Toward Prosperity

A Review of Poverty, Inc.

In late 1984, Band Aid, a charity supergroup of British and Irish musicians, recorded "Do They Know It's Christmas? (Feed the World)" to call for aid in response to an Ethiopian famine. In 2011, the TV show Glee covered the same song, whereupon Irish singer/activist Bono said it made him "very happy, indeed" that the Glee generation was taking such songs "so to heart" and giving new life to the same idea.

"What makes Bono happy about this?" asked Magatte Wade, a Senegal-born entrepreneur. "By now, Bono should know better." It's not that she's unappreciative of humanitarian aid. Humanitarian aid in the wake of a disaster is good. "But when humanitarian aid becomes a way of life, we all have a big problem."

The current model of government-to-government aid grew out of the Marshall Plan, which helped Europe recover from World War II. The Marshall Plan is generally considered a success, but in its wake an entire global industry has taken root. While the motivations behind the UN, the World Bank, the International Monetary Fund (IMF), and the profusion of nongovernmental organizations (NGOs), multinational corporations, consultants, and charities they contract with may well be noble, it is reasonable to ask how successful the conglomeration has been at alleviating poverty if the Glee generation is singing the same song their parents sang thirty years ago.

The Acton Institute's film Poverty, Inc. raises this and other penetrating questions. Filmed in more than 20 countries and drawing from more than 200 interviews, Poverty, Inc. shines a compassionate but much-needed discerning light on how the developed world is "helping" its still-underdeveloped global neighbors.

First, Poverty, Inc. shows, on both a macro and a micro level, some of the manifold unintended consequences of aid. To begin with, the aid model carries with it a set of false assumptions about poor people, implying that they're primitive or helpless. It can also foster a pernicious paternalism among donors that serves neither the poor nor the rich. To wit, the system is looked on today in some quarters as a kind of neo-colonialism, whereby unwanted outsiders control the affairs of indigenous people. And when the purported benefactors live conspicuously comfortable lives off the system, it is also reasonable to ask, Who really benefits from the poverty industry?

Taking a more close-up view, aid—especially when it comes in the form of free stuff being dumped in poor areas—grossly distorts local economies, potentially putting local farmers, entrepreneurs, and social services out of business. This serves more to perpetuate dependency than to alleviate it, and Poverty, Inc. shows us several instances of how this plays out in real people's lives, in many cases with generational consequences.

Best of all, Poverty, Inc. doesn't just highlight problems. It prescribes better ways to help. Being poor has a lot to do with being excluded from two related realities that we in the West take for granted. People in poor countries need (1) a reliable rule of law, such that laws securing business and property rights apply equally to the poor and to the rich and well-connected; and (2) access to networks of productivity and exchange—technology, cell phones, financial and educational systems—that place them and their enterprises on an equal footing in global markets.

Countries don't develop on aid, says Ghanaian software entrepreneur Herman Chinery-Hesse. They develop on trade and innovation and business. Poverty, Inc. isn't about fashionable, band-aid solutions. It's about reengineering aid in a way that respects the dignity and potential of people in underdeveloped regions. It's about empowering them to prosper for themselves. •