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  Who is “the West”? It is the rich governments in North America and Western Europe who largely control international agencies and the effort to transform poor nations. Although, over time, some non-Western nations (Japan) and professionals from all over the world have also become involved.

  The tragedy of the poor inspires dreams of change. President James Wolfensohn of the World Bank put on the wall of the lobby of the World Bank headquarters the words OUR DREAM IS A WORLD FREE OF POVERTY. He has written about this dream with inspiration and eloquence:

  If we act now with realism and foresight,

  if we show courage,

  if we think globally and

  allocate our resources accordingly,

  we can give our children a

  more peaceful and equitable world.

  One where suffering will be reduced.

  Where children everywhere will have a sense of hope.

  This is not just a dream.

  It is our responsibility. 12

  In the world’s capital, New York, the United Nations had an inspirational dream of its own at the start of the new millennium. It got “the largest-ever gathering of heads of state” to promise “to eradicate poverty, promote human dignity and equality and achieve peace, democracy and environmental sustainability.13

  Political leaders from around the world specifically agreed then on the Millennium Development Goals (MDGs). The eight MDGs for 2015 are(1) eradicate extreme poverty and hunger, (2) achieve universal primary school enrollment, (3) promote gender equality and empower women, (4) reduce child mortality, (5) improve maternal health, (6) combat HIV/AIDS, malaria, and other diseases, (7) ensure environmental sustainability, and (8) develop a global partnership for development. These are beautiful goals.

  At Davos in January 2005, British prime minister Tony Blair called for “a big, big push forward” in Africa to reach the Millennium Development Goals, financed by an increase in foreign aid.14 Blair commissioned a “Report for Africa,” which released its findings in March 2005, likewise calling for a “big push.”

  Gordon Brown and Tony Blair put the cause of ending poverty in Africa at the top of the agenda of the G8 Summit in Scotland in July 2005. Bob Geldof assembled well-known bands for “Live 8” concerts on July 2, 2005, to lobby the G8 leaders to “Make Poverty History” in Africa. Veterans of the 1985 Live Aid concert, such as Elton John and Madonna, performed, as did a younger generation’s bands, such as Coldplay. Hundreds of thousands marched on the G8 Summit for the cause. Live 8’s appeals for helping the poor and its dramatizations of their sufferings were moving, and it is great that rock stars donate their time for the needy and desperate.

  Yet helping the poor today requires learning from past efforts. Unfortunately, the West already has a bad track record of previous beautiful goals. A UN summit in 1990, for example, set as a goal for the year 2000 universal primary-school enrollment. (That is now planned for 2015.) A previous summit, in 1977, set 1990 as the deadline for realizing the goal of universal access to water and sanitation. (Under the Millennium Development Goals, that target is now 2015.15 Nobody was held accountable for these missed goals.

  In July 2005, the G8 agreed to double foreign aid to Africa, from twenty-five billion dollars a year to fifty billion for the big push, and to forgive the African aid loans contracted during previous attempts at a “big push.”

  The current enthusiasm for big plans got new life with the the “war on terror.” After defeating Saddam Hussein’s army, President George W. Bush enthused in a graduation ceremony at the Coast Guard Academy in May 2003: “These goals—advancing against disease, hunger and poverty…are…the moral purpose of American influence…. President Woodrow Wilson said, ‘America has a spiritual energy in her which no other nation can contribute to the liberation of mankind.’ In this new century, we must apply that energy to the good of people everywhere.16 The new military interventions are similar to the military interventions of the cold war, while the neo-imperialist fantasies are similar to old-time colonial fantasies. Military intervention and occupation show a classic Planner’s mentality: applying a simplistic external answer from the West to a complex internal problem in the Rest.

  Similarly, the aid-financed Big Push is similar to the early idea that inspired foreign aid in the 1950s and 1960s, when central planning and a “Big Push” were all the rage. This legacy has influenced the planning approach to economic development by the World Bank, regional development banks, national aid agencies such as the United States Agency for International Development (USAID), and the United Nations agencies. At first, these agencies called for the planning of poor countries’ economies. Later they shifted toward advocacy of the free market for these countries, yet in many ways the agencies themselves continued to operate as Planners (and still today, the UN, World Bank, and IMF advocate a kind of national plan they call a Poverty Reduction Strategy Paper).

  Jeffrey Sachs wrote a fascinating book in 2005 called The End of Poverty. He sees the world’s poor as caught in a “poverty trap,” in which poor health, poor education, and poor infrastructure reinforce one another. But there is hope from a Big Plan. “Success in ending the poverty trap,” Sachs writes in the book, “will be much easier than it appears.”

  But if rich people want to help the poor, they must face an unpleasant reality: If it’s so easy to end the poverty trap, why haven’t the Planners already made it history?

  The Backward Question That Cripples Foreign Aid

  How can the West end poverty in the Rest? Setting a beautiful goal such as making poverty history, the Planners’ approach then tries to design the ideal aid agencies, administrative plans, and financial resources that will do the job.

  Sixty years of countless reform schemes to aid agencies and dozens of different plans, and $2.3 trillion later, the aid industry is still failing to reach the beautiful goal. The evidence points to an unpopular conclusion: Big Plans will always fail to reach the beautiful goal.

  I am among the many who have tried hard to find the answer to the question of what the end of poverty requires of foreign aid. I realized only belatedly that I was asking the question backward; I was captive to a planning mentality. Searchers ask the question the right way around: What can foreign aid do for poor people?

  Setting a prefixed (and grandiose) goal is irrational because there is no reason to assume that the goal is attainable at a reasonable cost with the available means. It doesn’t make sense to have the goal that your cow will win the Kentucky Derby. No amount of expert training will create a Derby-winning race cow. It makes much more sense to ask, “What useful things can a cow do?” A cow can nicely feed a family with a steady supply of milk, butter, cheese, and (unfortunately for the cow) beef. Of course, you could win the Kentucky Derby if you had a championship-caliber horse, but this book will review the decades of experience that show aid agencies to be cows, not racehorses.

  Likewise, we will see in this book that aid agencies cannot end world poverty, but they can do many useful things to meet the desperate needs of the poor and give them new opportunities. For example, instead of trying to “develop” Ethiopia, aid agencies could devise a program to give cash subsidies to parents to keep their children in school. Such a program has worked in other places, so it could take children like Amaretch out of the brutal firewood brigade and give her hope for the future. But right now much aid goes astray because we keep trying to train the aid agency cow to win the Kentucky Derby.

  Searchers look for any opportunity to relieve suffering—e.g., the cash-for-school program—and don’t get stuck on infeasible objectives. One of the key predictions about Planners that we will see confirmed over and over in this book is that they keep pouring resources into a fixed objective, despite many previous failures at reaching that objective, despite a track record that suggests the objective is infeasible or the plan unworkable. We will see that Planners even escalate the scope of intervention when the previous intervention fails. They fail to search fo
r what does work to help the poor. The second tragedy continues. Yet Searchers in aid are already finding things that help the poor, and we will see that they could find many more if the balance of power in aid is shifted from Planners to Searchers.

  Setting goals may be good for motivation, but it is counterproductive for implementation. The free market operates without fixed specific goals, only general goals (e.g., businessmen making profits, consumers achieving satisfaction). The Art of What Works is a marvelous book by Columbia Business School professor William Duggan. He quotes Leonardo da Vinci: “As you cannot do what you want, / Want what you can do.17 Duggan points out with numerous examples that business success does not come from setting a prefixed goal and then furiously laboring to reach it. Rather, successful businessmen are Searchers, looking for any opportunity to make a profit by satisfying the customers. They evaluate the chance of reaching many different goals and choose the one that promises the highest expected benefit at the lowest cost (in other words, the highest profits). Book publishers did not fixate on the goal of selling books about teenage wizards until after J. K. Rowling found a way to please customers with such a book.

  Bill Duggan gives the example of Ray Kroc. Kroc was a salesman peddling the Multimixer, a machine that mixes six milkshakes at a time. His original idea was to sell as many Multimixers as possible. In 1954, he visited a restaurant called McDonald’s in San Bernardino, California. He noticed that the McDonald brothers kept eight Multimixers operating at full capacity around the clock. At first, he wanted to recommend their methods to his other clients, increasing the demand for his Multimixers. But then he changed his mind. He saw that preparing hamburgers, fries, and milkshakes on an assembly-line basis was a way to run a successful chain of fast-food restaurants. He forgot all about the Multimixer, and the rest is a history of Golden Arches stretching as far as the eye can see. How many Ray Krocs has foreign aid lost by its emphasis on plans?

  Getting Bed Nets to the Poor

  At the World Economic Forum in Davos in 2005, celebrities from Gordon Brown to Bill Clinton to Bono liked the idea of bed nets as a major cure for poverty. Sharon Stone jumped up and raised a million dollars on the spot (from an audience made up largely of middle-aged males) for more bed nets in Tanzania. Insecticide-treated bed nets can protect people from being bitten by malarial mosquitoes while they sleep, which significantly lowers malaria infections and deaths. But if bed nets are such an effective cure, why hadn’t Planners already gotten them to the poor? Unfortunately, neither celebrities nor aid administrators have many ideas for how to get bed nets to the poor. Such nets are often diverted to the black market, become out of stock in health clinics, or wind up being used as fishing nets or wedding veils.

  The nonprofit organization Population Services International (PSI), headquartered in Washington, D.C., gets rewarded for doing things that work, which enables it to attract more funding. This makes it act more like a Searcher than a Planner. PSI stumbled across a way to get insecticide-treated bed nets to the poor in Malawi, with initial funding and logistical support from official aid agencies. PSI sells bed nets for fifty cents to mothers through antenatal clinics in the countryside, which means it gets the nets to those who both value them and need them. (Pregnant women and children under five are the principal risk group for malaria.) The nurse who distributes the nets gets nine cents per net to keep for herself, so the nets are always in stock. PSI also sells nets to richer urban Malawians through private-sector channels for five dollars a net. The profits from this are used to pay for the subsidized nets sold at the clinics, so the program pays for itself. PSI’s bed net program increased the nationwide average of children under five sleeping under nets from 8 percent in 2000 to 55 percent in 2004, with a similar increase for pregnant women.18 A follow-up survey found nearly universal use of the nets by those who paid for them. By contrast, a study of a program to hand out free nets in Zambia to people, whether they wanted them or not (the favored approach of Planners), found that 70 percent of the recipients didn’t use the nets. The “Malawi model” is now spreading to other African countries.

  The Washington headquarters of PSI, much less the Davos World Economic Forum, did not dictate this particular solution. The local PSI office in Malawi (which is staffed mostly by Malawians who have been with the program for years) was looking for a way to make progress on malaria. They decided that bed nets would do the job, then hit upon the antenatal clinic and the two-channel sales idea. This scheme is not a magical panacea to make aid work under all circumstances; it is just one creative response to a particular problem.

  Philosophy of Social Change

  The debate between Planners and Searchers in Western assistance is the latest installment in a long-standing philosophical divide in Western intellectual history about social change. The great philosopher of science Karl Popper described it eloquently as “utopian social engineering” versus piecemeal democratic reform.19 This is pretty much the same divide as the one Edmund Burke described in the late eighteenth century as “revolution” versus “reform” (the French Revolution was a bloody experiment in utopian engineering). Social engineering experiments have been applied since then in such diverse contexts as compulsory resettlement of Tanzanians into state villages and Communist five-year plans to industrialize in the Soviet Union and Eastern Europe. Ironically, social engineering surfaced again as “shock therapy” in the transition from communism (after the five-year plans had failed) to capitalism, which eschewed the alternative of “gradualism.” Social engineering showed up in Africa and Latin America in the eighties and nineties as IMF/World Bank–sponsored comprehensive reforms called “structural adjustment.” Military intervention to overthrow evil dictators and remake other societies into some reflection of Western democratic capitalism is the extreme of contemporary utopian social engineering. The plan to end world poverty shows all the pretensions of utopian social engineering.

  Democratic politics is about searching for piecemeal solutions: a local group engages in political action to campaign for a missing public service, such as trash collection; and a politician recognizes an opportunity for political gain from meeting these needs and winning over this particular group.

  Even when our politicians are not exactly the sharpest tools in the shed, rich democracies somehow work. Political scientist Charles Lindblom in a classic article described rich-country politics as the “science of muddling through.” He noted that in rich democracies “actual policy practice is a piecemeal process of limited comparisons, a sequence of trials and errors followed by revised trials, [and] reliance on past experience.20 In other words, politicians in rich countries are Searchers at home.

  Burke and Popper recognized the economic and political complexity of society. That complexity dooms any attempt to achieve the end of poverty through a plan, and no rich society has ended poverty in this way. It is only when rich-country politicians gaze at the non-voters in the rest of the world that they become Planners. This is another clue to the likelihood of planning: outsiders are more likely to be Planners, while insiders are forced by their fellow insiders to be Searchers.

  Feedback and Accountability

  Two key elements that make searches work, and whose absence is fatal to plans, are feedback and accountability. Searchers know if something works only if the people at the bottom can give feedback. This is why successful Searchers have to be close to the customers at the bottom, rather than surveying the world from the top. Consumers tell the firm that “this product is worth the price” by buying it, or they decide the product is worthless and return it to the store. Voters tell their local politician that “public services suck,” and the politician tries to fix the problem.

  Lack of feedback is one of the most critical flaws in existing aid. It comes about because of the near-invisibility of efforts and results by aid agencies in distant parts of the world. The rest of the book explores how to begin addressing this flaw, from employing local “watchers” of aid projects to doing i
ndependent evaluation of those projects.

  Of course, feedback works only if somebody listens. Feedback without accountability is like the bumper sticker I once saw on an eighteen-wheeler: DON’T LIKE MY DRIVING? CALL 1- 8 00 -SCREW-YOU. Once Searchers implement the results of a search, they take responsibility for the outcome. Profit-seeking firms make a product they find to be in high demand, but they also take responsibility for the product—if the product poisons the customer, they are liable, or at least they go out of business. A political reformer takes responsibility for the results of the reform. If something goes wrong, he pays politically, perhaps by losing office. If the reform succeeds, he gets the political rewards.

  Although all governments include bureaucracy, in well-developed democratic governments, the bureaucrats are somewhat more specialized and accountable for specific results to the citizens (although God knows they try hard not to be). The bureaucrats gradually make improvements through what Lindblom called “disjointed incrementalism.” Active civic organizations and political lobbies operate from the bottom up to hold leaders and bureaucrats accountable, correcting missteps and rewarding positive ones. Rich voters complain if municipal trash collectors don’t pick up their discarded shipping boxes after Amazon delivers Harry Potter; politicians and bureaucrats have political incentives to correct any breakdown in trash collection. Feedback guides democratic governments toward supplying services that the market cannot supply, and toward providing institutions for the markets to work.

  At a higher level, accountability is necessary to motivate a whole organization or government to use Searchers. In contrast, Planners flourish where there is little accountability. Again, outsiders don’t have much accountability, and so they are Planners; insiders have more accountability and are more likely to be Searchers.

  We will see some of the helpful changes that can happen in aid when accountability is increased, shifting power from Planners to Searchers. Aid agencies can be held accountable for specific tasks, rather than be given the weak incentives that follow from collective responsibility for broad goals. Aid workers now tend to be ineffective generalists; accountability would make them into more effective specialists.