Davos: Easterly on Poverty

Thanks to Jeff Jarvis’ Davos blogging I learned about William Easterly, an economist who is very critical of his former employer the World Bank. At Davos he appears to be bashing much of what is now considered good poverty reduction strategy by World Bank and large private funds like the Gates Foundation. I’ve been impressed with Gates Foundation and still trying to find out more about whether the World Bank, on balance, is helping or hurting the poor. Digging a little deeper I found this Easterly quote, which certainly seems very reasonable:

William Easterly, a former research economist for World Bank:

The right response is to demand accountability from aid agencies for whether aid money actually reaches the poor. The right response is to demand independent evaluation of aid agencies. The right response is to shift the paradigm and the money away from top-down plans by “experts” to bottom-up searchers—like Nobel Peace Prize winner and microcredit pioneer Mohammad Yunus—who keep experimenting until they find something that works for the poor on the ground. The right response is to get tough on foreign aid, not to eliminate it, but to see that more of the next $2.3 trillion does reach the poor.

Of course few would disagree with the above, so he’s not really addressing the question of how to “get tough” on foreign aid.    I’ve been very impressed with the ability of the Gates foundation to focus laser-like on key health issues like malaria and fund accordingly.  I’m not convinced a bureaucratic or governmental approach can be nearly as effective, especially because it seems many of the poorest countries struggle with the simplest forms of accountability in business and government.      Clearly one of the great challenges is how to *bypass* ineffective and corrupt people and agencies within the poor countries so that aid can flow to the needy.