Wednesday, July 26, 2006

Improving Foreign Aid

Abhijit Vinayak Banerjee has a very interesting op-ed on how to improve foreign aid. My favorite point in his essay is this

It has been established that figuring out what works is not easy—a large body of literature documents the pitfalls of the intuitive approach to program evaluation. When we do something and things get better, it is tempting to think that it was because of what we did. But we have no way of knowing what would have happened in the absence of the intervention.

My own feelings probably lie closer to this, but if the developed world is going to be providing aid much more work should be done on making sure that it is effective.

Too often aid is given because it's the "right thing to do" but once the wallet has been opened there seems to be no regard for whether or not any good came of it.

HatTip: MarginalRevolution

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