Saturday, September 26, 2009

Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africa


DAMBISA Moyo’s widely discussed attack on the aid system—contrary to what you may have heard—never says that all aid should end in five years. Moyo does pose a rhetorical question about the consequences of quickly cutting off all aid, but page 76 makes it clear what she actually recommends: much more focus on using aid to encourage non-aid mechanisms of finance, so that aid declines over time with the ultimate goal of “an aid-free world.”

To assess whether the book is convincing, we need to understand that it is not about how Africa should develop; it is about which mechanisms of financing lead to better development outcomes in Africa. Moyo defines aid as systematic cash transfers to governments, via grants or concessional loans—omitting humanitarian, emergency, and charity-based assistance directly to the needy. Her task is to show that aid thus defined cannot greatly expand economic opportunity for ordinary Africans, and that only a set of alternative development finance mechanisms would greatly expand economic opportunity for ordinary Africans.

See full Review.