Go teach yerself ta fish

Matt Yglesias speaks a few words in support of rich-country aid to poor countries:

Economic growth is a crucial thing, especially for desperately poor countries, but it is what it is and there are other things on the table as well. To get growth, you need good policies. India, having adopted better policies, has enjoyed a good deal of economic growth over the past 10-15 in a way that no aid program could possibly deliver. On the other hand, India is still a desperately poor country and it's the kind of place where a lot of kids die of measles for lack of vaccines. Over time, if India keeps growing economically, one imagines the government will get a universal vaccination program (or something close to it) up and running, but the rich world could easily afford to step in here and help out.

The growth impact of something like that is going to get swamped by the much larger issues in play and ultimately India's success is going to be determined by Indian policymakers (and whether or not the country gets into a nuclear war with Pakistan) rather than foreign aid officials, but that doesn't mean that a well-designed program to save some lives can't, in fact, save lives.

The assumption here is that aid, while not as good as growth, certainly can't hurt. I'm just not so sure about that. One worry is that, if the U.S. gives enough aid to poor Indians to make a difference, the Indian government will be under less pressure to provide services like public health, vaccination, etc. That might lead India's government to use aid as a crutch, intentionally or not, so that it doesn't develop the capacity to provide public goods on its own. By the time India gets too rich to receive foreign aid, this crutch could have become ingrained - especially if, as happens in many African countries, Indian government officials pocket a large percentage of the aid that we send. There's a danger in thinking that aid has only positive effects - give a man a fish, and tomorrow instead of taking out his own boat, he might sit around on the dock waiting for another fish.

Of course, I want to see Indian kids healthy and well-educated and rich as much as anyone. I think a more important form of aid that we can give countries like India (besides trade, of course) is to send qualified personnel to help them build quality institutions, like universities, hospitals, and schools. Japan is doing this with the Delhi-Mumbai "industrial corridor" that it's helping India to build. I think that, in the long run, helping people in the developing world learn to run their own country more effectively will have a bigger effect than trying to fill in their shortcomings directly with traditional aid.