Last week, Zócalo Public Square ran the first book review I wrote for them. The inaugural piece was on The Aid Trap: Hard Truths About Ending Poverty by R. Glenn Hubbard and William Duggan. Here’s an excerpt:
In 2006, Warren Buffet made a $31 billion gift to the Gates Foundation. He explained the generous donation this way: “A market system has not worked in terms of poor people.”
R. Glenn Hubbard and William Duggan, the dean and a senior lecturer at Columbia Business School, turn Buffet’s assertion on its head in The Aid Trap. Free markets, they say, are not the cause of poverty. Indeed, the market system and strong private business sectors are the solution to poverty.
“The market has not worked in poor countries because it never had the chance,” Hubbard and Duggan write.
For those who feel good about their charitable contributions, The Aid Trap is not an easy idea to stomach: The food and clothes and medicine rich countries send to poor countries, the money they put in the hands of government programs, even the wells enterprising students dig in villages during their summer vacations — this kind of long-accepted charity does very little to alleviate poverty. In fact, flooding the market with free goods makes it difficult for local businesses to compete and provides incentives for governments to maintain the status quo.
You can read the whole review at Zócalo. Hubbard and Duggan make a compelling argument to change the way we look at charity. Zócalo is dedicated to increasing public discourse, so please do weigh in and comment. I’ll be writing reviews regularly. The next review will be on Vali Nasr’s Forces of Fortune.