Last weekend the Wall Street Journal ran the type of feature that I enjoy very much. It was a debate-style format between Bill Gates and Matt Ridley, author of The Rational Optimist.
The debate covered several areas and focused on global warming and improvement in Africa.
I’m disappointed that so much of the debate relied on misunderstanding the opponent’s position. It seems we could have much more productive discussions if we get better at recognizing when our view of the opponent’s position is flawed.
Quite frankly, I don’t believe the following portion of debate should have made it to print.
Gates writes this about Ridley:
In discussing Africa, Mr. Ridley relies on critics who say, essentially, “Aid doesn’t work, hasn’t worked and won’t work.”
Far from saying that aid “doesn’t work, hasn’t worked and won’t work,” I actually say this in my book: “Some of the most urgent needs of Africa can surely be met by increased aid from the rich world. Aid can save lives, reduce hunger, deliver a medicine, a mosquito net, a meal or a metalled road.”
I go on to say that “statistics, anecdotes and case histories all demonstrate that the one thing aid cannot reliably do is to start or accelerate economic growth.” Now here I admit that Mr. Gates does have a point. Unintentionally, I have given him and perhaps other readers the impression that, in my view, combating malaria or AIDS does not pay economic dividends. It does.
What I do take issue with is economic aid designed to stimulate economic growth. For example, a 2006 study by Simeon Djankov of the World Bank (now deputy prime minister of Bulgaria) and his colleagues concluded that “foreign aid has a negative impact on the democratic stance of developing countries and on economic growth by reducing investment and increasing government consumption.” Economic aid diverts resources into projects that fail, puts money into the pockets of corrupt government officials and crowds out the efforts of entrepreneurs. In one example, only 13% of educational aid to Uganda reached schools; the rest was siphoned off by rent-seeking officials.