Two thirds of the world’s poorest countries are in Africa. It’s home to 34 of the 35 states with the lowest life expectancy. More than 300 million people survive there on less than a dollar a day. (This figure has gone up by around 100 million over the last 10 years.) All this despite the fact that over the last 40 years more international aid has flowed into Africa than anywhere else.

Dan Chirot at the University of Washington is a friend and frequent lecturer in FREE’s conferences. He’s spent years working with CARE in the Ivory Coast. He explains why it’s in our national interest to see African nations succeed: when they fail, environmental damage, human rights atrocities, and global insecurity all increase.

Will even more foreign aid money help? The UN suggests wealthy nations contribute 0.7 percent of their Gross National Income (GNI) to international aid. The U.S. is heavily criticized for its current contribution of about 0.16 percent. But the Hudson Institute reports that, in part due to our lower tax rates, Americans give far more to charity than citizens of other countries. If private-sector donations are counted, U.S. foreign aid totals about 0.68 percent of GNI—close to the UN’s target. (And this discounts to zero the costs of sending the aircraft carrier strike group lead by the USS Abraham Lincoln to help the victims of the Asian Tsunami. Those who disparage the U.S. military ignore the reality that it represents the world's most rapid and effective response to global natural disasters.)

There are limits to the effectiveness of large-scale international aid. William Easterly explores them in his provocative book, The White Man's Burden: Why the West's Efforts to Aid the Rest Have Done So Much Ill and So Little Good. Easterly distinguishes two types of foreign aid donors: “Planners” and “Searchers.” He describes the difference:

“A Planner thinks he already knows the answers; he thinks of poverty as a technical engineering problem that his answers will solve. A Searcher admits he doesn’t know the answers in advance; he believes that poverty is a complicated tangle of political, social, historical, institutional, and technological factors. A Searcher only hopes to find answers to individual problems by trial and error experimentation. A Planner believes outsiders know enough to impose solutions. A Searcher believes only insiders have enough knowledge to find solutions, and that most solutions must be homegrown.”

Nobel Peace Prize winner Muhammad Yunus is a Searcher. Yunus, a Bangladeshi economist, is the founder of the Grameen Bank. He pioneered microcredit lending. During a 1974 famine, Yunus made trips to a local village to get a firsthand look at poverty. Finding the villagers could not meet the requirements for traditional bank loans, e.g., collateral, regular employment, and a credit history, he began making small loans, mostly to the village’s women.

Yunus observes: “Poverty is not created by the poor. It is created by the structures of society and the policies pursued by society. Change the structure as we are doing in Bangladesh, and you will see that the poor change their own lives. Grameen’s experience demonstrates that, given the support of financial capital, however small, the poor are fully capable of improving their lives.”

Kiva is an organization in the Searcher vein. Its website (Kiva.org) allows donors to make microloans to small businesses in the developing world. Their tag line reads, “Loans that Change Lives.” It has leant over $3 million to thousands of borrowers in over 25 countries. This entrepreneurial venture is so successful that on the day I tried to make two $25 loans, I was greeted with this message: “Thanks Kiva lenders! You’ve funded EVERY business on the site!!” On that day, 7,852 new lenders joined. (The next day I successfully leant to two businesses, both run by women entrepreneurs living in Uganda.)

When considering how to best help some of the world’s poorest, I hope you consider trying Kiva. They understand, as Easterly does, that economic progress is a decentralized process of discovery. It depends on the imagination and talents of individuals, responding to changing conditions and preferences. Directing your support to these folks seems to make a great deal of sense.