Dead Aid

Well, Jodie is out of town for a few days, so I did the first thing that most normal people would do with a house all themselves. I broke into Jodie's room and raided her library (okay, so I had the key to her room, but I could have also picked up one of the books I brought that I still haven't read). I haven't been reading many books for a while (I still devour The Economist), but I polished off a book in less than 48 hours (and I'm trying to decide what I'll read next). So, reverting to my old book review style, here goes.

*** Dead Aid by Dambisa Moyo - I'm pretty sure that this was the big development-book-worth-reading of 2009. It was written by a Zambian woman who has spent most of her professional career in Western financial institutions. Her central thesis is that foreign aid has pushed the African continent backward economically, and the only way for it to develop to its full potential is to bring aid flows down to zero. It's probably worth noting that when Moyo says "Africa" she is referring to sub-Saharan Africa. She never mentions this or explains her choice, and although I can understand why it makes sense in the context of the book, incorrect use of geographic terms bothers me a bit.

I guess it's pretty easy to get through a book that quickly when it's only 154 pages (plus foreword, intro and a rather brief set of citations). 154 pages means that the author is either very good at arguing her points, or puts forward some rather flimsy arguments. Unfortunately, in this case, I feel that it was the latter. Although I agreed with some of her major arguments, I disagreed with a healthy share as well, and the weakness of her arguments only served to make me feel more confident about my stances.

Many of the data she presented were put up without any citation. I suppose I could make some pretty compelling arguments if I didn't have to cite my data. She wrote a long section on how the Chinese are much more popular in Africa than Americans especially in terms of commerce. I can only draw my experience in three countries, but I've seen a lot of skepticism toward Asians (especially in rural settings, all people of Asian descent including Asian-Americans are assumed to be Chinese) where people will blindly follow the advice of someone who is American (which is usually a risky strategy). She even cites the example of Chinese built roads across the region and says that they are as smooth as the ones in California. At one point, I asked a Kenyan friend why one particular stretch of road was in such good shape. He explained that it had been built by the Japanese, so it was much stronger, while the Chinese-built roads are filled with potholes (and worse) before the next stretch of road can be completed. Regardless of whether his account was true (and I heard similar tales from many others), it hardly supports her statement that the Chinese are liked by most and much more popular than Americans.

She also condemned virtually all forms of foreign assistance, with only a slight mention of possible benefits that could arise from humanitarian relief (of course, the horror stories from humanitarian relief tend to be rather terrifying). In some cases, people arguing for modest budget cuts put forth the argument that it should be done with a scalpel, not with an axe. I feel that aid budgets should be cut with an axe, not with a guillotine. She acknowledges that there have been some effective campaigns, but feels that the abundance of overwhelming failures means that it should be foregone in all cases as the market offers more effective tools. I agree with most of it, except that I think that there are lessons from the success stories and the failures and a much leaner program with highly accountable officials could deliver some effective results. Moyo dismisses PEPFAR outright, while I feel that it has been one of the most effective campaigns to deliver anti-retroviral drugs to people living with HIV/AIDS (ARVs to PLWHAs for those who love acronyms), which offers tremendous benefit to both the donor and recipient countries (although the program certainly could be made more efficient).

I had to cede the point on trade and agricultural subsidies, since I know very little on those subjects. Still, I worry that her desire to end all US agricultural subsidies would be just as disastrous, and it comes down to finding the ones that offer a good return for the spending and cut the ones that don't. On the other hand, she picked a fight with Paul Collier on a point (I read The Bottom Billion two years ago and liked it much better) where it seemed like she was misrepresenting his argument. In fact, she brought in arguments from a lot of the major thinkers in this field and explained why they were all wrong and occasionally cited them when their arguments meshed with hers (and sometimes took jabs at them even as she was agreeing with them). As much as I love picking on certain people who she was picking on, I found myself mentally defending them as she tore them down.

Still, she writes with a voice that is easy to listen to. And she raises some very serious issues that warrant addressing. So while I would recommend picking up this book, I definitely advise doing it with a critical eye. Although she is Zambian (most of the other popular aid books are written by white males who have spent a lot of time in the system), at times, she seems a bit removed from the context that she is writing about. Her stronger credentials more likely come from her experience in finance and markets and lead to a book that focuses on markets as the solution to all woes.