Posted by: Home Strange Home | June 21, 2009

Dead Aid by Dambisa Moyo

I just finished reading Dead Aid by Dambisa Moyo, a controversial book that has been much talked about since its publication earlier this year. This “anti-aid” book, written by a successful female Zambian economist who currently works for Goldman Sachs, quickly became a New York times bestseller and a popular mass market book about Africa.

Dead Aid is worth reading for a number of reasons. First of all, it is written by an African, as opposed to one of the old white men that usually lead the debate on African development. This is pointed out by Niall Ferguson himself in the Foreword to the book, and is readily admitted by William Easterly in his subsequent mud-slinging contest with his antithesis Jeffrey Sachs via their blogs.

Secondly, and perhaps most importantly, it forces us to question many of our most basic assumptions about aid and opens a critical and transparent debate surrounding the “aid industry” and the effectiveness of development aid to date. Although the book is short (a mere 150 pages) and a light read, it is not an easy book to read in the sense that one comes away no longer knowing what to think or believe about aid…

Moyo’s basic argument is that aid is the cause of, not the solution to, Africa’s poor economic performance and underdevelopment. She points out that many countries in Africa are worse off today than they thirty years ago, despite the continent having received US $1 trillion in development-related aid over the past fifty years. She argues that “limitless development assistance has fostered dependency, encouraged corruption, and ultimately perpetuated poor governance and poverty.” She advocates financing alternatives such as trade, foreign direct investment, governmental bond issuances, capital markets, remittances, micro-finance, and increase domestic savings and investment. Moreover, she proposes cutting off all government aid to African within five years, clearly quite a controversial proposition.

Note that all of her arguments refer only to systematic government-to-government aid, and not humanitarian aid or charity aid disbursed directly by charities and NGOs on the ground. Moyo’s “aid” refers to concessional loans and grants made directly to developing country governments, either by a single country (bilateral aid) or through an international financial institution such as the World Bank (multilateral aid). Moyo asserts that such budget aid, which represents the vast bulk of aid, has failed to produce results and persists only because of vested interests in the West and flawed incentive systems within the aid industry (such as a lack of accountability to concrete results which is unheard of in any private industry).

Moyo’s arguments, echoing those of Peter Bauer and William Easterly, are at times both convincing and disturbing; she does seem to have a really good point in a few places. That said, the book is relatively simplistic as it is written for the general public, and it isn’t based on any of her own research as she is not an academic; it is an opinion piece based on gathered facts rather than a systematic analysis of aid effectiveness.

Nevertheless, I think Dead Aid does a service to the development field by questioning the status quo and encouraging and open debate about the effectiveness of the current aid strategy. Rather than just making a blanket call for “more aid,” Dead Aid makes us question whether that aid is working and what the best solution for Africa really is.

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Responses

  1. Bitter-Sweet Chocolate: The Latest Kickshaw of Lazy Journalists

    This is the stuff that many media in the West love to publish: Dead Aid, the book by Zambian academic Dambisa Moyo, advocates a stop of all development finances to Africa. The German monthly magazine Cicero for instance, in its July edition, exercises itself in prose dedicated to the beautiful, young exotic coming from the dark, wild continent in a heroic mission.

    Read more here:
    http://rubeneberlein.wordpress.com/2009/06/23/dambisa-moyo-dead-aid-cicero/

  2. Although I generally agree with the idea, there are certain caveats that she has left out (in my view).

    One, the corruption of and impact of MNCs in Africa. That would have stop as well. Try telling the international community that, along with giving up aid, they must now also stop raping Africa of its resources?

    Second, the bi-lateral nature of donor aid, i.e. it is a deal between. governments. I would argue that civil society in Africa should continue to receive aid, but all aid to governments should stop.

    But my first point is MUCH more important. Without aid, there will be a vacuum that the amoral private sector would quickly fill, with even worse consequences.

    And that has always been my problem with the perspective ideology of the west: they never get at the core issues but rather navigate around the perimeter.

    In other words, Moyo is clever, no doubt, but she is also narrow minded. But, after all, she is a trained economist.


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