by William Easterly

About the author: William Easterly is senior advisor in the Development Research Group at the World Bank and author of The Elusive Quest for Growth: Economists’ Misadventures in the Tropics.

Debt relief has become the feel-good economic policy of the new millennium, trumpeted by Irish rock star Bono, Pope John Paul II, and virtually everyone in between. But despite its overwhelming popularity among policymakers and the public, debt relief is a bad deal for the world’s poor. By transferring scarce resources to corrupt governments with proven track records of misusing aid, debt forgiveness might only aggravate poverty among the world’s most vulnerable populations.

Good Intentions

“Jubilee 2000 Sparked the Debt Relief Movement.” No. Sorry, Bono, but debt relief is not...