Government Spending

From Poverty to Prosperity?

The Millennium Village Project aims to "end extreme poverty" in Africa. But it's more likely to repeat past foreign aid mistakes.

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The homepage of the Millennium Villages Project (MVP) declares, "Our generation can end extreme poverty." In 2005, the Project began its 10-year effort to do just that—in a group of 11 African villages, at least—through a comprehensive package of foreign aid focused on sectors like education, business, agriculture, and health. The Project has expanded since it's inception to cover 14 village clusters that are home to about half-a-million people across sub-Saharan Africa.

George Soros recently pledged $27.4 million to the Project, after giving $50 million in 2006. The Project estimates that the portions of the initiative it funds cost $300,000 to $400,000 per village per year. Local and national governments, partners like non-governmental organizations and corporations, and local communities are supposed to fund the rest.

At some sites, the aid interventions are worth as much as the average villager's salary, and the project boasts some impressive gains. Its latest report, "The Next Five Years: 2011-2015," states that interventions caused crop yields to double and even quadruple in some areas, increased the share of households with access to clean drinking water from 17 percent to 68 percent, increased primary school enrollment by 10 percent, and decreased malaria prevalence by 72 percent. (Though some outside experts have questioned the project's claims.) But these accomplishments are entirely different from spurring development or ending poverty.

Nor is this the first time such ambitious interventions have been attempted. Much of the MVP's agenda would cause a sense of deja vu for people involved in the World Bank's 112 "integrated rural development" projects in the 1970s and 1980s. The Bank's projects did have a narrower focus—mainly the agricultural sector. But they followed the same "integrated" model that the MVP claims makes it unique, often combining efforts to resuscitate agricultural production with transportation infrastructure projects. MVP devotes part of its FAQ page to explaining how it differs from previous efforts.

The World Bank has all but admitted that its projects failed. The Bank noted in a 1990 report that many of its projects were too complex and ambitious for local leadership and institutions to handle, which led to poorer results than those for projects with simpler designs. (The MVP prides itself on how much more complex and ambitious it is than previous aid efforts.) The Bank also said that many benefits didn't last beyond the completion of projects because locals weren't involved enough and recipient governments became uninterested once funding was disbursed. It further noted that "the larger policy environment was perhaps the single most important factor in the success or failure of the projects."

Yet the limitations that hindered the World Bank 30 years ago still exist today. In The Wilson Quarterly, aid consultant Sam Rich noted that some of these issue—strained relationships between project organizers and local governments, challenges due to national policies, little local participation, lack of sustainability—were troubling the project just two years in.

The MVP works with local and national governments and plans to collaborate with national bureaucracies to scale-up the initiative in the future. It also claims to focus on "participatory community decision-making," even if one shopkeeper in an Ethiopian Millennium Village told development economist Owen Barder that he thinks, "It is all decided by a Professor in New York."

The "Next Five Years" report features an introduction by that "professor in New York," Jeffrey Sachs. A Columbia University economist who leads the MVP, Sachs wrote that it must "create a system for success" to achieve its goal of improving African villagers' lives.

The Millennium Villages are supposed to be test cases for establishing that system. The project's backers hope to prove that its system for development works, before expanding the initiative to regional and national levels, eventually covering the African continent. The sites also serve as experiments in the Big Push theory of development, prominent among some economists since the mid-20th century and espoused by Sachs in his 2005 book, The End of Poverty. The theory holds that a large, comprehensive investment can transform economies of poverty-wracked places, essentially jump starting their development. Big Push proponents say that instead of relying on gradual growth and change for development, a transformative push can generates economies of scale and positive spillovers that revolutionize societies.

Budapest-born economist Peter Bauer, an early skeptic of foreign aid as a driver of economic growth, denounced the Big Push theory decades ago. He argued that no one—least of all foreign advisors—really knew what investments or policies would drive economic growth, an insight that emphasized the importance of freedom from centralized state control or planning.

Bauer called arguments for foreign aid axiomatic: Aid proponents regarded progress as a sign that aid was working and a lack of progress as a reason for continued aid. But recent growth due to the newly opened economies of India and China—countries that receive tiny amounts of foreign aid relative to GDP—may be the best evidence yet that it takes much more than aid for the masses to pull themselves from poverty to prosperity.

A large donation by George Soros may help improve the lives of a limited number of poor African villagers, but the real system that has improved billions of lives throughout history wasn't an aid package crafted by technocrats. The innovations and adaptations that result in people being able to put food in their own mouths—let alone in being able to buy their own mosquito nets—have resulted mostly from the freedom to exchange ideas, technologies, and goods. Despite the hopes of the Big Push theory, the World Bank's "integrated rural developments," or the carefully crafted system to transform the Millennium Villages, there is no "clearly defined pathway" for development economists or international philanthropists to make this happen.

Tate Watkins is an intern at Reason magazine.

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  1. “Our generation can end extreme poverty.”

    “The poor will always be with us.”

    I’m bettin’ on Jesus in this one…

    1. extreme poverty? probably.

      regular poverty? probably not.

    2. You know, considering how pervasive poverty is, I’m inclined to think that making the world a more hospitable place for the poor to live in is probably more acheivable tham “ending poverty”.

      Increasing access to clean water and sanitation would be a good start in that direction.

      1. “making the world a more hospitable place for the poor” = reducing poverty

        1. It really sounds more like feudalism to me.

        2. No, Tony, making the world a more hospitable place for the poor” does not equal reducing poverty, it means that misery is lessened.

          But that point is missed on a self-righteous busybody who, like you, feels that the inferior classes must be improved.

    3. Well, you’ll always have poverty since when they measure it relative to median income.

      1. Extreme poverty = $1.25usd/day.
        Pls do the most basic hmwk before writing people off to die. Thx.

  2. George Soros, who made billions as a bond vigilante profiting off of (and possibly helping cause) the destruction of currencies, causing untold poverty? That George Soros?

    Why, that’s like a big-time supporter of AGW flying all over the place in carbon-spewing airplanes to spread the gospel.

    1. Breaking eggs, making omlettes, etc.

  3. I know that’s Jeffrey Sachs even without a photo caption. God help me.

    1. Yep. Recognized him and Soros right away. And is that Ban Ki-moon on the left?

  4. “I did very little. All I did was try to prevent some of the things that might undo it.” – John Cowperthwaite

    Well we’re movin on up,
    To the east side.
    To a deluxe apartment in the sky.
    Movin on up,
    To the east side.
    We finally got a piece of the pie.

    1. Okay, Google fails.

      Again.

      1. Oh, fun toy! Thanks for the link. 🙂

        Isn’t it weird that Canada’s GDP per capita took such a sharp hit in the 08-09 recession while the US’s just did a little gentle dip.

  5. The money always ends up in the hands of corrupt politicians, one would think that decades of failure that these fools would learn that their plans will fail.

    Africa needs investment, real investment(the evil selfish sort), Chinese investment has done more to create wealth than these do-gooders have achieved in 50 years.

    1. All the investment in the world wouldn’t make Africa any less dysfunctional than it already is. All this foreign aid is nothing more than a 21st century version of the White Man’s Burden.

      1. When I say investment, I mean investments for profit, and profits in Africa can certainly be made. Agriculture and Mining are the two obvious growth areas, but as wages in Asia go up, cheap labour in Africa will attract capital.

        Africa is the second biggest continent, it does have lots of war ridden areas, but it also has lots of other areas where money can be made.

        1. Not many companies are willing to invest in a country run by blacks.

          1. My mom says there’s a lot of black people in Africa.

            1. Your mom is wise beyond her years!

          2. Much the same was said of Chinese.

  6. Can you imagine if the Kochsusses and Soros joined forces?

    But Gandalf warned me that the Kochsusses do not share power…

  7. There comes a time
    When we need a curtain call;
    When it’s time to spike a really bad song.
    There are morons singing,
    Oh, and it’s time to put an end
    To this, the greatest blight of all.

    We can’t go on
    Pretending day by day
    That their songs somehow will feed Africans
    Their false charity, it is
    Taking God’s name in vain
    Just to feed their hypocrisy and greed

    To hell with them!
    They show us children
    Starving on TV just to put us in
    The mood for giving.
    That’s our cash they’re wasting
    On worthless canned food drives!
    I hope all of those celebrities
    Get burned alive!

    So, let’s tie them up
    Together in a burlap sack,
    And then drop them in the river to drown.
    As our Lord has warned us,
    Pride is a mortal sin,
    So let’s send all these leeches straight to hell!

    To hell with them!
    They show us children
    Starving on TV just to put us in
    The mood for giving.
    That’s our cash they’re wasting
    On worthless canned food drives!
    I hope all of those celebrities
    Get burned alive!

    They’re all down and out,
    They’re losers one and all.
    Only in the bridge
    Do they even rhyme at all!
    Well, well, well, well, let’s shoot these guys,
    Yes, go and get your gun
    So that we can be sure the job’s well-done!

    Tune out their songs,
    Forget the children
    They put on TV just to put us in
    The mood for giving.
    That’s our cash they’re wasting
    On worthless canned food drives!
    If we shoot a few oppressors, that
    Will save some lives

    [Chorus, ad infinitum.]

  8. We can end some poverty. Just allow me my war profits.

  9. When is Sachs’ line of bullshit going to start being ignored? Every time it fails, the response is always the same – we didn’t piss away enough money on his harebrained scheme.

    The sad part is, we know what creates development. Not Potempkin villages kept afloat on a river of handouts. Real, long-term, sustainable development. It isn’t all that hard. Non-predatory governance provides all of the impetus needed to enable financial development, entrepreneurship, and real economic growth. People work wonders all by themselves when they don’t have to worry about some thug killing them and taking their stuff.
    Instead, they’re puffing up policies that will only serve to encourage the very predation that plagues these societies. Who but the tribesmen, family and cronies of the local leadership do they think will be lucky enough to live in these villages? Who but the tribesmen, family and cronies of the local leadership do they think will be the contractors selected to construct the local infrastructure projects? Who but the tribesmen, family and cronies of the local leadership do they think will be hired as administrators and bureaucrats for the schools, clinics, etc.?
    But let’s face it, taking the grand tour courtesy of the kleptocrats is a lot more glamorous than teaching the local police not to rob the citizenry or organizing a system to formalize property rights in a meaningful way. They give better parties. And you can point to the road, clinic, school as something you gave them, something that they owe you for in the moral calculus of the whole affair. Under the latter option, the damned wogs start thinking they did it on their own.

    1. “When is Sachs’ line of bullshit going to start being ignored? Every time it fails, the response is always the same – we didn’t piss away enough money on his harebrained scheme.”
      You can’t fix stupid. Stupid is forever.

  10. Throwing good money after bad, AFAIC. But hey, whatever fire George wants to toss his piles of money atop, it’s all good. Where I get upset is at the money our government “donates” to Africa on our behalf.

    People that really want to get out of poverty that badly find ways to do it.

    In that fantasy universe where I run the country, America’s “African aid package” would include nothing more than the money harvested by Nigerian e-mail scammers from my stupider constituents.

    1. Free trade = greatest aid.

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  12. Why don’t they use that money to help them move somewhere other than sub-Saharan Africa?

    1. Because, Sam Kinison jokes about the Horn of Africa aside, it ain’t Africa that makes ’em poor.

      It’s failed policies, corrupt strongman governments, and wars.

      (Mengistu Haile Mariam, Robert Mugabe, Mobuto Sese Seko, Idi Amin…)

      A smorgasbord of man-made disasters

  13. Another restaurant claimed to use fresh mozz arella cheese, when it’s dishes were actually made with economy cheddar. The “fresh pasta” advertished on another menu tumed out to be frozen.My boyfriend thinks the same with me. He is eight years older than me. We meet online at —-Ag?d?t?.??M–.- .. a nice and free place for younger women and older men, or older women and younger men, to interact with each other. Maybe you wanna check out or tell your friends.

  14. What Africa needs, it seems to me, is its long delayed Industrial Revolution. Delayed by the spread of Marxist foolishness, U.N. “Oh, we must preserve the Native Culture” sentimentality (really, if the Native Culture is so goddamned wonderful, how come they’re starving?), and general condescending nitwittery. My hope for the 21st Century is to see the white behinds of those who would oppose or delay the spread of industrial prosperity receive well deserved kickings from notably brown feet.

  15. You can turn a squirrel into a millionaire, but what’s the point?

    1. Hey! screw you!

  16. But these accomplishments are entirely different from spurring development or ending poverty.

    It’s weird to use that quote in the headline, then spend the article explaining why the government can’t end “regular” poverty. That’s a straw man.

    Just tell us government programs, even when they’re well-intentioned, are still perpetrated through stealing our money. If people want to help other people in foreign countries, they can donate to charity.

    I understand why we do it, but there are times when I’d rather not even bother to attack a government program on its merits. That’s not really the point.

    1. “end extreme poverty

      That was the quote I was referring to, I realized people would have to scroll way up to the top to see what I was referring to.

  17. SSA has always been and always will be a pisshole. The collective IQ is way too low for those people to ever accomplish anything of worth.

    1. It is a sad truth.

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  20. It’s weird to use that quote in the headline, then spend the article explaining why the government can’t end “regular” poverty. That’s a straw man.

    Just tell us government programs, even when they’re well-intentioned, are still perpetrated through stealing our money. If people want to help other people in foreign countries, they can donate to charity.

  21. I realized people would have to scroll way up to the top to see what I was referring to.

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