Haiti and the problems with foreign aid

There are lots of recent comments chiding me for not recognizing the well-known problems with foreign aid, when it comes to Haiti.  "Why embrace planning?" is one question.  One reader wrote:

I have to say that Tyler disappoints me here; all of the discussion of the effectiveness of aid, and what type of aid works, is thrown out the window as soon as a real crisis hits.

I still believe that foreign aid does not raise economic growth rates, on average.  But aid can alleviate human misery, such as when a visiting doctor gives vaccines or hands out medicine.  (In fact per capita income may fall, as a result, if some "weaklings" are kept alive.) 

I also believe that the U.S. military can make a huge difference in the immediate aftermath of catastrophes.

Imagine U.S. troops liberating Buchenwald.  Would any commentators say the following?  "Don't give him that blanket, sell it to him!"  "Hey buddy, get a job!"  "Moral hazard: they'll just go get captured again."  etc.  I don't think so.

That's one way to look at aid for Haiti, noting that perhaps as many as three million Haitians currently stand at risk.  Just for a start, someone has to rebuild the port and it's going to be a foreign effort, organized by governments.  The market-oriented solution is more immigration, but even that requires a lot of governmental organization and best of all would be if Obama threw his considerable international prestige behind a coordinated effort to take in Haitian refugees.

A related question is how well Haiti can do as an anarchistic society.  Haiti is one right now and arguably many parts of the Haitian countryside have been quasi-anarchistic for a long time, ruled by either custom or gangs.  So this is an option, and indeed it is the default option, but I don't see it as desirable, any more than it helped Somalia (recant, Peter Leeson!).  In essence it would mean rule by gangs, funded by drug-running revenue.

It is striking how much cooperation and heroism we've seen in Haiti.  It's evidence that the Haitian social fabric is a lot stronger than many people thought.  It also suggests that economic growth models with a one-dimensional "trust" variable are not furthering our understanding very much.  I do expect the violence to get worse, as hunger and thirst continue, but so far the Haitian people have a lot to be proud of.


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