Four "poverty traps" are part of conundrum for foreign aid.

• Author: Kolbe, Jim
• Position: Development - Essay

Europe celebrated the 60th anniversary of the Marshall Plan last year. It was a celebration worth having. The Marshall Plan represented a stunning departure of foreign policy in all modern history. Never before had a conquering nation reached out its hand in such beneficence to its vanquished foe. For that matter, never before had foreign assistance been attempted or even contemplated on such a scale. And one would be hard pressed to find any other aid program before or since that so thoroughly met the over-arching strategic goals of a nation--which in this case was jump-starting European economies and shoring-up western Europe as a bulwark against the growing expansionist threat of the Soviet Union.

The Marshall Plan's success may not be beyond questioning, but it is widely accepted on both sides of the Atlantic as a success. In fact, it is so widely accepted that attempts to emulate or replicate it have been undertaken not only by its sponsor, the United States, but by the very countries that it was designed to benefit. Europe, once it returned to prosperity, along with another defeated foe, Japan, became champions of providing assistance to poor countries around the globe. To date, more than a trillion dollars has been transferred from western democracies to impoverished countries and people in an effort to lift them by the bootstraps and propel them toward their own prosperity as the Marshall Plan did for Europe.

Of course, it hasn't worked out quite the same way. One cannot find in Africa comparable successes to match the dramatic results demonstrated by Europe in the intervening years since World War II. At least partly as a consequence of the relative failure of foreign assistance, a whole new school of doubting Thomas's and advocates of alternative approaches has opened a debate on the future of development assistance--its scope and size, its shape, even its very existence. To a large degree, this debate is possible only because the Cold War ended and the perceived Soviet threat evaporated.

During the Cold War era, aid was seen largely through a narrow prism: does it assist U.S. and NATO objectives of containing the Soviet threat and diminishing the possibility of governments in developing countries aligning themselves with the USSR? Post-Cold War, aid-giving governments were at the very least required to rethink the objectives of foreign assistance, leading many policy makers and policy wonks to question its value altogether.

Some have argued that the rich and developed countries (we'll call them the "donor" countries) simply aren't doing enough in foreign assistance. This school of thought led to the G-8 enshrinement of the goal for donor countries to spend no less than seven-tenths of...