If there’s anything that the church should really be striving for, it’s approval from secular groups: “An official with the One Campaign, the global anti-poverty program backed by rock star Bono, said that his organization strongly supports the Christian Reformed Church’s Sea to Sea 2008 Bike Tour.”

I guess who tells you “Well done, good and faithful servant!” is illustrative of who is your master.

Last Friday I attended a day’s worth of events at the Assembly of World-Wide Partners of the Christian Reformed Church in North America. I was volunteering to write up summaries of some of the elements of the conference. I was assigned three items: the Friday morning plenary address by Ruth Padilla deBorst, “Together in Missions in the 21st Century”; the Friday workshop sessions on “Christian Education in Ministry”; and the Friday evening plenary address by WARC general secretary Rev. Setri Nyomi, “Partnering in a Global Context: Principles and Patterns that will Shape Us.”

In a series of posts through this week, I’m going to add my reflections and analysis to these summaries. Before I get to those events in particular, however, I want to say a little bit about how Friday morning opened.

Before Ruth Padilla deBorst gave her talk, two representatives from the Micah Challenge addressed the packed audience. First was Michael Smitheram, who is International Coordinator for the Micah Challenge. He introduced various folks attending the conference who are involved in the Micah Challenge’s work. He also provided a summary of what he thought the mission of the Micah Challenge was: “In the Micah Challenge, the body of Christ is finding its voice as a global constituency for the poor.” To be clear, by ”constituency" Smitheram means a political constituency. We’ll get back to that point a bit later.

The second representative of the Micah Challenge was Rev. Joel Edwards, President of the Evangelical Alliance (UK) and International Chair of the Micah Challenge. Rev. Edwards discussed three “miracles” in the fight against global poverty:

1. Jubilee 2000, a historic “miracle,” in which God galvanized the world to engage poverty, with the church at the epicenter.
   
2. Governments pledging to halve absolute poverty (MDGs)
   
3. The Micah Challenge.

Rev. Edwards clarified the genesis of the Micah Challenge, as the result of combined efforts of the Micah Network and World Evangelical Alliance.

Heading toward 2015, the Micah Challenge focuses on eight “covenants” with the poor (corresponding with the eight Millennium Development Goals), which go beyond “checkbook Christianity” to address heart and lifestyle changes (Micah 6:8).

“If we fail our promises to the poor,” says Rev. Edwards, “The world will be in a spiritually catastrophic place in 2015.”

I got the distinct impression that the Micah Challenge is really just the overtly religious equivalent of the ONE Campaign. There’s not much that is identifiably Christian about the aims of the Micah Challenge. The differences really lie in the motivation and basis for the Micah Challenge, which are clearly Christian.

But there needs to be a difference between something like the ONE Campaign and the Micah Challenge not only in the motivation (secular vs. religious), but in the telos. For a Christian, as I’ve said before, achievement of the Millennium Development Goals is not enough: “The service of the body must be done in view of the greater purpose of Christian missions: the salvation of souls. And this is something the government simply cannot do.”

To challenge Smitheram’s idea about the role of the Micah Challenge, the church’s work cannot simply be reduced to that of another special-interest group or political action committee, even if the poor are those who are ostensibly represented.

I can’t offer a wholesale endorsement, but it’s a critique worth a hearing...give it a watch.



See here for Acton’s answer to the One Campaign.









HT: eucharism

The May 16 Independent is guest-edited by the ubiquitous Bono and sports the RED brand--another Bono project where a share of the profits from the mag will be donated to fighting AIDS and poverty in Africa. (Other companies with RED brands include Converse, American Express, Armani, and GAP.) See the issue for yourself (where you will find a critique of subsidies, as well as Nelson Mandela giving props to RED as well as an interview with commedian Eddie Izzard--two men who much too rarely share a marquee).

What is of special interest to PowerBloggers is the article by Bob Geldof, founder of Live8, titled: Aid isn’t the answer. Africa must be allowed to trade its way out of poverty. This is the same Bob Geldof who has been lobbying for huge aid packages for twenty years, the same Bob Geldof who said “We must do something, even if it doesn’t work.” It quite something that this same fella who wrote the following:

In a time of weak world leadership, when the WTO negotiators are failing so miserably, let us remind their bosses - Bush, Chirac, Merkel et al - that we agree with them when they argue that, long term, “aid isn’t the answer”, and that the continent of Africa and its people must trade its way into the global market and sit where it rightfully belongs, negotiating as equals with the rest of us.

As always, I have no interest in questioning the intentions of Bob and Co.--I think they are the noblest of intentions, and I think more people ought to share their zeal for the poor. But could this admission that long term aid isn’t the answer mean that projects like the ONE Campaign are losing their luster? Or are people realizing that governments can’t solve poverty, but maybe the corrective is individual charity and free trade amongst free peoples?

And it is also worth noting that the cover art for the mag includes “Gen. 1:27”--I will save you the trouble of looking it up: “God created man in his own image; in the divine image he created them; male and female he created them.” I am curious how far Bono has parsed out the implications of this statement, as this verse lays the foundation for many of Acton’s economic arguments (for example, see here).

John Stossel has made an excellent and noteworthy journalistic career by going where the evidence takes him. He possesses an intellectual honesty and curiosity that is refreshing, especially when compared to the banal talking head syndrome which dominates most main stream media.

As co-anchor of ABC’s 20/20, Stossel has negotiated a deal which allows him to do special reports on whatever interesting and controversial topics he chooses. His latest was a special aimed at debunking popularly accepted myths, tied to the release of his new book, Myths, Lies and Downright Stupidity.

Here’s Stossel’s #1 myth: More foreign aid will end global poverty. (You can view video of the segment here.) Stossel points to Bono and Jeffrey Sachs as examples of people who perpetuate this myth, with their advocacy of the ONE campaign and emphasis on increased foreign aid.

Stossel relies in part on June Arunga and James Shikwati of the Inter Region Economic Network to explode this myth: “Arunga grew up in Kenya, and she wonders why Americans waste money on foreign aid to Africa … when many politicians just steal it.”

“What’s holding down Africans is actually the bad governments, the bad policies that make it difficult for Africans to make use of their own property,” Shikwati said. “What the aid money is doing to Africa is to subsidize the bad policies that are making Africans poor.”

The Acton Institute has worked on exposing the false assumptions of this myth a long time, and with the help of Arunga and Shikwati as well. Arunga wrote a letter from a WTO meeting in Cancun in 2003, first published by the Acton Institute (PDF) and subsequently carried in the Philadelphia Inquirer (October 6, 2003). James Shikwati authored an Acton Commentary that same year, “The WTO and the Voice of the Poor.”

For more information about Acton’s work in these areas, check out our special Aid to Africa section, which brings together a number of important and related resources, including conversations on debt relief and the moral nature of business with the Rt. Rev. Bernard Njoroge, bishop of the diocese of Nairobi in the Episcopal Church of Africa, and Chanshi Chanda, chairman of the Institute of Freedom for the Study of Human Dignity in Kitwe, Zambia.

You can also visit Acton’s award-winning IMPACT ad campaign, aimed at raising awareness about the complexity of global poverty and the Solutions video, which addresses failures of governments first, governments only proposals.

And for more of John Stossel, check out the 2 CD set of his address at the Lord Acton Lecture Series on October 20, 1997, in which he deals with the pervasiveness of government and the nature of self-interest in the free economy.

Bono and the One Campaign want us to sign a petition encouraging the government to spend 1 percent of the U.S. budget for aid to developing countries. The One Campaign states that this would “transform the futures and hopes of an entire generation of the poorest countries.”

Now I admire the intentions of Bono to fight against poverty and he puts his money where is mouth is. But how do we know that increased aid will make a difference? How will the money be spent? Billions of dollars of aid have poured into developing nations, often with minimal if any positive results. Why does increasing something that really hasn’t worked going to make it better. I would understand and support it if we saw results that aid really makes a difference in providing a foundation for sustainable growth that would enable developing nations to lift themselves out of poverty, but this has not been the case. Aid often goes to the hands of corrupt leaders or gets squandered away. Further it is too often connected to ideology that has little or nothing to do with development or poverty, e.g., population control. How many millions of dollars a year go into population control programs despite little or no evidence of a causal relationship between increased population and poverty? In fact, population can often be a positive element for economic growth. See Jacqueline Kasun’s book The War Against Population or Julian Simon’s the Ultimate Resource.

But what if the problem is not insufficient aid, but something else?
According to Hernando de Soto the problem is the Mystery of Capital. There are billions of dollars of “dead” assets in the developing world. Assets that cannot be turned into capital and thus can’t be an engine for economic growth. There is also a lot of saving in the developing world. De Soto writes:

Even in the poorest countries the poor save. The value of savings among the poor is, in fact, immense—forty times all the foreign aid received throughout the world since 1945. In Egypt, for instance, the wealth that the poor have accumulated is worth fifty-five times as much as the sum of all direct foreign investment ever recorded there including the Suez Canal and the Aswan Dam. In Haiti, the poorest nation in Latin America, the total assets of the poor are more than one hundred and fifty times greater than all the foreign investment received since Haiti’s independence from France in 1804.

He then writes:

If the United States were to hike its foreign aid budget level to the level recommended by the United Nations—0.7% of national income—it would take the richest country on earth more than 150 years to transfer to the world’s poor resources equal to what they already possess.

Because these assets are not properly documented with legal title etc, they cannot be turned into capital to start businesses and create wealth like they are in the developed world where we do this every time an entrepreneur mortgages his house to start a business. Now DeSoto’s work is not a panacea, but it addresses some serious problems that need to be addressed. It also recognizes that rule of law, private property, and economic and entrepreneurial opportunity are needed for development.

The One Campaign is exciting, and it is supported by host of cool people. But although it feels good it doesn’t mean that it is the answer. The problem is a lot more complex than the One people make it out to be, but their way has been tried and tried to little avail. Maybe government aid isn’t the answer after all.

An interesting piece in Tuesday’s Financial Times (registration req.) by Jagdish Bhagwati, economist at Columbia University. In the form of a letter to U2 front man Bono, Dr. Bhagwati offers a (I think) stinging criticism of attempts to save Africa through appeals for more governmental spending. (This is especially interesting since Bono plays off the songsheet of another Columbia economist Jeffrey Sachs.) If you can find a copy of the article, I highly recommend it, but in the meantime, here is a sample:

But, if you have erred in allying yourself with the development experts who wrongly focus exclusively on aid spending in Africa itself, a greater folly is to have tied your initiative to the aid target of 0.7 per cent of GNP. This target goes back to 1969 and has not been met except by a tiny fraction of donors, essentially the Scandinavian countries. The problem is that the target relates to government spending. Fiscal spending is subject to what economists call “hard budget contraints.” There are always many demands on the government. The US, for instance, has just had a colossal increase in spending on the Iraq war and on Hurricane Katrina relief and reconstruction...

How, then, are we to translate the enthusiastic altruism that you have generated, dear Bono, into larger, sustained flows of aid? Surely the answer is to go after personal, rather than governmental, flows...

So, if you take seriously the estimated audience for Live8 concerts at 2bn, halve it for those who were there for a lark or are impoverished themselves, and halve it again for those who attended the concerts twice, you would have half a billion who could sign up for an average pledge of $50 a head as a supplement to their normal giving, yielding a net sum of $25bn outright. The money would be worth almost twice that amount in actual aid, since they would be grants wheras most aid consists of loans that must be repaid.

This would mean abandoning some of your current allies. But you can do nothing less if your efforts are to yield results. In a recent interview, you said that you expected your music would endure forever but poverty would have ended in a hundred years. I wish you good luck on your music. But not even a hundred years would suffice to end poverty if you fail to correct your course.

Although I am a year behind here, I have just started reading Jeffrey Sachs’s The End of Poverty: Economic Possibilities for Our Time, paperback just released by Penguin (with a foreword by Bono!). I’ll avoid the urge to comment on everything that strikes me this or that way in the book--and I most certainly am not going to try to go head to head with Sachs on economic matters. But, being a student of language, I would like to point out a subtlety some might consider benign, but I suspect is of relevance. It exists in the following passage from the Preface to the Paperback Edition:

Continue reading "Beginning "The End of Poverty""

The traditional formula for understanding the relationship between the developed and the developing world is the following: Aid = Economic Growth. That is, foreign aid spurs economic development in poorer nations.

A new study released by the National Bureau of Economic Research challenges this wisdom, however. “Aid and Growth: What Does the Cross-Country Evidence Really Show?” by Raghuram G. Rajan and Arvind Subramanian shows that “regardless of the situation -- for example, in countries that have adopted sound economic policies or improved government institutions -- or the type of assistance involved, aid does not appear to stimulate growth over the short or long term.”

Findings like this should cause advocates of aid-oriented programs like the ONE Campaign and the Micah Challenge to reassess their efforts. One way to change things would be to focus on actual outcomes rather than simply looking at the inflow of aid. The ONE Campaign by definition is focused on the front side, the supply of aid, rather than any actual effects of the aid: “We believe that allocating an additional ONE percent of the U.S. budget toward providing basic needs like health, education, clean water and food, would transform the futures and hopes of an entire generation of the poorest countries.”

A summary of the NBER paper states, “Challenging the simplistic but seductive view that increased assistance from rich countries is likely to put many poor countries on the path to prosperity, a new study on the impact of foreign aid finds ‘little evidence’ that it ever has a positive effect on economic growth.” So the real-world formula looks something like this: Aid ≠ Economic Growth.

“Rajan and Subramanian observe that there is a tendency in analyzing the impact of aid for economists to take sides and conclude that it is good or bad for growth. But the authors argue that neither assertion is valid because the data supporting either argument is so ‘fragile’ that with only minor tweaks, it can yield the opposite result. For example, they take an analysis.”

The important thing to realize is that past aid programs have had no provable positive effect. The conclusion is not that aid has no part to play in future development, but simply that it cannot be the only answer, and as part of the solution, “the aid apparatus (in terms of how aid should be delivered, to whom, in what form, and under what conditions) will have to be rethought.”

Jay Richards’ previous post on Richard Rahn’s article “Not Rocket Science” illustrates Huxley’s famous statement about a fact destroying a theory.

Jay quotes Rahn’s lists of the politicians and development experts who support increased foreign aid.

It’s no longer just politicians and economists. Bono’s One Campaign is designed to get the developed nations to contribute 1 percent of their GDP to foreign aid for the poorest countries. No doubt Bono and many other supporters have good intentions. But good intentions don’t fight poverty. Economic opportunity, entrepreneurship, and free trade do.

Using the Heritage Foundation/WSJ “Index of Economic Freedom” Rahn lists example after example of the success of countries who liberalized their economies, and failures of those that haven’t.

The economically freest societies are the most prosperous, and the most economically repressive societies are the poorest.

Ireland 30 years ago was among the poorest countries in Europe. It then made a major shift toward freeing up its economy -- e.g., its maximum corporate tax rate is only 12 1/2 percent (it ranks No. 3 out of 157 countries in the index). As a result, it now has the second-highest per capita income in Europe and is far ahead of the old leaders like Germany (No. 19) and France (No. 44). (Note, when I refer to per capita income, I do so using the Purchasing Power Parity measure which accounts for local price differences.)

In Eastern Europe, Estonia is economically the freest (No. 7), and Romania the least free (No. 92), though the latter is now making progress. Both countries started out at roughly the same level 16 years ago, but now Estonia has almost twice the per capita income of Romania. Much of the credit for Estonia being the most successful transition country goes to its brilliant and able free-market former prime minister, Mart Laar.

On the other hand, the biggest recipients of development aid over the last quarter-century, for the most part, have gone nowhere economically. Egypt (No. 129), the biggest recipient of development aid in the last quarter-century, is a prime example, with a per capita income about 5 percent of Ireland’s.

Despite the evidence you will continue to hear Kofi Annan and the others clamoring for more aid and more generosity. Instead of aid, they should start asking to reduce tariffs and subsidies and encourage and assist developing countries to set up market economies guided by the rule of law.

Hernando de Soto’s book The Mystery of Capital illustrates that what is needed is not more aid, but the ability to turn assets into capital and less government regulation and interference in the economy.

The One Campaign is right to care about the poor in Africa and elswhere. Perhaps if we could get Bono’s good intentions and passion behind sound economics we might see some real change.