The Spectacle Blog

What Good are Foreign Aid and Humanitarian Intervention?

By on 6.6.13 | 11:20AM

Humanitarian action, whether short-term aid after a crisis or long-term development assistance, is generally approached as a technical challenge. Economist Chris Coyne challenges this engineering mentality in his new book Doing Bad By Doing Good: Why Humanitarian Action Fails.

Given how government operates, he argues, it's unrealistic to assume it can tackle humanitarian disasters or guide foreign economies to prosperity. “If that makes me a pessimist, to say you don’t know what you are doing, then I will happily accept that label,” he declared Wednesday afternoon at a Cato Institute forum.

He notes that development is an economic problem defined by constraints in resources and human knowledge. As U.S. ambassador Lewis Luncke said after the 2010 earthquake in Haiti, “It’s ironic, but after the immense suffering, we do have an opportunity. Haiti is now so profoundly broken there is really a chance to put it back together in a way that all of the well intentioned developmental programs of the past would not have done.” Traditional development is premised on an understanding of what will be good for ordinary people in foreign countries. The confidence that those objectives can be achieved by direct, linear policy actions is misplaced, however, for the same reasons that central planning cannot match market systems in allocating resources efficiently and responsively.

Although aid feels like the right thing to do, there is a real risk that intervention, particularly hasty responses to an evolving crisis, will produce negative outcomes—many of which are difficult to observe. One intervention can beget another, as when Libyan loyalists fled to Mali. in general, bureaucracies tend to waste resources and lack accountability, least of all to the people they are meant to benefit.

As a solution, Coyne proposes an emphasis on economic development and entrepreneurial action, noting that foreign remittances by emigrees dwarfed international aid 3 to 1 in 2005. The informal, undocumented economy is roughly $10 trillion dollars; unlocking that potential through good institutions would allow poor nations to grow to the point that they are no longer seek external support. “The fascinating question is why in developed countries are we able to take things like vaccines and education for granted when others cannot?” Promoting good institutions is an immense challenge, but offers the promise of empowering ordinary people to build their own futures.

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