Posts tagged with: Institute of Economic Affairs

We’ve had a busy couple of weeks at the Acton Institute, hosting a number of events here in Grand Rapids including a couple of Acton Lecture Series presentations. The first of those came on October 15, as we welcomed John Blundell, Visiting Fellow at the Heritage Foundation and Distinguished Senior Fellow at the Institute of Economic Affairs. His talk was titled “Ladies for Liberty: Women Who Made a Difference in American History,” and provided a fine overview of a the contribution that women have made to the struggle for liberty in American history. We’re pleased to present video of Blundell’s lecture below.

More: John Blundell spoke once before as part of the Acton Lecture Series, in 2011. You can view his earlier address, “Lessons from Margaret Thatcher,” after the jump. (more…)

Last April 16, Acton’s Rome office co-sponsored a seminar in London on “The Morality of Work, Commerce and Finance: Lessons from Catholic Social Teaching” with St. Mary Moorfields, the only Roman Catholic parish in the Square Mile and located in the very heart of London’s investment banking district.

With several astute financiers, bankers, and business executives in attendance, the seminar’s expert speakers helped them articulate and ponder the moral and vocational aspects of the financial world in which they work. The seminar’s speakers also addressed the political and legal frameworks that regulate their sectors in light of traditional free market economic philosophy and the particular Catholic social teachings that both challenge and sustain modern practices in the sector.

Participants listen attentively to Philip Booth's technical and moral-theological assessments.

Participants listen attentively to Philip Booth’s technical and moral-theological assessments.

Msgr. Martin Schlag, a moral theology professor at Rome’s Pontifical University of the Holy Cross, led off discussion with his talk “Personal Virtues in the Workplace”. Schlag spoke about the interplay of the classical virtues before raising a discussion on the uniquely Christian “theological” or supernatural virtues of faith, hope, and charity.
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Blog author: mvandermaas
posted by on Monday, April 8, 2013

On October 5, 2011, Acton welcomed John Blundell, Distinguished Senior Fellow at the Institute of Economic Affairs, to deliver a lecture as part of the 2011 Acton Lecture Series. His address was entitled “Lessons from Margaret Thatcher,” and provided insight into the Iron Lady from a man who had known Thatcher well before she became the Prime Minister of Great Britain. You can watch his lecture below.

The Catholic Church has long been one of the most insistent voices concerning the obligation of wealthy nations to assist less developed nations. Philip Booth, author of the new Acton monograph International Aid and Integral Human Development, looks at this tradition and finds that the Church’s endorsement of aid is highly qualified — a positive sign of increasing awareness that old methods of development assistance may not be as helpful as previously thought. Indeed, there is good evidence to believe that aid might even harm the citizens of the countries that receive it. Get Acton News & Commentary in your email inbox every Wednesday. Sign up here.

Solidarity, Charity and Government Aid

By Philip Booth

Of all Christ’s teachings as reflected in the gospel accounts, there is none as consistent as his defense of the poor and downtrodden. This teaching applies also to international relations and individual and societal responsibilities toward the poor and marginalized beyond one’s own borders. The Christian desire to assist the economic development of poorer peoples is founded on the principle at the heart of the Christian life: love. To be concerned about and act in favor of the poor around the world is to practice the virtue of charity.

However, in this context, it is a mistake to equate charity with government aid. When the Church talks about solidarity and the preferential option for the poor, it usually refers to these concepts in the context of charity: the service of love in providing for one’s neighbor without expecting anything in return. In his 2009 World Peace Day message, for example, Pope Benedict XVI said: “[I]t is timely to recall in particular the ‘preferential love for the poor’ in the light of the primacy of charity, which is attested throughout the Christian tradition, beginning with that of the early Church.”

Booth

This is not to say that there is no role for governments in providing aid for poor nations. However, such aid does not fulfill our duty of solidarity, and it is for individual Christians to make prudential judgments as to whether government aid is effective in aiding the poor. That government provision of any good, service, or assistance does not discharge our duties and cannot bring the world to perfection was made clear by Pope Benedict XVI in Caritas in Veritate: “Solidarity is first and foremost a sense of responsibility on the part of everyone with regard to everyone, and it cannot therefore be merely delegated to the State” (no. 38).

Political authorities play their part in bringing about the common good. To do this, they set the framework of laws within which individuals, families, and communities operate. The state may also enact laws where sins of omission are of sufficient seriousness to prevent people from participating in the common good. Thus if charity is not sufficiently generous to allow people to have the basics of life (such as food, clean water, and healthcare) the state may step in. It may do this on an international basis if the capacity of individual national states is insufficient. The state may also provide certain infrastructure that is necessary to promote the common good.

These guidelines leave a wide area for judgment in four respects. First, if government aid actually does more harm than good, it would be imprudent to use aid to try to promote the common good. Second, we may wish to use government policy to encourage more voluntary support. Third, there is the question of how much aid should be provided and how it should be delivered. Finally, especially if it is shown that aid does not raise the living standards of a recipient country, we may wish to pursue other policies to try to bring about long-term and fruitful change in the political and economic character of a country.

In Caritas, aid is mentioned 19 times and development over 250 times. That Pope Benedict has not abandoned papal exhortations to governments to provide aid is clear. He states: “Economically developed nations should do all they can to allocate larger portions of their gross domestic product to development aid” (no. 60). This passage must be read in context, however. It is the only point in the encyclical where more aid of this type is explicitly recommended. On 15 of the 19 occasions on which the word aid is used, the Holy Father is critical of aid agencies, the way in which Western governments provide aid, or of the way in which recipient governments use aid.

Benedict writes: “International aid has often been diverted from its proper ends, through irresponsible actions” (no. 22). He reminds us of the “grave irresponsibility of the governments of former colonies.” Those responsible have a duty—a very serious duty given the historical record—to ensure that aid is provided in a bottom-up way that genuinely leads to development for the poor.

The pope also stresses the importance of “institution building” for development (e.g., no. 41). Caritas suggests that a main focus of development aid should be to ensure that institutions exist so that the rule of law, protection of property rights, and a properly functioning democracy thrive. “The focus of international aid, within a solidarity-based plan to resolve today’s economic problems,” Benedict writes, “should rather be on consolidating constitutional, juridical and administrative systems in countries that do not yet fully enjoy these goods” (no. 41).

Benedict criticizes tied aid (assistance that must be spent in the nation providing it) and warns about aid dependency; he also demands a removal of developed-country trade barriers, which stop underdeveloped countries from selling their goods and produce. Indeed, he links the two points and suggests, in keeping with the tradition of Catholic social teaching, that aid should be temporary and that trade is the “principal form of assistance” to be provided to underdeveloped countries. In other words, countries should not be dependent on aid but move away from aid toward self-supporting economies.

Caritas also has advice for those involved in distributing aid, including agencies and charities. As the pope says: “International organizations might question the actual effectiveness of their bureaucratic and administrative machinery, which is often excessively costly” (no. 47). He calls for complete financial transparency for all aid organizations. He blames both providers of aid and recipients for diverting money from the purposes for which it was intended. He expresses concern that aid can lead to dependence and also, if badly administered, can give rise to exploitation and oppression. This can happen where aid budgets are large in relation to developing countries’ domestic budgets and the money gets into the hands of the rich and powerful rather than the poor and needy.

This analysis leaves open, however, the issue of how we should respond if the political, legal, and economic environment is not only hostile to economic development but also such that aid will be wasted and may be used to centralize power within corrupt political systems. Aid, in the wrong political environment, might do significant harm. Indeed, there is no substantial economic evidence that aid does significant good and a lot of evidence to suggest that it might harm the citizens of the countries that receive it.

Philip Booth is editorial and program director at the Institute of Economic Affairs in London. This article was excerpted from Booth’s new Acton monograph International Aid and Integral Human Development.

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.

International Aid and Integral Human Development by Philip Booth is available through the Acton Bookshoppe.  Booth’s article in The Telegraph can be found here.

Blog author: jcouretas
posted by on Wednesday, May 13, 2009

Much of the blame for the current financial crisis has been aimed at Wall Street and the bankers who, the story goes, created toxic debt instruments and then lined their own pockets with the proceeds. In “Verdict on the Crash: Causes and Policy Implications,” a new analysis from economists and scholars — including Acton Institute Research Director Samuel Gregg — the London-based Institute of Economic Affairs comes to the opposite conclusion: It was governments and regulators who erred. Moreover, the IEA report says, the people most often berated for their part in the crisis – the hedge fund managers and those who run tax havens – are among the least guilty. The report also spells out the need for a “radical overhaul” of the financial system to guard against a repeat of the errors that led to the crisis.

The authors of “Verdict on the Crash” assert that “a revolution in financial regulation is needed. The proposals of the G20 governments and the EU are wholly misconceived. Specific and targeted laws and regulations could restore market discipline.”

Read a letter to London’s Daily Telegraph from the economists and scholars who wrote the “Verdict on the Crash” report for IEA. Read highlights and download the full report from the IEA blog. Acton’s Samuel Gregg authored the chapter titled, “Moral Failure: Borrowing, Lending and the Financial Crisis.”