an iron law of aid: Aid agencies need bad news to justify their existence… Indeed, the ADB is currently following and will surely continue to follow another iron law of aid: Not only do old aid agencies never die, neither does any single old department of an old aid agency.
I’ve written several times on the research of economist William Easterly on the damage done for “foreign aid”. E.g., see Africa’s Poverty Trap and Foreign aid vs. growth: Robert Lucas and William Easterly which begins:
That didn’t work, so let’s try it again
Which of the following policies have helped developing countries reduce poverty?
1. investment in physical capital
2. investment in education
3. controlling population growth
4. loans to countries in financial crisis
5. forgiving foreign debts
Today Easterly examines another of these aid institutions, the Asian Development Bank, that is determined to keep its 2000 employees and $6 billion of annual lending.
Pity the Asian Development Bank. It is trying to come up with a reason to exist for an Asian continent that already is achieving development and doesn’t need a Development Bank. Given all the economic success stories in today’s Asia, you’d think the ADB could pat itself on the back for a job well done and then pack up and go home.