Foreign Aid to Africa? Just Say No

Finally, A Rational Voice on Aid Policy

Source: NASA

The New York Times recently did a very interesting interview with a certain Dambisa Moyo on aid policy to Africa. She’s apparently an ex-Goldman Sachs banker who is trying to stop aid from being sent to Africa. The New York Times is calling her the “anti-Bono.”

She makes, in my opinion, a valid point that’s long overdue in getting coverage.
In response to what she feels had held back Africa:

“I believe it’s largely aid. You get the corruption — historically, leaders have stolen the money without penalty — and you get the dependency, which kills entrepreneurship. You also disenfranchise African citizens, because the government is beholden to foreign donors and not accountable to its people.”

Long overdue. Besides the points which she made, there’s also the issue of American and European farm policy (which is inseparably linked to aid policy) impoverishing Africa by wholesale annihilation of its agricultural sector. I wrote about this issue of farm policy in the Dartmouth Free Press (which is where the link goes) and other blogs, though haven’t gotten around to doing so here yet. Don’t worry, though, I intend to give you all an earful on it soon.

Regardless, it’s always rather ironic that so many of the things we do out of “kindness” turn out to be so terribly harmful in reality. The Law of Unintended Consequences, or perhaps of Good Intentions. Economics is sometimes counterintuitive. But sometimes, tough love is really the right thing to do.

I really wish American politicians begin to understand that someday.

Most Commented Posts

No Related Posts

Posted on February 22nd, 2009
Filed under: Economics, Politics by James Wang

Moo2400

Good point on the faults of foreign aid, food aid in particular. Far too many people are under the notion that giving is the way to go to help these people, when in reality it only increases their dependency on the developed world (I wonder how much this could be applied to things such as welfare?). Of course, there's far more to it than just food aid (particularly subsidized foods being imported from the developed world along with SAPs), but what you said is certainly a part of it. Keep it up.

James Wang

Thanks for reading, Moo2400. I agree that this entire mess has many
aspects to it. As for helping them/welfare for us... I'm personally of
the notion that actually, we CAN help them in certain ways, such as
with free technology transfer of GMO crops to at least get their
economies out of poverty sooner and with greater efficiency.

They won't be able to develop these advanced techniques for themselves
anytime soon, and it'll end up helping us too with a greater yield of
food overall in the entire world. There won't really be "dependence"
in terms of incentive distortion, since they would have otherwise did
the same thing with inferior crops. That's a way of helping them with
the money and also helping us in the long run as well.

But in the end, we aren't really doing this for them. We're ultimately
doing this just for us (or just for our agribusiness industries),
since with all of our agricultural subsidies, we produce more than
economically rational for our country. We just dump all of these crops
in their country since we end up with no where else to put them. "The
road to hell" may be paved with good intentions, but this is basically
just expediency for us.

Moo2400

Yes, I’m under the impression that we can do something as well, but that it goes more along the lines as the old saying “you can give a man a fish and feed him for a day or you can teach a man to fish and feed him for a lifetime.” The GMO crops would certainly be a start, though I must admit that I’m not too familiar with the exact pros and cons of them. Either way, I essentially agree with you there.

I’d be more focused on, as you said, the agricultural subsidies we use to flood these countries’ with crops at below the cost of production, thereby destroying their agricultural industry. But even then, that’s still just a piece, as I’m sure you’re aware – the other major bit of it, I think, is that we need to allow them to create some form of protectionism for their agricultural industries, unless we wish to see them in the situation the UK was in during the early 20th century, but unlike the UK, without any means to protect their own food interests. All of this just deepens the whole food crisis further.

However, going that far would require reforming many of the structural adjustment policies imposed on many of these countries by organizations such as the WTO, IMF, and World Bank, and it would also likely bring up debt relief, which is a whole other issue entirely.