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

You can tell the author is African because there's a promotional blurb on the back cover saying how articulate she is....

I found the writing a little dry but it's chock full of facts and citations backing up what intuitively feels like a shocking proposition: that aid to Africa should be cut off (or that Africa should wean itself off it). This makes more sense once the author's explained that she's talking about the kind of "aid" where Western governments loan more money than the receiving government has the infrastructure to use, so there's motivation to funnel it to personal benefit, until interest mounts to the point that it can't be paid off, but Western governments continue to make loans anyway. She mentions some aid schemes show more specifically target countries with a particular poverty index and I can't remember if she points it out explicitly but it's pretty clear that this means if you want the money to keep coming then you've got a strong incentive to keep your country poor. In any case that amount of money under the control of a few is also strong incentive for coups and civil wars, and so forth. She lists various other destructive effects of this kind of aid, too many to summarise, but it's pretty convincing.

At the same time I do feel pretty strongly that, having extracted vast resources from Africa, the West bears some responsibility to make reparations. (I don't consider loans to be reparations even aside from the fact that reparations should make things better, not worse.) Fortunately the author does mention alternative ways for African countries to grow their economies both individually and in collaboration and there are potential roles for Western governments here as well as for industry - but relying on the countries themselves committing to essentially diversifying their revenue stream.

Mostly I came away from this feeling more than ever that modern financial systems are absolutely toxic. But given that they exist, she's pretty persuasive about ways to take advantage of them. It would take someone much more knowledgeable than me to know how well her suggestions have held up in relation to developments over the last 15+ years. show less

"Dai un pesce a un uomo e lo nutrirai per un giorno; insegnagli a pescare e lo nutrirai per tutta la vita." Lo ha detto Confucio qualche millennio fa. E, infatti, l'autrice di questo interessante e documentato libro lo conferma. Ecco cosa dice dei Cinesi e di cosa hanno fatto, o stanno facendo in Africa:

"Ma invece di conquistare l’Africa con la canna del fucile, la Cina sta usando la leva del denaro. Secondo le sue stesse statistiche, a fronte dei 20 milioni di dollari investiti in Africa nel 1975, nel 2004 ne ha investiti 900, sui 15 miliardi complessivi ricevuti dal continente. Strade in Etiopia, oleodotti in Sudan, ferrovie in Nigeria, energia elettrica in Ghana… sono solo una parte del fiume di progetti miliardari con cui la show more Cina ha inondato l’Africa negli ultimi cinque anni, e ognuno è parte di un piano ben orchestrato ...".

Poi ancora: "L’errore compiuto dall’Occidente è stato dare qualcosa in cambio di nulla. Il segreto del successo della Cina è che la sua penetrazione in Africa è solo affaristica. L’Occidente ha mandato aiuti in Africa e in definitiva non si è curato del risultato; questo ha creato una cricca d’élite che ha escluso dalla ricchezza la maggioranza della popolazione causando instabilità politica. La Cina, all’opposto, manda in Africa denaro e in cambio pretende di guadagnare; grazie a questo atteggiamento, gli africani ...".

Non c'è bisogno di aggiungere altro. Il nostro "umanismo-mielismo-pietismo" uccide l'Africa e gli africani. Ma questo non lo si può dire perchè non è "politicamente corretto", specialmente dalle parti del ... Vaticano. Non aggiungo altro. show less

"Dai un pesce a un uomo e lo nutrirai per un giorno; insegnagli a pescare e lo nutrirai per tutta la vita." Lo ha detto Confucio qualche millennio fa. E, infatti, l'autrice di questo interessante e documentato libro lo conferma. Ecco cosa dice dei Cinesi e di cosa hanno fatto, o stanno facendo in Africa:

"Ma invece di conquistare l’Africa con la canna del fucile, la Cina sta usando la leva del denaro. Secondo le sue stesse statistiche, a fronte dei 20 milioni di dollari investiti in Africa nel 1975, nel 2004 ne ha investiti 900, sui 15 miliardi complessivi ricevuti dal continente. Strade in Etiopia, oleodotti in Sudan, ferrovie in Nigeria, energia elettrica in Ghana… sono solo una parte del fiume di progetti miliardari con cui la show more Cina ha inondato l’Africa negli ultimi cinque anni, e ognuno è parte di un piano ben orchestrato ...".

Poi ancora: "L’errore compiuto dall’Occidente è stato dare qualcosa in cambio di nulla. Il segreto del successo della Cina è che la sua penetrazione in Africa è solo affaristica. L’Occidente ha mandato aiuti in Africa e in definitiva non si è curato del risultato; questo ha creato una cricca d’élite che ha escluso dalla ricchezza la maggioranza della popolazione causando instabilità politica. La Cina, all’opposto, manda in Africa denaro e in cambio pretende di guadagnare; grazie a questo atteggiamento, gli africani ...".

Non c'è bisogno di aggiungere altro. Il nostro "umanismo-mielismo-pietismo" uccide l'Africa e gli africani. Ma questo non lo si può dire perchè non è "politicamente corretto", specialmente dalle parti del ... Vaticano. Non aggiungo altro. show less

Finally! A book written about Africa by an African woman. This is an excellent book for anyone who is interested in international development, development aid, and nonprofits. Moyo examines the role these play and the global institutions who on the surface seem to have great intentions yet the implications of their good will can frequently do more harm than good.

If you're looking for a critical and knowledgable book about our global aid system, this is an incredibly insightful read written by a brilliant African author.

Dambisa Moyo has provided those in the aid community and African economists & scholars a provocative plan for bringing sub-Saharan Africa's economy and quality of life up to the standards of the rest of the world, or at least alongside other developing parts of the world. In a time when every industrialized nation has internal critics who worry about continuing systematic bilateral or multilateral aid to Africa while its own economy is struggling, Dead Aid will find many who support the premises of its argument--aid hasn't worked, and in fact has hurt the governments of sub-Saharan Africa who have relied to heavily on it.

As correctly pointed out, however, nearly 500,000 Western development workers and economists rely upon the show more government-to-government aid "industry" to justify their existence (a point also noted in Wrong's "Our Turn to Eat"), so overcoming the poverty filled images and stories this group brings before a well-intentioned Western public will be difficult. Additionally, the Dead Aid approach to development would necessitate other (sometimes bigger) financial concessions from countries in Europe and from the United States, such as dropping subsidies on agriculture. Moyo provides many facets to her plan for development, but courage would be needed by both Western governments as well as Africans to actually see any of her plan come to fruition.

The unique viewpoint provided in her work yields exponentially more rewards than it requires in effort to follow her argument in this short work. Publishing this work is dangerous for Moyo. Individuals who have no experience in the economic or development field or who are unfamiliar with post-colonial African history may find the second half of her work tedious or overly detailed, yet may complete the first half of the work and grasp on to her arguments as evidence for discontinuing aid--the evidence for Dead Aid must be balanced with that detailed solution provided in the last half of the book. On the other hand, many Africans who rely upon aid for their power may discount her work as influenced by her neo-colonial education and work experience. Nevertheless, this work must not be ignored, for the cycles of ineffective (yet seemingly endless) aid only seem to continue, and Africa deserves to be seen not as a hopeless charity case, but as a region with great potential and even greater people. show less

Dead Aid is an interesting, provocative look at the foreign aid industry and its effects on Africa. Dambisa Moyo, who formerly worked for Goldman Sachs and the World Bank, draws a conclusion not unknown to others in the field: development aid (as differentiated from humanitarian aid) has not only done little good for the nations of Africa but has indeed caused great harm. While I don't necessarily disagree with her conclusion, I didn't find her arguments particularly convincing.

There is no question that much of the aid intended to build economies in Africa has been grossly wasted, stolen, and misused. There is little to show for the trillions of dollars that have been poured into the continent--a failure with numerous causes. But Moyo's show more main premise is that aid itself is the cause, that it creates a culture dependent on foreign handouts and rife with corruption that, according to the author, apparently wouldn't exist if aid weren't available. I find both arguments hard to swallow, especially since they are based mostly on the logical premise of cum hoc ergo propter hoc (with this, therefore because of this). In this thinking, when aid is given, the recipients don't develop other resources, therefore aid causes them to not try. It's the same argument that's been used for years to oppose welfare programs applied in this instance not to individuals, but to entire nations. I find that a little facile. I suspect aid fails more often because it is poorly structured and managed, an argument that Moyo essentially dismisses out of hand.

Whether you agree with Moyo's reasoning or not, you have to seriously question the solutions she proposes. While outlining a litany of worthwhile approaches to economic development including micro-lending, opening markets in the developed world to African products, and more foreign direct investment (FDI), her silver bullet is a solution only an investment banker could love: the bond market. Somehow, Moyo expects the magic of the free market financial system to end corruption in Africa, stop wasteful spending, and power the continent out of poverty. I react to that proposal the same way Jaime Talon, one of the lead characters in my novel, Heart of Diamonds, did when confronted by a similar argument about a panhandler in New York: "What matters is that right now--today--that man over there is hungry. Somebody needs to do something about that, not just ignore it and hope the holy and all-powerful market economy will provide a solution."

I have to ask, given the brilliant performance of Wall Street and Fleet Street in providing structured finance for America and Europe, how can we expect them to solve the problems of Africa? These are the people who brought us sub-sub-prime mortgages wrapped in gilt-edged bond ratings and called gold. Their ability to assess risk and police wasteful government spending in Kinshasa is rather suspect, at least to me. I also fail to see how corrupt leaders and their minions will be any less likely to steal funds from private lenders than they are from the World Bank. Perhaps my most significant objection, though is when Moyo says the developing nations will be better served paying ten percent interest (the rate she quotes for emerging market debt in 2007) than the 0.75% they are charged by the World Bank. How does that work to anyone's advantage other than the investment bankers?

Don't misunderstand my review. I agree with many of Moyos' conclusions and her objections to the current approach to foreign aid. Mandating the purchase of American products with American aid dollars, for example, is enormously wasteful, self-serving, and undoubtedly harms the African farmers and manufacturers such aid could help. She's also dead on when she calls for an improved business climate in Africa so that direct investment, both foreign and local, stands a better chance to succeed.

Pulling Africa out of the swamp of poverty is a complex operation. I applaud Dambisa Moyo for presenting a provocative set of arguments in clear, understandable layman's prose. Dead Aid brings an important subject into the public eye. show less

Does anyone really need to be convinced that monetary aid doesn't work, and particularly doesn't work for Africa? Apparently so, because Western politicians and Western celebrities continue to send money to despots and stage ridiculous "benefit" concerts and drives to wring even more out of taxpayers. Why do they do this? I suppose they have to assuage their misplaced guilt somehow, and it's much easier to throw money at a broken system than to do the work to figure out how to make it functional. I can't know their motives, really. Maybe they honestly don't see what's right in front of them and the rest of the world: aid hasn't helped Africa. On the contrary, Moyo argues that it has severely damaged the economies and cultures and show more governments of those African countries that have relied upon it (some for 97% of their income).

The United States has given a trillion dollars to Africa over the past few decades, and what is there to show for it? Widespread corruption, poverty, and disease, and shrinking economies. And Moyo argues that aid is not neutral -- it hasn't simply failed to fix these problems. It has caused them. Free money rewards despots and encourages armed conflict. It discourages initiative, industry, and entrepreneurial spirit. It harms those few individuals who are working hard to better their lot -- Moyo gives the example of the African mosquito-net maker who is put out of business by the arrival of 100,000 donated nets from foreign do-gooders who purchased them from non-African manufacturers.

So, what's Moyo's better way for Africa? Free markets. Trade. Foreign Direct Investment. Micro-loans. In short, business. It's not personal guilt-driven "philanthropy" that will help Africa, in the short term or the long run. It's healthy, not-excessively-regulated business. It's already been proven that these methods work, see India and China or South Africa for examples.

I don't think Moyo's argument is perfect here, and not everything in this book is convincing. It's not terribly well-edited or well-documented, and it's not too accessible for the non-economist layman. (She does say that it's written for economists and policy-makers, not necessarily the casual reader.) But I think, generally, she's right and says things that absolutely must be said and heard. show less