Wednesday, November 23, 2016

Dead Aid - Book Recommendation

By Anthony:

I recently finished reading "Dead Aid" by Dambisa Moyo and would like to recommend it to you. Parts of the book are really easy to read, but to be honest, a huge section in the middle is really dense and tough going because it is about economic details that were over my head.  But really I think you could still get a lot out of reading this book even if you skip/skim much of that section.   Most important, it is written by an African author, and it is good for us to hear African voices about aid to Africa.

Generally Moyo's argument is that billions of dollars in aid have been given to African countries over the last fifty years and yet the level of poverty has largely remained the same.  Moyo argues that not only is aid ineffective but that it has contributed to many of the problems in Africa such as corruption and dependency.  Moyo argues that it would be better to stop giving aid completely, but we should do so gradually over a five year period.  She is not talking about disaster relief aid or the aid work of small organizations.  She is referring to the large scale aid given to African governments from other countries (through grants and loans).  After advocating for aid to be cut off, she proposes various other solutions for bringing development to Africa.

I'm actually rather attracted to her idea.  I don't think I would actually advocate for it (way too risky and maybe cold-hearted).  But I do wonder what would happen.  I think at first probably a lot of people would die, especially those most vulnerable.  But perhaps in the long run I could see a lot of change happening once Africans realized they could not be dependent on aid and then real development could happen.  Perhaps Moyo is taking the long view, big-picture, perspective.  It is certainly arguable, I think, that although her idea would cost a lot of lives at the beginning, that in the end more lives would ultimately be saved through finally addressing systemic issues and finally having African countries develop and be less dependent.

“With an average per capita income of roughly US$1 a day, sub-Saharan Africa remains the poorest region in the world.  Africa’s real per capita income today is lower than in the 1970’s, leaving many African countries at least as poor as they were forty years ago.”

“life expectancy has stagnated – Africa is the only continent where life expectancy is less than sixty years; today it hovers around fifty years, and in some countries it has fallen back to what it was in the 1950’s (life expectancy in Swaziland is a paltry thirty years).”

I found much of the book compelling, but it's a far from perfect book.  There are problems with Moyo's research, argumentation, and proposed solutions.  I'm not an expert and simply don't have the time or motivation to hash out all of those problems.  I will just comment here that I agree with the reviews that while aid has at times been a big problem, there are discernible accomplishments from aid over the past fifty years that should not be discounted and Moyo did not mention them.  Aid is not wholly evil.  It can accomplish much that is good.  You can read about the other problems of the book in these reviews:

Why Dead Aid is Dead Wrong
Review: Dead Aid - The Road to Ruin
Review of Dead Aid by William Easterly 

I think the book is incredibly thought provoking and it will open your eyes to the larger world systems of aid, grants, bonds, corruption, economies, and governments.  That is why I suggest the book to you.  Here are a few other things that I thought were interesting or that I appreciated:
  • Moyo does a great job at examining the paternalistic aspect of aid.  She is tired of Africans and African countries being treated like dependent children.  She is tired of Western musicians like Bono having more of a voice than the leaders of African countries.

    Quote with some paraphrase - “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.”  [Instead, this responsibility has been left to musicians and actors like Bono.  Because of this, debates about the pros and cons of aid have stopped.]  “As one critic of the aid model remarked, ‘my voice can’t compete with an electric guitar.’
  • Her examinations of corruption in African countries was very interesting and depressing.  So much aid is given to corrupt African leaders who use their money on themselves rather than their people.  Unfortunately Western countries seem to keep giving more and more aid to such corrupt governments, even to leaders who are dangerous dictators.  Moyo mentions Bokassa's coronation as Emperor of the Central African Empire in 1977 and how he spent $22 million on the event.  Unfortunately aid often fosters corruption.  At least this is what Moyo argues and it makes sense to me.  It can prop up corrupt governments, keeping them in power.  I have heard about this happening on the small scale of Western aid given for NGO work countless times while in Uganda.  If it happens on the small scale level of aid so commonly, then it only makes sense that it would be also be happening on the large scale in governments receiving aid.  
  • I was disturbed by learning in this book about all the loans given to African countries by Western governments and how it is basically impossible for them to ever be able to pay them back because of the interest that has accumulated. Unfortunately, some of the loans were given to corrupt pockets and the money was not used to build up infrastructure so there is not enough money today being produced to pay back the loans as intended.  And when countries default on the loans, there is not much Western countries can do about it.  Western countries cannot give severe penalties because we do still want to help countries who are in poverty.  I've read some other books lately that argue that these loans should be forgiven.  I have no idea of the correct solution to this problem.  It's just depressing to think about.
  • I learned about how much aid is given that doesn't have any good impact.  Quote - “A World Bank study found that as much as 85 percent of aid flows were used for purposes other than that for which they were initially intended, very often diverted to unproductive, if not grotesque ventures.”
  • Moyo has a long section about China's involvement in Africa.  This was super interesting to me as we saw a lot of Chinese influence when we were in Uganda.  I thought her analysis was pretty well balanced, though some of the reviews disagree.  The Chinese are investing in Africa in a huge way.  And both sides are benefiting.  The Chinese gain from the African natural resources that they need, and the Africans are benefiting through the developments of infrastructure that the Chinese are bringing.  It is true that the Chinese work in Africa in a way that is not always good.  For example, there are some labor abuses and environmental degradation.  But generally, we've seen in Uganda at least that the Chinese are bringing good infrastructure help and providing jobs, and that is one of the things that people need most in Africa, not more aid, but more jobs.  I wonder if more of these kinds of relationships (that are just and equitable without the abuses), are really what is needed.  If the US could stop giving so much aid but instead partner with African countries in a similar way, could that really turn the tide and bring real development?  Honestly though, I don't know enough about the details about how China works in Africa to know how well it's working, and it's also probably different in each country.
  • I thought it was incredibly interesting thinking about what Moyo said about why few companies and businesses from other countries come to Africa to set up shop here.  (though the Chinese are perhaps an exception).  Generally companies don't want to come because of the poor infrastructure, poor power supply, poor roads, poor telecommunications, because of the corruption, all the bureaucracy, all the red tape and complicated regulations, the fact that the rules are not clear, the fact that investors don't know where to go or who to ask, not to mention the risks of war, unrest, poverty, disease, terrorists, and other social problems.  Investors have a bad image of Africa.  This makes sense to me.  But it is so unfortunate, because one of the best routes to development in my mind would be more American companies coming to Africa and providing jobs.  I realize this is the same thing that Americans are complaining about as they want the jobs to stay in the US.  Our world is a complicated place.  

    Quote illustrating the red tape
    - “In Cameroon, it takes an investor who seeks a business license on average 426 days to perform fifteen procedures.”  Quote -  “The Commission for Africa notes that Uganda’s economy grew by around 7 per cent between 1993 and 2002 when the country improved its regulatory climate.  It also reduced the number of people living on less than a dollar a day from 56 per cent in 1998 to 32 percent in 2002 after the government introduced measures to attract investors.”
  • Moyo examined the trade rules around the world, as well as Western subsidies for Western farmers.  Quote - "Estimates suggest that Africa loses around US $500 billion each year because of restrictive trade embargoes - largely in the form of subsidies by Western governments to Western farmers."
  • Some last quotes I found particularly good or thought provoking - 
President Kagame from Rwanda said,Now, the question comes for our donors and partners: having spent so much money, what difference did it make? In the last 50 years, you’ve spent US $400 billion in aid to Africa.  But what is there to show for it?  And the donors should ask: what are we doing wrong, or, what are the people we are helping doing wrong? Obviously somebody’s not getting something right. Otherwise, you’d have something to show for your money.  The donors have also made a lot of mistakes.  Many times they have assumed they are the ones who knew what countries in Africa need.  They want to be the ones to choose where to put this money, to be the ones to run it, without any accountability.  In other cases, they have simply associated with the wrong people and money gets lost and ends up in people’s pockets.  We should correct that.” 

“Senegal’s President Wade remarked in 2002: ‘I’ve never seen a country develop itself through aid or credit.  Countries that have developed – in Europe, America, Japan, Asian countries like Taiwan, Korea, and Singapore – have all believed in free markets.  There is no mystery there.  Africa took the wrong road after Independence.’”

African proverb book ends with - "The best time to plant a tree is twenty years ago.  The second-best time is now."


  1. Thanks for the great book review Anthony. It sounds like similar themes to the movie, "Poverty Inc.". Certainly the history of aid on the African continent deserves some thoughtful review. We also need to be diligent in our current aid efforts to encourage independence, the development of local industry and skills, and dignity to all recipients. Interesting African proverb to end the book. I could interpret that in a couple of different ways!

  2. Thanks for provoking more thinking, Anthony. I very much appreciate Partners Worldwide's approach to poverty -- experienced business owners mentoring other business owners in developing countries. Those local businesses then provide profit and jobs for others. I'm sure you are familiar with their work. Of course that's on a small scale, but very effective. Truly free markets with property protection can go a long way towards alleviating poverty.

  3. Thanks for the comments. And Sharon, I really like Partners Worldwide as well

  4. Very interesting to hear from an African perspective. Thanks for sharing.