October 15, 2009 | Read Time: 1 minute
NEW BOOKS
The Aid Trap
by R. Glenn Hubbard and William Duggan
Billions of dollars of aid have been given to poor countries but the money has not led to prosperity and has instead fallen victim to the “charity trap,” the mistake of donating money to poor people in impoverished nations instead of promoting self-sufficiency, contend R. Glenn Hubbard, dean of Columbia Business School, and William Duggan, a senior lecturer at the school.
The authors point to the burgeoning economies of China and India as evidence that thriving businesses are the key to ending poverty. They criticize prominent proponents of charity, including the investor Warren Buffett, of whom they write, “The truth is, Buffett knows very little about the market in poor countries — he makes his money in rich ones.”
The authors outline four major reasons why they believe the aid system does not work: the charity trap, self-interest of people connected to the aid system, the absence of advocates in wealthy countries for promoting business in poor nations, and the lack of other ways for rich countries to assist poor ones.
Publisher: Columbia University Press, 61 West 62nd Street, New York, N.Y. 10023; http://www.cc.columbia.edu/cu/cup; 198 pages; $22.95; ISBN 978-0-231-14562-6.
