Thursday, December 22, 2011

Defense versus foreign aid: Which one to cut during trying times?

Here is an interesting article in The Economist that looks at why the public support slashing foreign aid but not defense spending during austerity era. The stimulating debate is over the spending on fighter jets to bomb dictators and free the repressed people and slashing spending on providing anti-Malaria bed nets to the same repressed people.

The author argues that with the drumbeating of ineffectiveness of aid in reducing poverty and spurring growth, the public is more willing agree to slash foreign aid that is supposedly not working than defense spending. And, the debate usually drags like the never-ending battle between Sachs and Easterly over aid’s effectiveness. It is ideological belief most the time. A belief that the government should concentrate more on defense and law enforcement (i.e. smaller government, not smarter!), and let the markets determine the rest. Read the full article.

Congress is slashing foreign aid to fight malaria in large part because the one category of government spending that the American public actually wants to slash, by a wide margin, is foreign aid. Meanwhile, the public opposes cuts to the defence budget (though they oppose cuts to education, Medicare and domestic anti-poverty programmes even more). So the fact that the political sphere is debating whether or not to bomb Muammar Qaddafi's tanks, rather than whether or not to raise spending on anti-malarial bed nets in Malawi, isn't really that surprising. But why does the public want to cut foreign aid, rather than defence? One reason is that for the past decade and more, both serious development experts like William Easterly and unserious politicians, mainly on the right, have been strenuously arguing that most foreign aid doesn't work. In fact, in Mr Easterly's case, one of the things he argued didn't work (in his excellent book "The White Man's Burden") was centrally planned efforts to distribute anti-malarial bed nets. He thought this was one of those things that would work better with a market solution: we should subsidise at most $8 of the cost of each $10 bed net, but let the rest of the distribution work itself out via market mechanisms.

Again, it's not surprising that the public doesn't want to spend more on foreign aid for anti-malarial bed nets, when people keep telling them such aid doesn't work. What makes the situation more piquante is that, as Jeffrey Sachs argued in a 2009 article in Scientific American, in the specific case of bed nets, the claim appears to be completely wrong. The reason anti-malarial bed nets hadn't been much of a success in Africa before 2005 or so was that donors and executing agencies hadn't spent enough money buying them, and hadn't yet figured out how to distribute them.

[…]Mr Easterly and Mr Sachs have a long-running and intense debate on this and other development issues. I usually agree with Mr Easterly more than Mr Sachs, but in the specific case of bed nets he's had to retreat; more recently he's been sensibly pointing out that even if free distribution works better, you have to figure out a reliable way of identifying organisations that will actually do the distribution for free (rather than selling them illicitly, failing to distribute, etc), and there's no obvious scalable way to do that. But this only raises a further problem for the "bomb Libya or fight malaria" paradigm: how can you even ask the question if spending more on anti-malaria campaigns may not have any effect, since it's about the quality of the agencies, not the amount of funding? If there's no fungible way to shift effort from bombing Libya to fighting malaria, how can there even be a trade-off here?

Still, let's stipulate that shifting spending from the government bombardment of Libya to government anti-malaria efforts in the developing world would work. Certainly, few public-health experts would dispute that many health problems can be most efficiently addressed by having the government undertake preventive measures and distribute them for free. But here's the thing: you will hear approximately no voices on the right-hand side of the political aisle making this case in the United States today. The strategic direction of conservative political thought over the past 30 to 50 years has been to minimise the consensus on the extent of public goods: to argue that there are almost no areas of the economy or society in which government has a constructive role to play,except for national defence, and a few other areas such as law enforcement. Certainly not health.

I would suggest that if we're wondering why the American public devotes so much of its political attention to wars, and so little to anti-malarial bed nets, we might want to consider the role played by consistent efforts over the past 30 years to convince the public that government has almost no legitimate or positive role to play in society apart from a few narrow categories, including law enforcement and national defence, and not including health care. People who believe that virtually all social and economic endeavours, apart from defence and law enforcement, are best addressed by leaving them up to market forces and private industry will not naturally see much else for political discussion to focus on apart from military activity and law enforcement. To put it another way: if we don't think peaceful humanitarian interventions (like anti-malaria campaigns in Malawi) work, then, yes, military humanitarian interventions (like bombing Libya) are the best possible use of American resources towards humanitarian ends. If we do think government humanitarian programmes like anti-malaria campaigns in Malawi work, then I would expect to see a rather different attitude towards foreign aid and public health-care spending than I have seen in American politics these last few years.

To put things in one last way: it simply isn't true that we aren't faced with calls for peaceful humanitarian interventions as often as we are faced with calls for military ones. We are faced with calls for peaceful humanitarian interventions all the time. People are asking for more money for USAID. People are asking for more money for UN peacekeepers. People are asking for more money for the United States Institute for Peace. They're asking for more money for the Global Fund to Fight AIDS, Tuberculosis and Malaria. If you want America, collectively, to be doing more of this sort of thing and less of the bombing sort of thing, then what you need to do is to argue that those sorts of activities are central missions of the United States government, because the most powerful political forces in America over the past couple of decades have been arguing that they aren't, and that's why we're not doing more of them.