The Optimist

A Friend in Need

Can disaster aid actually win hearts and minds?

On Tuesday last week, Turkey reversed its previous stand and decided to accept aid from Israel to help deal with the tragic earthquake that had stricken the country's east. Shipments of portable housing units began the next day. Turkey's Foreign Minister Ahmet Davutoglu was quick to emphasize that accepting aid did not signal an improvement in diplomatic relations between the two countries, strained ever since Israel's raid of a Turkish aid flotilla bound for Gaza in 2010 -- likely a response to the perception that aid can buy off recipient governments, even if it can't change popular attitudes. The irony is that the humanitarian assistance that responds to disasters -- unlike the majority of aid that goes to long-term development projects -- might be the one case where that logic is sometimes reversed.

At a time when the United States' aid budget is confronted by an army of hatchet-wielding deficit hawks among the Republican Party's congressional majority and presidential candidates, some aid proponents are making the case that development and humanitarian assistance are powerful tools to buy friends and influence people. And it is true that aid has long been used to grease the often-rusty wheels of diplomacy. The Camp David Accords between Egypt and Israel were cemented with the help of an aid package worth an average of $2 billion a year to Egypt. Since 1985, U.S. law has mandated that the U.S. Agency for International Development (USAID) take account of would-be aid recipients' voting patterns at the United Nations -- rewarding larger aid packages to those who vote with America. Political Scientists David Carter at Pennsylvania State and Randall Stone at the University of Rochester note that this kind of carrot-minded approach has been successful, influencing countries' votes on decisions that the U.S. State Department declares as politically important.

Twisting politicians' arms is one thing, but changing popular attitudes is another matter entirely. Look again at Egypt: Despite being one of the largest recipients of USAID financing over the past 30 years, Pew surveys suggest only 20 percent of Egyptians have a favorable view of the United States -- considerably less than half of the U.S. favorability rating in former Cold War foe Russia. Popular opinion in Egypt is driven by other factors, not least broader U.S. foreign policy in the region. (A propensity to invade neighboring countries doesn't help.) And development assistance just isn't a major factor in the financial fortunes of the average citizen. Maybe that was true back in 1990, when net overseas development assistance to the country equaled 36 percent of government expenditures. But by 2008, that figure was just 3 percent -- only a little more one-tenth the value of tourism and one-seventh that of manufacturing exports.

Aid's limited impact on public opinion usually applies even when the aid is specifically focused on winning converts. A study by consultant Michael Kleinman and Mark Bradbury, a director at the Rift Valley Institute, looked at U.S. military aid for small projects in Kenya designed to improve popular support for the U.S. military presence there, and found that it didn't. Attitudes were shaped by faith, the relationship between target populations and the Kenyan state, U.S. foreign policy, and events in Somalia -- not by a U.S.-financed well or asphalt road. A German aid agency-financed 2010 study, using repeated surveys in Afghanistan's Takhar and Kunduz provinces, found that in a comparatively peaceful period between 2005 and 2007, development aid did have a small, short-lived positive impact on the general attitudes of Afghan respondents towards foreign peace-building operations in their backyard. But this impact disappeared as threat perceptions rose between 2007 and 2009. Not surprisingly, other factors -- in this case, how many people were getting shot -- were just more important than who was cutting the checks.

But there is evidence of an exception to the rule that money can't buy love, and it involves disaster assistance. Four years after a 2005 earthquake in northern Pakistan, economists Tahir Andrabi of Pomona College and Jishnu Das of the World Bank surveyed attitudes towards foreigners in the region. They found trust in foreigners was significantly higher in areas where humanitarian aid had been concentrated than in other areas -- dropping off by six percentage points for each 10 kilometers of distance from the fault line.

Why might recipients react differently and more positively to disaster relief assistance than they do to other forms of aid? In part it is surely related to the simple gratitude felt by people who have just lost much of what they had in a flood or earthquake. But it is also more plausible that such aid is given without a broader political motive. Although U.S. food aid flows according to the size of the surplus domestic crop as much as recipient need, using humanitarian relief to reward or punish countries for U.N. voting records or other diplomatic policies presents a practical challenge -- you can't schedule a disaster. Recipients appear to understand that, and are more likely to view such aid as given in good faith. In the Pakistan case, for example, Andrabi and Das note that the positive impact on attitudes was related to a significant on-the-ground presence of foreigners who were assumed to have purely humanitarian motivations -- aid distribution was not perceived to be (and wasn't) linked to war-fighting efforts.

Aid is likely to be a more effective foreign policy tool when it comes to persuading governments to do things that lack popular support. Creating that popular support in the first place is much harder. Perhaps Turkey's Davutoglu is right to say that even government relations won't improve in the case of Israeli disaster aid -- after all, U.S. humanitarian support in the aftermath of Iran's Bam earthquake only temporarily thawed diplomatic tensions. On the other hand, maybe the assistance can play a small role in improving popular opinion towards Israel in Turkey. For good or ill, that's one more reason for governments to respond with open hearts and open checkbooks whenever disaster strikes worldwide.

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The Optimist

Club for Growth

The past decade might have been grim for the economically stagnant West, but without a booming developing world it would have been much worse.

The latest data on economic growth released this year by the World Bank confirms what we all already knew: The United States and most of the West had a pretty grim decade between the turn of the millennium and 2010. It's a well-worn story now, a decade bookended by bursting bubbles, with limping, debt-financed progress in between. But there is a lot of good news elsewhere in the bank's assessment of gross domestic product (GDP) growth around the globe: Over the same period, 19 economies doubled in size. Both the causes and consequences of that growth varied considerably, but one thing is clear -- the United States would have been even worse off without it.

The U.S. economy itself expanded by 18 percent from the decade's start to end, ahead of Britain (15 percent), Germany, and Japan (both less than 10 percent). Ranking the 164 countries for which the World Bank has data on GDP growth over the decade, that means the United States came 134th, with Britain, Germany, and Japan in 140th, 154th, and 155th place, respectively. Even the apparent U.S. lead in this category of slimeless snails was partially devoured by a faster growing population, so incomes per head increased by around 1 percent a year in all four countries. (Iraq placed dead last in the global ranking -- surely another blow to the reputation of American economic leadership.)

At the same time, the top 19 countries in the world in terms of decade-long growth saw their GDPs more than double over the ten years from 2000 to 2010. And that top 19 included some really big countries -- not least India and China -- so nearly 2.6 billion people benefited from all of that economic dynamism.

Just as significantly, Africa has been going gangbusters -- though you probably haven't noticed, since the whole region of 49 countries still has a combined economy smaller than the state of Texas. Yet within the club of economies that doubled in size were no less than eight from sub-Saharan Africa, the region traditionally written off as a hopeless economic backwater. Indeed, that region took 17 of the top 40 spots in the decade's global GDP growth rankings; its GDP is 66 percent larger than it was in 2000. Populations have expanded there, too, by around 28 percent over the decade -- but even accounting for more people, the average income in the region is about a third higher than it was 10 years ago.

There is no single answer to the question of what is behind the economic dynamism of the club of doubled economies. Some benefited from expanding output and high prices of minerals exports. The World Bank's data, along with State Department's, suggest that nine of the 19 fastest growers rely considerably on extractive industries. Equatorial Guinea and Azerbaijan, the top two performers worldwide -- whose economies more than quadrupled in size over the decade -- are both highly dependent on oil. So are Turkmenistan (third place) and Angola (fourth). Sierra Leone, Bhutan, Chad, Tajikistan, and Kazakhstan round out the economies highly reliant on extractive industries. Others owe at least some of their dynamism to the rebound from recent and devastating civil wars, including Rwanda and (again) Sierra Leone.

But the rest -- China, India, Ethiopia, Mozambique, Cambodia, Armenia, Belarus, Uganda, and Vietnam -- don't easily fall into either of those categories. None have considerable reliance on mineral wealth, and while some were previously embroiled in civil war, their conflicts ended at least five years before the turn of the millennium. The factors behind their rapid growth are probably as varied as the countries themselves.

Whatever the secret, it doesn't appear that it was simply a case of creating nirvana for private sector growth. The average 2010 ranking among the world's 19 fastest-growing countries on the World Bank's Ease of Doing Business index, which measures the conduciveness of a country's regulatory environment to starting a new firm, was 114 out of 183. Even among those nine countries that don't owe their growth to extractive industries, five -- including India and Ethiopia -- had a ranking below 100. That result echoes the conclusions of economists Dani Rodrik, Ricardo Hausmann, and Lant Pritchett. They looked at 80 periods of "growth acceleration" where an economy increased its growth rate by 2 percent or more for at least seven years. Nearly all were unrelated to economic reforms including liberalization of trade and prices.

And just as the causes of economic growth varied considerably among these countries, so did the associated consequences. Not least, the link between income growth and improvements in the broader quality of life was incredibly weak in a number of cases. Sierra Leone, Ethiopia, Uganda, and Rwanda all combined their top-19 placing in economic performance with a top-19 global ranking in terms of adding years to life expectancy over the decade; on average, a child born in 2010 will now live six years longer than one born in 2000. But while Equatorial Guinea may have been first in the world in GDP expansion, it was 109th in terms of extending health, adding less than two years to life expectancy over the decade. That poor performance was doubtless related to the fact that Equatorial Guinea's President Teodoro Obiang Nguema Mbasogo was considerably more concerned with ensuring his son was well stocked with fast cars and fancy boats than with ensuring that health systems in his country operated at even the lowest levels of efficiency. In Obiang's defense, Chad, Turkmenistan, and Belarus did even worse in the rankings -- and, more surprising, so did China, which added only 1.8 years to predicted lifespan at birth.

Even if the causes and related impacts of growth varied, however, it is pretty clear that the United States was a beneficiary. In terms of national security, the list includes a number of countries that may have moved some distance further away from failed-state status thanks to their development performance. And a bad decade for the U.S. economy would have been even worse without these high-flying performers. In some cases, their expansion was built on growing exports of raw materials and oil that kept prices lower -- for Americans and everyone else -- than they otherwise would have been. In others, particularly China and India, it was built in part on the export of cheap goods and services to the American consumer. And in most cases, the growth created considerably larger markets for U.S. industry. According to data from the U.S. International Trade Administration, U.S. exports to the 19 fastest-growing economies grew approximately fivefold in current dollars between 2000 and 2010, to $119 billion.

So, however weak U.S. economic performance looks in comparison, Americans should be cheering on these countries to another decade of record growth. And they should be doing their part to help that happen: keeping trade open, and allowing ideas, money, and (most importantly) people to move back and forth with greater ease. The best way to extend the Amerislump for another decade would be to do the opposite.

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