Lords of Poverty !

* Lords of Poverty: The Power, Prestige, and Corruption of the International Aid Business. New York:
Atlantic Monthly Press, 1989, 234 pp.
Lords of Poverty and Servants of the Poor
Amy Sherman
Stewardship Journal, Winter 1991
According to British author Graham Hancock, one can get quite rich attending to the poor.
His book, Lords of Poverty, * is a scathing indictment of official "overseas development
assistance," that collection of efforts of bilateral and multilateral organizations allegedly
about the business of transferring resources from the rich, industrialized North to the poor,
underdeveloped South. Hancock's thesis is blunt: foreign aid is "rotten," he says, rotten to
the core and "utterly beyond reform." It should be terminated because it almost never
helps the poor and often is grossly detrimental to them.<br /><br />
Such advice cuts across the prevailing wisdom in the relief and development (R&D)
community and Hancock is undoubtedly correct to lament that foreign aid has become
such a sacred cow that anyone who questions its value, or asks those in business of
"being kind to others" just what they do and whether it works, is viewed as "churlish."
Frankly, the description fits Mr. Hancock's biting approach rather well, though one can
excuse his sarcasm considering how offensive are the tales of corruption and selfishness
he tells. <br /><br />
According to Hancock, some 80 percent of the overall expenditures of the various UN
bodies engaged in "relief and development" work goes towards personnel and related
costs.
1
He describes in excruciating detail the "perks" enjoyed by the staffers of
"Development, Inc." (his term for the World Bank, and loosely, all the official
development agencies) -- their first-class travel, their six-figure salaries, their lavish
conferences. And there is something, well, discomforting about World Bank President
Barber Conable's lofty suggestions that the Bank's labors "will count for nothing if it
cannot look at our world through the eyes of the most underprivileged" -- coming as they
do after a $200-a-plate catered four-course meal at the ritzy Sheraton-Washington.
After exposing just how little money is actually put into development projects, Hancock
criticizes the way these projects are designed and executed. He asserts that development
workers rarely approach the recipients of their "kindness" to elicit their concerns and
suggestions. Rather
development. . . is nothing more than a transaction between bureaucrats-a
deal that gets done, in the name of others. by intermediaries and brokers.
The real principles in the affair-the taxpayers in the wealthy countries and
the poor in the South-are treated as though they are somehow incidental to
the main event.
2
"Conspicuously absent" in the process of designing R&D projects are efforts to engage
the knowledge or participation of local people.1
Graham Hancock, Lords of Poverty, p. 99.
2
Ibid., p. 67.White Elephants
Perhaps even worse than this neglect (or arrogant dismissal, as is sometimes the case) of
the concerns of the "beneficiaries" is the inappropriate nature of most of the projects
undertaken. Hancock describes one after another inefficient, capital-intensive, unwieldy,
high-technology prestige projects and "white elephants" that have wreaked havoc on the
poor and the environment. He argues that such unrealistic, wasteful projects are more the
norm than an aberration. The people at Development, Inc., he suggests, believe that
"bigger is better," and recognize that the more expensive and complicated the project, the
more benefits will accrue to the donor country. Moreover, in Hancock's account the
staffers get starry-eyed over grandiose schemes that seek a total restructuring of
impoverished communities. The harmful effects of these grand designs range from
disappointment when a project flops because its expensive equipment cannot be
maintained to the complete disruption of traditional life when whole peoples are forced to
relocate to participate in some "development" scheme that will allegedly improve their
standard of living. Hancock cites the Indonesian government's "transmigration
program" as a case point. The recipient of multimillion dollar support from the World
Bank, this project has relocated six million Indonesians in an effort marred by human
rights abuse and environmental destruction.
3
Hancock reports that most foreign aid programs are "designed by foreigners and
implemented by foreigners using foreign equipment and foreign markets."
4
He criticizes
such projects because they are rarely labor-intensive, employ inappropriate technology,
are not simple to build and maintain, and are expensive to operate. Even worse, they
often benefit the wealthy at the expense of the poor. In Ghana, for instance, the huge
Akosombo Dam of the Volta River displaced thousands of poor Ghanians. The dam
generates electricity for the middle and upper classes residing in the city but completely
bypasses the nearby rural villages. Moreover, Hancock charges that some 80,000
villagers have been "permanently disabled as a result of schistosomiasis, a parasitic
water-borne disease carried by two species of snail that are now the commonest molluscs
in the Volta reservoir."
5
Given the seemingly self-evident stupidity of many of these ventures, one wonders where
things went wrong. For Hancock, the principal problem is that foreign aid is distributed
from the staff of Development, Inc. (who have a vested interest in maintaining their cozy
bureaucratic positions) to government elites in the third world (who have a vested interest
in continuing the significant dollar flows that permit their extravagant lifestyles and
continuation in power). No one, it seems, has a vested interest in seeing foreign aid
actually work -- to the point where it is no longer needed. No one, perhaps, except the
poor.
3
Among his criticisms of this "victimizing" development project, Hancock cites the trammeling of the land
rights of traditional Indonesian tribes and the combined resettlement of ethnic groups with historical
animosities, leading to intense civil strife.
4
Ibid., p. 155.
5
Ibid., p. 140.Foreign "Aid"?
Hancock also has a bone to pick with the very phrase "foreign aid." The term is deceptive,
he contends, considering that the chief beneficiaries of "aid" are contractors in the
Western, industrialized states. As even the development community itself admits, foreign
aid is "good business" for the donor. Hancock shows that donors usually reap more than
they sow: for every $10 a donor country gives to the World Bank, for example, $7 are in
fact spent on goods and services from the North.
6
In a perverted way, it has indeed been
better for the donors to give than to receive: currently, the net transfer of resources from
South to North exceeds that of North to South because of the vast debt the less developed
countries (LDCs) accumulated when receiving massive (albeit concessional) loans in the
name of "development."
In summing up, Hancock dismisses the argument that foreign aid must be continued
because "the poor can't survive without it." Rather, he argues, foreign aid is typically
irrelevant to downright harmful to them. It enriches only development professionals,
Western contractors, and third world bureaucrats, and it enables exploitative regimes to
continue following misguided and wasteful policies. The best thing one can do for the
poor, it seems, is to terminate foreign aid. Perhaps then, Hancock concludes,
when the middle men of the aid industry have been shut out, it will
become possible for people to rediscover ways to "help" one another
directly according to their needs and aspirations as they themselves define
them, in line with priorities they themselves have set, and guided by their
own agendas.
7
What About Nonofficial Assistance?
Hancock's concluding observation allows the reader a welcome alternative to leaving the
book feeling utterly hopeless and disillusioned about development work. For it raises the
question of whether transferring resources from North to South through private,
NonGovernmental Organizations (NGOs) would avoid the manifold problems Lords of
Poverty so powerfully exposes.
If the essays in Christian Relief and Development, * a collection of nineteen articles by
staffers from Christian associations engaged in various aspects of development ministry,
are any indication, the answer may be yes. The contributors to this volume, edited by
Fuller Theological Seminary professor Edgar Elliston,display considerable sensitivity on
nearly all of the matters about which Hancock lambasts the official R&D agencies.
6
Ibid., p. 158.
7
Ibid., p. 193.
* Christian Relief and Development: Developing Workers for Ef ective Ministry. Foreword by Ted W.
Engstrom. Dallas: Word Publishing, 1989, 351 pp.Paul Heibert's contribution, "Anthropological Insights for Whole Ministries," for example,
argues that participation by recipients is absolutely essential. His views reflect a theme
heavily emphasized throughout the volume: that recipients must be involved in defining
their own needs and designing, implementing, and evaluating their own projects. Other
contributors maintain the importance of R&D staff living among the people they
serve and adopting an "incarnational" approach, i.e., learning the culture from the "inside
out" in relationships characterized by mutual respect. According to Hancock, staff at
Development, Inc. talk above the heads of recipients by dealing directly with government
officials. In contrast, the authors in Elliston's work stress the need for frequent contact
with the people in "non-dominating" friendships.
Distinctives of Christian R&D
An essay by Elliston himself describes other factors distinguishing the work of Christianbased agencies from that of the official groups. The most obvious, of course, is the
evangelicals' commitment to proclaiming the gospel (a commitment unabashedly
endorsed by all the contributors in the book). Elliston also notes that with official foreign
aid, decisions about projects often are made with an "ethnocentric assumption" that "the
donor's way is best." In contrast, Elliston urges Christian ministries to follow a "receptorcentered" approach that draws on local wisdom and is sensitive to cultural concerns. Still
other selections in the book describe the importance of allowing the recipients to define
for themselves what constitutes "the quality of life." Development projects, they argue,
should be designed with these definitions in mind. Several contributors also share
Hancock's concerns regarding the need for environmental sensitivity in development
planning. They assert that the Christian worldview mandates man to be a careful steward
of the earth, acknowledging God as creator and owner of its resources. Arguments for
"appropriate technology" surface in many of the essays (though it is rarely defined with
any great specificity).
The religious organizations also appear to do well in terms of keeping administrative
overhead costs low and pumping the bulk of donations directly into the field.
Remuneration for staffers is far less than in the official agencies and many workers serve
in a voluntary capacity. All in all, in terms of Hancock's criteria, the Christian NGOs
seem to fare pretty well. The funds they raise do reach the poor; the poor have some say
in what is done with them; the agencies are accountable to their donors and are open, not
secretive, about their finances; local input and advice are sought out; attempts are made
to integrate only "appropriate technologies" and to do so in gradual increments and with
receptivity to the community's concerns; the prevailing attitude of staff is marked by
cultural sensitivity, restrained enthnocentrism, and deliberate avoidance of paternalism;
and development projects promote the recipient's self-reliance and encourage his or her
participation at each stage of the work.
There is, in short, much that is praiseworthy about Christian relief and development
ministry. But Hancock's concerns are not the only valid ones that can be raised about
development work, and though one is heartened that evangelical agencies seem on thewhole to have avoided many of the mistakes of their secular brethren, several problems
of commission and omission are nonetheless evident.
Principalities and Powers
First, several contributors to the volume urge that Christian R&D agencies seek to
identify, understand, and address the "root causes" of underdevelopment. Much is said in
this context about confronting the "principalities and powers" of oppressive social and
economic structures, but little is done in the way of actually defining what those
structures are. In addition, a subtle undercurrent of support for dependency theory's
explanations of third world poverty runs throughout several selections. One article, for
example, argues that the church must respond to current North-South dilemmas "with a
social and economic analysis which addresses the problem [of underdevelopment] at its
structural roots" and that "to do so we must forge into territory currently dominated by
Marxists. We may even find points of agreement. . . ."
The case for the existence of dark "principalities and powers" is not a difficult one to
make in most third world countries: oppression, exploitation, and corruption do run
rampant. But observing the reality is one thing and defining and explaining it is another.
Too often the tendency in the selections is either to blame these phenomena on
international economic relations which are held to be "unjust" or to mislabel the internal
economic systems of these regimes as "capitalist" or "Western."
With regard to the first mistake, it suffices to say that the roots of exploitation are found
more in the phenomena Hancock describes (corrupt state bureaucracies in the countries
receiving aid) than in the international market. Only one selection in Christian Relief and
Development affirms that "underdevelopment. . . has its roots in the minds and hearts of
individuals and in the moral and ethical ideals of cultures." Most of the essays point to
external factors, such as the structure of international North-South economic relations, to
explain underdevelopment. While misguided foreign assistance, trade and tariff policies,
fluctuation in global prices, inclement weather, and other external factors can contribute
to third world poverty, the past four decades of experience in the LDCs suggest that
internal factors -- culture and government macroeconomic policies -- are more significant.
Countries that have been able to graduate out of underdeveloped status, or are on the way
toward doing so, share certain cultural features (such as strong work and savings ethics)
and policy attitudes (openness towards international trade, appreciation of market
mechanisms) that distinguish them from the worst-case LDCs.
With regard to the second mistake, what is needed is a better understanding that third
world regimes are typically authoritarian-bureaucratic ones running statist economic
systems better defined as "mercantilist" than as "capitalist." Greater precision in the
definitions is critical: when the contributors mislabel the unproductive, kleptocratic, and
closed LDC economies "capitalist" they encourage the second problem evident in the
volume: namely, promoting a suspicious and hostile attitude toward capitalist
development models. This tendency is unfortunate because of the promise marketoriented and open economies hold for the betterment of the poor.The Need for Perspective
This problem is evident in several selections, where authors are quick to question the
value of transferring a Western, capitalist, industrialized model to the third world.
Certainly valid criticisms can be raised-particularly concerning the wisdom of a
premature, urban-oriented industrialization strategy when the vast majority of the poor in
the LDCs live in rural, agricultural areas. Also, as Hancock notes, certain technologies
introduced in inappropriate contexts do not promote "development" but do harm the
environment. One contributor to Elliston's volume, Wayne Bragg, picks up this theme
with a vengeance, contending that "the whole growth model of the Western technological
society is based on an extractive and dominionistic approach to nature."
8
Bragg laments
as well the "dangerous anthropocentrism" of Western development models. But such
extreme phraseology is worrisome in light of the unhealthy trends in some theological
circles that indicate fuzziness of memory about what God called "good" and what He
called "very good." Environmental sensitivity is a must for the Christian, if
stewardship means anything. But nature is to serve man's needs, and an exaggerated
exaltation of the creation can lead to the rejection of carefully planned development
projects that seek to harness nature's forces for the benefit of the poor.
After condemning "the prevailing economic development model" as unsustainable, Bragg
goes on to decry the various social ills of modern industrialized society. "A society that
produces neurotics, latchkey kids, runaway teenagers, child-abuse, wife-beating, a large
prison population, abortions, high suicide rates, and other social maladies just to remain
economically strong, " he says, "is not a model of development." In this context, Bragg
charges that the social costs imposed by "laissez faire" capitalism in the East Asian
"success" stories are acutely high (implying that other LDCs should not follow this
model). While Bragg is undeniably correct to lament these social ills and to argue that
they detract from the "quality of life" that development is supposed to bring, his
comments lack adequate perspective. For one thing, Christian doctrine suggests that these
sins stem from the same place as all others -- the human heart -- and that consequently all
societies, developed or underdeveloped, will be affected by these sorts of maladies. For
another, such evils do seem to pale in comparison to famine, massive preventable deaths
due to inadequate health care, gross and systematic violations of human rights, massive
homelessness, and whole populations living on the very margins of survival. While the
East Asian countries undoubtedly have significant problems to address, at least they can
be said, as Peter Berger has put it, to have "lifted the poor from grinding poverty and
wiped out Third World misery."
9
On this issue of perspective, Christians can learn from
demographer Nicholas Eberstadt's penetrating observations following a trip to North and
South Korea:
No one who has been to both cities could honestly say that living
standards in Pyongyang even approach those in Seoul. . . . The contrast is
reflected in the faces of children. In Pyongyang, the most common skin
initation visible among schoolchildren is ringworm-an infection typically
associated with poor hygiene or lack of soap. In Seoul, the corresponding
affliction is acne-typically associated with a diet too rich in fats and oils.
10All development models bring problems. But the nature of the ills differs from one
approach to another, and prudence -- the ability to judge between imperfect models -- is
essential for Christians involved in development work.
8
Elliston, p. 55.
9
Peter Berger, "Underdevelopment Revisited," Commentary (July 1984), p. 45.
10
Nicholas Eberstadt, "The Coming Collapse of North Korea," Wall Street Journal, June 26, 1990.Development as "Empowerment"
A final problem with Christian Relief and Development is that while the contributors do
well to argue for "wholistic" development, reminding readers that it is more than material
progress, they fail to discuss the political component of development. One way of
defining "wholistic development" is to suggest that it contains three elements: economic,
social, and political.
11
The first relates to improving economic growth, creating new
employment opportunities, producing a standard of living by which everyone's basic
needs can be fulfilled, etc. The second relates to questions of distribution of resources,
access to education and health services, social mobility, and so forth. The third relates to
the distribution of political power, and to issues of personal freedom, civil and political
lights, the vibrancy of "civil society," and the degree of choice individuals and
communities have over decisions affecting them. This "political" component of wholistic
development is important because the Christian view of human nature indicates that
people are created for freedom and creativity, for association with others, and for
enjoyment of vocational pursuits as God leads.
Development is rightly called "empowerment" in several selections. But apart
from a few vague calls for Christians to work for "liberation," the book offers no
discussion about how we should define the sorts of political systems that best encourage
empowerment. Doing so requires an examination of the right role of government in the
society. Development projects at the grassroots level occur inside a larger, "macro"
political context. In most LDCs, that larger context is authoritarian or "formally
democratic," i. e., governments are elected but political power is tightly controlled by
bureaucratic elites, legislative authority is dominated by the executive branch, political
parties are inaccessible for most people. In either case, there may be little diffusion of
political power and little ability for local communities to organize to defend their rights.
Patron -client relations may the norm at the macro level, and there may be a noticeable
bias of political power (and resource distribution) towards urban centers.
Christians engaged in R&D have at least two tasks in light of these difficult
political realities. First, they must begin to sketch out a conception of the types of
political systems most conducive to wholistic development. Second, they must begin to
address in a systematic way thorny questions about relations between their agencies and
the host country governments.
The problem with regard to the first task is that many Christians define the "good
society" as the Kingdom of God. This may be excellent as a standard of reference, but
little is ever said about what the Kingdom looks like here and now, in its this-worldly,
"not yet" variety. Moreover, Christians are correct to note that no current
political/economic/cultural system can be equated with the Kingdom. But prudential
judgments between the available options must be made if we are to serve the poor.
Significant questions must be raised: which economic models -- market- or state-oriented
-- do best in promoting wholistic development, meeting basic needs, increasing social
mobility, and broadly distributing the benefits of increased productivity? What types of
political systems today best reflect Biblical guidelines about the right role of government?
Christians often shy away from these questions because they desire to appear evenhanded
11
Of course cultural convictions and traditions, including religious beliefs, undergird and inform each of
these three elements.in the assessments that all systems fall short of the ideal (the Kingdom). But discerning
which ones fall further away than others is critical. Historical evidence to date suggests
that the democratic-capitalist model does a better job than other available models in terms
of promoting prosperity from which large segments of the population can benefit:
improving the physical quality of life for citizens as measured in terms of infant mortality
rates, life expectancy, literacy, and access to health and educational facilities;
guaranteeing human rights and political freedoms such as religious liberty; limiting the
power of governmental authorities and creating vibrant "social space" for the associations
of civil society to blossom; and widely distributing political power and protecting
minority rights.
This is not to suggest that Christian R&D workers must all obtain bachelor's
degrees in political science or become cheerleaders for democratic-capitalism. It is only
to recommend that R&D agencies have some sort of understanding of the "macro"
picture. Such an understanding would provide a helpful starting point for the agencies to
carry out the second task: evaluating their relations with host country governments. This
extremely significant issue is (oddly) missing from Elliston's book. Indeed, little seems to
have been ever published by evangelicals on this subject (though Bruce Nichols' book,
The Uneasy Alliance, does address certain church/ state issues bearing on how Christian
agencies abroad struggle to integrate evangelism in their development efforts without
upsetting relations with the host country and/or U.S. governments). One can assume that
good relations with local authorities facilitates Christian service to the communities R&D
groups have targeted. But by what criteria does the ministry determine what its relations
should be with governments whose own policies are doing sustained and demonstrable
harm to the poor? How does a ministry determine when cooperation with the host country
government is no longer possible and that abandoning their work is the necessary, best,
though painful, course?
A "Development Ethic"
The best essay in the volume, by Food for the Hungry's Darrow Miller, helps provide
some guidelines for answering these difficult questions. Miller begins by arguing that the
root causes of underdevelopment are "internal," in other words, to be found inside the
culture (a minority perspective in Christian Relief and Development, as noted earlier).
Christian R&D agencies, Miller suggests, should be culturally sensitive but cannot be
"value-neutral." Rather, they must recognize that some cultural attitudes fit with a
Biblically-informed "development ethic" better than others. This "development ethic"
includes: an understanding of nature as an open system in which wealth is not static and
fixed but rather dynamic and can be created through the application of human wit: a view
of history as linear -- with a definite end and purpose: and acceptance of evil as personal
and real and implying the need for limited government in light of man's fallenness; an
affirmation of work as sacred; and a recognition of human equality and diversity and
rejection of coercive schemes that seek to impose conformity and equality of outcome.
12
Miller asserts that Christian R&D ministries should seek to encourage acceptance of
12
Ellison, pp. 97-108.these attitudes. They can also assess government policies in light of these principles. For
example, a government may support legal discrimination of certain social groups on the
spurious claims of traditional caste systems, may overextend its authority in ways
contrary to the Biblically favored limitation of power, or may promote coercive
"equalization" schemes (such as Tanzania's "ujaama"initiative.) Having a set of "prodevelopment" principles helps the Christian agency make critical judgments about
government practices instead of excusing harmful policies as "just part of the culture."
Making these sorts of judgments is not ethnocentric, Miller maintains: rather, it is a
necessary task of Christian groups seeking the welfare of the poor while submitting to the
norms for all cultures revealed in Scripture.
Christian ministry through relief and development that is informed by the sort of
thoughtful analysis reflected in Miller's essay has great potential for promoting wholistic
development, improving spiritual and material conditions. More agencies should seek to
articulate a "development ethic" in the comprehensive way Miller has, especially in light
of the significant policy reforms underway in a number of LDCs. Broadly speaking,
many regimes are in the process of moving from heavily state-dominated economies to
more free-market ones. Generally, this may be a positive trend, given the lessons learned
by the failures of statist LDCs and the successes of market-oriented newly industrialized
countries as they have unfolded over the past few decades. But the processes of transition
are extremely painful and difficult, they cause significant dislocations in the short term,
and they may fail to address the critical problem of over-centralized political power. Thus,
Christian relief and development organizations today face unique challenges in assisting
the poor (mainly in addressing the short-term problems created by adjustment policies)
and unique opportunities in evaluating these macroeconomic trends in light of the criteria
of "wholistic" development. In the last analysis, while Elliston's book contains several
pieces of useful information for Christians involved in relief and development, it fails to
provide adequate guidance for these agencies to face these unique opportunities and
challenges..