Thoughts on food aid

Development requires fresh thinking. Throwing money at tried and failed programs is as deplorable as inaction. But new doesn't necessarily mean good.

Cash distribution is something that has been floating around among young(ish), forward thinking development scholars and practitioners for a while. Owen Barder makes the case:

American legislation requires that food aid be bought in the US, that  50 percent of commodities be processed and packed in the US before shipment, and that 75 percent of food aid managed by USAID and 50 percent of the food aid managed by the US Department of Agriculture be transported in “flag-carrying” US-registered vessels. The result is that only 40% of money spent on food aid by the US actually goes towards buying food; the rest goes to US transport companies. Buying the food locally would be better, but best of all might be something even more radical.  Why not give the money itself to people who are hungry?

Not a bad idea, but keep in mind that most countries that really, really need international food aid are often not open to the help: Burma after last year's Cyclone Nargis, Zimbabwe for the past 29 years, North Korea - the list goes on. De-tying food aid from American agricultural producers is a noble cause and a good idea, but that doesn't mean direct cash aid is its' logical, or even possible, conclusion.

Wishful thinking

Nancy Birdsall at the Center for Global Development, one of the few decent think tanks in DC, has produced her "policy wish list" for 2009. It's pretty predictable stuff and some of her wishes are stuff we here at zzzeitgeist have been advocating for some time, though her methods are not prescriptions we see too often. 

Everyone seems to support freer trade and increased development, but is it a good idea to avoid protectionism by offering "permanent duty-free, quota-free market access for the poorest countries" and embrace innovations such as cash on delivery aid? Foreign aid certainly needs to be modernized but Blattman does a better job of explaining why. It's hard to only give aid based on quotas when a country lacks the infrastructure necessary to reach said quotas. 

Too bad in this economic climate these wishes will remain just that.

BTW what's up with number 5?

Collective isn't a four letter word

Chris Blattman had an interesting post up today on the roots of group action. Drawing on his field experience in Liberia, he offers an anecdote that seems to reveal he believes that collective action is a social phenomenon capable of improving the efficacy of international aid.

It is an interesting conception. He is right in saying that donors prefer to give money to "groups". Agencies like to work with organizations as it offers a sense of legitimacy and allows for a more for formalized relationship than could exist with unorganized communities or individuals. More importantly, such group think or collective action can promote greater civic engagement, pride and hopefully efficiency and production. This is not a new idea: de Tocqueville surmised that American civic associations were behind our unique embrace of a radically new political (and resultant economic) system. More recently, Robert Putnam gained notoriety with Bowling Alone, his work that equated the decline of American power with lower rates of social interaction and public discourse.

The premise seems rather obvious. Our social capital, the net worth of our relationships and the "wealth" they create, increases if we participate in group life. Blattman gets at the real question though: how do we encourage this type of behavior in the context of war-torn or otherwise struggling states? Attaching strings to aid money is not enough. If anything, it favors those who already have enough access to influence and power to initiate the formation of such groups. What is required is a structural shift in how we disseminate aid. Incentives are a good place to start. I'm generally somewhat skeptical of the merits of libertarian paternalism but this seems to be a good test case for wielding such soft influence.

Whether governments, institutions, or donors steer people toward collective action, if it yields better results it can only help the efficiency of, and in turn argument for more, foreign aid.