USAID's new idea, though, is a step in the right direction because, if actually implemented, it could mean major reforms in aid policy that take into account the criticisms raised in Perpetuating Poverty. For example, the book's contributors argue repeatedly that a major problem with aid is that it goes to LDC governments instead of their economically productive citizens. Since one of the stated objectives of the Clinton foreign-aid policy is stimulating market-oriented economic growth, and since aid is supposed to be disbursed to further specific objectives rather than to placate client states, the way has been paved for non-governmental entities to receive assistance. Perpetuating Poverty could have taken up several lines of inquiry suggested by the Clinton reforms, such as how best to channel aid to the LDCs through private voluntary organizations and domestic businesses in the poor countries.
The contributors to Perpetuating Poverty want to end foreign aid as we know it. Though their case is persuasive, such an outcome is unlikely for at least two reasons. First, while opinion polls regularly indicate that Americans show little enthusiasm for foreign aid in general, Americans nevertheless often demand humanitarian action in the face of human tragedies. (Rwanda comes immediately to mind, and images of the Somalian and Ethiopian famines aren't far behind.) Many Americans think foreign aid is an expression of humanitarianism, because they are usually told that aid is essentially economic and meant to alleviate Third World distress. Perpetuating Poverty would have been strengthened by a serious consideration of the merits of relief, as opposed to development assistance, and by the recognition that many citizens think that terminating relief aid is undesirable.
Still, it's true that the statist development model on which foreign aid is currently based is fundamentally flawed. The lessons of the past four decades of development experience in the LDCs clearly demonstrate that market-friendly, outward-looking policies lead to growth while state -centered approaches fail. But the contributors ought to have taken up an additional question: What role, if any, is there for foreign assistance if the multilaterals embrace in practice as well as in rheto ric the neoliberal development model Perpetuating Poverty favors? Since ending all aid doesn't seem immediately feasible, such a question about the transformation of aid is crucial.
The book could have included, for example, an essay discussing the merits of aid to social investment funds which permit LDCs undergoing market-oriented reforms to cushion the pains of structural adjustment on the poor. It also could have assessed the role that foreign aid played in the economic success stories of the East Asian tigers (Singapore, South Korea, Taiwan, and Hong Kong) as well as newly industrializing countries such as Chile, Malaysia, Indonesia, and Thailand. While those countries have received significantly less aid than many LDCs, they nevertheless have re ceived some, and it would be helpful to understand how such assistance helped or hindered them in their adoption of pro-market, neoliberal development strategies.
Finally, given the mixed (both diplomatic and economic) objectives of foreign-aid policy, it would have been useful for the contributors to have assessed the individual performance of each of the three components of foreign aidsecurity assistance, development assistance, and humanitarian assistance.
Despite these oversights, Perpetuating Poverty is a powerful book that should encourage policy makers to reevaluate the very phrase "foreign aid." Such language assumes that concession ary wealth transfers from the developed to the underdeveloped countries actually assist the latter in making economic progress. Perpetuating Poverty relentlessly explains why this is often not so. With that matter settled, the way is now clear for an equally rigorous, radical rethinking of aid policy that could transform "foreign assistance" into something that actually serves the poor rather than pro longs their agony.
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