The end of aid?

Abstract

The article reviews the debate on the effectiveness of foreign aid, focusing on the opposing views of Jeffrey Sachs and William Easterly. Sachs argues that poverty is a “poverty trap” that requires a “big push” of investment in areas such as agriculture, sanitation, education, and public health. Easterly, however, rejects the “financing gap” and “poverty trap” arguments, emphasizing the importance of good governance and policy for aid effectiveness. The article highlights the difficulties in assessing the effectiveness of aid, with micro-level studies showing positive impacts while macro-level studies yielding mixed results. The article concludes that while both Sachs and Easterly have valid points, the debate ultimately remains unresolved, and the solution to poverty likely lies in a combination of good policies and well-targeted interventions. – AI-generated abstract.