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official assistance, while the remaining 0.3%was to be met by private capital flows.

These targets meant that aid flows were tobe decided by reference to the rich countries’wealth and, implicitly, degree of moral obli-gation (they were “supply-determined”, to useterminology I coined in the 1970s). Arguably,it would make more sense if they were“demand-determined”, dictated by the needsof the poor countries and adjusted for their“absorptive capacity”, or ability to put aidfunds to good use.

The progressive politicians who listened tothese great men did not believe that altruismcould generate official flows at the target of0.7%, so they shifted almost immediately toarguments based on rich countries’ “enlight-ened self-interest”. The Cold War served thispurpose beautifully: nations were supposed toturn communist if we did not give develop-ment aid. But the Cold War ended in 1989.

Today, 9/11 and the war on terror are usedto make the same case. Yet, everyone knowsthat the 9/11 terrorists were not exactly poor,and more systematic analysis by the econo-mist Alan Krueger has only underlined thislack of relationship between poverty andterrorism.

In fact, the poor usually put up with theircondition – what I call the “non-revolution offalling expectations”. Rather, their ambitionsbecome aroused once their condition beginsto improve, leading to the revolution of per-ceived possibilities, or what used to be calledthe “revolution of rising expectations”.

hy should we giveaid? How muchshould we give?How should we giveit? These questionshave concerned thedevelopment worldsince the start ofrich-country for-

eign aid programmes almost half a centuryago. Yet current debates suggest that old les-sons – such as altruism works better than self-interest – have been forgotten. Moreover, newconcepts about how we raise and spend moneyneed to be embraced.

The original rationale for granting officialaid was developed by the great pioneers ofdevelopment economics in the decade afterWorld War II. Arthur Lewis, Paul Rosenstein-Rodan and Gunnar Myrdal thought that devel-oped countries were morally obliged to giveaid to developing countries much as progres-sive states redistribute income and wealth, viataxation, within their own borders.

Tithes and targetsRecall that the Christian churches oftenrequire a tithe of 10% of one’s income, andone of five pillars required to be a good Mus-lim is the zakat – giving 2.5% of one’s wagesto the poor.

Beside this, the original target that Lewissuggested for foreign aid – a neat 1% of national income – appears positively modest. Even this was later cut to 0.7% for

Wise aidWe should appealto altruism ratherthan self-interestto reach our aidtargets, saysJagdishBhagwati, and be much moreimaginative abouthow we deliver it

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important donors such as Paul Martin, Cana-da’s Liberal prime minister, and George Bush,the American president, stoutly foughtagainst it and only reluctantly signed – signifythat there will now be a shift from mere assentto actual achievement?

I am afraid not. As all past experience sug-gests, national budgets are always subject totight constraints and competing nationaldemands, including helping deprived groupswithin the country’s own borders.

Take just one example. Faced with the Iraqwar, the problems of the inner cities and thecleanups following hurricanes Katrina andRita, how will the American governmentdeliver on its commitment to increase aidfrom the current level of about 0.16% ofnational income to 0.7%? It simply will not.The same goes for Canada and countlessother governments.

The problem is that Geldof and others aretranslating the new altruistic energies of rich-country citizens into the tired old 0.7% targetthat relates to governmental aid spending,with all the hard-budget constraints it faces.

We need, therefore, to link this moralenthusiasm of the people to a people’s, not agovernment, target. Thus, for instance, if wehad half a billion people – a number that therock concerts reach – sign on to pledge just$50 or more annually in aid, that would raiseat least $25 billion.

Moreover, these would be grants and hence

Appeal to altruismOn the other hand, while these and otherimplausible appeals to self-interest generallyfail to increase development aid, the appeal toaltruism, frankly asserted instead of disguisedas self-interest, can work. This is what hap-pens in the Scandinavian countries, whichhave the highest proportional aid spending inthe world. Countries such as Japan and Amer-ica, which have used the self-interest ration-ale, have not done so well.

Besides, nowadays the altruism rationale iseasier to exploit than ever. As I argue in mybook In Defense of Globalization, televisionhas eroded the distance that shielded us from seeing the famines, the pestilence, thefloods, the tsunamis and the genocides thatoccur elsewhere.

When we see these images, it is impossiblenot to act on the humanity that binds us together. A rock star such as Bob Geldof does not create this empathy andmorality. He exploits it to organize concerts tostimulate more aid flows.

Link aid to a people’s target Does it make sense to tie this altruism-drivenimpulse to the old 0.7% target for officialflows that was one of the few areas of agree-ment at last summer’s Millennium Develop-ment summit at the United Nations?Remember that this target has been endorsedby most nations for some decades now butfew have matched their words with deeds.

Does signing on to it yet again – and

worth much more than government aid,which is still a mix of grants and loans.

Surely, such a pledge would hardly run upagainst our individual budget constraints?Forgoing a dinner in New York or Paris, ortwo in the cheaper hinterlands, would be allthat was called for. The money raised could bespent by the developmental aid agencies ofthe people making the pledges.

Out of AfricaRaising money is not the only challenge. Acrucial problem is that in much of Africa(where the biggest aid increases are contem-plated) there is a limited ability to absorbthese funds thanks to governance break-downs, associated corruption and shortagesof skilled manpower, without which evenwell-intentioned programmes can founder.

I have little doubt that Africa’s capacity to absorb aid money can be improved but it requires hard work. Aid should only be sent to Africa at the pace at which it can beabsorbed and at which programmes can beimplemented.

If we can spend aid money outside Africa,perhaps the continent’s absorptive capacityfor direct, conventional spending becomesirrelevant? Thus, substantial sums can bespent outside Africa on researching cures andvaccines for diseases that afflict it, such assleeping sickness, AIDS and malaria.

Moreover, we need a programme to bringAfrican students by their thousands to uni-versities in industrialized countries. We alsoneed to start a Grey Peace Corps that wouldtake our retired professionals to Africa atsalaries high enough to attract them, so theycan immediately start filling several criticalshortages of skilled manpower.

There are endless possibilities if only weapproach the question of giving aid in thisway, rather than thinking conventionallyabout aid as funds to be spent directly inAfrica. We can accelerate aid spending muchmore rapidly if only we do that, instead of pre-tending that there is no absorptive capacityproblem in Africa and that those who worryabout it are morally defective.

It is time to have aid walk on both legs. GA

CV JAGDISH BHAGWATIJagdish Bhagwati is university professor, economics and law, atColumbia University and senior fellow at the Council on ForeignRelations. His latest book is In Defense of Globalization.

Rock stars exploit our empathy to stimulate aid

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