The Marshall Plan for Mediocrity

Speaking of The Balko, I noticed a link to his nice debunking of the Marshall Plan Myth, of which Balko summarizes:

the plan -- while significant at the time -- was really pittance of what we give today in aid, the foreign aid we've given out since the war has had no real results (and has probably been detrimental), Europe recovered largely on its own -- and there's some evidence that Marshall Plan aid actually hindered development, and those countries most cited as post war success stories were the countries who got the least amount of aid.

The rest of the 'Marshall Plan' imitators had equally unimpressive results, whether it be aid to third world countries or plans for improving US schools. A flow of free money may have a similar effect as the "resource curse", crowding out initiative and rewarding bosses, potentates, and other politically-connected rent-seekers at the economy's expense...

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Western Europe had been very

Western Europe had been very successful before the war, so its not surprising that it was successful after the war either. They had the basic infrastructure, human capital, etc., needed to make successful economies in other words. The same is true of Japan. The same has not been true of say Haiti.

:beatnik:

They had the basic

They had the basic infrastructure, human capital, etc., needed to make successful economies in other words. The same is true of Japan. The same has not been true of say Haiti.

I will posit that if you took the infrastructure and human capital of - say - Nordrhein-Westfallen (a prosperous German province) and placed it all under the control of a Haitian government and legal regime, you would witness a miraculous, never-before-seen plummeting of Nordrhein-Westfallen's economy until, in short order, it ended up as poor as Haiti is today.

It is the (relative) structural liberalization and increasing ecomonic freedom (plus a healthy dose of the rule of law) that caused Germany and Japan to prosper after the war, not infrastructure or an abundance of Ph.D.s.