**************************************************************

First a piece from the NY Times on how all that promised cash may or may not be used

http://www.truthout.org/docs_05/011205W.shtml

For Honduras and Iran, World's Aid Evaporated
    By Ginger Thompson and Nazila Fathi
    The New York Times     Tuesday 11 January 2005

 Tegucigalpa, Honduras - The people of San Miguel Arcángel know all too well what it is like to be struck by disaster, and they have watched the world rush to Asia's rescue with sober eyes.

    Elder Nahum Cáceres said his entire community was swept off a hillside six years ago by Hurricane Mitch. In his wallet he keeps a handwritten list of the dozen international aid organizations that have come and gone since then.

    "I don't know how much they sent, but they tell me this is a million-dollar project," Mr. Cáceres said, looking down over an unsightly patch of flat gray houses in different stages of completion. "I would like them to see what has happened with all their money."

    Eric Moscoso, a neighbor of Mr. Cáceres, was more succinct: "We are abandoned."

    Six years ago it was scenes from Honduras that filled television newscasts and newspaper pages. Then as now, there was a public outpouring of sympathy and support. Then as now, heads of state pledged huge amounts of aid. International relief agencies committed themselves to "build back better," promising to stay for the long term and provide the tools needed to overcome the social and economic forces that make the poor so vulnerable.

    It is possible that this time will be different, that the donor nations really will come through with the aid they have promised, and there are reasons for optimism. [In Washington on Monday, President Bush promised a "long-term commitment" to the victims and urged Americans not to reduce charitable giving to other parts of the world.]

    In addition, the tsunami catastrophe, in sheer numbers of victims and countries affected, is on a scale far greater than any recent natural disaster. And in the post-9/11 world - particularly the United States, with the war in Iraq and the fight against terrorism - the richer countries now have a strong incentive to demonstrate their sensitivity to the concerns of people in developing countries, and particularly to Muslims, who died in disproportionate numbers in the waves.

    But all too often when disaster strikes - from here in Honduras to Iran, where the ancient city of Bam was shattered by an earthquake a year ago, to Mozambique, which endured floods in 2000 - that mission seems to last only as long as the media attention.

    After the last bodies are counted and public focus shifts, governments stop sending money, pledges are withdrawn, many private relief organizations pack their bags and the poor are left to finish reconstruction projects in the face of the same entrenched systems of corruption and neglect.

    Walking with Mr. Cáceres through the dirt streets of San Miguel Arcángel, one has a hard time telling whether his neighborhood is doomed or coming back to life.

    Half of the sturdy, concrete houses have not been properly wired for electricity. A water and sanitation system was installed four months ago, but the main pump broke down over Christmas. There is a school, but mothers say the teachers have worse attendance records than their children. There is a clinic but no doctor, a police post with no officers, and a community meeting hall, but no one in the community has the keys.

    "We have new houses, but all the rest is the same," Mr. Cáceres said. "It's true we were poor before. And we are still poor. But now we are forgotten."

    As aid officials plan how to deal with the challenges facing the battered coasts of Thailand, Sri Lanka, India and Indonesia, some have cautioned that they must do things differently this time.

    "There is still this feeling that we want to do the right thing, right now, but we don't want to stay in it for the long term," said Eric Schwartz, a former Clinton administration official. As a senior National Security Council official, he helped organize the United States response to Hurricane Mitch. "Maybe the tsunami crisis could be used as a vehicle to educate ourselves about the importance of staying the course," he said.

    Meeting in Brussels on Jan. 7, directors of Europe's relief agencies looked back at the record of reconstruction efforts in Honduras, Iran and Mozambique to examine how those operations had fallen short.

    Mitch was the tsunami of its time, a freak of nature that hovered over this region for nearly five days, dumping rain measured in feet, not inches. It was called the hemisphere's most devastating disaster of the century, one that turned rivers into raging torrents and unleashed landslides, killing and burying its victims all at once. It cost an estimated 9,000 lives and more than $9 billion in property damage.

    Pledges Unfulfilled

    Soon after the tragedy, the international community pledged about $9 billion to help rebuild Central America. Today, experts at the Center on International Cooperation at New York University say most of that money never materialized. Half of what did was offered as loans, Honduran officials said.

    Trocaire, the overseas development agency of the Roman Catholic Church in Ireland, said Europe did not even begin its $250 million reconstruction plan in Honduras until three years after the hurricane struck. And it said debt relief meant little to Honduras because the country was still obligated to make interest payments on its debt, estimated at some $219 million last year.

    Abby Stoddard, a research assistant at the Center on International Cooperation, said, "In general, relief funds are disbursed quicker than recovery funds, which are needed after the cameras go away, and there is no mechanism for holding governments accountable for living up to their pledges."

    That pattern was apparent in Iran, too. A year after an earthquake with a magnitude of 6.9 destroyed the central city of Bam, killing more than 40,000 people and leaving almost as many homeless, the streets there are still strewn with mounds of rubble. Tens of thousands of people who lost their homes remain crowded in prefabricated housing.

    The authorities there promised to have the ancient city rebuilt by now. But navigating Iran's byzantine bureaucracy and legal system held up projects longer than many relief organizations could wait.

    "Time is crucial" for the relief groups, said Patrick Parson, project coordinator of the British-based medical relief agency Merlin. "A lot of them just got tired of waiting and pulled out."

    As a result, Iranian officials reported that they had received only $17 million of the $1 billion pledged by the international community to help rebuild the 2000-year-old city. United Nations officials, including Secretary General Kofi Annan, have recently called on world leaders to fulfill their pledges.

    "Foreign aid had more positive psychological effect than anything else," said Dr. Hamid Reza Jamshidi, the Iranian health minister's representative in Bam. "People had lost everything, their home and their family. They felt they were not left alone when they saw different groups of foreigners in the city."

    Central America, as a battlefield of the cold war, has long been accustomed to foreign occupation. But the people of Honduras had never seen anything like the military operations that arrived to bring aid after Hurricane Mitch. Honduras, the region's poorest country, was the hardest hit. The scope of death and destruction pales in comparison to that still unfolding across the Indian Ocean.

    Response to Hurricane

    But Mitch was considered an unparalleled natural disaster back then, and like the killer tsunamis, it stirred an enormous response. Mexico established a special air route to the affected areas and sent airplanes, helicopters and military ships to transport medicine and food. Canadian air force crews shuttled daily to deliver aid.

    The United States promised more money than it had for any previous disaster - some $900 million - and sent a military relief force of a scale not seen since the Berlin airlift 50 years earlier. At least nine countries deferred debt payments.

    When the waters began to recede, relief workers and Central American authorities looked into the face of the disaster and saw opportunities. They promised more than bricks and mortar to rebuild communities.

    In a meeting in Stockholm in 1999, about six months after the storm, donor countries and Central American governments committed themselves to channeling money into long-term programs to transform the region.

    Donor governments insisted on close scrutiny of the spending. Japan and Switzerland hired only subcontractors from their own countries to rebuild Honduras's major bridges, recalled Moisés Starkman, the former Honduran minister of international cooperation. The United States approved only those infrastructure projects that had been examined by the Army Corps of Engineers.

    But just as the first new bricks were being laid, the United States Congress set a two-year-deadline on Washington's reconstruction programs, contending that the money was for emergency relief. And when the federal money was gone, so were many private organizations, whether their projects were finished or not.

    Phil Gelman, regional adviser for the United States Office of Foreign Disaster Assistance, was working in Honduras for Care International at the time. That deadline, he said, doomed American projects to fail at achieving long-term goals.

    'You can build a house in three years," he said. "You can build a house in three months. But rebuilding systems is a different thing.

    "These countries did not get to be the way they are overnight. They don't change overnight."

    That becomes clear during a visit to places like San Miguel Arcángel. It is one of several sprawling housing complexes built for those displaced by Hurricane Mitch in an area known as Amarateca, about 15 miles north of Tegucigalpa.

    The project began with a single great promise: to provide safe, affordable housing to people who had never had it before. There are some places where the promise for a better life seems clearer, but they are the exception, not the rule.

    Not far from San Miguel Arcángel is a community built with support of the Spanish government and the Red Cross, called Ciudad España. The 1,300 units have electricity and running water. There is a library, a police post, an elementary and a junior high school, three day care centers and a senior center.

    Luis Felipe Quiroz is a leader on the newly elected community council. "The hurricane took everything from me," he said. "From that moment on I was nothing. Now I have my life back."

    Most of those left homeless by Hurricane Mitch had lived in slums perched on the banks of the Choluteca River, which cuts through the center of the capital. They had unreliable sources of electricity and water. And they were squatting on land declared uninhabitable because of the potential for deadly floods.

    Little Time for Planning

    Three years after Mitch, 20,000 people were still homeless and living in temporary shelters. Relief agencies complained that the Honduran government provided almost no help in finding sites inside the capital to build new housing complexes. By the time they identified Amarateca - far from ideal because of a 45-minute bus ride from jobs- relief agencies had little time for urban planning.

    They rushed to put up walls and roofs, before municipal authorities installed basic services. Then the government reneged on its promise to provide the services. The hurricane victims rebelled.

    In 2002, about 200 people stormed into a church in the capital and told the priest that no one could leave until the families were permitted to move into permanent housing. Relief agencies relented, but there was no electricity, running water and sanitation in the new homes.

    A year later, angry residents blocked the major northbound highway to demand basic services.

    Mr. Cáceres said they finally got electricity six months ago. The United States Army Corps of Engineers installed a water system four months ago; it promptly broke down.

    Today, people in San Miguel Arcángel say the houses built by the international community are better than anything they could have ever dreamed of buying on their own. But many are unemployed, and costs have risen.

A couple of short pieces on the nature of need and response

FLOOD TIDE; COMMENT Series: 1/5
Hendrik Hertzberg.  The New Yorker New York:Jan 17, 2005.  Vol. 80,  Iss. 43,  p. 035 

Nearly four million men, women, and children have died as a consequence of the Congo civil war. Seventy thousand have perished in the genocide in the Darfur region of Sudan. In the year just ended, scores of thousands died in wars and massacres elsewhere in Africa, in Asia, in the archipelagoes of the Pacific, and, of course, in Iraq. Less dramatically, but just as lethally, two million people died of malaria around the world, and another million and a half of diarrhea. Five million children died of hunger. Three million people died of aids, mostly in Africa. The suffering of these untimely and terrible deaths--whether inflicted by deliberate violence, the result of human agency, or by avoidable or treatable malady, the result of human neglect--is multiplied by heartbroken parents and spouses, numbed and abandoned children, and, often, ruined survivors vulnerable to disease and predation and dependent, if they are lucky, on the spotty kindness of strangers.

The giant wave that radiated from western Sumatra on the day after Christmas destroyed the lives of at least a hundred and fifty thousand people and the livelihoods of millions more. A hundred and fifty thousand: fifty times the toll of 9/11, but "only" a few per cent of that of the year's slower, more diffuse horrors. The routine disasters of war and pestilence do, of course, call forth a measure of relief from public and private agencies (and to note that this relief is almost always inadequate is merely to highlight the dedication of those who deliver it). But the great tsunami has struck a deeper chord of sympathy.

One can understand why. Partly it's that although the scale of the horror is unimaginable (or so it has been repeatedly described), the horror itself is all too imaginable. A giant wave speaks to a childlike fear that can be apprehended by anyone who has ventured too far out from the beach in a suddenly mounting swell, has felt helpless in the suck of undertow or riptide, has been slammed and spun and choked by a breaker tall enough to block the sky. Partly it's that the reach of the disaster was so vast, far vaster than any hurricane or monsoon or terrestrial earthquake: three thousand miles from end to end. Partly it's that people from all over the world, seeking a holiday in the sun, witnessed the catastrophe. People from more than fifty countries lost their lives in it; among the dead and missing, nearly two weeks later, were more than seven thousand foreign tourists. (Nearly two thousand of them were Swedes; if that number holds, then Sweden's immediate losses, proportionately, will be greater than Thailand's.) Finally, and perhaps most important, it's that this is a drama that has victims and heroes--but no villains. No human ones, anyway.

The terrible arbitrariness of the disaster has troubled clergymen of many persuasions. The Archbishop of Canterbury is among those newly struggling with the old question of how a just and loving God could permit, let alone will, such an undeserved horror. (Of course, there are also preachers, thankfully few, who hold that the horror is not only humanly deserved but divinely intended, on account of this or that sin or depredation.) The tsunami, like the city-size asteroid that, on September 29th, missed the earth by only four times the distance of the moon, is a reminder that, one way or another, this is the way the world ends. Man's laws are proscriptive, nature's merely descriptive.

Yet it is the very "meaninglessness" of the catastrophe--its lack of human agency, its failure to fit into any scheme of human reward and punishment--that has helped make possible the simple solidarity of the global response. President Reagan, to the exasperation of his aides, used to muse that human beings, faced with some mortal threat from beyond the skies, would put aside their differences in common cause. Something like that, on a very modest scale, appears to be happening as the world clamors to help the survivors of the destroyer from beneath the seas. Tsunamis have no politics.

Even so, there were familiar elements in the responses of the Bush Administration. Two days after the disaster, a White House spokesman, asked why President Bush himself had so far remained silent, explained, "He didn't want to make a symbolic statement about 'we feel your pain.' " On the third day, the President finally voiced his condolences in person, and two days later the government's emergency-aid allotment, initially pegged at fifteen million dollars, was raised to three hundred and fifty million, where it remains. On the eighth day, even as Secretary of State Colin Powell, in Thailand, was saying that enough money was at hand, Bush, now back at the White House, appeared side by side with his father, George H. W. Bush (whom he had never before granted such a public role), and his father's successor, Bill Clinton (the object of his spokesman's snideness), to announce that he was appointing them to lead a private fund-raising drive in the United States.

"We're a very generous, kindhearted nation," the President said on December 29th. And so we are. But it is unseemly to boast about it at such a moment. It would be unseemly even if it were not the case that Australia, Germany, and Japan have been considerably more generous in absolute terms and perhaps a dozen other countries have been more so in per-capita terms. "We're showing the compassion of our nation in the swift response," Bush said on January 3rd. "But the greatest source of America's generosity is not our government--it's the good heart of the American people." That is true, too; but it is also true, or should be, that in a democracy a government's generosity is an expression of a people's heart, not something separate from it. There is reason to worry that the Administration regards private relief efforts as a partial replacement for, rather than as a supplement to, the efforts of the United States government; and reason to worry, too, that the funds for tsunami relief will come at the expense of victims of disasters yet to occur. According to the Times, the Administration plans to use money from the disaster-and-famine-assistance program of the United States Agency for International Development, whose budget for this year is $384.9 million, and consulted with "senior Republican lawmakers" to try "to cover the costs of this disaster without undermining Mr. Bush's other priorities," such as "making his tax cuts permanent."

A few influential Republicans, however, are beginning to say that America should help the victims of the tsunami without beggaring other assistance programs, and if their view prevails then our aid will indeed be, as the Administration insists, an expression of "American values." But these are American values that, at least for the moment, are also manifestly German values and Japanese values and Norwegian and Swedish and Spanish and British values and Sri Lankan and Indian values--values that are, like the victims of the tsunami, simply human.

THE TALK OF THE TOWN; AFTER THE FLOOD

Akash Kapur. The New Yorker. New York: Jan 17, 2005. Vol. 80, Iss.  43;  pg. 036

The South Indian fishing village of Komitichavadi, about seventy-five miles south of Chennai, the capital of the state of Tamil Nadu, is situated on a stretch of coast that was particularly hard hit by the tsunami. In the neighboring hamlets, fifty-nine people, mostly babies and the elderly, were killed. Hundreds were injured, and many are missing. In Komitichavadi, however, not a single person died; everyone has been accounted for.

The villagers owe their good fortune to the quick thinking of Govind, the headman of the local panchayat, a traditional village council of a kind that exists all over rural India. On the morning of the tsunami, Govind received a call on his cell phone from his wife. She was in Chennai, where she had felt tremors from the earthquake off Indonesia, a thousand miles away. Soon, Govind noticed the ocean rising, and his wife called again. The waters were flooding the beach promenade in Chennai, she said, and people were being swept away; she begged her husband to escape. Instead, Govind rushed to the ocean, where children were playing and fishermen were sorting through their catch. He ran along the beach, waving his arms in the air, warning everyone to flee. A few minutes later, the water rushed in. "Everyone just ran," Govind said. "They didn't even have time to save their nets. They just ran up the hill to the temple and sat and waited."

Though no one died, the village was destroyed. Fifteen homes along the waterfront were demolished. More than a hundred boats were lost; fishing nets, some worth almost as much as the boats, were damaged or lost. The village prawn farm, where forty people were employed and a new building had just been constructed, has been shut down. January is usually a big month for fishermen: they can earn as much as ten thousand rupees (more than two hundred and twenty dollars) a week. Now those earnings, as well as those for the coming months, are lost.

People involved in crisis management like to refer to "the three 'R's": rescue, relief, and rehabilitation. The last stage is in many ways the most important, as well as the most expensive and time-consuming--and therefore the most widely ignored. For now, the aid is flowing in; people seem resigned to living off charity for a few months. But once that dries up it's anyone's guess what the villagers of South India are going to do to get by.

On a sunny afternoon ten days after the tsunami, Govind, who is forty-seven, sat in his living room, the green walls decorated with portraits of deities, and spoke about the panchayat's relief work. The sea was visible through his front door; it was calm, but the beach was deserted. There were no boats or ships on the water.

Immediately after the tsunami, Govind said, everyone had congregated by the temple, under a sprawling banyan tree. The whole village, in effect, had become a refugee camp. With no aid or government workers in sight, Govind borrowed a hundred and thirty thousand rupees (almost three thousand dollars) from some neighboring landowners and used the money to buy rice and build makeshift tents outside the temple.

A few days later, government aid workers finally showed up and assessed the damage. Relief--in the form of rice, kerosene, and two bedsheets per family--arrived soon after. No relief has come from international aid agencies. "We're not Nagapattinam," Govind said, referring to a part of the coast where thousands had died. "But we're still scared."

With other members of the panchayat, Govind went to see the local district collector, the highest-ranking bureaucrat in the region, fifty miles away. Govind told the collector, "Food and clothes and pots and pans are fine, but we need boats and motors and nets to keep alive. We need to start new lives." The collector promised to help. The panchayat gave him a list of those who lost boats, nets, or houses.

Last Thursday, early in the morning, a group of four volunteers pulled up at Govind's house in a maroon Maruti. Govind was outside brushing his teeth. They introduced themselves. Two of them, a man and a woman, were from Bangalore, more than two hundred miles inland, and two were locals. They were not affiliated with any organization; they had raised money and materials from friends.

Govind was thrilled to see aid workers. He took them to the beach, showed them how far the water had reached, and described how the boats had been sucked out to sea. He pointed out a damaged boat from another village that had washed ashore. They were struck by the neatness of the waterfront: the debris had mostly been cleared. They asked Govind how many people had died in Komitichavadi, and Govind said none. This seemed to disappoint the people from Bangalore. The woman mentioned that the scene did not much resemble what she had seen on TV. They had come looking, one of the workers later said, for "places that had been really destroyed."

The group spent about half an hour in the village. As they were leaving, Govind asked, "Are you actually going to help us, or are you just passing through?"

They drove back onto the main road and headed south to a village about forty miles away. Sixteen people had died there, and twenty-five in the next village. Two hundred homes had been destroyed. The woman from Bangalore was much happier with this village. She said that it was a better use of her aid.

*************************************************************

 A piece on the role of the media  ….

This article can be found on the web at
http://www.thenation.com/doc.mhtml?i=19990208&s=north

Media Starvation Diet

by JAMES NORTH

Compassion Fatigue: How the Media Sell Disease, Famine, War and Death
by Susan D. Moeller

[from the February 8, 1999 issue]

All during the year 1984, those of us with firsthand experience in Africa knew that drought and famine were cutting across vast swaths of the continent. We also knew that the Reagan Administration, and the West generally, had offered only a small portion of the emergency aid that would be needed. We tried to raise the alarm (one of my articles, "Hunger in Africa," ran in The Nation on April 14), but almost no one seemed to be paying attention.

Then on October 23 the BBC ran some shocking footage from Ethiopia. NBC first turned down the same film, but then changed its mind. Susan Moeller describes what happened next. "The phones at NBC, like the phones at the BBC in London, began ringing off the hook. Thousands wanted to know what they could do to help.... In the 36 hours after the NBC broadcast more than 10,000 people called Save the Children. By November 2, Save the Children was receiving 2,000 pieces of mail a day."

Irish rock musician Bob Geldof watched that first televised report and had trouble sleeping. The next day, he started calling his friends in the business. The Band Aid Christmas single, followed by "We Are the World" on this side of the Atlantic, prompted sneers about egotistical rock stars overstepping their zone of competence. But Geldof and his friends ended up changing history despite the cynical realpoliticians; the singers raised millions themselves, but, even more important, they helped create a wave of publicity that shamed the Reagan Administration and other Western governments into greatly increasing aid. In the end, hundreds of thousands of Africans did die. But hundreds of thousands more survived, (and I met some of them a year later in the desert of western Sudan).

But the 1984-85 famine was not the last in Africa. Hunger continued to hit the continent again and again, along with outbreaks of disease and wars, reaching one terrible culmination in the 1994 genocide in Rwanda, in which an estimated 800,000 people died. Hard-nosed Western commentators began to speak of "compassion fatigue," some of them not hiding their relief that the disturbing wave of internationalist idealism seemed to have receded.

Susan Moeller, who teaches American studies and directs the journalism program at Brandeis University, has made an indispensable effort to analyze how the American media have covered these tragedies. She has gone into tremendous detail (in places probably more than was necessary) to show that US reporting relies too much on stereotypes and strains too hard to Americanize foreign events. She also warns that total overseas coverage is declining sharply; the TV networks devoted 45 percent of their newscasts in the seventies to foreign affairs but only 13.5 percent in 1995, the year of O.J.

She interviewed many of the journalists themselves, and she includes some damning revelations, such as the former New York Times managing editor who says clearly, "The greatest threat today to intelligent coverage of foreign news is not so much a lack of interest as it is a concentration of ownership that is profit-driven and a lack of inclination to meet responsibilities, except that of the bottom line."

In the end, though, her study raises more questions. She cannot seem to decide how to assign blame for "compassion fatigue"--to the media themselves, or to an uninterested audience. She points out that the newsweeklies sell fewer newsstand copies when they do foreign events; among Time's ten worst-selling cover stories since 1980 are features on Bosnia and Somalia. So she partly exonerates the media. Also, she applauds reporters in the field in Bosnia and Rwanda, attributing what she calls the lack of interest in their reports to something new: "compassion avoidance" by the public.

In fact, Moeller has done her work so thoroughly that her findings can be used to raise doubts as to whether compassion fatigue truly exists; her research can support a different interpretation. First, graphic pictures alone are not enough to prompt public reaction. As Susan Sontag noted in On Photography:

The images that mobilize conscience are always linked to a given historical situation.... A photograph that brings news of some unsuspected zone of misery cannot make a dent in public opinion unless there is an appropriate context of feeling and attitude. The photographs Mathew Brady and his colleagues took of the horrors of the battlefields did not make people any less keen to go on with the Civil War.

Images without a story fail in the end. And in the Third World today, Americans have no "context of feeling and attitude"; they don't even know any of the people. In this Age of Celebrity, it is astonishing that even educated Americans struggle to name a single Third World individual, aside from exceptions like Fidel Castro, who has been around forever, and Nelson Mandela, who had to endure twenty-seven years of prison and emerge a saint to earn name recognition.

Why this pitiful lack of knowledge, in what is supposed to be the great Age of Information? The world of fiction suggests that it cannot be due to a total lack of public interest. Masses of Western readers have enthused over the works of Latin Americans like Gabriel García Márquez and Isabel Allende. After the Egyptian Naguib Mahfouz won the 1988 Nobel Prize in Literature, translations of his works, particularly the magnificent Cairo Trilogy, introduced several hundred thousand Americans to the astonishing range of humanity in his home city.

Madonna and Arnold Schwarzenegger are not yet threatened. But why has there been absolutely no corresponding impact in news coverage? Moeller shows that people in the Third World are still portrayed as nameless, helpless wretches; she explains that in Somalia in 1992 "the stories depicted the victims of the famine as bereft of family, alone in their struggle for survival," and, "as a result, the impression was created of a man-and-godforsaken people."

What then happens was shown by Herman Melville in his short story "Bartleby the Scrivener." The story is named for its maddeningly obstinate main character, a law clerk who seems increasingly unable to function in the world but who rebuffs all efforts to help him. The first-person narrator's feelings toward Bartleby change over time:

My first emotions had been those of pure melancholy and sincerest pity; but just in proportion as the forlornness of Bartleby grew and grew to my imagination, did that same melancholy merge into fear, that pity into repulsion. So true it is, and so terrible too, that up to a certain point the thought or sight of misery enlists our best affections; but, in certain special cases, beyond that point it does not. They err who would assert that invariably this is owing to the inherent selfishness of the human heart. It rather proceeds from a certain hopelessness of remedying excessive and organic ill.

This reaction may not be altogether admirable, but it is deeply human. Yet in the Third World today, in Africa and elsewhere, it is based on a big lie; these are not hopeless places, characterized mainly by "excessive and organic ill."

Over the past couple of decades, the most significant development in the Third World has been the rise of independent grassroots organizations--labor, education, ecology, feminist and human rights groups, which are changing the political scene in places as diverse as India, Brazil and Zambia. Yet you will rarely read about these organizations, even in the major American newspapers. You will almost never see them on television.

Americans can identify the dishes in Thai restaurants, but they have never been introduced to Dr. Prawasi Wasi, a gentle physician who is that country's beloved social conscience. In the jet age, Westerners may go on safari to Kenya, but they don't know about Professor Wangari Maathai, the feminist ecologist who helped start the Green Belt movement there. Its 600,000 members have planted 10 million trees; Maathai's outspokenness has earned her attacks from the Moi regime as a "subversive" and "traitor." And how could the Western press have ignored Fela Kuti, the Nigerian musician who died recently after spending decades issuing blistering, raucous pop songs attacking one military dictator after another from the smoky, after-midnight confines of his Lagos nightclub?

Leaving out these kinds of people distorts our image of the Third World. The result is to confirm Melville's hard truth about how humans react when faced with apparently hopeless cases.

How much of this one-sided coverage is because the media are giving the public what it wants? We cannot deny that Western culture has for several centuries included a widespread Orientalist wish to see the Third World, particularly Africa, as exotic, inferior and helpless without us. As Chinua Achebe, the great Nigerian novelist, says in his provocative essay lambasting Joseph Conrad's Heart of Darkness, "For reasons which can certainly use close psychological inquiry, the West seems to suffer deep anxieties about the precariousness of its civilization and to have a need for constant reassurance by comparison with Africa."

Nonetheless, we have definitely moved beyond nineteenth-century imperialistic modes of thought. People in the West are confronting their own many-cultured reality; fifth graders today in Iowa or London are offered a view of the world different from what their forebears got in 1899, when Rudyard Kipling held sway.

My experience over the past twenty-five years writing about Third World people convinces me there is an audience for the truth--open-minded, curious, not huge, yet not insignificant either. But people don't want to read about victims. If I tell them about a Bolivian tin miner who earns a dollar a day, they will turn the page, maybe wincing slightly with Melvillean guilt. But if I tell them the tin miner has a cute daughter named Erica, that he is a fanatic for the Bolivar soccer team, and that he and his friends in the miners' union used to catapult sticks of dynamite toward the dictatorship's soldiers, readers are more likely to pay attention.

Moeller's detailed account of the press coverage of the Rwanda genocide offers more intriguing evidence that the public is willing to go past the Orientalist pattern. She praises the press, particularly print reporters, for getting to the scene promptly. Then she looks at the reaction in the West. She gives an account of a man walking into a store, glancing at a newsmagazine with Rwanda on the cover...and buying instead another publication, which featured the model Cindy Crawford. Moeller calls his behavior "compassion avoidance," and she is mildly disapproving.

But this man precisely illustrates Melville's insight. Western governments, with their so-called experts, did not act during the genocide, so how is the magazine buyer going to know what to do? After the killings were over, there were proposals for some kind of permanent international intervention force, but at the time, all of us felt stunned and helpless. He is not a bad man because he turned to Cindy Crawford.

Then Moeller describes a fascinating shift in the West after the killings diminished. Once Rwanda started to seem more recognizable, as a crisis of hunger, disease and refugees, Americans did contribute. Doctors Without Borders said that a bartender in Alaska called--after seeing one of their physicians on network TV--with $9,000 he and his patrons had collected. Moeller concluded: "Americans weren't naive enough to think that their five dollars sent to Oxfam would rescue a child trapped by genocidal killers. It might however buy a refugee child a blanket."

Private donations during one emergency after another are of course no long-term answer to misery in the Third World. An unjust global economic order that puts international banks, corporations and arms manufacturers first is the root cause of the poor world's problems. But here too, there is doubt that "compassion fatigue" is real. In a few short years, the international campaign against landmines came out of nowhere to win tremendous victories and a Nobel Peace Prize. The organized struggle against Third World sweatshops is making an increasing impact. The worldwide human rights effort has even put Augusto Pinochet on the defensive; the Chilean dictator, who had once promoted himself to the exalted rank of "capitan-general," was reduced to trying to hide out from a Spanish judge in an English hospital.

No one is suggesting that we are at the doorway to a paradise of internationalist cooperation. But people do respond when you first show them that they are dealing with other people on the other side of the globe, not with victims, and when you offer them a plausible way to act that has some chance of success. Otherwise, they will try to ignore what they perceive as a hopeless situation--not because they are inhuman but precisely because they are all too human.

 *******************************************************************

And finally an article on how effective aid is in preventing crises rather than responding to them….

http://www.cato.org/pubs/pas/pa-273.html

Help or Hindrance:

Can Foreign Aid Prevent International Crises?

by Doug Bandow

Doug Bandow is a senior fellow at the Cato Institute and former special assistant to President Reagan. He is the author and editor of several books, including U.S. Aid to the Developing World: A Free Market Agenda and Perpetuating Poverty: The World Bank, the IMF, and the Developing World (with Ian Vásquez).

Executive Summary

Few programs have consumed as many resources with as few positive results as foreign aid. Since World War II the United States has contributed more than $1 trillion in assistance to other countries. Other nations and international aid agencies have provided more. Although individual development projects have no doubt worked, and humanitarian aid can help alleviate the effects of crises, there is little evidence that cash transfers do much to advance growth or stability in the developing world.

The failure of foreign assistance to meet its traditional goals has led to new justifications. A current favorite, especially of the Clinton administration, is that international financial aid can prevent social catastrophe. But almost every country that has suffered internal catastrophe collected abundant foreign aid beforehand. Foreign aid did not forestall catastrophe. To the contrary, in many countries it helped create and aggravate problems.

Decades of financial transfers have not fostered economic growth. Many nations have been losing ground. Seventy developing states are poorer today than they were in 1980, and 43 are worse off than they were in 1970. Aid levels do not correlate with economic growth.

To truly help poor nations, Washington should end government-to-government assistance, which has often buttressed brutal and venal regimes and eased pressure for reform, and drop its trade barriers, which now impede poor nations' participation in the international marketplace.

 Introduction

Few programs have consumed as many resources with as few positive results as has foreign aid. Since World War II the United States alone has contributed more than $1 trillion (in 1996 dollars) in bilateral assistance to other countries. Other nations, directly and through such U.S.-funded multilateral institutions as the International Monetary Fund, the World Bank, and the United Nations, have provided hundreds of billions of dollars more.

Yet the recipients of that largesse have, by and large, failed to grow economically and develop democratically. In many cases, so-called aid has proved to be positively harmful, underwriting brutal dictators as they have pillaged their peoples; in other instances, Western financial flows have subsidized the creation of disastrously inefficient state-led development programs. Often, Washington and other sources of aid have backed regimes that were both corrupt and collectivist.

Even many advocates of continued foreign assistance acknowledge the disappointing results of past policies. For instance, the U.S. Agency for International Development admitted in 1993 that "much of the investment financed by U.S. AID and other donors between 1960 and 1980 has disappeared without a trace." U.S. AID administrator Brian Atwood says of the assistance to Zaire, "The investment of over $2 billion of American foreign aid served no purpose.

Instead of dismantling failed programs and reducing ineffective aid flows, however, the Clinton administration has simply concocted new justifications for more of the same. The administration wants to increase total foreign affairs spending by $1.2 billion for fiscal year 1998. Warned Secretary of State Warren Christopher before he left office, "The biggest crisis we're facing in our foreign policy today is whether we will spend what we must to have an effective American foreign policy."

One of the administration's most creative arguments is that assistance can forestall social collapse--the kind of disasters that occurred in Rwanda and Somalia, which triggered expensive American rescue efforts. In his 1997 state of the union address, Clinton claimed, "Every dollar we devote to preventing conflicts . . . brings a sure return in security and savings." That has also been a consistent theme of Atwood as he has attempted to defend his program from proposed congressional budget cuts.

However, there is nothing in five decades of foreign aid experience to indicate that Washington has a unique ability to predict which nations are in the greatest danger of dissolving, let alone to use assistance to forestall such human catastrophes. To the contrary, most of the countries that have collapsed into chaos received significant amounts of aid over the years. Unfortunately, not only was that money used poorly, it often buttressed the very governments that were most responsible for the ensuing disasters.

The Long Failure of Foreign Aid

U.S. economic assistance comes in various forms--grants and loans for bilateral projects, primarily through U.S. AID, as well as credit from multilateral agencies, including the IMF, the World Bank, and such regional agencies as the African Development Bank, to underwrite borrower development projects and provide aid for "structural" economic reforms. Other forms of foreign assistance include security programs, disaster relief, and subsidized crop shipments (primarily Food for Peace). Although there is no doubt that some individual development projects have worked, and that humanitarian aid can help alleviate the effects of crises, there is little evidence, despite the presumption of the term "foreign assistance," that official cash transfers, whether bilateral or multilateral, actually do much to advance growth or stability in the developing world.

The Clinton administration has admitted that the record of aid has not been altogether good. One recent task force reported that "despite decades of foreign assistance, most of Africa and parts of Latin America, Asia and the Middle East are economically worse off today than they were 20 years ago." As a result, the administration cut off funding to some 50 nations, mainly because they are, like Zaire, abject failures. The administration was even more critical of U.S. AID as an organization. Said Atwood, "We were an agency on the road to mediocrity, or worse." The result was an intense administration effort to "reinvent" the agency.

Unfortunately, there is little evidence that better targeting and management would enable foreign aid to assist poor nations in achieving self-sustaining economic growth. Steady financial transfers have not stopped developing countries from stagnating economically; indeed, many nations, particularly in sub-Saharan Africa, have been losing ground economically. The United Nations Development Programme calls the 1980s the "lost decade" for many poorer states. "Over much of this period," explains the international agency, "economic decline or stagnation has affected 100 countries, reducing the incomes of 1.6 billion people--again, more than a quarter of the world's population. In 70 of these countries average incomes are less than they were in 1980--and in 43 countries less than they were in 1970."

International comparisons are obviously fraught with difficulty, but overall aid levels do not correlate positively with economic growth, and many of the recipients of the most foreign assistance, such as Bangladesh, Egypt, India, the Philippines, Sudan, and Tanzania, have been among the globe's worst economic performers. Of course, even a positive correlation would not be enough to prove that aid actually aids. The real issue is causation, and there is no evidence that aid generates growth.

Particularly impressive are studies by Peter Boone of the London School of Economics and the Center for Economic Performance. In an assessment of the experience of nearly 100 nations, he concluded that foreign transfers had no impact on investment levels in recipient countries. "Long-term aid is not a means to create growth," reported Boone. His results yielded "strong evidence against many poverty trap models which predict that aid transfers will allow countries to escape from a low income equilibrium or poverty trap." Boone also reviewed the impact of foreign assistance on recipient regimes and found that aid most benefited local political elites. As he explained, "Aid does not promote economic development for two reasons: Poverty is not caused by capital shortage, and it is not optimal for politicians to adjust distortionary policies when they receive aid flows."

Not only is there no positive correlation between aid levels and economic growth, but most recipients of assistance remain dependent on foreign transfers. As U.S. AID acknowledged in a detailed 1989 report, "Only a handful of countries that started receiving U.S. assistance in the 1950s and 1960s has ever graduated from dependent status." Similarly, some countries have been on IMF programs for literally decades.

Aid for Policy Change

The failure of foreign aid to meet its traditional goals has led to a search for new justifications. One is advancement of market-oriented policy reform. Some skepticism about aid agencies' newfound commitment to the market is in order, however, given the fact that for years foreign aid subsidized governments that were both authoritarian and collectivist.

The results of past policy-oriented lending are not much cause for confidence. Many governments simply are not interested in policy reform. Some of them want their countries to develop but are unwilling to pay the political price for adopting the policies necessary to do so. Others treat ideological objectives as paramount. Still others are simply most interested in staying in power. One need not be a reflexive critic of government to recognize that such regimes are an impediment to development. Writes Alan Carter of Heythrop College in London, "Third World states are neither the instruments of international capital nor of an indigenous bourgeoisie, but are rational actors who will industrialise their economies when practicable, but who often find it in their interests to be accomplices in the dependent development or even underdevelopment of their own economies." In such cases, he warns, "aid primarily serves to prop up regimes that are complicit in the exploitation of their people and the destruction of their environment”. Unfortunately, that has been the experience of the IMF and the World Bank, which have for years supposedly been underwriting policy "reform" around the world. Yet most governments have simply taken the money and run, causing those taxpayer-funded organizations to extend new loans.

Aid can inhibit the commitment to reform of even more responsible governments. Warns Cindy Williams of the Congressional Budget Office, "Without reform, however, aid can reinforce policies that do not further development." By masking the pain of economic failure, development assistance allows borrowers to delay reforms, worsening the underlying problem. "Scarcity of resources" in such cases "is good for reform," writes Dani Rodrik of Columbia University. Necessity, brought on by the failure of collectivist and populist economics, almost always drives the reform process. Observed U.S. AID, "Few people, least of all politicians, embark on a deliberate course of change without being motivated by some significant political or economic crisis. The simple fact behind most subsequently successful economic policy is the failure of the one that preceded it. Surely that is the lesson of Russia, where aid has acted as a subsidy for the Yeltsin government, irrespective of its economic policies. The only colorable justification for those payments is that they keep Boris Yeltsin in power, not promote capitalism.

Preventing Crises: The Newest Justification

Even newer is the argument that Western financial transfers can be used to prevent social catastrophe, the veritable implosion of entire nations. In June 1994 a State Department spokesman announced that President Clinton had instructed U.S. AID to "start putting together a socioeconomic and political early warning system, to identify the vulnerabilities" of weak developing states, and to "start putting some resources behind them. Atwood has called this mission "crisis prevention.  He has gone on to advocate "preventive investment" in "nation building." He wants the agency to make special efforts to anticipate crises and handle transitions, "to help nations move progressively away from crisis and toward sustainable development

Others have made much the same argument. Sens. Nancy Kassebaum (R-Kans.) and Richard Lugar (R-Ind.) defended additional contributions to the International Development Association, a World Bank affiliate, on the basis that "a modest investment in development through IDA" will be less than "the costs of humanitarian relief and peacekeeping operations that follow failed regimes and weakened economies." Tom Getman of the Christian relief organization World Vision advocates foreign aid as a means of combating "political and economic instability and regional conflicts." Peter Bell of CARE, another humanitarian group, complains that "the world's wallet says refugee camps are better business than nation-building." He goes on to insist that "we must recognize the value of dollars to prevent conflicts."

Sadako Ogata, the UN high commissioner for refugees, has also suggested using aid to forestall crises. She advocates being as concerned about the possible creation of refugees as about actual refugees. In 1995 her organization asked, "What might have happened in Rwanda if the estimated $2 billion spent on refugee relief during the first two weeks of the emergency had been devoted to keeping the peace, protecting human rights and promoting development in the period that preceded the exodus?"

The Myth of Lack of Aid

That question is impossible to answer with certainty, but the answer is probably "nothing." Rwanda did not go unaided before imploding. Between 1971 and 1994 that nation received $4.7 billion in foreign assistance from the United States, the multilaterals, and European nations. In fact, almost every country in crisis received abundant outside transfers from a variety of sources before disaster struck. Over the same period Sierra Leone received $1.8 billion, Liberia $1.8 billion, Angola $2.9 billion, Haiti $3.1 billion, Chad $3.3 billion, Burundi $3.4 billion, Uganda $5.8 billion, Somalia $6.2 billion, Zaire $8.4 billion, Sri Lanka $9.8 billion, Mozambique $10.5 billion, Ethiopia $11.5 billion, and Sudan $13.4 billion. Through 1991, Yugoslavia received $530 million; through 1994, the territory had received $6.1 billion (see Table 1 and Appendix).

Table 1
Aid, 1971-94 (millions of nominal dollars)

Source: Organization for Economic Cooperation and Development, Geo-
graphical Distribution of Financial Flows to Developing Countries (Paris:
OECD, various years).

*Data through 1991. Including aid flows through 1994 to the states that
made up the former Yugoslavia, total U.S. aid amounts to -$250 million,
total international aid amounts to $6.1 billion, and the annual average
is $253.6 million.

Although those aid flows varied in importance to their recipients, in no case were they unimportant. In some years assistance accounted for 10 percent of the gross domestic product of Sri Lanka and Zaire, 20 percent of the GDP of Rwanda, 25 percent of the GDP of Uganda, and 30 percent of the GDP of Burundi. Between 1970 and 1994 aid was 10 percent of Haiti's GDP, 15 percent of Burundi's and Rwanda's, and nearly 20 percent of Chad's.

In none of those cases did foreign assistance forestall catastrophe. Moreover, few nations in Africa, irrespective of aid levels, have escaped social breakdown. Conflict and economic decline have resulted in tens of thousands of refugees fleeing Gambia, Mali, Mauritania, Niger, Senegal, Togo, and Western Sahara, as well as the states listed above.

Complex Domestic Factors Cause States to Fail

Obviously, there are numerous reasons why so many nations, including some in Southeast Asia and the Transcaucasus as well as those mentioned above, suffer so. Angola has been brutalized by a long civil war and military intervention by Cuba; only recently has the conflict moved toward resolution. Burundi and Rwanda have been rent by cycles of tribal violence, the genesis of which was colonial policies that favored one tribe over another. Chad has endured civil war and outside intervention by Libya. Ethiopia has suffered through three disasters: Marxist revolution, war with Somalia, and a separatist campaign by Eritrea. Haiti has spent most of its history under repressive authoritarian rule. Liberia, Mozambique, Sierra Leone, Sri Lanka, and Yugoslavia have undergone the ravages of particularly bitter civil wars. Somalia was victimized by a Western-backed strongman who proved unable to defeat either Ethiopia or indigenous guerrillas; when his rule collapsed, so did central authority, as competing clans struggled for control. Sudan has been rent by conflict between Muslims, Christians, and animists for decades. Uganda disintegrated under the effects of misrule by the grotesque Idi Amin, followed by domestic insurgency and outside intervention. Zaire had the misfortune to be an artificial state created for Belgian colonial interests and born of civil strife. Rebellion, UN intervention, and authoritarian rule by the egregiously corrupt Mobutu Sese Seko have sent that country spiraling into chaos.

However similar the general causes of those and other examples of economic and political collapse, the individual circumstances varied greatly by country. Few of the problems were amenable to outside intervention; in none of those cases was inadequate international aid the determining factor. Of course, had those nations been capable of better using capital, foreign transfers might have been of more use. But precisely because they are not capable of using capital to advantage, past aid has been wasted, as would have been any additional transfers as part of an "early warning system."

Aid Helped Cause Breakdown

Indeed, foreign aid almost certainly helped create and aggravate problems in Ethiopia, Somalia, Sudan, and Zaire, in particular, by subsidizing dictators whose rules proved especially disastrous. Among the most important causes of social division and catastrophe is what has been called "the overpolitisized state Yet government-to-government aid only strengthens overpoliticized states.

Even the most humanitarian sounding aid--so-called Food for Peace shipments--can accelerate social breakdown. Onetime relief worker Michael Maren criticizes a decade of assistance to Somalia. Of Western humanitarian personnel he writes, "Separately we'd arrived at the conclusion that the relief program was probably killing as many people as it was saving, and the net result was that Somali soldiers were supplementing their income by selling food, while the [Western Somali Liberation Front]--often indistinguishable from the army--was using the food as rations to fuel their attacks into Ethiopia." At the same time, food assistance discouraged local production and enhanced the central government's control over the people. Then, after the Barre government finally collapsed, Western assistance worsened the chaos by enriching the local militias and discouraging local reconstruction efforts.

At best, advocates of aid can argue that they would do better this time, that now that the Cold War has ended, there is less pressure to use assistance as de facto bribes to assorted dictators. However, the bulk of aid to most Third World nations has always been economic, not security. Between 1971 and 1994 the United States provided barely one-fifth of the total assistance received by Somalia. The rest was economic assistance from a variety of sources--the multilaterals and the European governments, in particular. During the same period Rwanda received more from IDA alone than from the United States; Burundi collected 3.6 times as much from IDA as from Washington. In short, the problem with past aid to failed states was not that it was overly oriented toward political purposes. The problem was, rather, that international financial transfers turned out not to be aid at all.

What Causes Development

In the end, poor countries are largely responsible for their own destinies. Experience has demonstrated that sound domestic policies, not foreign aid, are what generate economic growth. The West's dramatic escape from poverty has always been a good place to start in attempting to understand development. The rapid economic and social progress of Europe, during which people first rose out of the dismal poverty that characterized most of human history, occurred largely in countries that had a specific kind of regime--classical liberalism--which generally allowed markets to operate, respected the rule of law, protected private property, and permitted economic competition. That experience has been repeated more quickly and spectacularly in East Asia, where it has taken but a generation or two for desperately poor nations to be included among the world's most successful economies. (That is not to say that the British or German, let alone the Japanese or South Korean, experiences were laissez faire. Rather, all broadly relied on market forces, despite varying degrees of government economic involvement.)

What was true of Great Britain, the United States, Japan, and South Korea is also evident in today's successful developing states. Perhaps the best broad-based study of economic policies over the last two decades is, by economists James Gwartney, Robert Lawson, and Walter Block. They created an index of 17 variables to measure economic freedom, as well as three alternative summary indexes. Ranked highest were Hong Kong, Singapore, the United States, and New Zealand. At the bottom came numerous African and a handful of Latin American countries. Most improved between 1975 and 1990 were Chile, Iceland, Jamaica, Malaysia, and Pakistan. The researchers found that economic policies matter. Obviously, the results for individual countries may be affected by many factors, but the overall result is compelling. Explain the authors, "No country with a persistently high economic freedom rating during the two decades failed to achieve a high level of income. In contrast, no country with a persistently low rating was able to achieve even middle income status."

Similar are the results of the 1996 Index of Economic Freedom by Heritage Foundation analysts Bryan Johnson and Thomas Sheehy. Although their study offers somewhat less systematic international comparisons, it reaches the same conclusions. Johnson and Sheehy explain that their analysis "demonstrates that economic freedom is the single most important factor in creating the conditions for economic growth and prosperity." Their data also demonstrate that the countries that place the greatest reliance on open markets consistently have the highest growth rates.

Domestic Factors Are Most Important for Growth

Studies by other analysts and organizations reach the same general conclusion. Researchers at Cornell University and the Organization for Economic Cooperation and Development have used a computable general equilibrium economic model in an attempt to measure the impact of different policy measures. Market-oriented reforms in exchange rate, fiscal, and monetary policies all improve economic growth rates. Benefits tend to flow to poorer, rural residents; urban elites who were enriched through political manipulation of the economy are usually the biggest losers.

A decade ago Union College economists E. Dwight Phaup and Bradley Lewis surveyed a dozen Third World "winners" (with average annual growth rates exceeding 6 percent) and a score of "losers" (average annual growth rates below 2.2 percent). The two groups' average annual growth rates were 7.7 percent and 1 percent, respectively. Phaup and Lewis concluded, "It would appear that whether [less developed countries] are winners or losers is determined mainly by their domestic economic policies. Resource endowment, lucky circumstances, former colonial status, and other similar factors make little difference in the speed with which countries grow economically. The results of domestic policy choices pervade every economic area."

More recently, Mancur Olson Jr., of the Center for Institutional Reform and the Informal Sector at the University of Maryland, came to the same conclusion. He reported that such factors as access to knowledge and capital cannot explain the relative income differences among nations. "The only remaining plausible explanation is that the great differences in the wealth of nations are mainly due to differences in the quality of their institutions and economic policies," he explained. He found that poorer nations with the best economic policies consistently grow the fastest.

Phaup and Lewis relied in part on a detailed World Bank study, published as part of the World Development Report 1983. The bank assessed the relative economic distortions in 31 primarily developing nations and found that countries with the least interference with the marketplace had annual growth rates twice as high as those of nations with the most inefficient policies. The more market-oriented countries also enjoyed far greater domestic savings, additional output per unit of investment, and increases in both agricultural and manufacturing output Explained the study, developing nations that introduced fewer "distortions" into their economies--particularly price controls, import restrictions, interest rate limits, and similar policies--did better, while "those countries with the worst distortions experienced significantly lower domestic saving and lower output per unit of investment, thus leading to slower growth." The bank estimated that inefficient intervention could cut annual GDP growth by as much as 2 percent.

U.S. AID has reached similar conclusions. Particularly important, in its view, were open trade policies--more outwardly oriented countries grew nearly four times as fast as more protectionist states. The agency also pointed to the friendliness of the investment climate to domestic and foreign business alike. The difference in average annual per capita growth between the most open economies and the least open economies was seven percentage points. Finally, the agency called "the level of distortion between domestic and international prices . . . another good aggregate indicator of economic policy."

Specific Experiences

Those general assessments are reinforced by the results of narrower studies of different regions and nations. For example, David Osterfeld reviewed the economic impact of a range of variables: corruption, food, foreign aid, migration, multinational corporations, population, and resources. His conclusion was that development occurred most quickly in an "enabling environment" in which the rule of law was stable, property was protected, political power was decentralized, and most of the economy was private. Sustained economic development is possible, he explained, but "the principal obstacle is an environment that penalizes individual initiative, is hostile to private ownership, discourages saving and investment, and severely restricts the operation of the free market. Accordingly, development will not occur in the absence of radical changes in the politico-legal frameworks now existing in most of the countries in the so-called Third World."

Numerous examples support his thesis. The East Asian economic powerhouses of today--Hong Kong, Japan, Singapore, South Korea, and Taiwan--were much poorer than such Latin American countries as Argentina after World War II. Of the many differences between those regions, the most important was the economic model adopted. Latin America firmly embraced inward-looking policies that set up trade barriers and promoted domestic industries through an array of state subsidies and other privileges. The nations of Africa, the poorest on the globe, followed Latin America into the abyss of collectivist development strategies. After initially experimenting with Latin American-style protectionism, East Asia, in contrast, chose various forms of capitalism.

The city-states of Hong Kong and Singapore possess little other than open economic markets They have developed nonetheless. Resource-rich countries like Mexico and Zaire have, in contrast, struggled economically for decades. States as varied as Argentina, Brazil, India, and Tanzania failed to prosper so long as they emphasized state-led development plans; all four have since adjusted their policies, leading to greater economic progress. A variety of World Bank studies of Africa has illustrated the problem of foolish policies. A 1993 bank review of the adjustment experience of 18 developing countries, Boom, Crisis, and Adjustment, found that good policies, especially freer trade and macroeconomic stability, were important for economic success. In its World Development Report 1995 the bank compared the experiences of Ghana, Malaysia, and Poland. The respective governments employed very different development strategies, and, not surprisingly, the bank reported that "the result has been wide differences in economic growth rates and labor outcomes," with market-oriented policies winning.

Obviously, every country is the beneficiary or the victim of unique circumstances, and that makes any one pairing suspect. Nevertheless, the experience of all countries presents a consistent picture--one that is particularly telling when cultural groups are divided, as they have been in China, Germany, and Korea.

Conclusion

Foreign aid has been tried and found wanting. Aid transfers have not promoted self-sustaining economic development in the Third World. There is no positive correlation between foreign assistance and economic growth, and there is little evidence of causation in those nations that have succeeded economically.

Naturally, advocates of aid are attempting to come up with new arguments for preserving their programs. But this attempt to put old wine into new wineskins--to offer new justifications for yesterday's failed policies--will not work. There is perhaps no greater tragedy today than that of the broken-down societies that dot the globe. But there is no evidence that increased aid flows can prevent such human catastrophes in the future. Indeed, abundant foreign assistance to brutal and venal governments in the past helped create today's tragedies.

The primary responsibility for development lies with Third World states themselves. Governments must create an economic environment in which people are free to be productive. The industrialized nations can help--primarily by doing no harm. Washington should end government-to-government assistance, which has so often buttressed regimes dedicated to little more than maintaining power and eased the economic pressure for needed reforms.

The United States and other developed countries should allow poorer nations to participate more fully in the international marketplace. The Congressional Budget Office has observed, "The broad economic policies of the major Western countries--trade policies, budget deficits, growth rates, and the like--generally exert greater influence on the economies of the developing countries than does aid." Access to the markets of wealthier nations is particularly important for poorer states. The World Bank's J. Michael Finger figures that Western protectionism reduces the Third World's GNP by a full three percentage points, twice the amount of foreign aid now provided by the industrialized nations.

Mass poverty, famine, and murder blight our globe. However, the understandable desire to do something should not become an excuse for maintaining the failed policies of the past. Foreign aid has not delivered self-sustaining economic growth or prevented the collapse of numerous poor societies into chaos over the past five decades. It will do no better in the future.