What is the best way for developed nations to help Third World countries rescue themselves from poverty For rock stars it is to organize a series of international concerts - dubbed Live 8 - in advance of the G-8 meeting of the world's most powerful nations. Nine concerts - including one in Barrie, north of Toronto - will be held on July 2 to pressure G-8 leaders to boost foreign aid budgets to 0.7 per cent of gross domestic product, and cancel debt owed by the poorest nations. For a country like Canada this means nearly tripling the foreign aid budget and spending some $42-billion more over the next decade.

But will spending such vast sums improve the conditions of people living in squalor If taxpayers could be assured it would, most would gladly contribute. But given the abysmal record of government aid agencies to improve living conditions in Africa, and elsewhere, Ottawa should resist calls from entertainers to spend more. Providing more foreign aid - without fundamental governance reforms - is a costly proposition for taxpayers and one that will not help the world's poor.

Developed nations today contribute approximately US$70-billion a year in official development aid to the Third World. And what has such generosity achieved Most experts would say, not much. While volunteer aid agencies do good work feeding and healing the sick, government attempts to improve economic conditions have largely failed.

For answers why this is so, taxpayers - and policy makers - need only pick up a copy of Lords of Poverty. Published in 1991, the book exposes the many failures of the multibillion dollar government aid business. Lords of Poverty is an indictment of the international aid industry, and as a New York Times book review noted, "If books had hands, this one would be reaching out to strangle the United Nations officials who will no doubt be reading it at their desks in brown paper wrappers." (Voluntary agencies are spared criticism because they tend to be funded by charitable contributions and are pressured to spend money more wisely than government agencies.)

Author Graham Hancock became disillusioned with the aid industry after working in developing nations. He asserts - with examples of waste and corruption - government aid programs more often than not worsen the conditions of those they are meant to help. Aid organizations, like the Canadian International Development Agency, serve to keep western consultants employed but do little to develop poor economies. Government programs are ill conceived because they rest on the premise that developed nations must save the Third World - precisely what taxpayers are being told in advance of Saturday's Live 8 concerts.

From 1950-55 total government aid seldom exceeded US$1.8-billion per year. By 1962 total world aid hit nearly US$6-billion and a decade later OECD nations (i.e. western countries) gave almost US$10-billion. By 1984 this figure jumped threefold and the Soviet Union was also doling out development assistance. Total world aid in 1987 was over US$50-billion, topped US$60-billion when the Berlin Wall fell, and stands at US$70-billion today.

If foreign aid works shouldn't the poor be doing better today than before the dollars started flowing Instead Africa remains an economic basket case whereas millions of people have escaped the poverty trap elsewhere. Improvements in Asia and South America, however, are not attributed to handouts from the West but better governance and trade opportunities.

Africa lacks the basic conditions to better the lives of its citizens, and more money will not change that. The first step is to develop an independent judiciary that can enforce laws and contracts. Developed countries meanwhile should work with nations willing to help themselves by making such changes. This is not to suggest full blown democracy must exist, but progress must be seen. Handing billions more to corrupt governments will drive up Mercedes-Benz sales, but do nothing to help the poor.

The most dramatic improvement in living conditions will result from western nations reducing tariff barriers and liberalizing trade to give Africans greater economic opportunities. And when aid money is to be spent, project outcomes must be defined so results can be measured. This means focusing on combating the AIDS epidemic or providing clean water rather than "developing an economy."

Taxpayers support providing emergency aid when disasters strike, but not funding economic or regional development projects. They know this type of grant-giving will not work any better in Africa than it has in "developing" our Atlantic Canadian economy or native reserves. Regrettably, this is the type of foreign aid championed by government aid agencies with the backing of Live 8.