The great anti-poverty show

In two days time, several million anti-poverty campaigners, progressive pop stars, socially aware bishops, labour union executives, environmental radicals, "thoughtful" corporate statesmen, anti-globalisation net-workers and young idealists of various kinds will be gathering outside the G8 meeting in Scotland to urge the assembled world leaders to "Make Poverty History".

They will have walked miles, slept in fields, wrapped white ribbons around public buildings, attended globally-linked pop concerts, signed petitions, cheered MPH's leader, Sir Bob Geldof, and generally fought world poverty in a roundabout way.

Next to Sir Bob himself, British Prime Minister Tony Blair, the G8 host on this occasion, is the impresario of this vast worldwide charitable pop concert.

Blair is hoping to mark his presidency of the G8 with an agreement to lift Africa out of poverty. He is happy to have the pop stars and activists pressuring the other government leaders to add in their aid billions.

And he had the United States in his pocket even before the G8 began.

Bush announced last week the United States would be doubling aid to Africa. He had agreed to cancel the debts of the world's poorest countries. Before that, he had significantly increased funding to combat the Aids epidemic in the Third World.

No doubt Bush wanted to repay the British leader for his unstinting support over Iraq. But there is a deeper affinity between the two leaders underlying these outlays.

Bush and Blair are deeply religious and believe governments should help people who are "hurting". And as in Iraq, they believe this obligation crosses international frontiers.

If, however, the United States, Britain and the G8 countries' government do embark on helping poor Africans, they should first ensure they really are helping and not harming them. Yet no correlation can be found between aid and economic growth.

Tanzania under Julius Nyrere, the saintly austeritarian dictator, received more aid per capita than any other aid-receiving country. It languished in poverty and backwardness.

The World Bank's generosity helped to prolong that poverty. Its wealth transfers strengthened the Nyrere Government and enabled it to maintain its wealth-destroying socialist policies.

Western charity prolonged dictatorial misrule and ethnic cleansing. Blair and Bush have some grasp of this reality.

They accept that previous aid failed in part because it failed to tackle the corruption of aid-receiving governments it often went directly from Western agencies to the dictator's Swiss bank accounts but say they will ensure that aid will go only to virtuous governments in return for ending such corruption. Or as the saying goes, this time it will be different.

This sounds like over-confidence a trait both men share on a massive scale. In the first place, aid has little or no connection with the real factors that produce growth.

As innumerable development studies have demonstrated, nations, not unlike families, become wealthier when their people educate themselves, work hard, maintain intact families, suppress crime, save prudently and invest for the future.

Aid cannot directly assist these processes to a significant extent. It can even obstruct them by encouraging self-destructive attitudes such as the belief that wealth comes from luck and influential connections rather than from hard work.

And as Tanzania illustrates, it tends to increase the power of parasitic governments over their societies.

Vanish on cue

When poverty fails to vanish on cue, however, the Western aid agencies and their showbiz allies in the Make Poverty History (MPH) coalition will demand not only more aid but sterner interventionist measures too.

And if the MPH manifesto is any guide, these will make matters worse. MPH wants protectionist tariffs for agriculture in the Third World that would raise food prices in those countries (thus penalising poor consumers) and choke off trade between poor countries as well as with the West (thus reducing economic opportunities for producers).

It wants to price poorer workers out of the labour market by erecting higher "labour standards".

And it wants to halt privatisation programmes ignoring the fact that government monopolies in the Third World are over-staffed with relatives of influential people, treated as private bank accounts by ministers and thus forced to charge high monopoly prices to the non-influential (ie, the poor).

This is a comprehensive programme for increasing poverty. Having summoned this aid-showbiz coalition to their aid this week, however, Blair and (to a lesser extent) Bush will have to listen to them when they demand sterner measures.

Blair may not be politically strong enough to resist. If so, more aid (and more poverty) would follow.

By indulging these daft paleo-socialist panaceas, however, Western governments are directing Africa, Third World governments and the poor away from the only policies that are known to deliver growth and prosperity.

As scholars such as Hernando de Soto, Deepak Lal, and the late P.T. Bauer have established, these are legally protecting private property, dispensing justice honestly, reducing regulations that obstruct small businesses, maintaining a sound currency that preserves savings and allowing the poor to market their goods without official interference.

You may notice two things about that list. It conforms closely to the traditional conservative idea of limited government.

And it treats the Third World poor not as helpless invalids who need our constant care and supervision but as active decision-makers in their own economic progress.

We are encouraged to think of them as helpless by all the aid posters showing starving children. But a more realistic account of their activity and priorities was recently given by the British educational historian, James Tooley, who spent several years studying Third World schools.

What he found was astonishing. Desperately poor people in Africa and Asia, dissatisfied with the poor quality of state education, were sending their children to small private schools for very modest fees.

Still more fascinating, the education they were receiving was both good in itself and markedly better than that on offer in the free government schools.

And because they were paying, they got service when they complained. The state schools ignored and patronised them.

Neither governments nor aid agencies such as these schools which offer no scope for their compassion and idealism.

The proposal in the Make Poverty History manifesto to spend more aid on [state] education, for instance, would undermine the progress the poor have made on their own.

If we really want to help them rather than their governments, we should put aid directly into the hands of parents in the form of educational vouchers and cut out the middlemen in Make Poverty History.

John O'Sullivan, former adviser to Lady Thatcher and former editorial page editor of The Post, is editor-at-large of the National Review and a member of Benador Associates.