I came across this very interesting article on Tech Central Station. 'For God's Sake, Please Just Stop Aid' An excerpt: William Easterly, author of The Elusive Quest for Growth and a leading authority on development, is skeptical. He believes that the proliferation of goals and recommendations in the report is over-ambitious. He chides the mindset of the aid community, which is awash in plans, strategies, and frameworks to meet the very real needs of the world's poor. These exercises make sense only in a central planning mentality in which the answer to the tragedies of poverty is a large bureaucratic apparatus to dictate quantities of different development goods and services by administrative fiat. Top-down planning didn't make the Soviet bloc rich, and it isn't going to make poor countries rich. Easterly's views are in line with those of the late Peter Bauer, who already in the 1970s warned that "aid" is typically not a transfer to the needy but to governments. Thus, the predominant effect of "foreign aid" has always been to enlarge the size and scope of the state, which always ends up impairing prosperity and diminishing liberty. Worse yet, it leads to the centralization of governmental power, since the transfers are always to the recipient country's government. According to Bauer foreign aid inevitably diverts resources from the activity of production to the activity of "rent seeking" or attempts to acquire governmental funds. It creates a giant patronage machine with all the attendant corruption that such things have always entailed. Such corruption often leads to armed conflict over the control of the patronage in many Third World countries. And, as more and more resources are devoted to rent-seeking instead of production and entrepreneurship, the recipient countries become poorer and poorer. If anything, it is foreign aid that causes a "vicious circle of poverty." Like all forms of welfare, foreign aid also enforces an attitude among aid recipients that circumstances are beyond their own control, and therefore they must depend on begging from foreigners rather than on entrepreneurship. In doing so, foreign aid creates a giant moral hazard. In the same vein the Kenyan economist James Shikwati, who is an avid proponent of globalization, complains about the perverse effects of aid. In an interview with the German weekly Der Spiegel he declares that aid to Africa does more harm than good. Asked about his opinion on the increased aid commitments at Gleneagles, his reaction was: For God's sake, please just stop aid. ... With the aid money huge bureaucracies are being financed. In the meantime it promotes corruption and complacency. Africans are taught to be beggars and not to be independent. In addition, development aid depresses local markets everywhere and dampens the spirit of entrepreneur-ship that we so desperately need. As absurd as it may sound, development aid is one of the reasons for Africa's problems. If the West were to cancel these payments, ordinary Africans wouldn't even notice. Only the politicians and bureaucrats would be hard hit. Which is why they maintain that the world would stop turning without this development aid. ... Africa must take the first steps into modernity on its own. There must be a change in mentality. We have to stop perceiving ourselves as beggars. These days, Africans only perceive themselves as victims. ... In order to change the current situation, it would be helpful if the aid organizations were to pull out. Currently, Africa is like a child that immediately cries for its babysitter when something goes wrong. Africa should stand on its own feet.
I hear you to a certain extent. However i am a South African and we have a vibrant fre market system , with social leanings. There are many South africans abroad in high profile positions. So yes certain African countries are in dire need , and yes there is corruption in certain countries through war , maladministration etc. Bro dont paint such wide strokes in your argument...
It appears that you have mis-read. Those were not my arguments. That was an excerpt of an article which highlights the arguments of William Easterly, Peter Bauer, and James Shikwati.
I think we should stop giving aid. I've always been against it. I think people can be hurt more by giving them aid, because they become dependent on it. People should be able to work for everything they need and want, as long as they are physically and mentally capable of it.
We've been giving aid for years, and what has it done? African countries are just as poor today as they've always been. This tells me that giving them money isn't working. The reason for this is because their corrupt governments spend it all. I've heard about presidents of third world countries shopping at high end stores and buying rolexes while the people starve. The governments are the problem, not the people. When these countries decide they want to become democratic, things will get better. This may require a revolution.
That's a very interesting article, Will, but there's one glaring problem with it... it does not state but rather assumes that aid = finance. So it's imbalanced and ultimately does not seem to offer a solution, except to just cut off aid (finance) and that's it! Aid can also be in the form of tools, equipment, seeds, education, medicine, knowledge, people in the field etc so if, for instance, you give poor farmers the simple means to survive & provide for themselves AND you withhold the distribution of finances that can, and often *will* be used by those that do not actually need them (behaviour which is by no means exclusive to Africa I'd like to add) then there may be a positive way forward. Charities have been aware of this situation and the views for some time now and have been changing their methodologies so that assistance gets directly to those that need it, afterall what use are chickens, goats, standpipes or seeds to a corrupt official in an Armani suit who gets driven home to his mansion in a new Mercedes? Like I said, interesting article but rather limited in its vision.
Sigh. I wish I could say you guys were wrong but you're not. My previous remark was an observation of how it is easy to make such comments when you have a roof over your head and get to eat every day. If the aid was delivered as it was supposed to be then this would be the case for millions more but as you rightly point out, it often doesn't get anywhere near those who need it. Somalia was a breathtaking lesson in how greed and thirst for power was put before a starving nation. The US were welcomed as heroes when they unilaterally decided to skip with all the formalities of 'normal' aid delivery and just pour in troops with food and aid to help the starving and save the dying. It went well for a short time until greedy warlords with armed militias started hijacking these food-aid convoys and taking over food depots in a bid to gain control for their own selfish ends. The end result was the loss of many lives, the US and UN withdrawal from Somalia and a bitter lesson learned.
Lever: If the rulers are as wiley as those in Somalia and Ethiopia, they will just take that "aid in kind" and sell it for cash. That trick makes it slightly more difficult to abuse the aid system, but not significantly. Worse -- that doesn't address the real problem. Yes, misappropriation of aid by political power blocks is a problem -- but the real problem is that the constant flow of aid is destroying the self-esteem and motivation of the recipients. In other words, the problem is not that the aid isn't getting there -- the problem is that the aid is getting there.
Well it's basic knowledge, Aid doesn't work. Those countries that have got aid have generally become poorer, while corrupt government members have enjoyed luxury. Africa is the continents that get's most aids of all, but it's also the only continent, that have becamed poorer in GDP per capita terms the latest 20 years. Lots of aid was beeing gaved to eastern europe after the break up from the Soviet union. Many countries in the western Europe gaved away shoes and clothes in huge amounts. This resulted in a massive shut-down of shoe and clothes shops in eastern Europe(especially Ukraine) to shut down, which created even more unemployment over there. Aid wether it is material or moneybased, increase the inflation, increase the imports, increase the corruption and decrease the productivity.
That is true, Will, there is always somebody somewhere tying to make a quick buck out of anything they can. Re-reading the whole of the article you link to, Will, it clearly and exclusively talks about financial aid and, yes, if we are to stop sending financial aid then money will not end up with the wrong people i.e. in the hands of corrupt governments, just as Peter Bauer originally stated back in 1957. (He is also a proponent of completely derestricted immigration "policies", but that is another story) I still think the article is limited in scope in that it is strong in its condemnation of the concept that aid (financial) is "wrong" but it cannot even start to suggest what is "right". Criticism? yes. Constructive? no. Cutting all aid to Africa is as simplistic a notion as that of removing Saddam from Iraq resulting in America, then the world, being a safer place and look what happened there. <hypothetical>So let's just cut all aid to Africa and see if all Africans gain self-esteem, watch the hungry and poor become motivated. If anyone fails to become motivated do we just brand them as lazy? If anyone dies from malnutrition can we confidently retort that, although they died from starvation, at least they died with their pride intact?</hypothetical> I also agree that purely financial aid so far hasn't worked, but have we given the aid-in-kind enough of a run yet? Handing out sacks of grain will feed people until the bag is empty but by providing seeds, tools, a constant supply of water and the techniques to successfully cultivate that crop year after year will empower people to be self-sufficient and then regain their independance and self-esteem. After that the trade barriers that promote the import of western goods and restrict the export of African produce should be dismantled so that they can then fairly compete with us (if we'll let them ) I'm not (totally) disagreeing with you, Will, or anybody else for that matter, I just know that there is more to this issue than simply "turning off the tap". We could talk all night of the potential political and social implications too, but I have a beer waiting...
This is a point with which I disagree. It is fairly trivial for these corrupt governments to redirect the flow of aid-in-kind to their political cronies -- or to sell this aid-in-kind to another country altogether. And a fascinating topic in its own right. I concur with Mr. Bauer on most of this point. That makes two vs. six billion. I believe that the article is very clear in what it suggests is right. The article, in its very title, states "Just Stop Aid." That is a clear directive of what the article states is right. Aid-in-kind is far from a new idea. It has been tried for many years. What is more likely to work is encouraging U.S. businesses to build factories and offices in Africa. Right now, U.S. businesses are doing this in India and are significantly raising the standard of living for that country. The African nations we would be dealing with have large populations of unskilled labor, so the requirement would be factories which could utilize unskilled labor. This would allow these business to compete with the current generation of Chinese slave labor camps. Except, of course, that these factories would be run with a stronger focus on human rights, human dignity, employee retention, and employee growth. Why don't U.S. businesses do this in Africa right now? It's simple -- Africa suffers from a severe lack of law and order. Businesses do not feel that they are likely to achieve a safe ROI (Return On Investment) because as soon as their start to make a profit, their factory will be nationalized by the government or burned to the grund by the rebels. That's why China is doing better than most of the third world right now -- they have law and order. Sure, they will execute you for saying the wrong thing -- but at least they have law and order. Therefore, to increase the inflow of direct foreign investment into these African countries, the U.S. aid organizations must provide financial guarantees against the factories being nationalized or destroyed. They can't actually prevent these things from happening, but they can provide an insurance policy for the investors. The African governments could provide assurances that these things won't happen, but no one is likely to believe them. Their combined historical record is very clear. In addition, the U.S. government must provide military assistance to protect these businesses. An attack on these businesses must be seen in the same light as an attack on American soil -- whether the attack comes from the government or from the rebels. We're not involved in local politics, we surmount local politics. Without these financial and military guarantees, foreign direct investment in Africa will continue to hover near zero and Africa will continue its cycle of starvation and despair. Please remember that cycles of starvation are a natural outcome of subsistence farming. This is how we in the West lived until the industrial revolution. Farming might be the right solution for much of Africa -- but modern industrial efficient farms that can guarantee sufficient food production -- not a guy with a shovel and a bag of seeds. Don't condemn Africa to that fate.
Well, aid can work in the short time. It did in West Germany, and it is working in Iraq today. But only when it goes for rebuilding investments. Limited aids should therefore be given to countries in need, but not for a longer period than a few years. This is obvious. The country will be dependent on Aid if they get Aid for a longer time. It will also create corruption and many other bad habits. Responsibillity can hardly be created in a country that is dependent on others good will.