Nobel-winning economist Angus Deaton argues against giving aid to poor countries

Federal Nigerian troops walk along a road to the frontier with Biafray, Oct. 13, 1968. On the roadside two emaciated Nigerian boys suffer from starvation and malnutrition. (AP Photo/Dennis Lee Royle

Washingtonpost – It sounds kind of crazy to say that foreign aid often hurts, rather than helps, poor people in poor countries. Yet that is what Angus Deaton, the newest winner of the Nobel Prize in economics, has argued.

Deaton, an economist at Princeton University who studied poverty in India and South Africa and spent decades working at the World Bank, won his prize for studying how the poor decide to save or spend money. But his ideas about foreign aid are particularly provocative. Deaton argues that, by trying to help poor people in developing countries, the rich world may actually be corrupting those nations’ governments and slowing their growth. According to Deaton, and the economists who agree with him, much of the $135 billion that the world’s most developed countries spent on official aid in 2014 may not have ended up helping the poor.

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