Countries such as Canada that spend on foreign aid will face two problems. Their own taxpayers may not like the idea of anti-poverty money going to countries that are already selling them most of the goods on their shelves. And the governments of those countries won’t take well to being told how to manage their domestic inequality problems.
Those countries will need help, though, because they seem to be caught in a trap. They earn enough to end poverty. Dr. Sumner estimates it would cost them between 1 per cent and 2 per cent of GDP to eliminate the worst of it. (This is what these states typically spend on their militaries.)
To free up that money, they’ll need to tax the middle class. But this “middle,” like the countries themselves, often consists of people who have recently escaped poverty and aren’t making much more than $2 a day.
“Growth by itself isn’t going to do it,” Dr. Sumner says. “There will still be a lot of poor. They’re going to have to find a way to put their wealth to work – and that’s where aid could help.” We’re no longer the wealthy superiors, but fellow countries facing a common problem.