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JSPES, Vol. 34, No. 4 (Winter 2009)
pp. 480-510

The Poverty of Nations: The Impact of Foreign Aid

Herbert H. Werlin

Retired, University of Maryland, College Park

This article focuses on the debate over the usefulness of foreign aid, beginning with books by Jeffrey Sachs and William Easterly, combined with the more recent contributions of Dambisa Moyo and Paul Collier. Political Elasticity (PE) theory is put forward to facilitate our understanding what has to happen for countries to economically develop. In so doing, the theory attempts to reform political terminology, including such words as corruption, democracy, decentralization, and political power. Also introduced is the concept of “political software,” referring to the quality of relationships between leaders and followers. The case studies presented, dealing, first of all, with solid waste management in Lagos, Nigeria, and, secondly, with agricultural production in Ghana, are intended to illustrate the effect of political software deficiency on urban and rural life. This is followed by a comparison of Bangladesh and Vietnam, suggesting that a “development from below” approach (including microcredit programs) advocated by Muhammad Yunus, is not enough to enable countries to escape extreme poverty unless (as in Vietnam) political leaders are motivated enough to engender the “social energy” necessary to do so. At the conclusion, the experience of the World Bank is presented, indicating various reasons why it has not been more successful in bringing about development and suggesting an “alternative approach” intended to be “motivational,” rather than charitable.