Globally, over a quarter of children under the age of five are undernourished. A child born in a developing country is over 13 times more likely to die within the first five years of life than a child born in an industrialized country. Food production per capita in Africa has declined over the past thirty years, making the region ever more reliant on imports and food aid.
The solutions to some of these problems seem simple enough: sleeping under a mosquito net reduces the risk of a child dying by 20%. Treating drinking water with chlorine can cut that by an additional 10%. With subsidies for fertilizer and high-yielding seed, farmers in Malawi for example, are generally able to produce enough food to meet national needs. The World Bank estimates that for a cost of less than 50 dollars for every person living in a rich country, we could reduce by half the proportion of people suffering from hunger, achieve universal primary education, and reduce child mortality by two-thirds. One might ask, “What is preventing the global community from taking the action needed to achieve these goals?”
Unfortunately, nothing about foreign aid is simple. While malaria control programs have been successfully implemented in Tanzania, in neighboring Uganda millions of dollars intended for this purpose have gone missing from government accounts. Even when aid is used for its intended purpose, critics argue that an influx of free food, fertilizer, or mosquito nets destroys incentives for farmers and entrepreneurs to deliver these goods.
Ineffective and even repressive governments are able to cling to power thanks to aid from abroad.
What, if anything, can rich countries do to assist poor people in the developing world? How can aid be targeted and managed to do the most good? Well-known and respected economists come to wildly different conclusions on these questions. The course will use readings, discussion, and writing assignments, to examine current debates about foreign aid specifically, and about programs to help reduce poverty, more generally.
Through concrete examples, students will be introduced to fundamental ideas in economics such as growth theory, public goods, and principal-agent problems. We will consider both theoretical arguments and empirical evidence, and critically evaluate some of the recent literature on aid effectiveness. We will also consider alternatives to aid such as reform of rich countries’ trade and agricultural support policies.
• Each student will be required to present and lead a class discussion based on one of the assigned readings. Written reflections (1-2 pages long) on the readings will be due each week prior to the class discussion. Grading will be based on a class presentation, participation in class discussions, weekly writing assignments, and a 10-15 page paper.