For developing countries, one of the most catastrophic things than can happen is a natural disaster. The poor lose the little they have; important infrastructure - which is often a much bigger proportion of government budgets than 1st world countries - is ruined, and the human cost is terrible for the human capital of the nation.
In the aftermath of these disasters, it is often NGOs and charities that provide some of the most crucial help. One such charity is Oxfam. They were some of the first on the scene in Indonesia, Sri Lanka and India after the Boxing Day tsunami and its volunteers delivered essential supplies to Nepalese citizens after the 2014 earthquake.
They were also active in Haiti, the Caribbean state that shares an island with the Dominican Republic, after the disastrous earthquake in 2010 that claimed over 250,000 lives. But almost 7 years after the earthquake, a special report by the Guardian accused Oxfam workers of sexually exploiting Haitians at their most vulnerable moment. It led to one of the biggest charity scandals in history, with the chief executive of Oxfam GB resigning and the whole organisation being banned from operating in Haiti ever again.
Failures in charity work do not have to be as nefarious as this clear instance of gross misconduct. Charities often fail in their missions because their donors often demand extremely low overhead costs. This is understandable – those who are giving away thousands or millions want to make sure that their money makes a difference and does not end up in some middle manager’s pocket. Furthermore, charities can sometime hide safeguarding concerns and sweep them under the rug for fear of losing funding.
While this is an extreme example of harm caused by foreign aid, such harm does exist - development economists have targeted aid programs from India to Brazil for failing in their aims and often adversely affecting those it is meant to help. Sometimes, these failures are not malicious and are merely the result of poor planning and foresight, leading to unintended consequences. Nevertheless, these consequences can have ruinous effects on some of the poorest people in the world, most of whom live in extreme poverty (defined by the UN as earning less than $1.90 per day). Failures in aid can be split into 3 categories: poorly executed programs, ineffective programs and harmful programs.
Poorly executed programs can often lack an understanding of the region or demographics of the region it tries to help. For example, the famous development economist Abhijit Banerjee writes about an initiative in Madhya Pradesh, India where the objective was to introduce computer kiosks in rural areas. When the kiosks were installed, frequent power cuts and poor internet connections meant that the scheme was, to put it bluntly, an abject failure. Sadly, these failures are extremely common. In Lake Turkana in Kenya, a $22 million fish processing plant was built with the help of the Norwegian government. The aim of this was to cultivate a fishing industry among the Turkana people; however, these were nomads who had no tradition of fishing or eating fish. After just a few days, the plant closed and it has remained that way ever since.
Ineffective programs are based on assumptions that are wrong. For example, a program in Kenya to combat the HIV/AIDS epidemic through educating young girls had little to no effect on behaviour, attitudes or outcome - the only difference was that pregnant girls were more likely to be married. This was the result of promoting that unprotected sex was only safe between a married and committed couple. Furthermore, efforts to reduce occurrences of waterborne disease such as cholera through cleaning the water supply often has a limited impact. Often, it is not the water supply that causes the bulk of the problem - it can be other factors such as hygiene habits.
Harmful programs are the worst of the 3. While the others often lead to a waste of money for donors, this can lead to the poor and vulnerable losing money and seeing a drop in their living standards. This is clearly the worst outcome. This mostly occurs when economic development programs change behaviour of its targets, changing their careers into a path that may not be suited for them. For example, the DrumNet program in Kenya transitioned firms from growing ‘local’ crops (for sale in Kenya) to ‘export’ crops (to be sold to foreign firms). However, after the transition was completed, the firm that purchased the export crops stopped their scheme, and the farmers were forced to sell at lower prices than the start of their program. These types of programs are far more prevalent than one would expect. In Egypt, a large-scale project intended to control schistosomiasis through mass drug administration actually ended up contributing to higher rates of hepatitis C.
While aid programs are often well-intentioned, they can be (and often are) ineffective. It’s important for everybody involved - the donors and those who receive the aid - that any programs, whether large-scale or small-scale are thoroughly checked to ensure that it has a positive impact because a failure can ruin a life.
