Interviewer: What do you think about professor [Jeffrey] Sachs’ argument for a dramatic increase in foreign aid? Do you side with [NYU economics professor William] Easterly in the debate?
Jagdish Bhagwati: My reaction is: plague on both your houses! Professor Rosenstein-Rodan, who advised John F. Kennedy on foreign aid, taught me about “absorptive capacity”—that we should ensure that aid is absorbed productively. This is not just a moral requirement—few would want aid to be given just as a duty but with disregard to its consequences. In the 1960s and 1970s, I participated on the huge discontent on the left about how aid was either a malign-intent way of keeping neocolonial control of the decolonized lands, or that it unwittingly led to dependence in various ways: by reducing domestic savings, by hurting domestic agriculture through supply of foreign aid, and argued that, on balance, aid had been useful in countries like India. I doubt professor Sachs ever pays attention to such sophisticated objections, always dismissing those who raise them as if they were wicked conservatives with horns and no brains. But Easterly is equally wrong in arguing that aid hardly works.
♠ Posted by Emmanuel in Development at 10/25/2007 03:17:00 PMIn an interview with a university publication, Columbia Professor Jagdish "In Defense of Globalization" Bhagwati has just declared a plague on both Jeffrey Sachs and William Easterly's houses in the debate regarding aid's efficacy. Call it Bhagwati in defense for a middle way between "we need more aid" (Sachs) and "aid does little good" (Easterly):