Dead Aid: Why aid is not working and how there is another way for Africa [Kindle Edition]

The popular conception of Africa is not a pretty one. We are bombarded with images of civil wars, corruption, senseless ethnic violence and mass-scale poverty. Small wonder then that we are driven by compassion to help those "poor Africans" caught in the quagmire of misery; indeed, our celebrity-obsessed culture has taken up the cause with programmes like Make Poverty History, Live Aid, and Bono's endless solicitations on behalf of Africans. But does all this aid work? In this book, Ms. Dambisa Moyo, a Zambian-born economist, challenges the supposed efficacy of aid and demonstrates that aid has failed miserably to deliver economic growth.

Ms. Moyo differentiates among three types of aid:
1. EMERGENCY HUMANITARIAN AID. This is needed in the aftermath of a disaster such as during the Asian tsunamis in 2004;
2. CHARITABLE AID. Administered by organisations like Oxfam, charitable aid is targeted to delivering specific public goods like building toilets for teenage girls in India; and
3. DEVELOPMENT AID. This is bilateral or multilateral (via the World Bank to African governments) aid, which is used to supplement government annual budgets.

Developmental aid forms the bulk share of total aid flows to Africa; therefore, Ms. Moyo focuses her criticism on development aid.

She begins the book with a credible overview of the history of development aid--from its conception at the Bretton Woods conference in 1947 through the oil crises of the mid 1970s to the fall of the Berlin Wall. She argues that development aid was conceived as a means to spur economic growth. Showing growth statistics for Africa in the 1970s and 80s, she conclusively demonstrates that aid-receiving African countries have not grown in the two decades. Indeed, some aid-receiving countries like Niger, Benin, Liberia and Sierra are poorer today than there were thirty years ago. Therefore, on this metric, the aid-driven development model has spectacularly failed to deliver on its objectives.

Ms. Moyo then asks why aid has failed? Her answers are insightful. They include:

- Aid to Africa is an open-ended commitment, unlike other historically successful aid interventions like the Marshall Plan;
- Aid corrodes the incentives system in many African countries (Ethiopia and Uganda, for example). Aid is essentially "free money"; therefore, governments do not see the need to generate revenue by growing their economies. Why work with local entrepreneurs when you can always go cap-in-hand to beg the white man?
- Aid engenders corruption because aid money is easy to steal.

What solutions does she propose? Ms. Moyo proposes tried-and-tested market mechanisms: that African countries wean themselves off aid and, instead, like China, South Africa and Botswana, look to the capital markets to raise money. Nothing radical there, right? She, however, proposes that aid be turned off in five years. That proposal really got her critics' goats and drew their (Jeffrey Sachs and Bono's) derisive ire. How can you turn off the tap, they argue? Doing so would mean certain death for thousands of Africans. Ms. Moyo was subsequently criticised as an out-of-touch lackey of the aid-hating Right, while implying that she (Ms. Moyo) wants to deny the opportunities that she had to other poor African women (Sachs). Her critics also argue that her ideas are not new.

Sachs' arguments are hopelessly flawed and counter-productive. Ms. Dambisa Moyo's proposal to cut all development aid to Africa is a hard one to swallow for people, like Bono and Sachs, who are used to speaking for Africa, but it is one that we need to seriously consider. As an African (a Nigerian), I don't know that all development aid should be cut in five years. However, I agree with Ms. Moyo that development aid cannot be an open-ended commitment; African governments must be incentivised to start seeking other alternatives to aid, as aid cannot deliver the sustained economic growth that African definitely needs. Only the discipline of the market and entrepreneurship can deliver long-term economic growth in Africa.

Even though Ms. Moyo's main arguments are well-supported, the book has one significant shortcoming: it does not appear to be well-researched . The author seemed to 'shoot from the hip' and repeat herself inordinately. Also, Ms. Moyo takes a rosy view of the role that the Chinese want to play in Africa. I do agree with Ms. Moyo that the Chinese engagement model (business) in Africa is potentially more beneficial than the West's (pity, condescension), but I question China's sensitivity to human rights issue on the Continent.

Western aid, given from a sense of pity, is very difficult to challenge. How can you fault someone who tries to help you? But the aid-driven development model, as Ms. Moyo argues, has not and cannot deliver economic growth. Instead, aid has supported a generation of African leaders that have become lazy, thwarting the Continent's economic progress, while creating an entrenched bureaucracy (The World Bank, IMF, USAID, ODA)--indeed, an industry (Bono, Geldoff and Sachs)--that have a vested interest in business as usual.

The message in Dead Aid is not new; it has already been delivered--with greater analytical depth--by Paul Collier (The Bottom Billion) and Bill Easterly (The Elusive Quest for Growth and The White Man's Burden). Dead Aid's strongest selling point, however, is the messenger: an articulate, intelligent, well-educated African woman. As an African, I want to hear hard-headed proposals for Africa's development from African leaders, and not unworkable, bleeding heart solutions from Bono, Bob Geldof, and Jeffrey Sachs. For content and delivery alone, Dead Aid deserves only two stars. However, for content, delivery and messenger, Dead Aid deserves a heart-felt four stars.

Not long ago I went to a presentation of this book at the Danish Institute for International Studies (DIIS), and I have subsequently read the book.
If I had not been at the presentation, I would probably have rated the book lower; at the start of her presentation, Ms. Moyo said that the book was not an academic analysis, but was rather intended to create debate. With this in mind, the book is surely worth reading, since the debate on aid to poor countries is in much need of reflection and new ideas.
But that said, this is not such a great book, and its message is not new. In fact, the best thing about the book is its quite provocative premise that Ms. Moyo largely views aid as the cause of all of Africa's problems.

The first part of the book is a fine albeit superficial summary of the history of aid, and its problems in relation to Africa, where she argues that aid to Africa since the end of colonial times has been the major cause for increased poverty, lack of growth, corruption and bad governance, even conflict! This of course leads to the more or less explicit premise that aid should just be done away with (something that the book has been widely quoted for), but in selected parts of the book, you can see that she is not necessarily as extreme as she gives the impression of in that first part: "However worthwhile the goal to reduce and even eliminate aid is, it would not be practical or realistic to see aid immediately drop to zero. Nor, in the interim, it might be desireable." (page 76).
The main problem with the first part of the book is her lack of differetiating between different kinds of aid; she does a simplistic differentiation in the start of the book between humanitarian and NGO aid (regarding the latter, Ms. Moyo said at DIIS that she would write another book, where I would nevertheless expect the overall message to be the same), and there is a big problem in this if a person knows more about aid: issues like how it is provided and to whom, as well as the timeframe (a huge problem she rightly points out), are only implicitly treated, and these are quite relevant discussions in the aid debate, where the discussion between budget-support or project-aid is widely discussed. Also here, it is a pity that while she (competently) talks about the ECONOMY of aid, she barely talks about the POLITICS of aid, which I would argue is the main cause of many of the problems of aid: let us not be naïve to think that Western donors provide aid largely for altruistic reasons!

The second part of the book has Ms. Moyo's recommendations about what should be done to develop Africa, and is quite relevant, but very poor in the sense that there is nothing really new in it; in fact, Ms. Moyo largely repeats a market-oriented liberal approach to economic development: development of SME's, capital markets for investment, free trade and fair and just laws on property and banking. I think many existing development economists will have difficulty not agreeing with her.
Knowing this now, I find it disappointing that at the debate at DIIS there was no more discussion when one of the panelists, Erik S. Reinert, implicitly criticised Ms. Moyo's neo-liberal approach by arguing that Africa needed to develop like the west had done: by nurturing its infant industries through state protectionism and investment.
Although well-informed, and Ms. Moyo clearly being a good intellectual, the book is a disappointment for anyone wanting a more in-depth analysis (and may I add here how annoyed I was that some of her endnotes referred to Wikipedia). Although Ms. Moyo refers to some of the development thinkers that have said similar things such as William Easterly or Paul Collier, she uses them only selectively, when in fact William Easterly has already said much of what she says (and more eloquently) and Paul Collier has given a criticism of many of the weaknesses she mentions about aid, but argues that the main problem is that aid DOES WORK when provided under specific conditions.
One can only have the feeling that Ms. Moyo generalizes as much as any European about a continent of 54 countries and one billion people.

While I would say that this book is very good for reflection and discussion, it should NEVER BE READ ALONE, but should be supplemented by some of the more in-depth books on the subject, as for instance William Easterly's White Man's Burden, for someone who largely agrees with Ms. Moyo, or Jeffrey Sachs' The End of Poverty, for someone who argues that aid can solve all problems, as well as Paul Collier's The Bottom Billion, which has a much more balanced view on aid than any of these, including Ms. Moyo herself.

Excitedly, I bought this book - with no background in this field - willing to learn about 'why aid makes things worse and how there is another way for Africa'. I was impressed by Moyo's credentials and by the praise from Kofi Annan on the back cover (I subtly missed praise from the Daily Mail on the front cover). What I discovered was an intriguing, insightful and to all intents and purposes, a well-researched thesis (in response to other reviews on amazon) with interesting facts (e.g. there's direct correlation between the level of corruption and a country's GDP).... this is where my praise for this book ends.

I felt that Moyo used the most insidious form of manipulation by presenting only the facts which support her theory, conveniently omitting or playing down information inconsistent with her argument (e.g. Botswana). As a scientist, I want to see all the facts laid out on the table and hear a well informed thesis; this is not the case with Dead Aid. In addition, the concept and solution is dragged out over 150 pages where 50 would have sufficed: it is an essay at best. Moyo does not confront what I feel is the principal problem with African aid mismanagement (and is a central part of her argument): corruption, until a third of the way through the book. Finally, her arguments are not structured clearly, there is a degree of contradiction and too much financial jargon for the lay-person.

Overall, the subject and argument are interesting and I did learn about another way for Africa, even though personally I feel a little dubious about Moyo's proposed 'other way' and I felt more manipulated than persuaded.