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Planners versus Searchers in Foreign Aid




Only for the recipients of foreign aid is something akin to central planning seen as a way to achieve prosperity. The end of poverty is achieved with free markets and democracy—where decentralized “searchers” look for ways to meet individual needs—not Poverty Reduction Strategy Papers (PRSPs) to achieve Millennium Development Goals (MDGs). The PRSPs and MDGs create lots of bureaucracy but hold no one specific agency in foreign aid accountable for any one specific task. Planners in foreign aid use the old failed models of the past—the “Financing Gap”, the “poverty trap”, the government-to-government aid model; and the “expenditures = outcomes” mentality. Searchers in foreign aid would imitate the feedback and accountability of markets and democracy to provide goods and services to individuals until homegrown markets and democracy end poverty in the society as a whole. An example of the more promising “searchers” approach in foreign aid is 2006 Nobel Peace Laureate Mohammad Yunus and Grameen Bank.

Suggested Citation

  • Easterly, William, 2006. "Planners versus Searchers in Foreign Aid," Asian Development Review, Asian Development Bank, vol. 23(2), pages 1-35.
  • Handle: RePEc:ris:adbadr:2321

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    References listed on IDEAS

    1. Hertel, Thomas, 1997. "Global Trade Analysis: Modeling and applications," GTAP Books, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, number 7685.
    2. James E. Anderson & Eric van Wincoop, 2004. "Trade Costs," Journal of Economic Literature, American Economic Association, vol. 42(3), pages 691-751, September.
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    Blog mentions

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    1. Lección 2: La Escuela Austriaca y el Public Choice sobre Desarrollo Económico y Pobreza
      by Adrián Ravier in Punto de Vista Economico on 2012-08-16 02:07:43


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    1. repec:bla:socsci:v:98:y:2017:i:1:p:282-298 is not listed on IDEAS
    2. Simplice A. Asongu & Jacinta C. Nwachukwu, 2017. "Foreign Aid and Inclusive Development: Updated Evidence from Africa, 2005–2012," Social Science Quarterly, Southwestern Social Science Association, vol. 98(1), pages 282-298, March.
    3. Simplice Asongu, 2016. "Reinventing Foreign Aid For Inclusive And Sustainable Development: Kuznets, Piketty And The Great Policy Reversal," Journal of Economic Surveys, Wiley Blackwell, vol. 30(4), pages 736-755, September.
    4. Asongu, Simplice & Nwachukwu, Jacinta, 2017. "Increasing foreign aid for inclusive human development in Africa," MPRA Paper 81193, University Library of Munich, Germany.
    5. Simplice Asongu, 2014. "A brief clarification to the questionable economics of foreign aid for inclusive human development," Working Papers 14/028, African Governance and Development Institute..
    6. Asongu, Simplice, 2014. "Reinventing foreign aid for inclusive and sustainable development: a survey," MPRA Paper 65300, University Library of Munich, Germany.
    7. repec:pri:cepsud:195spears is not listed on IDEAS
    8. Badassa Tadasse & Bichaka Fayissa, 2009. "Determinants of the Allocation of US Aid forTrade," Working Papers 200901, Middle Tennessee State University, Department of Economics and Finance.
    9. Dean E. Spears, 2009. "Bounded Rationality as Deliberation Costs: Theory and Evidence from a Pricing Field Experiment in India," Working Papers 1199, Princeton University, Department of Economics, Center for Economic Policy Studies..
    10. Davis, Lewis S., 2010. "Institutional flexibility and economic growth," Journal of Comparative Economics, Elsevier, vol. 38(3), pages 306-320, September.
    11. Claudia Williamson, 2010. "Exploring the failure of foreign aid: The role of incentives and information," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 23(1), pages 17-33, March.
    12. Spears, Dean, 2014. "Decision costs and price sensitivity: Field experimental evidence from India," Journal of Economic Behavior & Organization, Elsevier, vol. 97(C), pages 169-184.

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