Posted by Bob on 8/24/2007, 1:07 pm CARE International has decided to stop sending to poor nations the $45 million in U.S. food it receives each year. Why? They say it does more harm than good. This comes as no surprise to readers of The Patriot—or to James Shikwati, an African economist who has been pleading with Western nations to stop sending aid. Such foreign aid may assuage the consciences of wealthy Westerners, and it may help Bono headline a world tour, but that’s about where the benefits stop. As is often pointed out, the aid rarely gets to its intended recipients, as warlords and corrupt governments redirect it for their own purposes. Even when it does reach those who need it, the unintended consequences wreak havoc on local economies. Floods of donated food and clothing hurt local farmers and manufacturers struggling to get their businesses off the ground, while the pattern of aid encourages dependence and removes incentives for entrepreneurship and reform. The better alternative is investment. The conscience-warming effect may be less noticeable in the short term, but in the end, profitable investment that encourages growth and rewards hard work and successful business ventures is the only lasting way to help the world’s poor. Of course, those calling for more foreign aid are usually the same folks who oppose free trade and outsourcing—the very things that have the best potential to actually help the poor in any meaningful way, despite the growing pains of losing jobs. Investment requires good government: rule of law, stable financial systems and property rights. Rather than giving handouts, the West would do well to export its true source of wealth: good government and free markets.
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From: The Patriot
