Foreign aid is a tricky thing. While it can often be a shining example of humanitarianism and compassion, it can also smack of real politik; who gives to whom, how much, and when is often more a reflection of geopolitical strategy than of objective need. Further, various development types (notably William Easterly) will tell you that aid doesn’t do a whole lot of good for its recipients. Nonetheless, most of us would broadly agree on the importance of development assistance and humanitarian aid. But who should pay for it?
It should be noted that this trend may be somewhat exaggerated. Given that China and India account for about a third of the world’s population, any demographic shift that includes both of them is likely to have a significant global impact. And indeed, both China and India have recently graduated to middle-income status, bringing loads of poor citizens along with them (as well as a hefty amount of incoming aid dollars). Disproportionately large though they may be, China and India are not alone. 27 countries have made the shift since 2000. And by and large, this is a good thing.
The problem is—as anyone who has traveled to India or China or Brazil could tell you—a surging economy doesn’t erase all poverty. National growth may be good for most people (including the poor), but it’s no silver bullet. But as these countries add to their coffers, is it still the responsibility of wealthy nations to give them aid? Or is it time for these blue-collar countries to take care of their own?
|Is she doing her part to aid her countrymen?
Firstly, we must ask if they are fully able to address their own needs. China has the money to spend a ton on its military, but if redirected, would it be enough to radically help the hundreds of millions of poor people inside its borders? If so, is it still the responsibility of developed nations to step in if a middle-income country is using its wealth irresponsibly? But what about Botswana, which spends quite a bit less on its military, but is still groaning under the weight of its HIV epidemic and widespread unemployment?
We also have to look at inequality. Though maligned, the Gini index is the best estimate of income inequality in a country. China and India fall in the middle third of nations, though the top third features quite a few middle-income countries. Addressing inequality has been a vexing question for all countries, rich and poor alike; some advocate redistribution while others prefer to let the free market do the heavy lifting. Regardless of method, it doesn’t hurt to have good governance, human capital, and an efficient bureaucracy in place. Capacity to address inequality does not materialize just because a country is manufacturing and/or exporting a lot. Perhaps this is an area where some newly minted middle-income countries suffer, as economic gains may outpace a nation’s ability to train the personnel necessary. It is reasonable to expect this capacity to lag behind economic growth (especially if the growth is a result of private sector success and takes time to translate into revenue for the state), and international assistance may be a reasonable bridge in this period.
I remain pretty agnostic on most of this, mostly for lack of definitive data. Perhaps more critical is the issue of how accurate the World Bank’s categorizations are. MethodLogical contributor Jason Kerwin has argued that these economic measures are far from perfect, while MethodLogical contributor Jason Hopper has mused on the usefulness of other measures, such as the Human Development Index or the Multidimensional Poverty Index. But as countries (if not individuals) acquire wealth, the dynamic of developed-developing countries will continue to evolve. The question of how best to aid the poor remains the same, but perhaps our methods must evolve as well.