PDF Summary:The White Man's Burden, by William Easterly

In The White Man’s Burden, economist, NYU professor, and Brookings Institution senior fellow William Easterly argues that the global humanitarian aid system is fundamentally flawed. His main critique is that the international aid system prioritizes top-down, centralized, and tightly directed aid distribution—all controlled by people in rich countries (primarily the United States and those in Western Europe), far away from the developing world that they're meant to be serving. Because the aid community is so disconnected, it creates big plans and sweeping missions that are overly ambitious and completely unsuited for the reality on the ground, it overlooks local needs and concerns, and it rarely holds itself accountable for its failures.

In this guide, we’ve updated some of Easterly’s statistics, supplemented his ideas with more recent examples, and incorporated alternative and opposing viewpoints from leading experts in the fields of economics, political theory, and business.

(continued)...

Political and Economic Freedom

In Capitalism and Freedom, Milton Friedman argues that economic freedom is an essential component of total freedom—the ability of an individual to pursue her own happiness and fulfillment without any external impediments, provided that she does not infringe on the freedom of others. Friedman writes that a society cannot have political freedom without the ability of individual buyers and sellers in a marketplace to engage in voluntary transactions that satisfy their needs. In fact, according to Friedman, there has never been a successful example of a society that combined state control of the economy (in the form of socialism or communism) with political liberty.

Political power is dangerous, because it can be easily concentrated and centralized in the hands of the few. Economic power, however, works differently. In a well-functioning capitalist society, millions of individual buyers and sellers make decisions about which goods and services they require to satisfy their needs—with buyers free to choose their sellers, sellers to choose their buyers, and workers to choose their employers.

Thus, argues Friedman, a great deal of power over a crucial area of day-to-day life is taken away from the hands of the few, and placed into the hands of the many. Free markets are inherently decentralized in nature, thus maximizing individual freedom and choice. In a capitalist society, economic power acts as a check on the power of political authorities because it is not in the hands of the government.

Why Markets Can’t Be Imposed

However, writes Easterly, a free-market system cannot be imposed on a society that lacks the preconditions for it to function properly.

According to Easterly, markets don’t simply exist in a vacuum. Among other things, markets need a well-developed civil society, functional government, a legal system that respects private property rights and is based in the rule of law, and adequate regulation to ensure that goods are safe and reliable.

Perhaps most importantly, markets require a high degree of social trust among strangers in order to foster an economy based on voluntary transactions—trust is the only way customers know they won’t be ripped off, that what’s being sold is genuine, and that people will honor debts and pay for goods they’ve ordered. These values are deeply rooted in local culture and experience, and they can’t be imposed by an outside force.

It’s impossible to simply replicate a Western-style legal, judicial, and property ownership system in a country that is culturally unfamiliar with such institutions and expect them to work well.

Culture Change and Free-Market Reform

Cultures develop organically in communities of people—whether that community is an organization, a small town, or an entire nation—over long periods of time, without central planning or direction. When it’s entrenched, culture becomes something that most people don’t even consciously think about—rather, it is just the “natural” and “normal” way of doing things within that community.

As a result, it is difficult to transform a culture through some sort of top-down initiative, especially if that initiative is being led by someone from outside the community (as, Easterly points out, is nearly always the case when it comes to foreign aid). For example, in a culture based on collective subsistence farming or hunting, people will likely be highly skeptical and apprehensive about moving toward a free-enterprise system in which they individually produce goods or sell their labor in a market and then use the proceeds for their own personal consumption.

Some commentators argue that cultural change can only happen when small victories change an organization or society’s collective understanding of what’s possible. These incremental successes inspire confidence among people that they can do more. Thus, as we’ve seen Easterly argue, big, complex plans to “change the culture” are almost always doomed to failure. Instead, most experts write that culture change starts by addressing the most pressing challenges.

For instance, if the larger problem is a lack of free markets in a society, an incremental step might be giving entrepreneurs in select communities small grants to open up tiny independent businesses, or setting up local fairs or flea markets where people can begin to learn the basics of a free exchange system. Once these immediate challenges are successfully overcome, more ambitious goals can be attempted.

The Failure of “Shock Therapy”

Easterly writes that since the 1980s, a lot of aid from developed countries has been conditioned on the imposition of free-market reforms upon recipient countries. However, this approach has done far more harm than good.

Following the 1991 collapse of the Soviet Union, Western economists implemented what they called “shock treatment” programs in Russia and other former Soviet republics—the sudden removal of protectionist measures like price controls and state subsidies and the immediate privatization of state assets. The theory was that these reforms would unleash a new age of entrepreneurship that would help these Communist bloc countries transition from authoritarian, planned economies to liberal, free-market economies.

The results, according to Easterly, were a disaster. The sudden economic liberalization in Eastern Europe in the 1990s was swiftly followed by inflation, unemployment, poverty, economic stagnation, and the rise of a plutocratic class (often drawn from the ranks of former top Soviet officials) who used their connections to buy former state-run enterprises at bargain prices.

The Shock Doctrine, the Fall of Russia, and the Rise of Putin

In The Shock Doctrine, Naomi Klein explores economic shock therapy in greater detail. She describes shock therapy as a method of (supposedly) boosting a country’s economy through rapid deregulation, privatization, and severe cuts to government spending. In reality, however, Klein argues that the practice gave rise to what she calls the “disaster capitalism complex,” a privatized system of destruction and reconstruction of national economies that funnels billions of dollars into corporate pockets.

Klein notes that the collapse of the Soviet Union was a watershed historical moment that brought shock therapy to the fore—and had serious consequences for the people of Russia. Under Boris Yeltsin (the first leader of post-Soviet Russia), a team of Western-influenced Russian economists implemented an economic plan of deregulation, privatization, and reduction of government spending. Most significantly, they engineered the selloff of major national industries to wealthy buyers—oligarchs who plotted with politicians to purchase public assets at a steep discount. Most disturbingly of all, these wealthy oligarchs paid for the assets out of bank accounts created by government officials and funded by public money.

In his bestselling memoir, A Promised Land, former President Barack Obama makes a connection between the rise of Russian President Vladimir Putin (Yeltsin’s successor) and these failed attempts at economic and political liberalization. Obama describes Putin as an authoritarian figure who rode the popular backlash against the country’s decline in the 1990s from a world power to an impoverished, indebted, and dysfunctional state following its collapse and the sudden imposition of market reforms. By the time Obama came to office in 2009, Russia under Putin had reversed many of the limited, Western-backed steps toward democracy—in many ways, slipping back into authoritarianism.

The Putin regime has been known to jail political opponents on trumped-up charges, while much of the nation’s economic power continues to rest in the hands of Putin-connected crony capitalists. Obama writes that Putin’s political style was to position himself as a ruthless strongman, committed to restoring Russia to its former glory—with over-the-top masculine displays, blatant homophobia, and chauvinistic gestures toward Russia’s ethnic and religious minorities all forming central elements of his political pageantry.

Indeed, commentators have argued that Putin’s primary ideology is to “make Russia great again,” a theme that Putin-controlled state propaganda has aggressively reinforced by presenting Putin himself as a unique historical figure who can restore the nation to its former glory.

The Failure of Structural Adjustment Loans

Similarly, Easterly writes that the IMF and the World Bank have imposed a variation of shock therapy under the softer name of “structural adjustment loans”—economic reforms that recipient countries must implement in order to secure the loan. These reforms usually involve some combination of a reduction in public spending, privatization, deregulation, and a removal of trade barriers, with the ostensible purpose of galvanizing the transition to a free-market economy and improving the population’s standard of living.

However, according to Easterly, the track record of structural adjustment loans has likewise been a dismal failure. Countries often end up on multiple rounds of loans, with new loans used to cover the old ones. This only increases these countries’ overall debt load, requiring more good money to be thrown after bad, in a never-ending, vicious cycle. These governments are seldom held accountable for their corruption and fiscal irresponsibility—and, as a result, have little incentive to reform, since they know they can usually count on another round of loans.

As a result, the foreign aid ends up propping up and rewarding bad governments, while saddling their economies with massive debt loads that make them undesirable destinations for international business investment—all to the detriment of the people. The aid seldom reaches the poor people who need it, instead getting siphoned off to dictators, war criminals, local mafia-like organizations, or corrupt politicians.

The Problem of Moral Hazard

Of course, if an irresponsible government knows that it is going to continually be bailed out by the World Bank or IMF, they have little incentive to reform or crack down on corruption. In The Undercover Economist, Tim Harford describes this dynamic as a moral hazard. Moral hazard results when the existence of some kind of insurance against liability inadvertently removes the incentive for responsible behavior. For example, if your car is insured against theft, you’ll be more likely to park it on the street (where theft is more likely to occur); whereas if it isn’t insured, you might be willing to pay for a car lot (which would make theft less likely).

Harford argues that moral hazards are inherent in public unemployment insurance systems as well, because they partially demotivate people to find a new job. But as a society, we don’t want people to become destitute when they suffer job loss, so the creation of some moral hazard is necessary in a benevolent society. Similarly, the IMF and World Bank have made the tradeoff that the moral hazard of bailing out known bad actors is better than the alternative of default.

The West Can’t Change Bad Governments

Easterly writes that what’s true for capitalism is also true for democracy. They are both good systems that, in the long run, lead to superior outcomes over their alternatives. But in poorly run countries, they cannot be imposed in the top-down manner favored by Western aid organizations. To put it another way, foreign aid is not going to change bad governance, nor will it be effective if given to bad governments to distribute.

Easterly argues that corrupt and authoritarian governments play a big role in causing and sustaining poverty, because their pattern of extortion, incompetence, graft, and selective enforcement of the law makes their countries politically risky places in which to invest or form businesses. In contrast, stronger democracy and political freedoms are positively correlated with significantly greater growth than found in authoritarian regimes.

Easterly argues that democracy actually works in a bottom-up rather than top-down fashion, because it favors local responsiveness to local demands. It creates a system of accountability for government officials: Good politicians who deliver for the public get rewarded through reelection, while bad ones who are unresponsive to the public get voted out.

Moreover, a liberal political system allows for a free press that can expose government wrongdoing while providing civil protections for dissidents and minorities.

The Case Against Democracy

Not all commentators agree that democracy is a good system of government, worthy of emulation. In Against Democracy, libertarian author Jason Brennan argues that democracy is an inherently flawed system that consistently leads to poor outcomes.

The crux of Brennan’s argument is that the overwhelming majority of voters are too ignorant, self-interested, biased, and apathetic to make informed decisions. As a result, they tend to elect politicians who are reflections of themselves—ill-informed, narrow-minded, incompetent, and simply unintelligent. Brennan’s solution to this problem is to establish a system in which only the best-educated, rational, and most scientific-minded members of the population would have the right to vote. Specifically, he recommends selecting and screening potential voters the same way that members of trial juries are screened and weeded out for potential biases.

Why Democracy Can’t Be Imposed

Despite its virtues, however, Easterly asserts that democracy is not a perfect system. Indeed, democracies can be fractured by ethnic, religious, or socioeconomic divisions, all of which can be exploited by politicians who pander to different groups’ resentments toward one another—and in the process, undermine the social fabric that is the cornerstone of a well-functioning system of self-government.

Easterly writes that democracies are quite fragile, vulnerable to sabotage and even destruction by unscrupulous actors within the political system. And because they’re inherently fragile, Easterly argues that it’s impossible to design a perfect democracy. Like a free-market system, a successful democracy depends on underlying social conditions and experiences. Those elements are deeply rooted in a country’s history and culture, which can’t be changed by even the most well-intentioned external democracy-promotion plans. Easterly explains that certain socioeconomic conditions tend to make poor soil for democracies to take root and grow—including wide income inequality, a traditional and patriarchal social structure, an entrenched landed elite, a history of sectarian conflicts, and rigid racial caste systems.

Outside agents, whether they’re the IMF, World Bank, or United Nations, cannot simply override these deep anti-democratic structural forces to impose a democracy.

Norms and Democratic Survival

As Easterly writes, it’s difficult to arbitrarily impose democracy in places where the social and cultural conditions are inhospitable to a free political system. But even in societies where there is a long history of democratic government and mass political participation, democracies can be vulnerable to sabotage and self-destruction.

In How Democracies Die, Steven Levitsky and Daniel Ziblatt argue that political norms—the unwritten rules that govern political conduct—provide the best protection for democracy. In a well-functioning democracy, political actors adhere to shared norms governing what is and is not acceptable behavior, regardless of what might be technically permitted by the written rules. They write that democracies become fragile and vulnerable to collapse when political actors begin using their power to undermine or violate these norms.

The two main democratic norms Levitsky and Ziblatt highlight are mutual toleration and institutional forbearance. The authors define mutual toleration as accepting the legitimacy of one’s political opponents and acknowledging their right to govern, as long as they win in free and fair elections—regardless of ideological differences.

The second norm Levitsky and Ziblatt identify is institutional forbearance. This is the unwritten rule by which political actors agree not to weaponize their control of institutions to marginalize their opponents. For example, the majority party in the legislature might technically have the legal authority to uniformly and unequivocally block the judicial nominations of a president of the opposite party. But doing so would not only hamper the functioning of the judiciary, but be a violation of the norm of institutional forbearance. This could lead to a tit-for-tat cycle of retaliation—resulting in the ultimate destruction of democracy.

The Dysfunctional Aid Bureaucracy

Easterly extends his critique of the prevailing foreign development aid model to the structure of the aid organizations themselves. He writes that the major aid organizations are saddled by inefficient bureaucracies that lack accountability, overlap or compete with one another, and don’t have clearly defined goals.

Lack of Accountability

Easterly contrasts the behavior and incentives of the aid bureaucracies with those of the private sector. Private-sector bureaucrats (like managers, customer service agents, and salespeople) are responsive because of market incentives: Customers will take their business elsewhere if they don’t feel they're being treated well.

But international aid workers lack this accountability mechanism, largely because they tend to be based in the rich countries themselves—far away from the places they’re meant to be helping. This means that they are responsive to politicians, voters, and donors in the rich countries—not to the impoverished people they ostensibly serve.

The Aid Community and the Principal-Agent Problem

The competing incentives of the aid community—the need to please the rich donors in their home countries while simultaneously working on behalf of the poor people they’re meant to serve—is similar to what’s known in economics and in managerial studies as the principal-agent problem. This arises when a party engaged to carry out a task (the agent) has poorly designed incentives that lead them to engage in behavior that works against the interests of the party they work for (the principal).

In this case, it’s best to think of the people in developing countries as the principals and the aid organizations as the agents. Although the aid organizations are meant to be working on behalf of their principals, in reality, they have a strong incentive to do things that will result in getting more money from the rich countries (to pay their own salaries and expand their staff), as well as favorable press coverage (to make themselves look good). As a result, these agencies tend to focus on the kind of high-profile, flashy, attention-grabbing initiatives that generate lots of donations and clicks—but do little to help people in the developing world, and in fact, draw vital resources and attention away from their most pressing needs.

Lack of Coordination

Easterly writes that the aid community is also plagued by a lack of coordination among agencies. There are too many aid agencies, and many of them have overlapping or conflicting portfolios and missions.

This makes it difficult to figure out which agency is responsible for solving which problem, and it creates wasteful and time-consuming red tape that prevents people on the ground from getting the help they need. The lack of coordination also creates a problem for donors. Because of the multitude of agencies and non-governmental organizations (NGOs), it’s difficult for donors to figure out where to contribute their money. This means they end up spending resources inefficiently, because there’s no central agency to direct donors to the best and most effective use of their money.

The Benefits of Collaboration Among Aid Organizations

Nonprofit experts write that the coordination problems that Easterly describes can be avoided or overcome through more effective collaboration between nonprofit organizations. Partnerships or collaborations can help mission-oriented organizations pool administrative resources like accounting, purchasing, office supplies, and transportation—lowering overhead and freeing up resources to allocate to direct programming. By joining forces, nonprofits or aid organizations can also expand the range of services they offer by tapping each other's experience and talent—especially if they have related, but different, missions.

For example, an aid organization focused on improving irrigation systems in developing countries can partner with an aid organization that works to teach farmers more sustainable agriculture practices to offer a more comprehensive set of services to agricultural workers.

Lack of Clear Goals

Easterly writes that all bureaucracies need clear, defined goals. This enables others to hold these organizations accountable, because they can evaluate how they performed relative to the benchmarks they set.

To move toward accountability, Easterly recommends that aid bureaucracies develop clear portfolios and stake out specific areas of expertise by clearly defining which problems they are working to solve and creating specific metrics to gauge performance.

In general, Easterly writes that this means having fewer objectives and scrapping the grandiose, top-down plans in favor of more realistic, tangible, measurable goals. Narrowing their focus will enable these organizations to develop subject-matter expertise and cultivate useful knowledge.

Crucially, Easterly writes that the aid community needs independent evaluations of its work and progress. He argues that these independent evaluators could be drawn from the ranks of business and academia.

Tracking Progress

In Measure What Matters, John Doerr argues that the best way to track progress toward goals and develop useful metrics is to identify your company’s objectives and key results (OKRs).

Your objective is your ultimate goal, what you and your team exist to achieve. All objectives must be measurable, concrete, and action-oriented. Your key results are the rungs on the ladder leading to your objective. These are the sub-goals that facilitate the achievement of your ultimate objective.

To implement the OKR system, Doerr advises that you need to start by identifying the most important tasks your organization needs to accomplish within a set timeframe. Once you’ve identified your company’s objectives, you then direct departments, teams, and individuals to identify their own objectives. Every objective, regardless of whether it’s an individual or department objective, should align with the company’s top objectives.

The AIDS Crisis: The Price of Utopian Thinking

Easterly writes that public health is one area where international aid actually has achieved real, measurable success, possibly because it is a subject that lends itself well to defining clear goals and measuring direct impact—in terms of vaccines administered, patients treated, new hospitals built, and other metrics. However, he adds that public health is where the international aid community has also suffered some of its greatest public failures.

Easterly writes that the AIDS crisis in Africa has been one of the world’s greatest humanitarian disasters since the 1980s. He argues that the aid community’s response to the AIDS pandemic has been marred by the same utopian, top-down, impractical thinking that has compromised its efforts elsewhere.

Explaining the Higher Rate of HIV/AIDS Infection in Africa

The numbers show the true scale of the AIDS catastrophe in Africa—and the devastating price humanity has paid for the world’s failure to properly address it. In the small African nation of Botswana, a full 40% of sexually active adults are HIV-positive, with similar figures in other sub-Saharan countries. By contrast, the rate of infection among sexually active adults in the US is around 1%, with similarly low rates in countries from Russia to India to Thailand. Experts continue to be perplexed by the extraordinarily high infection rates in Africa, given that Africans do not appear to use intravenous drugs, participate in promiscuous sex, or engage in prostitution—all well-documented risk factors for HIV/AIDS—at higher levels than people in other parts of the world.

Some researchers suggest that the greater social tolerance for men in African nations from South Africa to Uganda to Botswana to engage in multiple, simultaneous, long-term sexual relationships could be the explanation. This is because a single act of intercourse with an HIV-positive individual is relatively unlikely to spread the virus—between 0.1% and 1%. But in a long-term sexual relationship with repeated sexual encounters (and thus, exposure to the virus), the likelihood of infection will be far greater.

Focusing Too Much on Treatment, Ignoring Prevention

Much of the response to AIDS in Africa today is focused on helping HIV-positive people access antiretroviral drugs that are used to treat the symptoms of the virus. However, Easterly argues, these HIV/AIDS treatments are simply not cost-effective in Africa—and the disproportionate emphasis placed on them reflects misguided utopian thinking on the part of the aid community.

The drugs are too expensive to be able to distribute in impoverished African countries on a wide enough scale. Moreover, an effective treatment regimen entails not just the drugs, but also a comprehensive set of services that, once again, is beyond the capabilities of the aid agencies to build from scratch in countries often lacking the most basic public health infrastructure.

Finally, Easterly argues, the drugs won’t prevent most AIDS deaths anyway—at best, they might prolong a patient’s life by a few years.

Easterly attributes the inefficient focus on treatment drugs to grandiose, heroic, and glamorous ideas about “solving” or “curing” the AIDS crisis in Africa. In fact, prevention would be far more cost-effective.

Even today, he writes, the foreign aid community is inordinately focused on treatment. Much of this is purely political—highly effective (and cost-effective) prevention measures like sex education and condom distribution are politically controversial (and less impressive), while distributing medication is relatively uncontroversial (and generates glowing publicity and accolades)

Harm Mitigation and Needle Exchange Programs

Sex education and condom distribution to combat the spread of HIV are not the only effective and practical harm-mitigation measures to suffer from a misplaced emphasis on “perfect” solutions. Like those measures, needle exchange programs—in which intravenous drug users can obtain free and safe needles and syringes and discard used needles and other paraphernalia without fear of arrest or harassment—have proven to be highly effective at reducing the spread of bloodborne diseases like hepatitis C and HIV, and they help connect addicts with treatment programs. Cities in states from Vermont to California have implemented such programs, with notable success: CDC data shows that users of needle exchange programs and safe injection sites are five times more likely to enter drug treatment and about three times more likely to ultimately stop using drugs than those who never use such programs.

However, the stigma and backlash that such programs generate—usually borne of misguided fears that they encourage or legitimize drug use—has created political pressure to shut these facilities down in states from West Virginia to Indiana and shift toward more “zero tolerance” policies, even as the opioid epidemic rages out of control.

Diversion of Resources

Besides being ineffective, Easterly argues that big, publicity-grabbing health crises like AIDS divert much-needed resources and attention away from other sources of death and misery on the African continent that could often be treated more effectively and cheaply.

He argues that there is no legitimate moral case to be made for prioritizing the suffering of AIDS patients (nearly all of whom, unfortunately, will soon die of the disease with or without treatment) over that of people suffering from maladies like diarrhea, malaria, and intestinal worms. While these latter diseases do not command the attention of the global public and media the way AIDS does, they do kill millions of people each year. However, unlike AIDS, they are all highly treatable with inexpensive medicines.

Easterly argues that the disproportionate use of resources and attention focused on AIDS is both inefficient and inhumane, because it diverts money from an area where it would make a meaningful difference (treating diseases like malaria and diarrhea) to one where it almost certainly won’t (treating AIDS patients). Refocusing resources on these sources of suffering would both give the aid community a far greater return on its investment and result in millions of lives saved.

The international aid community has to do a better job of making difficult choices about how best to prioritize and allocate scarce resources.

The moral argument that Easterly is making when he advocates prioritizing the treatment of malaria and diarrhea over HIV/AIDS is utilitarianism. Utilitarianism is a moral school of thought, founded by the English philosopher Jeremy Bentham (1748-1832) that is concerned primarily with final outcomes. Utilitarian thought teaches that any action that maximizes human happiness is the morally correct one.

Thus, it would be morally correct to let one person die in order to save the lives of 10 others. If we apply utilitarianism to the arguments that Easterly is making, it would be morally indefensible to use medical resources to prolong the life of one AIDS patient—or even, hypothetically, to save that one patient—if it came at the cost of letting 10 malaria patients die who would otherwise live.