The campaign against development aid: a counterblast

From time to time books and articles appear announcing that aid to  developing countries does more harm than good.  These have proliferated recently, just at the time when the global recession and collapse of credit are beginning to do incalculable harm to the poorest people in the poorest countries.  The recession is doing great damage in our rich ecionomies with millions losing their jobs, almost as many losing their homes, others losing their life savings, and all because of the reckless greed and incompetence of the financial sector moguls of north America and western Europe.  But in the poorest areas of the world, there will be millions more unnecessary and avoidable deaths, especially among vulnerable children, as a direct result of the mismanagement of the rich economies.  This imposes a clear obligation on us in the richest countries to do much more to protect the poorest from the consequences of our own follies and selfishness.  Rather than cutting back on aid, as the anti-aid campaigners propose, we should be stepping it up — unless, as they claim, it actually harms those who receive it, instead of helping them.

One of the most widely publicised recent statements of the case against aid has come in the book Dead Aid, by Dambisa Moyo.  Ms Moyo is described in the review of her book in The Independent newspaper as

an African woman, articulate, smart, glamorous, delivering a message of brazen political incorrectness: cut aid to Africa.  Aid, she argues, has not merely failed to work; it has compounded Africa’s problems.   Moyo cannot be dismissed as a crank. Educated at Harvard and Oxford, she heads the Africa strategy of a major bank. Nor can she be dismissed as a renegade who has rejected her roots. She is deeply wounded by the lack of development in Zambia, her home country.

Here, it seems, is a serious argument from an apparently impeccable source which finds an echo in the instincts and prejudices of conservatives everywhere who, like the Victorian conservatives before them, blame the poor for their poverty and insist that any help they might receive from more virtuous and hard-working people like themselves will simply be wasted or corruptly diverted; it will encourage dependency, drunkenness and idleness, discourage thrift and hard work, and condemn its victims to perpetual poverty — the modern global equivalent of the workhouse.

Those of us who recoil from such a self-serving approach to the problem of world poverty and the role of aid as one of many tools in the effort to eliminate or at least to reduce it will thus be reassured to read a clinical deconstruction of Ms Moyo’s work by an experienced development economist in a detailed and comprehensively sourced review (pdf).  Owen Barder[1] concludes his point-by-point analysis by writing:

Moyo has the cheek to accuse people working in the aid industry of promoting their own interests, and then`– as an investment banker from Goldman Sachs — to advocate instead that the poorest countries should be encouraged to borrow more in private capital markets. And her argument is based on what appears to be a deliberate mis-statement of the evidence.

Moyo advocates some commendable policies other than aid which might accelerate the development process. But these are already conventional wisdom, and Moyo’s book does nothing to challenge the view that progress on these can be faster with more support from aid.

There is a debate to be had about aid, but Moyo’s book, sadly, does not advance it. Dead Aid is poorly researched, badly argued, mendacious in its use of evidence, and pedestrian in its suggestions for alternatives to aid.

The saloon bar commentators with their airy dismissal of aid as a waste of our taxpayers’ money will have to do better than this. But at a time when the need for more, and more effective, aid is so overwhelming, it seems a pity that time and energy should have to be wasted on rebutting the case for giving no aid at all.

Up-date, 2 April. Dambisa Moyo appeared on the Colbert Report on US television on 1 April (no, it’s not an April Fool — at least, I don’t think it is).  You can see and hear her defending her views on aid here.  Even making allowances for the frivolity of the interviewer and the meanness of the allocation of time to Ms Moyo, her performance is wholly unconvincing.  Any ordinarily perceptive viewer would surely want to know why the various measures she advocates, including mainly private sector investment, have to be alternatives to aid rather than simultaneous contributions to development;  and many will, one hopes, spot the flaw in her fundamental syllogism:  African countries have been receiving aid;  but some of them have become poorer; therefore aid makes countries poorer. No doubt she’s a clever lady, but either she doesn’t know that that’s nonsense, in which case she’s not that clever; or else she does know, in which case —  oh, you know.

[1] I declare an interest in that the writer of the review happens to be my son.

Brian