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

• Author: Michael A. Clemens
• Position: Research Fellow Center for Global Development
• Pages: 53-54

Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africa. Dambisa Moyo. Farrar, Straus and Giroux, New York, 2009, 188 pp., $24.00 (paper).

Page 53

Thesis of a rigid revivalist

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.

I take three things away as I finish the book: its indictment of the aid system is its most convincing and least original contribution; its proposed alternative to the aid system is the most original and least convincing. For these two reasons the book’s principal importance derives—appropriately—not from what is written therein, but from who wrote it. I will explain each of these points.

First, the book executes a stinging airstrike on several myths and profound flaws of the aid system. These accusations are generally accurate in some measure, well supported, and valuable. I’ll list just a few. Donors never had much basis for applying lessons from the Marshall Plan’s successes in reconstructing rich Europe to transforming a poor continent. Donors have frequently failed to contrive aid mechanisms that accurately and credibly punish failure in effective delivery, or reliably limit aid to corrupt regimes. The latest debt crisis was less a sign of donors’ lack of the altruistic mettle to forgive debt than it was a sign that earlier rounds of debt forgiveness failed to touch the fundamental problem. Motivating aid through guilt and glamour is incompatible with fostering rigorous accountability for results...