Aid and development


Perhaps it is serendipity, but Dambisa Moyo is on every channel and newspaper that passes before my eyes. Her current media presence is on the back of her popular new book, Dead Aid, a sustained indictment of aid as a route to development. The fact that Dambisa Moyo was born in Zambia are perhaps giving these arguments more publicity than previous criticisms of development aid. Though previous criticisms of aid are no less true, her media skills bring a vibrancy to the defence of free markets and trade at a much needed time.

Digging out a copy of Eat the Rich by the idiosyncratic P. J. O’Rourke, and turning to the chapter on Tanzania, the futility of aid is laid bare:

Tanzania has been smothered in help. It has received loans, grants, programs. Projects, an entire railroad from the Chinese government (running 1,200 miles to nowhere in particular), and just plain cash. In 1994, by World Bank tally, foreign aid made up 29.1 percent of the Tanzanian GDP, more than the budget of the Tanzanian government.

O’Rourke was writing of a time before the government rejected the socialism of ujamaa in favour of elements of market liberalization. As a direct consequence, its GDP has grown dramatically. Dambisa Moyo in this interview on the BBC makes the point that African countries do not need to do anything special, just copy policies that have led other countries to profound economic growth. As the ASI’s President, Dr Madsen Pirie, wrote last year as part of the popular Common Error series:

The unusual condition is wealth. This is what changes things. We should ask what are the causes of wealth and try to recreate and reproduce them. When you ask the wrong question, "What causes poverty," you end up with wrong answers. People fall into the trap of thinking that the wealth of some causes the poverty in others, as if there were a fixed amount of wealth in the world and that rich people had seized too large a share of it.