Time for China to Graduate
Break the tautology
Only a few countries have ever graduated from 'developing' country status...the development (foreign aid) industry is a self-fulfilling prophesy because it is one of the most adept at 'special interest' rent-seeking (eg gaming the system for the gamers to benefit at the expense of everyone else).
Aid is especially special because those who pay the taxes for aid programs dont even expect anything at all for their money, unlike some programs where the taxpayer knows their money is being used for programs for their neighbors or at least the poor, or rich businesses and rich farmers, somewhere else in their own country. The beneficiaries of the industry's programs are not even in the same country as those who pay for the programs. Welfare economics indeed.
The bilateral development agencies and the international institutions like the IMF and the World Bank and the African Development Bank mostly set their own rules, and jobs with these places are highly paid and highly prestigous, with the red carpet being rolled-out most everywhere they go (except for the brave political leaders in the "developing world" who reject their orthodoxy).
The point is is that there is no incentive for the development industry to ever graduate anyone from their programs. That is why so few ever graduate. And because the leaders of these countries (not the people of the countries, but the leaders) benefit from cheap money and prestige offered by 'development' they dont reject the orthodoxy either.
China - who has received lots of aid over the years - but not from the USA as they are a 'communist' country - is now the third largest donor of food aid (after the USA and the EU), after moving from recipient to donor status in 2001. So now maybe China will have the guts to tell the industry no thanks for further aid, and/or the industry will have the propriety to "cut-off" aid and graduate China. We shall see, after-all, these things take time right?
For more information on the aid industry and rent-seeking see my paper, "The Protestors are Half-Right".
Only a few countries have ever graduated from 'developing' country status...the development (foreign aid) industry is a self-fulfilling prophesy because it is one of the most adept at 'special interest' rent-seeking (eg gaming the system for the gamers to benefit at the expense of everyone else).
Aid is especially special because those who pay the taxes for aid programs dont even expect anything at all for their money, unlike some programs where the taxpayer knows their money is being used for programs for their neighbors or at least the poor, or rich businesses and rich farmers, somewhere else in their own country. The beneficiaries of the industry's programs are not even in the same country as those who pay for the programs. Welfare economics indeed.
The bilateral development agencies and the international institutions like the IMF and the World Bank and the African Development Bank mostly set their own rules, and jobs with these places are highly paid and highly prestigous, with the red carpet being rolled-out most everywhere they go (except for the brave political leaders in the "developing world" who reject their orthodoxy).
The point is is that there is no incentive for the development industry to ever graduate anyone from their programs. That is why so few ever graduate. And because the leaders of these countries (not the people of the countries, but the leaders) benefit from cheap money and prestige offered by 'development' they dont reject the orthodoxy either.
China - who has received lots of aid over the years - but not from the USA as they are a 'communist' country - is now the third largest donor of food aid (after the USA and the EU), after moving from recipient to donor status in 2001. So now maybe China will have the guts to tell the industry no thanks for further aid, and/or the industry will have the propriety to "cut-off" aid and graduate China. We shall see, after-all, these things take time right?
For more information on the aid industry and rent-seeking see my paper, "The Protestors are Half-Right".
posted by Cameron Weber at 9:45 AM
