Does aid work?

williamgrogan

I think Shotamouse and maybe Watty are losing the plot.

I said this in my opening post, "...., so examining the existing assumptions is essential. If the way aid is currently handled is ineffective, wasteful and even has a negative impact on those receiving it we must change the way it is administered."

I am not suggesting that we simply stop the aid budget.

The article in the IT clearly supports my point. In fact the author says, "we should be pround of out €480 million contribution ... even though he then goes on to say that it is ineffective ... surprisingly...

Maybe surprising to him but it isn't to me.

Why would anyone be proud of wasting a large proportion of €480 million?

To the question, "Does aid work?", can we at least agree that it doesn't work very well and needs radical overhaul?

shotamoose

Originally posted by williamgrogan
I think Shotamouse and maybe Watty are losing the plot.

I think you're refusing to answer the question. Which was: Is your earlier claim that Ireland's aid "policies ... make poor countries poorer" backed up by the Irish Times article? If not, why did you imply that it was?

I am not suggesting that we simply stop the aid budget.

I'm glad you're making that clear. It begs another question, though: Do you support the principle underlying the research you approvingly cited, which is that a higher level of aid is (other things being equal) a good thing? Or are you just going to quote the bits you agree with and leave out the bits you don't?

To the question, "Does aid work?", can we at least agree that it doesn't work very well and needs radical overhaul? [/B]

I would say that in some countries it works better than others.

The CDG study argues that there are essential aspects to understanding the effectiveness of aid: quantity and quality. The countries which score highly on the aid index give lots of high-quality aid. The CDG believes this to be very effective.

Would you agree, then, that the aid policies of Sweden, Denmark and the Netherlands "work" and that if the policies of Ireland and the US (for example) are to "work" they should follow that model?

If you don't agree that the aid policies of the countries who score highly on the CDG's aid index "work" then I can't think of any aid policy which you could describe as "working", which would in turn lead me to think that you had a problem with aid per se.

shotamoose

Oh, and one more thing. I'd like you to go back and actually read Watty's post. If you can find one single thing he said that means he is 'losing the plot', I'd like to see it.

Otherwise you're just insulting people who have the temerity to disagree with you. And for someone who so self-righteously criticised the 'venom' of other posters that would be very hypocritical indeed.

williamgrogan

The full sentence I said was ... In summary Ireland comes very near the last position on all measures of the effectivness of its aid AND its policies that make poor countries poorer.

I was referring to the article and the policies in the article were ...

On trade Ireland scores 5.8, lower than it should because of EU tariffs and subsidies. The US came first and Norway last in the category, the latter because of its very heavy agricultural subsidies.

in particular the underlined one.

I was taking two points from the article

1/ The aid was ineffective - which I have claimed from the outset and the article "proves" this by referring to a measuring mechainsm that shows this.

2/ That our policies such as subsidising food and the bureacuracy were making the aid ineffective, see this paragraph.

In assessing aid Ireland, with a ranking of three, comes out very low. This is because it is one of those donors which is penalised for overloading governments of poor nations with onerous aid-reporting requirements and endless "mission visits" from foreign aid officials.

As Foreign Policy points out, last year Tanzania declared a four-month "mission holiday", during which the country received only the most urgent visits by donor officials.

I am not clear, have you read the article?

BTW, the author is not as "extreme" on this as I am. He was surprised, I wasn't. Maybe if he was surprised more often he would question other assumptions he has probably made.

No one is suggesting that we do not help poor countries. What is up for disccussion is the way we go about it. In fact I would go further in stating that the richer poor countries become the better it is for us.

I must go back to work.

shotamoose

I haven't read the article. I have read some of the research by the CGD (and published in Foreign Policy magazine) which it is based on.

I was taking two points from the article

1/ The aid was ineffective - which I have claimed from the outset and the article "proves" this by referring to a measuring mechainsm that shows this.

2/ That our policies such as subsidising food and the bureacuracy were making the aid ineffective, see this paragraph.

1/ The CDG research does not say that 'aid is ineffective'. In Ireland's case, it basically says that "the aid was less effective than it could have been had it been handled in a more effective way, such as the way Sweden, Denmark and the Netherlands handle their aid". 'Less effective than it could have been' is not the same as 'Ineffective', and there's no point pretending that it is.

2/ This is a rather bizarre point, since it implies that no matter how effective aid becomes, it will be ineffective as long as other policies 'cancel it out'. But this thread is not about every development policy under the sun, it is about aid. Please stick to the point.

In fact I would go further in stating that the richer poor countries become the better it is for us.

A truism which I haven't seen anyone argue with. Let's get back to specifics, such as my unanswered questions:

Do you support the principle underlying the research you approvingly cited, which is that a higher level of aid is (other things being equal) a good thing?

Would you agree that the aid policies of Sweden, Denmark and the Netherlands "work" and that if the policies of Ireland and the US (for example) are to "work" they should follow that model?

sextusempiricus

Originally posted by shotamoose


Maybe we're just answering different questions? If the question is: "Does aid work, by which I mean does it by itself make whole countries considerably richer?", then I would say "No". If the question is: "Does aid work, by which I mean does it make a significant difference to a lot of people when used well?" I would say "Yes, absolutely". I think both can be true, but I don't draw the conclusion that we need less aid: I think we need to become better at giving aid and recipient countries need to become better at receiving it.

Apologies for such a delayed reply. You are right. My concentration has been on whether aid encourages growth rather than your concern about its benefits for the welfare of the poor in the Third World. Of course growth and welfare are interdependent. For example HIV/AIDS can affect all but particularly those young adults who form the entrepreneurs and workforce that will help create wealth. Education on safe sex etc funded by aid has been helpful in countries like Uganda. Vaccination programmes too are a success and have been paid for with aid. Healthier people, one would think, should promote growth but let's not kid ourselves that such measures are the most important. Botswana has one of the highest rates of HIV/AIDS in Africa ( 39% of adult population) but can still show economic growth. How does it achieve this? In two words good governance.
Growth must remain our primary concern. Aid hasn't helped. Africa is the only continent in the past 25 years to become poorer despite the huge amount of ODA.
I note you have now changed your mind about the importance of Marshall Aid for economic growth in Europe post WW2. If that was unimportant in countries with traditions and laws favourable to enterprise and wealth production what hope can anyone have that giving alms to those counties in the Third World which lack good governance will help them on the road to economic advance. I suspect you agree that its unlikely to be very helpful although you only go so far as to claim that aid will not make countries considerably richer. I certainly wouldn't have used that word considerably. But perhaps we can agree on a modest benefit from a healthier population. The main problem is, as I've previously written, the rotten politicians people in the Third World have making decisions for them and usually enriching themselves with aid money. This especially applies to sub-Saharan Africa. Aid has certainly encouraged the politicisation of these counties and those with the drive to enrich themselves find that politics not manufacturing things they can sell is the best option. Perhaps you can enlighten me how they can become better at receiving economic assistance? Would you agree perhaps with the tying aid with good governance? This would appear to be the direction the World Bank is going.
Interestingly economists Burnside and Dollar have evidence that the impact of aid depends on the quality of state institutions and policies.
http://econ.worldbank.org/view.php?type=5&id=34209
Dollar has also written an important article giving evidence that globalization leads to the reduction of poverty in poor countries.
http://econ.worldbank.org/view.php?type=5&id=33773

Economist Professor Kym Anderson has estimated that if all trade barriers and agricultural barriers were removed the benefits resulting would range from $254 billion per year from 2005 (with $108 billion accruing to developing countries) to $2080 billion (with $431 billion to developing countries). Aid just doesn't compare with the benefits free trade is likely to bring the world's poor.
http://www.Copenhagenconsensus.com

williamgrogan

TOM KITT, TD, Minister of State for Development Co-operation and Human Rights, has a longish letter in today's Irish Times in reply to Richard Whelan's article.

Here

some excerpts

The Commitment to Development Index is not a measurement of aid effectiveness, as the headline implied. It is, in the words of the authors of the report in Foreign Policy magazine, an index which seeks "to rank rich nations according to how their policies help or hinder economic and social development in poor countries".

Development Cooperation Ireland uses the regular reviews of donor agencies conducted by the OECD's Development Assistance Committee (DAC) as the external benchmark of its performance. The most recent such review, published in November 2003, endorsed our policy approach and made clear that our national aid programme is in line with best international practice.

In the meantime, I hope these clarifications serve to underline that the Government's aid programme is effective, that it is contributing strongly to the fight against HIV/AIDS in Africa, to the development of health systems and to providing basic education.

I think the last paragraph is interesting as it doesn't say anything about Irish Aid assisting the economy. The omission is strange considering the sentence in the opening paragraph I have underlined above.

Incidentally aid for HIV/AIDS is good for helping cure those suffering from the disease but is not all that relevant to prevention or tackling the underlying cause. As far as I can tell, from general reading on the subject, the major cause of AIDS in Africa is the totally irresponsible attitude of the men and in particular the married men. Sex outside marriage with many different partners and with prostitutes is rampant. If I am right in my previous statement then this is an example of why aid often tackles the wrong problem. It sounds great that Ireland sends money to Africa to try and solve the AIDS problem. It makes us feel better and if we sent more we would feel even better still, BUT the problem is the attitude of the men. How does one tackle that problem? The real problem. We are solving the wrong problem. (Of course its not PC to say that African men are just downright immoral.)

shotamoose

Aid hasn't helped. Africa is the only continent in the past 25 years to become poorer despite the huge amount of ODA.

Can you be so sure that Africa would not have been worse off without aid? If not, then you cannot say that "Aid hasn't helped". In fact, if Africa would have been worse off, then aid did help.

Botswana has one of the highest rates of HIV/AIDS in Africa ( 39% of adult population) but can still show economic growth. How does it achieve this? In two words good governance.

I hope you can (a) define 'good governance',
(b) show that Botswana and other economically succesful countries (such as China, India and Vietnam) have policies which fit the definition of 'good governance' and
(c) show that economically unsuccesful countries do not have such policies.

Because until you do so, your statement is effectively empty.

In my experience, 'good governance' is a highly contested and poorly-defined term. Just like 'globalizers', which I discuss below.

I note you have now changed your mind about the importance of Marshall Aid for economic growth in Europe post WW2. If that was unimportant in countries with traditions and laws favourable to enterprise and wealth production what hope can anyone have that giving alms to those counties in the Third World which lack good governance will help them on the road to economic advance.

Hold on. The point I was making is that the post-war performances of Europe and Africa have been influenced much more by their pre-existing economic structures and ongoing international relationships, then by the relatively small amount of international aid they have each received. While aid has been a large proportion of GDP in some very poor African countries, it has still been low in comparison to the kinds of capital investment that are needed to significantly reduce poverty and kickstart growth.

The main problem is, as I've previously written, the rotten politicians people in the Third World have making decisions for them and usually enriching themselves with aid money.

Corruption is a problem, but do you really think it has been the main problem in Africa? As opposed to, say:
-disease (historically a very high incidence of malaria, more recently the AIDS pandemic);
-geography (African countries are more likely to be land-locked and sparsely populated);
-crippling debt burdens;
-capital flight (money smuggled out of Africa and lodged in rich countries);
-the enormous decline in the prices of almost every commodity Africa specialises in;
-the trade barriers erected by rich countries?

Aid has certainly encouraged the politicisation of these counties and those with the drive to enrich themselves find that politics not manufacturing things they can sell is the best option.

So it follows that reducing corruption - which some African countries are doing - will increase the effectiveness of aid?

Perhaps you can enlighten me how they can become better at receiving economic assistance? Would you agree perhaps with the tying aid with good governance?

By reducing corruption; by targetting spending on where it can be most effective; by improved monitoring and reporting. See above for my views on good governance.

Interestingly economists Burnside and Dollar have evidence that the impact of aid depends on the quality of state institutions and policies.

A few points: firstly, I've said already that the impact of aid will depend in part on the context. This is not an argument against aid - it is an argument for better context. Secondly, I've seen other papers arguing against B&D's conclusions, so it's still an open debate. Thirdly, we should not conclude (even if we accept their findings) that countries with poor institutional quality should be shut out. The people who live there may be in even more need of aid than those elsewhere even if the aid won't be spent quite as effectively.

Dollar has also written an important article giving evidence that globalization leads to the reduction of poverty in poor countries.
http://econ.worldbank.org/view.php?type=5&id=33773

Have you actually read this paper? Even a vaguely sceptical mind can see that it's mostly junk.

According to Dollar and Kraay, 'Globalizers' actually had higher average tariffs than 'non-Globalizers' in both the 1980s and the 1990s. Yes, you read that right - their 'Globalizers' are actually more protectionist than 'Non-Globalizers'. (Figure 2)

Also, and despite steadily increasing the protection of its economy, Zimbabwe is apparently a 'Globalizer' (Table 1), which will come as news to everyone. Curiously, Dollar and Kraay omit to mention this interesting result.

Finally, there is no relationship between tariff cuts and increase in trade volumes. In fact, weighted average trade volumes doubled in 'non-globalizing' countries defined in terms of tariff changes (Table 3).

Dollar and Kraay even admit that "changes in average tariff rates are not very strongly correlated with changes in trade volumes". Translated, that means that liberalisation is not strongly correlated with higher trade, which is strongly correlated with higher growth. In fact, the most striking result of Dollar and Kraay's research is that it is countries who started out the most protectionist (e.g. India, China, Vietnam) who are growing fastest now. Which is interesting to say the least, and in no way supports your contention that trade liberalisation is the path to greater riches.

I haven't read Kym Anderson's work, but it is based on a 'computable general equilibrium' model of the type used to produce eye-catching but extremely contestable headlines of this sort. For a discussion of the serious draw-backs of this kind of model, see here , here, and here.

Some CGE models have even shown that Africa will actually lose out under a typical round of multilateral trade liberalisation. So the statement that "Aid just doesn't compare with the benefits free trade is likely to bring the world's poor" is at best an unhelpful generalisation.

sextusempiricus

Originally posted by shotamoose
Can you be so sure that Africa would not have been worse off without aid? If not, then you cannot say that "Aid hasn't helped". In fact, if Africa would have been worse off, then aid did help.

OK perhaps aid can help welfare but only marginally. Where's the evidence it can help economic growth? In 2002 development aid from all sources to the developing world amounted to $57 billion. Contrast this with remittances from immigrant workers of nearly $80 billion, foreign direct investment of $115 billion and developing world trade in excess of $2 trillion. This suggests that economic growth through trade is the best route to help poor countries. The beneficial effects of aid are stymied by corruption, bad management and dependence. How important is corruption? Bokassa, president of the Central African Republic (1966-77)and then its self-styled emperor and renamed the Central African Empire (1979-79) extracted about $38 million per annum from the French government for its former colony. As he admitted himself, "Everything around here is financed by the French government." "We ask the French for money get it and waste it." In 1977 he wasted $20 million on his coronation complete with a $2 million crown. I have mentioned other abuses already but getting up to date I read in the 'London Times' (June 1, 2004) that Mr Mugabe of Zimbabwe has just awarded himself a 2,500 percent pay increase and offered tribal chiefs £2.7 million and free cars in return for their loyalty in the parliamentary elections next March. At the same time it can barely pay its 109,000 teachers and cannot maintain or develop its schools. Primary school enrolment which was 93% in 2000 was only 65% last year. Literacy rates are plummeting and more and more kids are dropping out. Mr Mugabe, it should be noted, was a former teacher.
Countries with a weak rule of law are likely to suffer from corruption. The rule of law is the only way countries have to punish crime, protect private property, enforce contracts and maintain reforms. Hume realised this in the eighteenth century when he saw the advance of society occurred with the 'government of laws not people.'
Here is one indicator of 'good governance.' Before I expand on this concept perhaps you can clarify for me how dependence can be avoided. It does seem that when aid is given to help a crisis it undermines the incentive for the recipient to help solve that crisis.

I hope you can (a) define 'good governance',
(b) show that Botswana and other economically succesful countries (such as China, India and Vietnam) have policies which fit the definition of 'good governance' and
(c) show that economically unsuccesful countries do not have such policies.

Because until you do so, your statement is effectively empty.

In my experience, 'good governance' is a highly contested and poorly-defined term.

Even if the term is contested it is becoming increasingly important in the aid debate. The current argument is that aid does help provided it goes to those countries with a record of sound government and market-oriented policies (Zedillo Reort for the UN, UN monterret Declaration and President Mbeki's initiative on aid-and-development for Africa). I have found the following definitions pertaining to good governance.

"Governance is the manner in which power is exercised in the management of a country's economic and social resources for development. good governance... is synonymous with sound development." World Bank & Asian Development Bank

"The term governance, as generally used, encompasses all aspects of the way a country is governed, including its economic policies and regulatory framework. Corruption is a narrower concept, which is often defined as the abuse of public authority or trust for private benefit. The two concepts are closely linked: an environment characterized by poor governance offers greater incentives and more scope for corruption. many of the causes of corruption are economic in nature, and so are its consequences-poor governance clearly is detrimental to economic activity and welfare." IMF

"Good governance means ruling justly, enforcing laws and contracts fairly, respecting human rights and property rights, and fighting corruption. Encouraging economic freedom means removing barriers to trade with neighbours and the world, opening the economy to foreign and domestic investment and competition, pursuing sound fiscal and monetary policies, and divesting government from business operations. Economic freedom also means recognizing that it is the private sector that creates prosperity, not central planning or bureaucracies."Paul O'Neill, former US Treasury Secretary

Contested but not, I feel, poorly defined. The concept as defined certainly underpins President Bush's Millenium Challenge Account (MCA). Bush has pledged that the US will increase its core development assistance by 50% over the next three years. The funds will go into a new MCA and " because sound policies are an essntial condition of development.... the Millenium Challenge Account will be devoted to projects in nations that govern justly, invest in their people and encourage economic freedom." Countries would be assessed by how much they measure up to 16 criteria. See http://www.whitehouse.gov/infocus/developingnations/millennium.html

Hold on. The point I was making is that the post-war performances of Europe and Africa have been influenced much more by their pre-existing economic structures and ongoing international relationships, then by the relatively small amount of international aid they have each received. While aid has been a large proportion of GDP in some very poor African countries, it has still been low in comparison to the kinds of capital investment that are needed to significantly reduce poverty and kickstart growth.

Money can come from private investment as well as foreign aid (see the figures for direct foreign investment given above) but it seems poor countries often like to shoot themselves in the foot.
Bauer has written that
"...aid recipient governments generally restrict the inflow of private capital, and also the way it may be deployed. Since a low level of capital is the ostensible rationale of aid, such policies are evidently anomalous." (p 94, 'Equality, the Third World and Economic Delusion')

Would you like to invest in Zimbabwe even if you could? This brings us back to good governance. Without it we could be just wasting money. All countries incidentally if they are to receive aid through the MCA must have inflation rates less than 20%. Zimbabwe's rate is about 500%.

Corruption is a problem, but do you really think it has been the main problem in Africa? As opposed to, say:
-disease (historically a very high incidence of malaria, more recently the AIDS pandemic);
-geography (African countries are more likely to be land-locked and sparsely populated);
-crippling debt burdens;
-capital flight (money smuggled out of Africa and lodged in rich countries);
-the enormous decline in the prices of almost every commodity Africa specialises in;
-the trade barriers erected by rich countries?

These are all problems but aid will only help marginally. I've already given support for aid used to help those suffering from AIDS. My views on reducing trade barriers have been consistently emphasised in this thread.

So it follows that reducing corruption - which some African countries are doing - will increase the effectiveness of aid?

Sure. But in a small way.

A few points: firstly, I've said already that the impact of aid will depend in part on the context. This is not an argument against aid - it is an argument for better context. Secondly, I've seen other papers arguing against B&D's conclusions, so it's still an open debate. Thirdly, we should not conclude (even if we accept their findings) that countries with poor institutional quality should be shut out. The people who live there may be in even more need of aid than those elsewhere even if the aid won't be spent quite as effectively.

OK. Tying aid to good governance is unjust to recpients led by corrupt politicians. Either these politicians see sense and improve (the MCA is a carrot here) or the people get rid of them. I just don't see why taxpayers, many of them not well off, should see their money wasted.

I'll try and make a few points re China, India and protectionism when I've thought about them more.

sextusempiricus

The huge economic growth that has occurred in China might seem to undermine my

emphasis on good governance. Under Deng however it did move in the right

direction to favour growth by allowing rural families to set aside some of their

produce to sell at market prices & by letting farmers lease land from the

government. Whereas Mao's policies had caused widespread famine, under Deng

crop yields rose by an amazing 7.7% between 1978 and 1984 and the country had a

food surplus. Subsequently economic free zones were set up free from socialist

controls and Chinese entrepreneurs could engage in foreign trade.

China however is not a 'rules- based economy' like most of those in the West and in

Hong Kong and Singapore. Business is not conducted in a verifiable manner using

contracts and under laws that are widely known and enforced. Agreements are

made on the strengths of relationships and connections rather than legally

enforceable contracts (guanxi). This does tend to encourage the development

of splintered local markets rather than regional, national or international ones. I

suspect Chinese growth might be even more impressive if it switched from a

relations-based to a rule-based governance.

Its true that communist oppression persists ( we cannot forget Tiananmen Square

and the labour camps ) but Chinese people do have more freedoms than they had

under Mao. They can travel more freely and choose their employment and even have

more power to pick their local representatives. Increased local democracy is

probably incompatible in the long run with dictatorship.

There is also a problem, encouraged I suppose by guanxi, of local protectionism

which dulls competition. In the 'Economist' of April 6th 2000 I read that

....last year the city of Wuhan, which produces cars in a venture with France's Citroen, slapped duties of nearly 100% on Shanghai-produced cars. Shanghai had started the war by taxing cars not made locally.

Its obvious that growth occurs with widely varying types of governance but studies

do show that annual Gross National Income/capita is likely to be improved in those

counties that allow political liberalization.

Richard Roll and John Talbot have a most interesting paper entitled 'Why Many

Developing Countries Just Aren't' (Nov 20th,2001)

I quote from their abstract,

Past literature has often associated country wealth with culture, geography, history and religion, but nothing can be done about such influences over a short horizen, and probably little can be done over generations. we seek instead to uncover the "deep" determinants of wealth; i.e. those macroeconomic, structural, political and institutional conditions realistically amenable to change. We found surprisingly good news, more than 80% of the internal variation in GNI/capita can be explined by mutable determinants. Fourteen candidate determinants are examined over five recent years (1995-99 inclusive). Property rights (+) and black market activity (-) have the highest levels of significance. Also contributing to the explanation are regulation (-), inflation (-), civil liberties (+), political rights (+), press freedom (+), government expenditures (+) and trade barriers (-) (but not trade levels). To check that these variables represent causes and not the effects of high income, we trace the trajectories of GNI/capita before and after political liberalizations or dictatorial retrenchments over the past half-century. Liberalizations are, on average, followed by dramatic improvement in country income, while substantial reductions in growth typically follow anti-democratic events. We conclude that counties can develop faster by enforcing strong property rights, fostering an independent judiciary, attacking corruption, dismantling burdensome regulation, allowing press freedom and protecting political rights and civil liberties. These features define a healthy environment for economic activity.

In sub-Saharan Africa some counties are edging their way to better governance and

evidence like this suggests that their efforts will be matched with economic growth

that will be far more beneficial than aid. Shotamoose states that aid might help to

kick-start their economies into growth but of course Europe 3 or 4 centuries ago was

as poor as many African countries today and still managed to develop without it. It

can alleviate immediate shortages but is more likely to retard growth. As Bauer

states (Equality, the Third World and Economic Delusion p101),

Even if aid is used productively, the maximum benefit to development cannot exceed the avoided cost of obtaining capital by borrowing. And aid is most unlikely to be productive.

Globalisation is certainly a very hot topic and I must admit to becoming quite dizzy

trying to evaluate the claims of different economists. Sachs and Warner advise

developing contries to liberalise their economies but their fellow Harvard economist

disagrees. Most confusing. There's plenty of literature thats both for and against. I'm

not an economist and found Johan Norberg's In Defence of Global Capitalism

one of the best for defending globalisation.

Shotamoose writes

...the most striking result of Dollar and Kraay's research is that it is countries who started out the most protectionist (e.g. India, China, Vietnam) who are growing fastest now. Which is interesting to say the least, and in no way supports your contention that trade liberalisation is the path to greater riches.

The situation is much more complex. I've described the situation in China already

(and its local protectionism which owes more to guanxi where in the absence of

law and defendable property rights people do business with those they know and

trust. India presents a different problem. Its growth indeed started to accelerate in

the 1980s when the Congress Party had bureaucratic protectionist policies. This

growth was fuelled with borrowed money leading to a severe crisis in the early

1990s. Dr Singh restored order to the goverment finances by cutbacks in wasteful

public spending and freeing private businesses from bureaucratic restrictions and

import controls known as the 'Licence Raj'. Tariff levels which had averaged 87%

were reduced to 27%. Since then India has received a steady stream of investment

from abroad and growth has been running at a healthy 5-7% annually. The

proportion of inhabitants below the Indian poverty linehas fallen to about 32% ( it

was 62% in 1966). I think this rather supports my case. Unless you can come up

with more convincing evidence I'm going to concentrate on encouraging more trade

rather than more aid to help the world's poor.