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Peter Bauer, the economist, died on May 3^rd 2002, just before he was to have been awarded the Cato Institute’s first $500,000 Milton Friedman prize for the advancement of liberty. 

For most of the last century he was one of the fiercest, and intellectually distinguished, critics of foreign aid.   He claimed that it misallocated resources, and tended to maintain corrupt or weak governments in power.   Resources tended to go to things that the donors thought were important rather than to the priorities of the poor I the recipient countries.  It allowed recipient governments to follow harmful policies such as trying to plan their economies instead of simply ensuring that property was respected so that people could create wealth themselves.  The net effect was to delay development and worsen conditions for the poor. 

His criticism was not restricted to the obvious harm of aid to buy arms.  He believed that the vast majority of aid was harmful overall.   One certainly does not have to look far to see examples; silted up dams, inappropriate health technology, education that does not follow local needs.   Perhaps most tragic of all whole generations of the brightest Africans have been drawn into government service or the chasing of foreign aid money instead of entrepreneurship.   It is no exaggeration to say that aid has not just failed to develop Africa, but it has kept it poor   

Bauer was particularly scathing of aid for population control, which he saw as a patronising interference in the choices of poor people.  He argued that they were perfectly capable of deciding how many children to have without help from outside, that more children was generally a good rather than a bad, and that such programmes frequently became corrupt and coercive.  

Unlike the mass of guilt ridden western liberals who salved their consciences by giving aid, without thinking clearly about its effect, Lord Bauer was a real friend to the poor.   Over the last 50 years the worlds developed nations largely ignored his message.  We must not make the same mistake over the next.  

Jim Thornton. Nottingham 13 May 2002

Read an iGreen review of his last book here

Read The Economist’s review of his policies published the day after he died here. 

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Last modified: September 10, 2006