On Feb. 9, William Easterly, professor of economics at New York University, gave a lecture titled “Foreign Aid to Fight Poverty: Altruism vs. Self-Interest.” The talk, which was sponsored by the Center for the Study of American Democracy (CSAD), explored the “paradox of aid” that often prevents foreign aid from successfully reducing worldwide poverty.
The event was held in the Higley Hall auditorium with a full room of students and professors in attendance. Director of CSAD and Professor of International Studies Joseph Klesner introduced Easterly as a former economist at the World Bank and the author of multiple popular books, including a 2015 book titled The Tyranny of Experts: Economists, Dictators, and the Forgotten Rights of the Poor.
Easterly began his lecture by addressing the possibility that foreign aid donors act in their own self-interests rather than with altruistic goals in mind, as many people assume. He referred to shifts in United States foreign aid policy following the 2001 terrorist attacks on the World Trade Center: After 2001, the U.S. shifted its focus toward giving aid to countries with higher levels of conflict and worse governance, such as African countries like Burundi and Chad. Since there were no major changes in the needs of impoverished countries or in the amount of global conflict that year, Easterly suggested that the most probable cause for the shift in aid was a change in the self-interests of the U.S. and other western foreign aid donors.
Easterly then explained the “paradox of aid” that makes it difficult to direct aid productively: Though aid is most needed in countries with the lowest income, those countries often have high levels of conflict, corruption and instability, making the aid less likely to be effective. Aid would have more success in countries with more robust political institutions, but those countries tend to not need as much relief. Ideally, based on data from the World Bank, money would go to countries that lie at a reasonable intersection of poverty and good governance.
After 2001, aid from western countries has been increasingly likely to go to countries with less stable governments who were allies in the war on terror, limiting the usefulness of the aid money in effecting change. “[Former President George W. Bush’s] idea of giving aid to good institutions was not the dominant policy, given that in his own mind, what he really wanted to do was fight the war on terror using aid money,” Easterly said. “The sad conclusion at the end of the day is that after 9/11, aid was likely to be less effective than before in reducing global poverty.”
Although he acknowledged that the political incentives of foreign aid donors make overcoming the issue of misdirected aid difficult, Easterly ended on an optimistic note, pointing out that the amount of people living in extreme poverty has steadily decreased over time despite high population growth. “Despite the bumbling of aid, and the aid system, and its advisors like me, somehow poor people seem to have figured out a way to end their own poverty without help from us,” he said.
Klesner expressed his satisfaction with the turnout for the event. “The audience was the largest I’ve seen for an academic lecture since before the pandemic,” he said. “I’m glad so many students got to hear Professor Easterly speak. Talks like this don’t happen at every college and university. I’m pleased we can do them here.”