Friday, July 10, 2009

Is Foreign Aid Undermining African Democracy?

Coming via ForaTV, Dambisa Moyo presents an intriguing critique of current foreign aid programs.

According to Moyo, successes enjoyed under programs such as the AIDs program -- in which AIDs drugs are provided to HIV sufferers -- lead Africans to doubt their elected leaders, as they watch foreign organizations provide services their governments should be responsible for.

Paradoxically, aid programs that seek to by-pass Africa's entrenched system of government kelptocrats may be stifling the single best antidote to this kleptocracy: a strong, vibrant democracy in which oversight is ultimately wielded by a citizenry that has confidence in their system.

According to Economist William Easterly, the most effective aid programs are those that will democratize the process of prioritizing the areas by focusing on allowing the citizens of impoverished countries to build their own economies from the ground up by utilizing the principles micro-economics.

Aid planners, still under the thrall of Jeffrey Sachs and his mostly-failed policies, continue to favour the principles of macro-economics and a top-down method of building national economies.

But as Easterly has often pointed out, this risks the creation of aid programs that are dangerously out-of-touch with the needs of locals.

An interesting case in point is a $15 billion agricultural aid program being pushed by Barack Obama. Investing in things such as seed, fertilizer, produce storage and research, the plan seems to be aimed at jump-starting a new green revolution in Africa.

While this satisfies an obvious need that impoverished countries have, locals may prefer to continue utilizing traditional agricultural methods as opposed to high-tech agricultural methods that will remain expensive -- likely prohibitively expensive -- long after aid dollars run out.

Easterly points out that, mixed in with successes, similar plans have been tried unsuccessfully before.

“The curse of aid is that they never learn from history,” Easterly said. “They need to go back and realize a lot of things promised today have been promised before.”

But even when the things that are promised are delivered, as Moyo points out, foreign aid is actually posing unforeseen problems for African democracies, as it undermines elected leaders who lack the resources to deliver on their own responsibilities.

If the western world truly expects democracy to flourish in Africa, it may be for the best to start to design foreign aid programs that allow it to function properly.


  1. This is probably one of the most insightful blog posts on the topic that I've ever read. Good job my man!
    And also: Kelptocracy?!
    My new word of the month!!!!!

  2. The entire foreign aid question is an extremely tough nut to crack.

    I personally favour a fusion of Easterly's free market models with Jeffrey Sachs' clinical economics model.

    But there are very hard questions to be asked regarding how much untrustworthy third-world governmental institutions should be involved in aid programs.

    It's easy to be thoughtful about it, I think. It's harder to find answers.


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