To Aid or Not to Aid?

From Economist's View, a description of an emerging food fight between Jeffrey Sachs, speaking for the African aid community and Dambisa Moyo among others speaking for those who oppose in particular aid to African governments.

Readers can find the particulars of this debate on the EV blog, so I won't repeat them here. I will however, offer a few comments.

First, as I have noted earlier regarding Moyo's work, her problem is not with feeding the hungry and other forms of emergency assistance, it is with government to government aid which she believes, as I do, simply fosters corruption. Both she and Sachs use the example of Paul Kagame, the President of Rwanda.

Kagame wants to reduce Rwanda's dependence on aid, which Sachs ridicules. But it should be noted that his anti-corruption credentials are impecable, a rarity in Africa. Romeo Dallaire, in his relentlessly depressing and pessimistic account of the genocide, Shake Hands with the Devil repeatedly cites Kagame as the one beacon of hope in that benighted nation. Kagame seems to understand that the route to both economic development and accountable government is reduced dependence on aid.

Indeed, as Minsky argued so strongly, albeit in a different context, the bulk of aid is more often than not captured not by those most in need but by those with the political clout to capture excess rents, which in the case of Africa is sadly political elites. My own experience on a trip to the Palestinian territories ten years ago was that the massive aid following Oslo was largely captured by the Palestinian Authority leadership or squandered on meaningless and unproductive pet projects.

In April, I wrote about Jacqueline Novogratz and the Acumen Fund. It is worth repeating a statement by her from that entry:

After more than 20 years of working in Africa, India and Pakistan, I've learned that solutions to poverty must be driven by discipline, accountability and market strength, not easy sentimentality. I've learned that many of the answers to poverty lie in the space between the market and charity and that what is needed most of all is moral leadership willing to build solutions from the perspectives of poor people themselves rather than imposing grand theories and plans upon them.

This is justice rather than charity. It is offering a place at the table rather than crumbs from it, and I am convinced that it is only in this way the Africa has a chance to truly thrive. For those who would like to invest in such a future, I would encourage them to visit the Kiva website.