Is Foreign Aid a Bad Thing?

It's not surprising that Dambisa Moyo has become an overnight intellectual celebrity, especially on the right. At a time when capitalism is in worse repute than it has been in decades, here comes a sharp, highly credentialed, and -- not incidentally -- gorgeous African woman hymning the salvific promise of free trade and international capital markets.

Moyo, a Zambian economist with degrees from Harvard and Oxford and experience at Goldman Sachs and the World Bank, goes beyond offering a critique of foreign aid and the Western, liberal consensus that sustains it. Her short, polemical book, Dead Aid: Why Aid Is Not Working and How There Is A Better Way for Africa, blames aid for nearly every ill Africa has endured. "Millions in Africa are poorer today because of aid; misery and poverty have not ended but have increased," she writes. "Aid has been, and continues to be, an unmitigated political, economic, and humanitarian disaster for most parts of the developing world."

Plenty of compassion-fatigued Westerners seem eager to hear this. They're sick of being lectured by celebrities like Bono and Angelina Jolie, and Moyo has tapped into a nascent backlash. The New York Times magazine called her "The Anti-Bono." The Daily Beast headlined its piece on the book, "Is Angelina Bad for Africa?" Moyo has appeared on TV -- from The Charlie Rose Show to The Colbert Report -- and all over the radio. Clearly spooked, the ONE campaign, the anti-poverty nongovernmental organization co-founded by Bono, sent out an e-mail to African supporters asking them to rebut the book. "We are concerned that if her book gets traction it could lead to a gutting of assistance to Africa, including for important programs like PEPFAR, the Global Fund, AGOA and education funding," it said. Of course, once Moyo's supporters got hold of the e-mail, they accused ONE of launching a campaign to discredit her, creating even more buzz.

In a way, it's heartening to see any book about development in Africa -- hardly an inherently sexy subject -- becoming such a sensation. But Dead Aid really doesn't deserve the hype. Not because it criticizes the world of foreign aid, which, though it certainly saves lives, can also be bureaucratic, paternalistic, and blind to unintended consequences in a way that's both farcical and tragic. Rather, the book falls short because it's sloppily argued, constantly mistakes correlation for causation, and, for a book that aims to puncture liberal pieties, strangely Manichean.

Foreign aid is a profoundly imperfect vehicle for advancing development, but even its harshest critics usually admit it does some things, like advancing girls' education, quite well. And while it would be a wonderful thing if African countries could purchase their own life-saving AIDS medications, there's no prospect of that happening anytime soon. Moyo, though, hardly acknowledges any of this.

In fact, her book rather resembles the kind of broad-brush anti-colonialist jeremiads popular on the far left. Just as some on the left blame all of Africa's problems on Western imperialism and capitalist exploitation, Moyo blames Africa's problems on aid. Aid, in her view, is responsible for African corruption and economic stagnation. It is "an underlying cause of social unrest, and possibly even civil war," apparently because it increases the spoils available to the victor. That's a pretty big charge, and she offers no evidence to back it up, other than to note that the leader of the RUF rebels in Sierra Leone demanded to be made chairman of the board controlling the country's diamond-mining interests as a condition for peace. We all know that civil wars are frequently fought for natural resources, but that's an entirely different thing than foreign aid. When the economist Paul Collier -- whose praise for Moyo is quoted in Dead Aid's press release -- looked at the material causes of civil wars in his book The Bottom Billion, he didn't list aid as a factor at all.

Even if aid doesn't cause civil wars, there's plenty to criticize about the way it currently works. Aid agencies are indeed self-perpetuating machines, responsible to their donors rather than those they ostensibly exist to help. In many cases they are judged on how much money they raise and spend, not how effective it is in practice. As New York University economist William Easterly noted in his penetrating 2006 book, The White Man's Burden: Why The West's Efforts to Aid the Rest Have Done So Much Ill and So Little Good, foreign aid donors have spent $2 billion building roads in Tanzania over the past 20 years, but Tanzania's road network has not improved, because no one maintained them.

Easterly explained how little control poor Tanzanians have over the way aid is allocated. A Tanzanian who wants to complain about a bad road, he writes, somehow has to communicate his desires to "'civil society representatives' and/or non-governmental organizations (NGOs), who articulate his needs through the government of Tanzania to international donors." The government then goes to the World Bank and the International Monetary Fund, which, as Easterly explains, require it to complete a "satisfactory Poverty Reduction Strategy Paper (PRSP), in consultation with civil society, NGOs, and other donors and creditors." Easterly's description of the bureaucratic process goes on for several more paragraphs, each loaded with multiplying acronyms. It's exhausting just to read, never mind to undertake.

Unlike Easterly, Moyo never goes into much specific detail about the system she's attacking. Sometimes it's unclear how much she really knows about it. She is more than justified in pointing to the abstinence-only provisions of PEPFAR, George W. Bush's AIDS initiative, as an example of the way donors can put their own political priorities above the needs of people on the ground. Yet she seriously mischaracterizes the program. Moyo writes that two-thirds of PEPFAR money is earmarked for abstinence-only programs. In fact, though, only PEPFAR funds devoted to the prevention of sexual transmission of HIV are affected by the abstinence provision. Far more money went to treatment than to the missionary efforts of chastity proselytizers. The abstinence earmark was destructive and outrageous, but the treatment side of PEPFAR has been effective. Given that she's proposing policies that would likely eliminate both, the onus is on her to understand how the program works.

Elsewhere, she's on firmer ground. Moyo is absolutely correct to criticize the way Western agriculture subsidies and tariffs undercut African farmers, helping to keep them dependent on aid. She's right to stress the possibilities of microfinance and other grass-roots development strategies. And she's certainly on to something when she points out that the public debate about the future of Africa involves remarkably few Africans. "Scarcely does one see Africa's (elected) officials or those African policymakers charged with the development portfolio offer an opinion on what should be done, or what might actually work to save the continent from its regression," she writes. "This very important responsibility has, for all intents and purposes, and the bewilderment and chagrin of many an African, been left to musicians who reside outside Africa."

It is for precisely this reason that it's unfortunate that Dead Aid isn't better. There are, after all, already very good books like Easterly's about the follies of foreign aid. The White Man's Burden demonstrates an intimate familiarity with the subject and combines bracing criticism with an acknowledgment of aid's successes. It is, however, yet another tome by a white man, and this is a debate that desperately needs more African voices, especially those that challenge the assumptions of bien-pensant Westerners.

What the discussion around aid doesn't need are irresponsible proposals seemingly designed to garner publicity rather than advance policy. Though Moyo calls for the West to cut off aid within five years, she doesn't bother grappling at all with what the result might look like. She simply assumes that African governments will find another way to maintain their schools and clinics, to build wells and develop modern agriculture systems to feed a continent that is poised to add another billion inhabitants in the next 40 years. But what if they don't? Leaders in Sudan and Zimbabwe seem content to let much of their citizenry starve, and as nice as it would be to think that, in the absence of aid, they would be overthrown in favor of more just rulers, to bank on that is to gamble with millions of lives. Even well-intentioned politicians may find it extremely difficult to cope with drastic reductions in support in the middle of a worldwide economic crisis.

Moyo says she's just talking about long-term development aid rather than the emergency humanitarian aid that keeps people alive in the immediate aftermath of wars and natural disasters. But it's not always easy to draw a bright line between the two categories. Is she suggesting that the U.S. stop paying for antiretrovirals for African AIDS victims? It's not clear.

Meanwhile, events have already proved one of her main ideas unworkable. Moyo champions international capital markets as a replacement for aid-based development funding. "The capital markets are open, and open for Africa," she writes. That may have been true when she typed those words, but with the current financial crisis, it's not anymore. Yet the fact that Moyo's ideas are unrealistic is unlikely to stop conservatives from embracing her. In fact, that may be part of her appeal. Unfettered capitalism is currently failing on a spectacular scale, one that's leaving true believers dazed and blinking and searching for ideological solace. Moyo offers a momentary escape from that reality. If the American Enterprise Institute hasn't snapped her up yet, it's only a matter of time.