Bill Easterly - What We Get Wrong About Foreign Aid

For decades, development economists, aid agencies, and all sorts of technocratic experts have been trying to engineer solutions to global poverty. But what if the structure and very essence of that effort is the problem? My guest today is Bill Easterly, one of the most important and provocative economists working on global development. He's the author of The Elusive Quest for Growth, White Man's Burden, The Tyranny of Experts, and most recently, Violent Saviors. He's also a former professor of mine and has deeply shaped how I think about poverty development and the relationship

between the government and the governed. Here's our talk.

Welcome to The Economics of Work. I'm excited to welcome Bill Easterly, one of the most thoughtful economists alive today, in my opinion. Bill's helped us shape how we should think and should not think about economic development. Bill, welcome to the show.

Thanks, Ben. Pleasure to be here. Yeah. So I want to start with a

compliment. When I first signed up for your course, so I took your course when I was a student in grad school, I was really, I think, you know, I'd known about your work and I was really thinking that you would be this like bombastic curmudgeon. And then So but what struck me was was how curious you were and how much of like a really curious searcher you really are in real life. And you were just like exuding intellectual humility. And that really comes off. So that's a compliment for you.

Thank you. Churchill said of Truman, he's very humble with a lot to be humble about.

Yeah, yeah, yeah. So well-deserved. So you first got famous for really, really arguing that foreign aid is not as effective as we think. And I think of your earliest work as kind of more of a plea for humility. Mm-hmm. But I think the way I kind of read your intellectual journey, and I'm curious to hear your thoughts if I'm reading it correctly, is that that sort of morphed into more of a theory about not just like what doesn't work, but actually why what we're doing is potentially quite harmful,

you

know, in a material sense and a non-material sense. Is that the right journey as you see it?

Yeah, I think, you know, originally I just...

kind of saw

what wasn't working, being in the World Bank, especially, you know, with lots of kind of big promises about lifting countries out of poverty. But that was not happening, especially in sub-Saharan Africa, where I was working for a while in the World Bank.

And,

you know, something seemed to be missing there. I think at that point, it was more like a disappointment. There just seemed to be zero effect of aid. Later on, I became more concerned about possibly negative effects of aid, especially political ones,

that

aid supported kind of tyrannical autocrats, or sometimes seen as benevolent autocrats if they raised their growth rate of GDP per capita, like, you know, say, Mele Zenawi in Ethiopia raised their rate of GDP per

capita.

But at the same time, he was like relocating farmers at gunpoint into model villages that were horrendous. You know, Ugandan President Museveni also achieved high growth, but he was taking land away from farmers and moving that gunpoint. You see a common theme there. So it