The handouts that feed poverty

FOREIGN AID today perpetrates a cruel hoax on those who wish the world's poor well. There is all the appearance of energetic action -- a doubling of foreign aid to Africa promised at the G-8 summit last July, grand United Nations and World Bank plans to cut world poverty in half by 2015 and visionary statements about prosperity and democracy by George W. Bush, Tony Blair and Bono. The economist Jeffrey Sachs even announced the "end of poverty" altogether by 2025, which he says will be "much easier than it appears."

No doubt such promises satisfy the urgent desires of altruistic people in rich countries that something be done to alleviate the grinding misery of the billions who live in poverty around the world. Alas, upon closer inspection, it turns out to be one big Potemkin village. These grandiose but unreal visions sadly crowd out better alternatives to give real help to real poor people.

The new proposals to end world poverty are, for one thing, not new. They are recycled ideas from earlier decades that have already failed. There was, for instance, the idea of the 1950s and 1960s that aid is necessary to finance a "Big Push" to allow poor countries to escape a "poverty trap" and climb the ladder toward prosperity.

This push has been underway for four decades now -- and has resulted in the movement of $568 billion in foreign aid from the rich countries to Africa. The result: zero growth in per capita income, leaving Africa in the same abysmal straits in which it began. Meanwhile, a number of poor countries that got next to no aid had no trouble escaping the "poverty trap."

Hence, it is a little surprising to see Sachs, who is director of the Earth Institute at Columbia University and an influential advisor to U.N. Secretary-General Kofi Annan, announcing once again that aid is necessary to finance a "Big Push" to allow poor countries to escape a "poverty trap" and climb the ladder toward prosperity.

Where did all the aid money go? The $2.3 trillion, that is, that has been sent to all the world's poor countries over the last five decades. Well, for one thing, it was stuck (and remains stuck) in a "bureaucracy-to-bureaucracy" aid model in which money gets lost all along the way.