The cost of development

From Angus:

The indefatigable Michael Clemens reports that a new Millennium Village project in Ghana plans to spend a minimum of $12,000 per household in the project. This is something north of 30 times higher than average annual household income in the region where the project is going.

I have no doubt that many of these households will be “lifted out of poverty” during the years when these expenditures are made.

But, I don’t think it can be called development.

Clemens proposes an interesting cost -benefit hurdle for the MVP by noting that if the money was placed in a trust that earned 5%, each household would receive $600 / year FOREVER (which would be triple the average annual household income in the region). He asks if the MVP method of spending the money will permanently triple the average incomes of these households.

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