Product Description

Over the past twenty years more citizens in China and India have raised themselves out of poverty than anywhere else at any time in history. They accomplished this through the local business sector& mdash;the leading source of prosperity for all rich countries. In most of Africa and other poor regions the business sector is weak, but foreign aid continues to fund government and NGOs. Switching aid to the local business sector in order to cultivate a middle class is the oldest, surest, and only way to eliminate poverty in poor countries.A bold fusion of ethics and smart business, The Aid Trap shows how the same energy, goodwill, and money that we devote to charity can help local business thrive. R. Glenn Hubbard and William Duggan, two leading scholars in business and finance, demonstrate that by diverting a major share of charitable aid into the local business sector of poor countries, citizens can take the lead in the growth of their own economies. Although the aid system supports noble goals, a local well-digging company cannot compete with a foreign charity that digs wells for free. By investing in that local company a sustainable system of development can take root.

Product Details

• Amazon Sales Rank: #376279 in Books
• Published on: 2009-08-07
• Released on: 2009-09-17
• Original language: English
• Number of items: 1
• Binding: Hardcover
• 216 pages

Features

• ISBN13: 9780231145626
• Condition: New
• Notes: BUY WITH CONFIDENCE, Over one million books sold! 98% Positive feedback. Compare our books, prices and service to the competition. 100% Satisfaction Guaranteed

From Publishers Weekly
Hubbard and Duggan, respectively dean and lecturer at Columbia Business School, make the case that current foreign aid and Third World projects—particularly in Africa—aren't working and that the developed world must rethink how it allots aid money. The authors dissect (and disagree) with the U.N.'s Millennium Goals strategy for attacking poverty, pet project of Jeffrey Sachs and a host of celebrities. They condemn the strategy as a charity trap, that perverts local economies and keeps corrupt leaders rich. The authors contend that poor countries can attain prosperity and self-sufficiency only if aid money goes to cultivating a functioning business sector. Microfinance, they say, is working but stops short; they propose something much more ambitious: a new Marshall Plan, an almost prohibitively daunting task given the vast differences among developing countries, the controls each puts on business and the input required from other developed nations. But the plainly stated thesis and the authors' willingness to confront conventional wisdom and examine and energetically attack the problem are refreshing and necessary. (Sept.)
Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.

Review
"Anyone who wants to end poverty should take seriously the powerful and provocative arguments of The Aid Trap. Even if R. Glenn Hubbard and William Duggan don't convince you to embrace their new Marshall Plan, you will come away with a deeper appreciation for the limits of charity, the dangers of top-down planning, and the importance of creating a vibrant and open business sector." -- J. Gregory Dees, Center for the Advancement of Social Entrepreneurship, Duke University's Fuqua School of Business "R. Glenn Hubbard and William Duggan make a persuasive case that international aid flows have been grossly misdirected. In trying to do good, those in the developed world may actually have ended up doing substantial harm to the developing world. Hubbard and Duggan instead argue that aid flows should be redirected towards encouraging business and entrepreneurship. This is a timely and readable book about how to solve one of the most challenging problems of our time." -- Raghuram G. Rajan, The University of Chicago Booth School of Business "The authors' willingness to confront conventional wisdom and examine and energetically attack the problem are refreshing and necessary." -- Publishers Weekly " The Aid Trap is not about the failure of conventional aid but provides the outline of a solution that can work if taken seriously. It is that rare prescriptive book, and the world must pay attention." -- Muhammad Yunus, winner of the Nobel Peace Prize "Glenn Hubbard and William Duggan's considered analysis of The Aid Trap adds a new and important dimension to the on-going development debate. This book, grounded in logic and supported by evidence, presents reasonable and sustainable steps that will move Africa forward." -- Dambisa Moyo, author of Dead Aid: Why Aid In Not Working and How There Is a Better Way for Africa "A few years ago, we in Mauritius set out to make it easier for our own people and foreign companies to do business in our country. The result has been far more prosperity for our people. Other countries want to learn from our experience. I am pleased to see that there is now a book that can help. The Aid Trap makes a strong case and offers concrete steps for countries not to rely exclusively on the aid world and join the business world instead. I hope this book has a wide impact on the minds, hearts, and actions of national leaders, multinational and local businesses, aid agencies, and concerned citizens around the world." -- Honorable Navinchandra Ramgoolam, Prime Minister of Mauritius "Offers a different and logical, if emotionally counter-intuitive, approach to foreign aid." -- Sarah Lynch, Forbes "The authors point to the burgeoning economies of China and India as evidence that thriving businesses are the key to ending poverty." -- Chronicle of Philanthropy "The Aid Trap articulates a constructive set of ideas about how to reform foreign aid." -- Economist "The Aid Trap does a good job of both highlighting problems with the current aid structure and prescribing solutions." -- Reuben Abraham, Alliance Magazine " The Aid Trap the well-entrenched myth that development aid will erase global poverty." -- d-sector.org

About the Author
R. Glenn Hubbard is dean of Columbia Business School and the Russell L. Carson Professor of Economics and Finance. He was chairman of the Council of Economic Advisers from 2001 to 2003 and has published more than one hundred articles on investing, banking, energy economics, and public policy. His most recent book is the bestselling Principles of Economics. William Duggan is senior lecturer in business at Columbia Business School, where he teaches strategy in graduate and executive courses. He has twenty years of experience in foreign aid. His most recent book, Strategic Intuition, was named Best Strategy Book by Strategy + Business.

Customer Reviews

It's More Than Just Economics, It's Culture
There is much good to say for the excellent work in refocusing country development from Aid to Business which is unheard of in the dev/biz. But unfortunately, the authors solution, an applied Marshall plan, will fail. There is a huge difference between current Africa and 1948 Europe/Japan in their respective positions along the "development curve". This difference, as referenced in "The Aid Trap", was infrastructure, technical and business/experience resources but did not address differences in cultural development from tribal, political, ethical and religious perspectives.

Recently the U.S. and EU have effectively been cut out of Africa by China and to a lessor degree India. As Engineers and Constructors (E&C's) working with equipment manufacture/suppliers we cannot compete with Asia in Africa. This situation has been changing and we now have been reduced to technical goods and services limiting direct participation in the market. Africa is being exposed to Chinese business culture, especially second and third teams, rather than the highly developed business culture of the U.S. The Chinese are some 30-50 years behind in cultural development with significant corruption. All is not bad, however, Africa has benefited from Chinese built infrastructure (good but not great) projects at greatly reduced cost. The Ethiopian $500M Tekeze hydro electric project built by the Chinese for $300M is just one example. What developer wouldn't smile to have a constructor chop 40% off a feasible project with the same revenue.

Historically observing and experiencing country development first in Japan from the 1930's, then Korea and now China has shown the rate of growth is dependent on the cultural environment. Africa is being handicapped by Asia. No amount of business Czar's (ECA) wisdom, as proposed by the authors, will be smart enough to overcome the cultural change required to support growth in Africa. The excellence of moving from Aid to Business, overcoming the devastating damage of enabling welfare will fail because it's not the U.S./EU business but Asia's business. China's business culture is developing with significant difference between eastern, central and western China -- Africa will not see a first team for many decades. This is to say nothing about the almost impossible tasks of a Marshall Plan selecting from top-down the right businesses at the right time to develop from nothing.

But there's always a way.

While Africa is reflecting on it's economic/political environment, tribal issues and country boundaries governing trade to enhances regional markets, African business leaders (and the authors) may want to look at India's "Bottom-of-Pyramid" business development approach. India is taking advantage of low cost redesign and manufacturing, microlenders, market development working with large multinationals. This gets to the real needs of the people and most importantly, learning the environment for a successful ethical business culture in competition, risk and profits. This was nicely summarized in the front page of the WSJ article, "Moving Up in India" Oct 20th, 2009 and also addressed in detail in C.K.Prahalad's book, "The Fortune at the Bottom of the Pyramid", with references to McKinsey business consultants. Cultural development through business plus farming expansion and agriculture research will provide, in the long term, the foundation to develop competitive offerings through trade.

The Aid Trap business approach puts some real sense into country investment; it needs time and cultural development to be successful. An applied Marshall plan doesn't fit. In Europe and Japan their cultures and industries were developed; in Africa it's going to be a process. A business approach can overcome the destructive dependency of welfare Aid while significantly improving culture under the proper circumstances. When the slack tightens in the worlds labor markets, Africa's opportunities will significantly improve. Cultural development through business is best done by African's themselves with help in consulting/tutoring by developed nations, especially the U.S.

David F. Latta

Razor sharp analysis of the key to fighting global poverty
This is that rare book about development policy reform that is actually a joy to read. It's short, minces few words, and absolutely focuses the development debate where it should be, on how to unleash the power of entrepreneurial business to fight poverty. What is most remarkable about this book is that it's diagnosis of the central problem - policies and customs that prohibit the emergence of a competitive business sector in poor countries - is even still debated or considered non-core to a development strategy. As a professional and entrepreneur in the field of small business development I can say that this book provides the single best diagnosis of the development challenge I have ever read. People will quibble with it on the margins: obviously there are differences between post war Europe and, say, Nicaragua today, but that is just missing the larger point that competitive business (not crony capitalism) is the only thing that has ever or will ever create wealth in the world, as well as being the most powerful check against concentrated power. So how do we leverage our "development" dollars to support a thriving and competitive business sector? As the authors point out, rich countries, when they want to create jobs employ certain strategies, but then advocate and fund entirely different strategies for poor countries. This is an important book that should (and I suspect, will) be read and acted on by the development establishment as well as citizens and social entrepreneurs looking for sustainable ways to fight global poverty. If you are interested in getting involved in helping to defeat the scourge of poverty, I highly recommend you read this book first, and then go get involved and make a difference.

The Aid Trap: Hard Truths About Ending Poverty
How do you make poor countries prosperous? That is the main question facing the rich countries today--how to help those living at the bottom of the economic ladder. The authors of //The Aid Trap// believe the rich nations have gone about this the wrong way. That foreign aid is not the answer. Instead the answer is something equivalent to the Marshall Plan that helped Europe rebuild its economy after World War II. The authors argue that businesses and a pro-business climate make the people truly prosperous; and therefore make the nation as a whole prosperous, since those companies and employees would pay taxes. Instead foreign aid has hampered business development.

This book is bound to ruffle some feathers, as it should. There has to be a reason that fifty years of foreign aid has not made a difference, and it is more than just corruption. This will certainly spark debate, and the authors welcome debate. They want to help the poor of the world. At least they are offering new ideas, and not just the same old tired ideas of the past. This book will open your mind about foreign aid.

Reviewed by Kevin Winter