Elisabeth O’Toole is a senior at Notre Dame studying International Economics & Development, and Spanish. As one of the Irish Impact interns, she assists with managing our social media platforms. Elisabeth has spent time volunteering and conducting research in Nicaragua and Guatemala. Passionate about international development and social enterprise, she is pursuing a career within this field after graduation in May.
A central question that strikes at the foundation of International Development is a simple one—does aid work? This question is by no means a new one, yet Jeffrey Sachs’ arrival on campus begs a revisiting of the question.
As a college student, I am certainly not in a place to make a definitive answer. However, my studies as an International Development student at Notre Dame have demonstrated that there is no silver bullet to poverty alleviation. My aversion to Sachs’ theories of development is contingent upon my belief that foreign aid cannot be relied upon as the sole solution to global poverty. Countries and regions require different resources, and more often than not, I argue that aid handouts will perpetuate the cycle of poverty instead of a self-actualized rise from poverty.
“The “big business” of poverty alleviation is a temporary yet constant band-aid—it allows nations to remain dependent on bouts of foreign aid, but is not successfully healing the wound lying underneath.” – Kelly Huffman, ND ’15
Funding exorbitant aid missions to countries without any idea of repayment or individualized purpose often leads to an unbreakable cycle of dependency. Empirically, aid abroad rarely if ever achieves anything other than a re-entrenchment of the causes of poverty that the aid was meant to address.
On that note, Sachs writes when he believes aid can be most effective:
Aid is one development tool among several; it works best in conjunction with sound economic policies, transparency, good governance, and the effective deployment of new technologies.
Yet when are all of these conditions meant? When considering corruption levels for countries, Rwanda is the only country in the clear amidst Sub-Saharan Africa. Without these sound structures in place, countries become reliant on foreign aid in place of growing independent. Good governance and allowing new technologies to inform emerging markets is a great idea in the abstract, but is rarely a reality.
“As shown through the documentary Poverty, Inc., this is what is holding developing nations back—they do not want to remain dependent on foreign aid, yet they do not have the means to be fully independent due to deep underlying issues.” – Kelly Huffman
Instead of clinging to a hope of an overly-utopian situation, why not work to create one?
Here is where social entrepreneurship comes into play. Social enterprises work at the grassroots to generate structures in which the poor can begin to pull themselves up from poverty.
“Donating an infinite amount of rice to Africa is never going to lift them out of poverty, but building infrastructure and providing opportunity may.” – Alysa Kane, ND ‘15
Social entrepreneurship is all about building capacity. Instead of distributing handouts to the masses, social entrepreneurship works to create hand-ups. Social entrepreneurs respect human dignity inherent to each individual in order to create opportunities for growth.
When considering the proverb “Give a man a fish, you feed him for a day. Teach a man to fish, you feed him for a lifetime,” one could relate foreign aid to giving a man a fish, and other developmental practices as teaching a man to fish. Taking this a step farther, instead of giving a man a fish or only teaching him how to fish, social entrepreneurship “also provides micro-entrepreneurs the pole, the tackle and a fishing partner.” (http://onforb.es/1Dr4SRI)
This is not to say that foreign aid is useless. In emergent situations such as the earthquake in Haiti, and the Ebola outbreak in Western Africa, foreign aid is absolutely necessary. In these contexts, there is not enough time to create organizational structures that serve to develop domestic capabilities to handle crisis. In crises, foreign aid is needed.
But what happens once the crisis is over? More often than not, the streams of foreign aid cannot cease because it has become the norm. People and markets become accustomed to relying on aid, and yet again the international aid community has missed an opportunity to develop the infrastructure that is perquisite to long-term poverty reduction.
Social entrepreneurship works at the grassroots level to develop job opportunities and markets, educational and health initiatives, all working towards the goal of sustainable economic development. Allowing for such localized approaches to grow both the economy and organizational institutions means that various crises can be avoided without a massive outpour of aid from other countries.
Sachs writes in a Foreign Policy Article:
These successes demonstrate a key lesson: that well-designed aid programs with sound operating principles, including clear goals, metrics, milestones, deliverables, and financing streams, can make an enormous difference, and that such programs should be devised and applied on a large scale in order to benefit as many people as possible.
On this point, Sachs and I are in agreement–this is a great method to alleviate poverty if all these contingencies are in harmony. However, situations like these are more of the exception than the rule. The system in place first needs to be fixed and often times created in order to consider the idea of development. Social entrepreneurship can be one of the solutions to perpetuate the works of economic development.
Jeffery Sachs, world-renown development economist and author of The End of Poverty, is the keynote speaker at this year’s Human Development Conference (please register for HDC). A student-run conference, the HDC welcomes student presenters from across the globe to discuss themes of past, present and future development issues.
Sachs will also deliver a public lecture on Thursday, February 26th at 7:00 pm at Washington Hall. This event is free but ticketed and tickets can be picked up from the LaFortune Center box office.
Sachs, Jeffrey. 2014. “The Case for Aid.” Foreign Policy Magazine. http://foreignpolicy.com/2014/01/21/the-case-for-aid/