Dead Aid: A new book by Dambisa Moyo
In her book 'Dead Aid' published this month, Zambian Dambisa Moyo argues that foreign aid has been bad for Africa, and must stop. Referring to "systemic aid" (the vast sums regularly transferred from government to government, or via institutions such as the World Bank), Moyo is not the only one to argue that foreign aid causes harm to the recipient nations, both Panorama's Africa's Aid Addiction and William Easterly in The White Man's Burden have made these arguments and made us think deeply. More than $1 trillion has been sent to Africa over the last 50 years and it has helped little.
Foreign aid consists largely of one government "helping" another government by increasing its budget and its power over the private sector, and multiplying its leverage over its citizens. As economist P. T. Bauer observed, there is an "inherent bias of government-to-government aid towards state control and politicization." Many believe that because aid is distributed by local politicians, this encourages the creation of corrupt government and hollows out the local economy and instead of breaking the "endless cycle of poverty," foreign aid encourages Third World governments to rely on handouts instead of on themselves for development.
The arguments are important arguments but of course they do not cover the whole range of aid. Attempts to eradicate poverty by political campaigning or large government grants are well intentioned but do not work. We have commented before that poverty has run out of use as a concept in aid (basically because poverty is defined to mean inequality rather than meaning poor quality of life; and eradicating inequality is consistent with making everyone's life worse). Make Poverty History as a concept is becoming history itself (but no doubt governments and the popular press will lag behind careful thinkers).
It would be easy to gloat. We work in 45 African countries but SOS Children's working model does not involve large scale aid grants and does not seek political change. In part we have avoided these because of a focus on individual children and improving their lot in life but it is nice to be proven right (albeit possibly for the wrong reasons). By sponsoring a child, donors help each orphaned child from childhood all the way to financial independence. And now that large scale magic bullets in the form of political campaigns, debt relief and government aid have all fallen by the wayside there are not many alternatives left which have proven better than helping children one by one.
This editorial was written by Andrew Cates, CEO of SOS Children UK