Advocacy of international aid, or what Bauer preferred to call “government to government transfer,” is one of the grave errors for which development economists stand accused. Bauer argues that such aid does not and cannot promote economic growth in the Third World; where development has occurred, foreign assistance played no meaningful role in the process. Given the inefficacy of such transfers, why do arguments for foreign aid persist? Bauer suggested that “Western guilt” was the principal impetus behind such flows (Bauer 1977). In fact, if the Third World transformed itself into a lobbying group for ever greater amounts of assistance, the rich countries are primarily to blame since, in Bauer’s view, the demand for foreign aid was created by the very act of giving it, with the original sin dating back to U.S. president Harry Truman’s misguided Point Four Program of 1949 (Bauer 1984).

Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, loc. 1769