http://bostonreview.net/BR31.4/deaton.html[2/10/2009 10:48:19 AM] CURRENT I SSUE table of contents FEATURES new democracy forum new fiction forum poetry fiction film archives ABOUT US masthead mission rave reviews contests writers’ guidelines internships advertising SERVI CES bookstore locator literary links subscribe Search bostonreview.net Search the Web ‘Evidence-based aid must not become the latest in a long string of development fads’ Angus Deaton  While skepticism about foreign aid used to be the preserve of the political right, it has now spread to some who clearly recognize the moral imperative of the world’s rich to help the world’s poor. Abhijit Banerjee is skeptical of aid as we know it, but he has both a diagnosis and a plan. The diagnosis is that donors are shooting in the dark because they refuse to collect solid evidence on what works. His plan is to collect this evidence using randomized controlled trials and to confine aid to projects that the evidence supports. Aid would then do a great deal of good. And although Banerjee does not say so, there would be much less of it, because only a fraction of projects that currently receive aid could be subject to randomized controlled trials. I agree with Banerjee on a good deal of this. I too am skeptical of current practice and I too believe in the value of empirical evidence. But I am also skeptical about the general usefulness of randomized controlled trials in this context. Because Banerjee is far from a voice in the wilderness—the arguments of the “randomistas” are having considerable success—it is important that we get this right, and that evidence-based aid does not become the latest in a long string of development fads. The historical record tells us that it is possible to grow and eliminate poverty without foreign aid; all of the now-rich countries did so. We also know that some of the most successful poor countries, such as India and China, grew with very little aid relative to their size, or with aid that was dictated by their own priorities rather than donors’. The least successful countries, many of them in sub-Saharan Africa, have been given large amounts of aid relative to their size and have neither grown nor reduced poverty. Isolating the role of aid in these outcomes is clearly very difficult, and a convincing statistical demonstration may not be possible. Yet empirical work has improved considerably, and some of us who had previously discounted the econometric literature are beginning to think that, indeed, there may be no effect to be found. Aid as we have known it has not MIT Sloan Mgmt Review Subscribe, Renew or send as Gift. 90-days risk-free, money back. MITSloanMgmtReview.com-sub.in Spigit - InnovationSpigit Social Productivity Tools for Enterprise Innovation www.spigit.com Innovation Advantage Go