Thursday, May 7, 2009

Ethics and Markets

"Africa's development impasse demands a new level of conciousness...And one thing is for sure, depending on aid has not worked. Make the cycle stope."

Dambisa Moyo, Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africa.

"...[T]hese three philosophers agree that if you fail to give anything, or only trivial sums, to aid the world's poorest people, you are acting wrongly."

Peter Singer, The Life You Can Save: Acting Now to End World Poverty.

So, Moyo dismisses or ignores NGO-type aid and promotes,instead,market-based alternatives to government aid that will spur economic growth. She suggests 5-year aid time limits. Singer isn't so categorically dismissive of government aid. Still, his focus is on NGOs and the role of charitable giving to save lives, reduce hunger, and cure diseases. He crafts a formula for giving -- 5% of income uof the first $148,000 and 10% of all income above $$148,000. It goes up a bit more for the superrich.

Moyo argues for the right kinds of development finance that will support sustainable growth that, in turn, will reduce corruption, build stronger institutions, and reduce poverty. Bonds,direct investments,trade,microfinance. Singer makes a moral argument that living ethically means that we cannot turn our backs on children dying today. And practically, well-off people in countries like the U.S. have more than enough financial resources to save and improve lives day in and day out without doing much harm to their own economic well being and family obligations.

Are these approaches mutually exclusive? Not really; they just ignore each other, except for a few swipes here and there. And they do share one feature in common: they are unlikely to achieve full adoption. Joining forces would be a good thing.

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