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Wednesday, September 05, 2007

Money Won't Solve Africa's Problem

Shockingly, despite around 50 years of independence for most African countries, many are worse off today.  Is this because of disempowering foreign aid?  Despite growing aid the number of poor in Africa continues to grow, reportedly doubling in the past decade.

Christian Science Monitor's Danna Harman asked more hard questions about the West's approach to Africa.  She gave two US economists the opportunity to debate Western Aid in relationship to Africa.

The two major schools of thought are 1) Governance first, improving local governments; 2) Poverty first, reducing poverty.  A third group says foreign aid is vital, but changes need to be made in the process.

William Easterly a professor of economics at New York University asks where the money spent already has gone and concludes that

...aid can certainly help alleviate the suffering of the poor, but that "the problem with aid is the people implementing the aid projects have weak incentives because they are never held accountable for results."

Jeffrey Sachs, Columbia University economist and UN Millennium Project director, takes the opposite view saying

...that the US spends more than $600 billion per year on the Pentagon, and less than one-hundredth of that in help for all of Africa. "One day's Pentagon spending would pay for all the bed nets [to stop malaria] for every sleeping site in Africa for five years," he charges. "People are hungry. People are dying. There are countless proven and effective ways to help, and which can extricate people from poverty in the long run. The drama is whether American politics can rouse itself to take note."

I feel the third group is the best place to be.  We should be focusing on both improving governance and supplying aid in an efficient and effective manner.  PEPFAR (President's Emergency Plan for AIDS Relief) is attempting to do this by providing grants to organizations as well as well-governed countries.


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ChrisB said...

In an interview with Spiegel, an African economist said Western aid was hurting Africa.

Also, Diane @ Crossroads has looked at this question with some useful insights.

crossn81 said...

Thanks for the links. It is good to see others are thinking critically about these issues as well. Diane's thoughts on adopting churches is a great model and idea.

Diane R said...

I did a short series on this subject not long ago and from my reading I became fairly convinced that giving money to governments, no matter how well they seem to be run, just doesn't work because of the beaucracy and corruption. Micro-economics where NGO's working with local villages seem to be very effective. Heifer, Int'l. is one such program where locals get an animal either for plowing or eggs or milk or meat. They receive training and support and also must promise as soon as they have animal offsprings, to share at least one with someone else so they can be empowered too.

sangwa said...

I think that the goals are not mutually exclusive. The aid given to Africa during the cold war was targetted not at the population but at the dictators (ex. Mobutu, Boigny, Kenyata...).

Now aid should be given to strenghten local governance (case 1 and 3). That aid should also be coordinated by national governments as to prevent program overlap and encourage donors to give.

Poverty reduction is the goal not the means to achieve it.

crossn81 said...

Sangwa. thanks for commenting. I like your thought about poverty reduction being the goal, not the means. It is a good thing to keep in mind!