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Seeking a better way than aid fort Africa“Dead aid: Why aid is not working and how there is another way for Africa”, written by Dambisa Moyo, was released in South Africa in January 2009. This month it has been selected as Manager’s Choice at Exclusive Books – a meta-review.
What’s it all about?
Over the past 50 years, more than US$1 trillion in development aid has been transferred from rich countries to Africa. However, rather than curbing poverty and increasing development, this aid has hampered Africa’s long-term sustainability. This is the central argument of Dambisa Moyo’s “Dead aid”, which analyses the history of economic development and aid in Africa over the past 50 years.
According to Moyo, development aid casts African countries into a vicious cycle: aid fosters corruption and market distortion, which create further financial dependency and the need for yet more aid. Moyo argues that the keys to development in Africa are improved access to capital and markets, trade with China, microfinance and large-scale investment in infrastructure.
To support her argument, she offers the examples of countries such as Argentina, Brazil and India, which are succeeding economically as a result of having taken a different (non-aid-based) approach to development.
In “Dead aid”, Moyo takes aim at almost everyone involved in the aid industry. Aid agencies are criticised for their fickleness in demanding transparency and accountability from recipient governments, and celebrities like U2’s Bono are said to have no feeling for what is happening on the ground. As a result, she argues, aid has often ended up in the private coffers of dictators and has had negative consequences for African citizens.
The only way forward, says Moyo, is to cut development aid to Africa over the next 10 years and force African governments to be more accountable to their private financiers.
Who’s the author?
Dambisa Moyo is an economist at investment bank Goldman Sachs in London, and she previously worked as a consultant at the World Bank. She was born in Zambia and holds a doctorate in economics from Oxford University. She lives in London, and “Dead aid” is her first book.
What do others say?
“Dead aid” received much media coverage and much criticism.
Although her argument that aid weakens governance holds true in some individual cases, it cannot be proved with certainty that this is generally the case. Moyo has also ignored the fact that the 1990s saw a change in foreign aid policies to a more strategic and targeted approach. For example, the Millennium Challenge Account requires that donor and recipient work as partners, dedicated to reform and transparency, and much aid is now routed through civil society organisation rather than going direct to government.
Moyo is also said to be naïve and overoptimistic in some of the alternative finance options she suggest, particularly as far as engagement with China is concerned.
However, the book was widely praised as being brief and accessible, and most felt that here arguments and research – although weak in parts – rang true at a fundamental level: it is a fact that African countries need more than money and that corruption and lack of governance too often rule the day.
“Dead aid” was released shortly after the 2008 Wall Street crash. African governments hoping to raise money on international financial markets are now facing a more challenging time than ever, and aid agencies and the World Bank are now regarded as key sources of finance. If ever there were a time for Moyo’s arguments to be put to the test, it is now.
Historian Niall Ferguson: ‘This reader was left wanting a lot more Moyo, and a lot less Bono.’
“The Washington Post”: ‘If Moyo’s point is that some aid can be bad, then it is noncontroversial. If her point is that all aid is bad, then it is absurd. The productive political agenda is to increase the good while decreasing the bad. The productive academic debate is distinguishing between them. Instead, “Dead aid” chooses to push the envelope of absurdity, proposing a “world without aid” on a five-year timetable. Moyo does not detail the possible outcomes. But we can reliably predict one of them. Many now alive would be dead.’
“The Times”: ‘There is no new research and her argument against aid is as spurious as the argument that it is bad to go to hospitals because many people die in them. To argue that all aid goes into the hands of corrupt leaders is naïve and shows a lack of understanding about how aid is distributed and the projects that do promote good governance and institution building. The lack of any examples of how aid has been used is a huge omission – instead we have anecdotes about African leaders on shopping sprees with donor money.’
How do I get hold of it?
“Dead aid” is published in South Africa by Penguin Books. It is available at Exclusive Books at a price of R180.00.
