Sauri, Kenya: Africa’s Natural Experiment in Foreign Aid

By Alex Mayyasi | April 25, 2009 at 5:51 pm

In his article “Africa’s Turn?” (now a Boston Review book featuring a collection of responses from relevant experts), Edward Miguel remains agnostic on  the question of how foreign aid has affected Africa’s economic growth:

“Many social science researchers have sought to establish foreign aid’s causal impacts on economic growth, but there are still no definitive statistical answers. Yet a look at the raw data on foreign aid across regions and time suggests that aid has probably played a rather small role in Africa’s recent economic success.”

Although this statement certainly seems fair, it is surprising that as someone writing extensively on Kenya, Miguel does not mention perhaps the greatest natural experiment about foreign aid to date.

In 2004, Sauri, Kenya, experienced a massive influx of aid: $100 of aid per villager, every year for five years. The project was an experimental part of the Millennium Promise to end extreme poverty. Of course, results are inconclusive. Villagers are healthier, poverty has decreased, children are receiving a better education and Sauri is envied by surrounding villages; Sauri also suffers from corrupt and inefficient use of the aid, political, ethnic and class tensions and the concern that the gains are unsustainable. See Sam Rich’s 2007 article on Sauri for more details.

The results of this natural experiment will not, however, be able to give us a definitive answer on the effectiveness of foreign aid. Sauri is the pet project of famed economist Jeffrey Sachs, who famously laid out full plans to end world poverty within our time in The End of Poverty (with an introduction by Bono). Many economists, none more than Bill Easterly (see his book criticizing Sach’s approach to foreign aid here), criticize this approach while still advocating for a humbler strategy that is sustainable and empowers locals, while done piecemeal to measure effectiveness.

While these debates about foreign aid will not be solved anytime soon, their importance is perhaps greater than ever before, as the  most recent G-20 summit   resulted in world leaders pledging over one trillion dollars to the International Monetary Fund to aid the world’s poorest nations in the face of the economic crisis.

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