Slate Money – The Development Edition (January 16, 2016)

Episode Overview

In this special “Development Edition,” host Felix Salmon (Fusion), joined by co-hosts Cathy O’Neill (mathbabe.org) and Jordan Weissmann (Slate), welcomes economist and NYU professor William (Bill) Easterly for a sweeping conversation on the state of global development. The discussion explores: tangible gains in living standards around the world; the role and failures of foreign aid and NGOs; the perils of “expert-driven” development models and authoritarianism; the checkered legacy of the World Bank; and how the world’s poor are increasingly driving their own progress.

Key Discussion Points & Insights

1. How Much Has the World Improved? ([03:06]–[06:54])

• Big Statistical Gains: Bill Easterly cites dramatic improvements in key indicators since 1960:

  “In 1960, 23% of children born in what was then called the third world died before their fifth birthday. And today that number is down to 5%.”
  — Bill Easterly [03:54]

• Rethinking Africa: Growth rates, technology adoption (e.g., mobile phones), and health outcomes have all improved in Sub-Saharan Africa, challenging persistent negative stereotypes.

  “Africa… growth rate in Africa for the last 20 years has been strongly positive, the best in its history. …Africa is twice the number of cell phone subscribers as the US.”
  — Easterly [04:45]

• AIDS and Ebola have not devastated Africa as once feared, in part due to behavioral change, improved medical treatment, and some targeted aid.

2. Does Foreign Aid Work—and When? ([07:02]–[09:53])

• Aid Wins and Fails: Targeted aid, like support for HIV/AIDS treatment and vaccination campaigns (e.g., GAVI), gets praise. Large-scale, growth-focused aid generally fares poorly.

  “I don’t give aid credit for much else. This one I will.”
  — Easterly (on AIDS treatment) [07:07]

• Negative Effects: Often, aid props up dictators or enables abusive projects; “development” funding is linked to oppression in places like Ethiopia and Uganda.

3. Are Certain Approaches to Charity More Effective? ([09:53]–[12:11])

• NGOs, Imagery, and Respect:

  “That kind of campaign… portraying the helpless child… is likely to be an NGO that does not have a very healthy respect for the autonomy and dignity of the poor…”
  — Easterly [10:42]

• Cash Transfers as Baseline: Programs that give money directly to people (like GiveDirectly) are often as or more effective than paternalistic approaches. Stereotypes about waste (e.g., spending on alcohol) aren’t supported by evidence.

4. Are Charities and Aid Organizations Improving? ([12:11]–[13:10])

• Randomized controlled trials and evidence-based evaluation are improvements but no panacea. Challenges with implementation persist.

5. Refugees, Displacement, and Economic Migration ([16:03]–[20:03])

• Who’s Being Left Behind or Helped?

  “Purely kind of what's usually called kind of economic migration from, say, sub Saharan Africa to Europe... that's actually not necessarily a bad thing.”
  — Easterly [16:03]

• Migration remains one of the fastest ways for an individual to improve their circumstances. Broad-based improvements at home have also made a difference.

6. What Drives Economic Development? ([17:29]–[20:03])

• The poor themselves, through education, entrepreneurship, and investment.
• Role of Government: Transition from interventionist to “enabling” government has helped; infrastructure, basic health, and education matter, but so do political and economic freedoms.

  “Political freedom and economic freedom really go together…”
  — Easterly [18:24]

• Amartya Sen reference: “Democracies don’t have famines”—freedoms provide protection.

7. China: An Exception or Confirmation? ([20:03]–[22:24])

• China’s growth aligns with major increases in economic (if not political) freedom and a move away from central planning.

  “China is a case of the most rapid liberalization in recent history. And that goes together with the most rapid economic growth in recent history.”
  — Easterly [21:21]

8. Trade Policy, Migration, and Development ([21:21]–[23:58])

• Access to world markets is vital for boosting wages and growth, not just for China.
• Movement of jobs (offshoring) and people (migration) are complementary—what matters most is maximizing choices and freedoms.

9. The Pitfalls of Supporting Authoritarian ‘Success’ Models ([24:24]–[26:23])

• Western aid too often supports authoritarian governments in exchange for stability or geopolitical alignment, sometimes at the cost of human rights.
• On so-called ‘benign’ dictatorships:

  “If Kagame really is so popular, why doesn’t he just hold an election? ... Why does he have to rig the election and suppress the dissidents?”
  — Easterly [25:29]

10. The World Bank: Purpose, Legacy, and Current State ([27:59]–[38:09])

• Intellectual Drift: Once promoted sound economics, now lost direction.

  “Now I think the current management of the World bank just doesn’t have a clue how development really happens...”
  — Easterly [27:59]

• Controversial Projects: Under President Jim Kim, alleged complicity with authoritarian regimes and forced resettlement in Uganda and Ethiopia.

  “...a World bank project involved having some soldiers show up with guns, burn down the homes and torch the crops and kill the cattle of 20,000 Ugandan farmers…”
  — Easterly [30:39]

• Loans vs. Knowledge Transfer: World Bank’s attempts to become a ‘Knowledge Bank’ (“McKinsey for countries”) fall flat—most “knowledge products” unused.

  “33% of World bank reports… were never downloaded… 87% were never cited by anyone else…”
  — Easterly [33:16]

• The ‘Expert-Authoritarian’ Model: Emphasis on grand plans, top-down implementation, and disregard for local knowledge leads to poor outcomes.

  “What if the expert advice is wrong? In a democracy there’s accountability… The problem… is nobody ever suffers from any wrong advice.”
  — Easterly [35:17]

Notable Quotes & Memorable Moments

• On Development Stereotypes:

  “That doesn't fit your usual image of Africa, does it?”
  — Felix Salmon [05:37]

• On Direct Cash Transfers:

  “Can any other aid program that’s spending the same amount of money claim to do as well or better than just giving cash?”
  — Bill Easterly [11:50]

• On Democracy and Development:

  “Political freedom and economic freedom really go together, and they're very highly correlated across countries.”
  — Easterly [18:24]

• On Rwanda’s Kagame and ‘benign dictators’:

  “If Kagame really is so popular, why doesn't he just hold an election? ... Why does he have to jail and murder the dissidents if he's so popular—he could just, you know, allow completely free and fair political competition."
  — Easterly [25:29]

• On World Bank Knowledge Products:

  “33% of World bank reports spreading this knowledge were never downloaded from the Internet… 87% were never cited by anyone else…”
  — Easterly [33:16]

Timestamps for Major Segments

• [03:06] – Big-picture progress in health and economics
• [07:02] – Aid successes and limitations
• [10:42] – Critique of NGO fundraising and respect for the poor
• [11:25] – GiveDirectly and direct cash as a baseline
• [12:40] – Randomized controlled trials in aid
• [16:03] – On refugees and economic migration
• [18:24] – Democracy, government’s “enabling” role
• [21:21] – China, liberalization, and growth
• [27:59] – The World Bank’s past, present, and future
• [30:39] – World Bank’s involvement in forced resettlement
• [33:16] – “Knowledge Bank” failure metrics
• [35:17] – The perils of “experts and autocrats” development

The Numbers Round ([41:00]–[42:29])

A classic Slate Money segment, each participant shares a relevant statistic to end the show:

• Felix: Global water withdrawals have tripled in the past 50 years and will rise another 40% by 2030—a worrying trend for development and potential conflict. [41:00]
• Jordan: Americans believe 28% of the US budget goes to foreign aid, versus the reality: about 1%. [41:00]
• Cathy: Contraceptive usage among Ethiopian women aged 15–49 rose from 6% (2000) to 40% (2015)—tangible health progress. [41:51]
• Bill Easterly: “More” democracies than dictatorships in the world now, versus 40 years ago—freedom expanding. [42:15]

Tone

The discussion is evidence-based, conversational, and often sardonic, particularly in critiques of elite-driven development models, world institutions, and international conferences (“Oh my God... I love to be rude about Davos” – Salmon [07:32]). Easterly is pointed but measured, steering focus toward empirical results and human dignity.

Summary Takeaways

• The world has made extraordinary progress in health, economic growth, and political freedom, including in places long dismissed as hopeless.
• Aid has clear wins in targeted health interventions but largely fails at driving broader economic development and often enables authoritarian abuses.
• Direct cash transfers to the poor and respect for recipients’ autonomy are gaining ground over paternalistic or top-down charitable approaches.
• Political and economic freedoms, democracy, and “enabling” (not overbearing) governments are essential for sustainable development.
• The World Bank has lost clarity in its mission; its “Knowledge Bank” role mostly fails, and its historic focus on big, expert-driven projects—often with autocratic cooperation—has been problematic.
• On balance, the world is, by most measures, becoming a freer and better place—largely because of, not despite, the resourcefulness of poor people themselves.

For those interested in these issues at “a much more granular level,” Bill Easterly recommends his new development-focused podcast (launched with NYU’s Development Research Institute).