Christian” or “Muslim” rather than “rich” or “poor.”
Some of the assumptions built into the mainstream international aid and development movement are puzzling. Among them is the faulty assumption that the comparison that matters most is how the developing world is doing in relation to the developed. Not surprisingly, this kind of comparison tends to make the gains in developing countries seem small, inscrutable, or nonexistent, and end up reinforcing the myth that progress is never achieved.
What’s more important than how a country like Zambia is doing in comparison with a country like Belgium is instead how Zambia of today is doing compared with Zambia of 3, 5, 10, or 20 years ago. The comparison that’s most important is to how bad things have been and how they are relative to now, not how things there are versus here.
You see the outworking of this first kind of comparison, however, in the paradigms adopted by aid and development experts. As Stephane Fitch writes, the other model of comparison (not between developed and developing nations, which among other things feeds envy and despair, but rather between how it was and how it is now in a particular place) can inspire surprising gains from seemingly modest proposals. In a recent issue of Forbes, Fitch writes about the work of F.K. Day, a bicycle company executive who has done extensive work in Zambia.
As Fitch writes, Day complains that “World Bank types…tend to favor (and fund) paved roads and train tracks.” They tend to favor (and fund) those things they assume to be marks of development and progress, based on comparison with the existence of those things in the developed nations. But more important for a country like Zambia than paved roads, train tracks, or even internet access and affordable laptops, are simple and reliable means of short-range transportation: bicycles. In this case, bicycles that don’t, in Day’s words, “suck,” mean much more for the typical Zambian farmer or weaver than a paved road or WiFi service. His charity produces bikes that are much more reliable, sturdier, and appropriate for the Zambian terrain.
Fitch describes Day’s vision:
Through his World Bicycle Relief charity the ponytailed entrepreneur hopes to put millions of sub-Saharan Africans aboard special heavy-duty bikes designed to withstand the continent’s rugged roads while carrying 200 pounds of cargo–enough for a weaver to bring his rugs, or a farmer to tote his produce, to market. Moreover, he aims to promote a self-sustaining bicycle economy with regional operations assembling the bikes and area mechanics trained to repair them.
Sometimes you need to walk before you can run, and pedal before you can press down on the accelerator. This is as true for an individual as it is for a national economy.
Day is focusing on encouraging and fostering entrepreneurship and sustainability (e.g. profitability), and he does so with an explicit acknowledgment of the power of markets to transform lives: “You can have all the goodwill in the world,” he says, “but if what you do isn’t driven by the invisible hand of Adam Smith, you’re doomed to fail.”
That’s another way of saying that good intentions are no substitute for sound economics, and the wedding of both is what you see in Day’s work. And that’s what we’re all about here at the Acton Institute. As Fitch concludes, “It’s amazing too how a charity with a small budget ($2.5 million) and a staff of 24, including 19 in Zambia, can change thousands of lives, two wheels at a time.”
For more information on Day’s charity, his brand of “ponytail capitalism,” and the “bicycle economy” he’s trying to build in Zambia, check out the Forbes slideshow.
The AP reports that of the roughly $379 million spent by the US government on relief efforts in Haiti, less than 1% has been in the form of direct government to government aid.
This has raised complaints from the Haitian president, Rene Preval, who says his government isn’t getting its fair share. According to the report, Preval spoke at a news conference and complained, “There’s a perception of corruption, but I would like to tell the Haitian people that the Haitian government has not seen one penny of all the money that has been raised — millions are being made on the right, millions on the left, it’s all going to the NGOs (nongovernmental organizations).”
But is that really so bad? If it is the citizens of Haiti who need direct assistance, why should more of the money be routed through the Haitian governmental bureaucracy?
Undoubtedly the government is struggling to provide any modicum of law and order in the chaos of the last two weeks. And whatever money the Haitian government receives should go firstly toward providing that kind of stability within which aid workers, food suppliers, and virtuoso entrepreneurs don’t have to be so concerned with theft and violence.
And in any case, the amount spent by the US government thus far is a small percentage of the nearly $2 billion in aid that has been sent in to the disaster zone. Indeed, according to the Chronicle of Philanthropy, private aid from America is running at about $470 million, topping the government’s contributions by nearly $100 million. Preval’s claims to a greater share of that aid money seem to not have much merit.
It isn’t the Haitian government that is the object of charitable aid; it’s the Haitian people, and that’s where the vast bulk of the money ought to be (and seemingly is) going. That’s also why calls for forgiveness of the Haitian government’s debts are so misguided, at least in the short term as the dead are still being pulled from the rubble.