Followup to So You Say You're an Altruist:
Today Dambisa Moyo's book "Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africa" was released.
From the book's website:
In the past fifty years, more than $1 trillion in development-related aid has been transferred from rich countries to Africa. Has this assistance improved the lives of Africans? No. In fact, across the continent, the recipients of this aid are not better off as a result of it, but worse—much worse.
In Dead Aid, Dambisa Moyo describes the state of postwar development policy in Africa today and unflinchingly confronts one of the greatest myths of our time: that billions of dollars in aid sent from wealthy countries to developing African nations has helped to reduce poverty and increase growth.
In fact, poverty levels continue to escalate and growth rates have steadily declined—and millions continue to suffer. Provocatively drawing a sharp contrast between African countries that have rejected the aid route and prospered and others that have become aid-dependent and seen poverty increase, Moyo illuminates the way in which overreliance on aid has trapped developing nations in a vicious circle of aid dependency, corruption, market distortion, and further poverty, leaving them with nothing but the “need” for more aid.
From the Global Investor Bookshop:
Dead Aid analyses the history of economic development over the last fifty years and shows how Aid crowds out financial and social capital and directly causes corruption; the countries that have caught up did so despite rather than because of Aid. There is, however, an alternative. Extreme poverty is not inevitable. Dambisa Moyo also shows how, with improved access to capital and markets and with the right policies, even the poorest nations could be allowed to prosper. If we really do want to help, we have to do more than just appease our consciences, hoping for the best, expecting the worst. We need first to understand the problem.
Politics or not, I find this to be a great illustration of the real-world consequences of failure of rationality. The interesting question is at what point the mechanism breaks down.
he logical course of action for rich countries is to study the most effective methods of poverty alleviation and development, and apply those. We can see clearly that this is not happening, but it's unclear as to why:
-Are rich countries wrong about the conditions they're facing, and thus using improper methods? If so, is there a bias that causes them to misperceive conditions? -Have rich countries erroneously identified ineffective methods of aid as effective? If so, is there a bias that causes them to wrongly pick the wrong methods? -Do rich countries actually want to harm poor countries and keep them down, under the guise of aid? If so, why is this scheme able to go on for so long? -Are, as EY implies, rich countries more interested in buying their own moral satisfaction? If so, why do people get moral satisfaction from appearances of morality instead of actual morality - wouldn't it be better if we derived pleasure from actually helping others?
There's probably more points at which the mechanism can fail. In any case, I think this is a great example of horrible consequences of failures of rationality: an entire continent's development may be slowed down, and countless lives shortened or destroyed. Perhaps issues like these are good for the purposes of discussion of practical applications of rationality - we probably won't be able to make everyone in power in rich countries a rationalist. How do we get them to act rationally?