In today’s Wall Street Journal, UNC history professor Peter Coclanis contributes a good piece entitled Haiti Needs to be Built, Not Rebuilt in which he makes the sound point that Haiti, due to its lack of the necessary foundations for economic development (the rule of law, private property, limited government) won’t benefit from a new “Marshall Plan” as some people are talking about.
That’s right, but I have to quibble with Prof. Coclanis’ praise for the Marshall Plan. He writes that it helped “usher in the European ‘economic miracle’ of the 1950s.” That ‘s the conventional wisdom about the Marshall Plan, but I think it’s mistaken. George Mason University economics professor Tyler Cowen has written a paper “The Marshall Plan: Myths and Realities” (available here) that takes a skeptical view of that giant international welfare program.
Prof. Cowen concludes, “Policy makers and aid proponents should no longer view the Marshall Plan as an unqualified success. At best, its effects on postwar Europe were mixed, while its impact on the American economy was negative. The basic problem with foreign aid is that economic growth is not a creature of central planning and direction. Growth is the result of individual initiative and enterprise within a sound legal and economic framework.”
The problem is that outsiders — politicians, philanthropists, human rights activists — are powerless to catalyze the change that Haiti needs, a change in thinking.
