Aid to Africa: Aiding or Abetting?

There have been some interesting contributions to the debate about Aid to Africa these past couple of weeks.

On AppAfrica, Jonathan Gosier used a well-known tale to make a point. He suggested that people look at Africa like it’s the land from the Wonderful Wizard of Oz:

“It’s a strange land, in some far away place; far away from Auntie Em’s farm in Kansas. There are many oppressed people, people who need a brain (an metaphor for better education), people who need courage and confidence, and people who need a little love. There’s plenty of evil witches to slay in Africa (pick your poison, actually) and often plenty of ‘men behind the curtain’ (The Wizards) who dictate what the politics of the continent really are.”

Into this land, enter Dorothy, the well-meaning but naïve Dorothy. She lands in Oz, catalyzes what appear to be positive changes, and then flies away, back to whence she came. When she returns, it turns out it’s not holding together very well and her actions/collaborations have had unforeseen consequences. But, Dorothy doesn’t live in Oz. She whizzes in and out of there and it’s the Munchkins, the little people, the inhabitants of Oz whom she so wants to help, who have to deal with the consequences.

According to Gosier, there are “Too many Dorothys in Africa’s Oz’."

His advice:

“Just remember, nothing happens in a vacuum and we should be careful of where we drop our houses.”

But that’s just the beginning. In comes a Financial Times interview with Dambisa Moyo, a Zambian economist who’s about to release a new book titled “Dead Aid.”

Sample the assessment of her point of view by FT columnist William Wallis:

"…she is starting from the premise that aid not only doesn’t work but is a large part of the problem: it crowds out private investment, fosters corruption, fuels conflict and undermines the rule of law. If that’s where you begin, then the fact that some donor countries are already squeezing their aid budgets and shelving lofty commitments to poverty eradication should prove a healthy wake-up call for African policymakers."

And for dessert:

"In fact, Moyo proposes far more radical treatment: a telephone call from every donor nation to every aid-dependent government in Africa, warning that in five years the taps will turn off. This, she believes, would trigger the search for alternative financing on a commercial basis, and force governments to create conditions in which business would thrive."

“In my world of no aid, it is easier for citizens to hold governments

accountable,” she insists.

(I love the idea of that five-year warning. Fair but firm.)

Speaking of citizens holding governments accountable is a perfect way to usher in Iqbal Quadir. In his learned opinion as reported in the Wall Street Journal:

"…governments should be sustained by citizens taxes" so that it is clear who they serve and to whom they owe their loyalty.

(Which of course, makes perfect sense when you look at the way some donor funded governments behave sometimes.)

According to Iqbal, aid short circuits accountability structures, weakening citizens’ hold over

government.

(Because he who pays the piper calls the tune and all that).

Aid, he argues, "empowers bureaucracies, promotes statism, and weakens government incentives to boost tax revenues through growth. Economic assets are often kept in the hands of the state, leading to monopolies, stagnation and extortion."

Therefore he urges that America (and might I add, every donor country) to:

"stop pouring billions into bureaucracies to buy short-term alliances and focus its efforts on bottom-up entrepreneurship."

So much good stuff said.

edit: my manners went awol. I neglected to tip the hat to David Ker for pointing me to the FT article.