A pre-earthquake photo of Port Au Prince.
This is not a natural disaster story. This is a poverty story. It’s a story about poorly constructed buildings, bad infrastructure and terrible public services.
Over the past few decades, the world has spent trillions of dollars to generate growth in the developing world. The countries that have not received much aid, like China, have seen tremendous growth and tremendous poverty reductions. The countries that have received aid, like Haiti, have not.
In the recent anthology “What Works in Development?,” a group of economists try to sort out what we’ve learned. The picture is grim. There are no policy levers that consistently correlate to increased growth. There is nearly zero correlation between how a developing economy does one decade and how it does the next. There is no consistently proven way to reduce corruption. Even improving governing institutions doesn’t seem to produce the expected results.
The chastened tone of these essays is captured by the economist Abhijit Banerjee: “It is not clear to us that the best way to get growth is to do growth policy of any form. Perhaps making growth happen is ultimately beyond our control.”
Laura Freschi comments:
Also of interest in the article is Brooks’ argument that Haiti’s “progress-resistant” culture is largely to blame for the country’s extreme poverty. This strikes me as overly reductionist (although interesting recent economics research does point to the importance of values like trust in determining prosperity.) Brooks’ list of rejected explanations include slavery and colonial history, bad government and corruption, foreign invasions, geography and climate. I wonder what others who have spent time studying, living or working in Haiti think of the relative weight of these explanatory variables.
(HT Don Boudreaux)