Is International Aid Making Things Worse?

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Comments

[Doug Hanson]

Mr. Frerichs, can you imagine the back lash to some popular "bono-like" celeb. coming out and saying, "Don't help Africa!"? This would be tantamount to professional suicide, all of the charitable causes would rise up in unison against such a campaign.

Ironically, the free hand-outs of "The West" keep Africa dependent and on it's knee's begging for more. Perhaps an international resolve to let developing countries deal with the consequences of their situation is necessary. I am reminded of Star Trek and the Prime Directive that attempted to protect less developed planets from technology they had not yet experienced. Perhaps there needs to be a similar standard given to worldwide AID.

I want to read "Dead Aid" - it seems like I would agree with the thesis of this book.

[Peter Frerichs]

I wrote a similar piece on aid to Africa. Here are some snipets:

Regardless of the feasibility of her suggestions, Dambisa Moyo, a former World Bank Consultant and author of “Dead Aid” is at least bucking the system somewhat and proposing a new direction for Africa.

The problem is dependency, argues Ms. Moyo, which in turn provides little incentive to develop sustainable country-specific growth models. The aid spigot is a rushing river that signals to many African countries, “Hey, no matter what happens, we’ll still be pouring money in no matter what.” The “business of aid” employs 500,000 worldwide and once Bono and countless other celebrities jump in compassionate pleas for additional financial support typically result in the blind issuing checks to the blind.

The most controversial argument in Moyo’s book is her belief that democracy is not the key to solving Africa’s problems. Rather, she posits a “benevolent dictator” who can push forth reforms might be better suited for many African countries at the moment. My rolodex of “benevolent dictators” is full of cobwebs so maybe you all could offer someone up.

Nevertheless, I like Ms. Moyo’s challenge, and her focus on economic growth being the prerequisite for democracy rather than the other way around has some legs. A long-term focus on the creation of bond markets (in the past 10 years 43 developing nations have issued international bonds and only three were from Africa) is an excellent suggestion.

More than anything this is a lesson in incentives. The continent is accustomed to aid and this is not good. Ms. Moyo references Botswana and South Africa as two shining stars that have prospered by not allowing themselves to be dependent on aid, but I’d argue the correlation of less aid to their respective development paths is far from clear.

All of this leads to hard decisions that will not be viewed as compassionate. Yet, where do we realistically go from here? Am I a bad person if I don’t give to Bono? Does anyone with any significant political, economic, or social clout want to lead the charge for less not more?