FOREIGN AID AND IRAQ

One way to think about the Iraq war was pioneering a new model of foreign aid. This NYT column (hat tip: Andrew Beath) describes the problem with the old foreign aid:

Wealthy nations and international organizations, including the World Bank, spend more than $55 billion annually to better the lot of the world's 2.7 billion poor people. Yet they have scant evidence that the myriad projects they finance have made any real difference, many economists say.

My old prof Lant Pritchett, author of a brilliant call for (more) freedom of migration (go to the link and click "The Future of Migration"), is quoted offering one reason why:

Mr. Pritchett, a veteran bank economist, tried to explain why rigorous evaluations were such a rarity in the culture of the bank. Its highly trained, well-meaning professionals too often think they know the solutions. "They have too little doubt,'' he said.

I wonder if Lant also mentioned (during an interview which was quote selectively) that governance is a big problem in many poor countries. My biggest takeaway from two years of MPAID training is that foreign aid can't substitute for good governance. Aid agencies are not in charge, so if crooks are in power, they're basically helpless to stop the crooks keeping the money. "Conditionality" is the latest not-very-successful attempt to square this circle.

Iraq is, to cite the hope expressed by one Iraqi blogger (Iraq the Model), a "model" for an alternative form of development assistance: instead of letting bad regimes take your money and make a chump of you for the notional sake of the poor, remove the bad regime, then pour in lots of money.

Based on my study of development, as well as a lot of my own thought rooted in my knowledge of history, economic and political theory, I take a favorable view of this new model-- provided that the precedent of Iraq ferments in the next years into something more like law (but not quite law, since law implies government, and I am not advocating a world government, at any rate not now). We could have a rule, for example, that unelected regimes that allow no civil or political rights are designated "totalitarian" and have no legitimacy in international law. We could have a rule that regimes that come to power through murder, or that gas their own people, permanently forfeit their legitimacy.

"Donor fatigue" has long been eroding the older form of foreign aid. At the Democrats' convention in Boston, we see once again that foreign-policy idealism quickly provokes donor fatigue-- people (not me, but a lot of people) tire all too quickly of helping damn foreigners.

Still, it's quite possible to envision Iraq, ten years from now, embodying civil and political liberties, democratic stability and economic prosperity that will excel, not only the Saddam era, but Saudi Arabia, Syria, Palestine, Egypt, and other comparable Arab countries-- a shining model for Islamic, Arab democratic capitalism. If so, the world will have to consider wider application of the Iraq model.