(Not) the last word on the anti-Bono

The NY Times, National Public Radio, the Financial Times,the BBC... I can't get away from Dambisa Moyo! At least we're starting to see refutations of her statement that aid to Africa has been an ""unmitigated disaster." Sadly, perhaps, no one with the status (or at least, the publicity) of Ms Moyo herself is picking up this argument.

Bono's .org for aid to Africa, ONE, has posted the following:

• Since 2002, more than 2 million Africans who might have otherwise died are on life-saving anti-AIDS medication;  
• between 2005 and 2007, in Rwanda and Ethiopia malaria cases and deaths were more than cut in half thanks to a dramatic increase in bed nets and access to anti-malaria medication.  
• since 1999, 34 million more African children are going to school for the first time;

All of these successes are directly attributable to a combination of increasingly effective aid, improved African governance, targeted debt relief and the hard work of people in Africa. [ONE doesn't support the direct attributions with a link, however.--Ed.]

Bono himself hasn't gotten involved. Instead, noted-but-overstated economist Bill Easterly has issued several counter-refutations of the ONE article, without really offering his opinion of Ms Moyo's book. (He likely finds it convenient but insubstantial.) Fortunately, David Roodman of Center for Global Development has at least taken the time to declare the book "sporadically footnoted," "selective in its use of facts," "sloppy," "illogical," "simplistic"   and "stunningly naive"--providing at least a mote of evidence for some of these adjectives and adjectival phrases.

The blogs and comments at the Guardian, the BBC and other UK-based sites are filling up with invective ("imperialist!"). In the US, Ms Moyo's media coverage provokes little popular response. Why is this?"

Another Ms Moyo weighs in on aid

Some years ago I was working with a small NGO in the Matabeleland South province in Zimbabwe. We were supporting the Zenzele Women's Goatkeeping & Development Group outside of the town of Gwanda by, among other things, conducting a two-week practicum on water harvesting. The goal was to help the women (who sang every day as we trekked out to their hectare garden plot) increase their crop yields, enabling them to sell more vegetables to their neighbors and others in the vicinity.

We measured slopes, we dug channels, we piled berms. We were guided by a German guy who had developed techniques for making community-built dams for the Swaminathan Foundation in Pondicherry. (He sounded exactly like my grandmother, from Alsace, by the way.) The challenge in Mat South is that rains come only one month out of the year--December I believe, IF they come--and typically wash away the topsoil without soaking deeply into the earth. An additional challenge is posed by the fact that the Ndebele people who occupy these lands were historically speaking, semi-nomadic pastoralists rather than farmers. Farming was not among their traditions at the time that their movements were constrained by Rhodesians arriving at the turn of the 20th century to take over land and launch Zimbabwean agriculture.

OK, we dug, we piled, we talked, we sang for a couple of weeks. These enterprising women discussed their various lines of business: gardening of course, and the had a milk cow, and they sewed school uniforms. And of course they kept goats, or rather, their kids kept the goats but the women sold them off for local consumption.

At the end of the workshop, we had a review session. After all that work, the women of the Zenzele group were somewhat enthusiastic, politely so, but they hadn't been blown away by the assembled experts and effort.

I asked Ms Moyo, who was sort of their leader, ""What is it that you really want to find out? What would be the most help for your group?' She said, ""Well, we have all these businesses, and we are making money..."" (Murmurs of jubilant assent.) ""... but we don't know how much money we are making, we have no records."" Ah. :""And so,"" she went on, ""We don't know whether to buy another milk cow--we can always sell milk, no matter what--or buy more sewing machines and fabric for the uniforms or rent another farmer's plot. If you could help us figure that out, we would be all right."" (Murmurs of concurrence.) So we had taken 2 weeks of their time, focused on water harvesting to improve cropping, and these women weren't sure--and had never been asked--whether cropping was a potential profit center or not.

It's almost enough to make me agree with Dambisa.

Slowly I turned, step by step, inch by inch... Dambisa Moyo!

Professor Dambisa Moyo has been flogging her book, Dead Aid, over the past few weeks on National Public Radio. I'm sorry, but when someone from a privileged background (OK, in Zambia) works for Goldman Sachs and the World Bank and then announces that aid doesn't work and that no one in Africa wants it, well, it just makes me ill.

Wm. Easterly and Ms Moyo to the contrary, I believe that there's a reasonable amount of evidence that aid works when it's well applied, well monitored, and well conceived. At the least, it's an arguable proposition that has been well-supported by empirical studies, even if those studies have themselves been contravened.*

More specifically, Ms Moyo says in her radio interviews that investment by the private sector will support infrastructure development and service provision, just as it does in OECD countries. Really? The autobahns of Germany were funded by the private sector? And healthcare in the UK and in France are private-sector goods that just happen to be provided to all citizens because it's a profitable undertaking?

Sure, as Ms Moyo points out, entrepreneurship, asking people what are their problems and what are their dreams is vital, supporting entrepreneurialism is vital.  But to dismiss aid in favor of entrepreneurialism when the Chinese government is essentially telling African governments and businesses, "We'll invest, and we won't ask questions," at best betrays a strong bias, and is at worst criminal. 

School completion, health care, peacekeeping, good governance--these are all areas in which aid has been proven at least provisionally to be efficient and effective. Infrastructure development, as I see it, is challenging because there are huge sums being wagered in countries that have few checks on nepotism, kick-backs and privateering. To argue, as Ms Moyo does, that aid should be rejected in favor of private-sector development is to argue, really, that the rich should get richer both at home and abroad, while the poor should pound salt.


* From the NY Times review of White Man's Burden: Easterly acknowledges that not all foreign aid has failed. In public health and school attendance, where results are relatively easy to measure, focused efforts have made a huge difference. The easier it is to see whether aid is working, he argues, the more likely it is to succeed.

The end of aid, again?

NY Times magazine profiles the economist Dambisa Moyo, a native of Zambia by way of Harvard and Oxford. Her upcoming book, "Dead Aid," calls (apparently) for an end to overseas development assistance, such as that provided by USAID, DfID, the World Bank, and so on, within five years. Ms. Moyo argues that China, which has received small amounts of aid over the past 40 years, has far outstripped African countries during that period based on hard work, and lots of it.

Think about it this way — China has 1.3 billion people, only 300 million of whom live like us, if you will, with Western living standards. There are a billion Chinese who are living in substandard conditions. Do you know anybody who feels sorry for China? Nobody.

Foreign aid, on the other hand, fosters a do-nothing culture that de-emphasizes entrepreneurialism and self-reliance while encouraging corruption on the part of political leaders and bureaucrats. 

Who could argue with her premises?

(I was driving south in Rwanda once, along the eastern shore of Lake Kivu heading down to the border of Congo. The road was semi-bad, we were traveling about 20 km/hr. In one town, kids lined the street and chanted from their French primers, "Donnez-moi un biscuit, donnez-moi un biscuit." The driver, Felix, stopped our vehicle and said to the children, "You have learned a bad lesson.")

William Easterly of course has pushed similar thinking for the past decade or so, citing evidence that only direct foreign investment--not aid--has been linked to improvements in per-capita GDP. And as I've written elsewhere, governments in Indonesia and other parts of Southeast Asia are less than willing to accept World Bank funding--at least, this was the case in summer of 2008--preferring to look for ways to access the Bank's specialists' expertise and that of Bank consultants rather than assuming debt and the strings attached to it.

Does the convergence of these events and opinions signal that we might be reaching an inflection point in our relationship to overseas assistance?

Sure, yeah, maybe. In the U.S., microfinance (don't think large-scale, such as FINCA and Grameen, think micro-donor-driven kiva.org) is still wildly popular, in part because it's more in line with Americans' self-images and bootstrap ethic. But Easterly, IIRC, also demonstrates that micro-finance doesn't lead to economic development. Individuals benefit, but there's no dissemination of the entrepreneurial spirit and, of much greater importance, no significant increase in the money supply. The micro-entrepreneurs make out (although less clearly and less often than is touted by Grameen), but it's at the expense of other, less-well-capitalized or less-well-run local businesses and individuals.

So, per Easterly and per Moyo, the goal is DFI, direct foreign investment. But it's difficult to imagine that a competition among kleptocratic governments in African and Asian countries and multi-national corporations in rich ones, plus China, is the most effective way to generate real benefits for rural and urban poor. The phrase "Race to the bottom" doesn't adequately encapsulate the environmental, cultural and economic costs of this free-for-all.

(I've seen the tailings that flow out of the Freeport-McMoRan coppermines in Timika, West Papua, still. I've been told that the majority Indonesia shareholder in that mine is a single anonymous individual (nee Suharto). The copper, gold and revenues have unimpeded transit out of Papua. Sure, perhaps there's a trickle-over effect when mine-derived capital is reinvested in an Indonesian mobile-phone company, but the local costs clearly exceed the local benefits.)

The answer, I'm sure, isn't telling poor-country governments to "brace up" for an end of aid and a return to private-sector primacy. Nor is it unloading millions in unwanted aid from above. More from Ms Moyo:

‘‘Dead Aid,’’ as your book is called, is particularly hard on rock stars. Have you met Bono? 
I have, yes, at the World Economic Forum in Davos, Switzerland, last year. It was at a party to raise money for Africans, and there were no Africans in the room, except for me.

I contend that the answer lies in a much more nuanced mix of aid and investment, with both types of in-flow subject to greater oversight, much more participation in decision-making by the grassroots, and with measures that balance social spending--on, say, schools and hospitals--with support for small and micro-businesses with large-scale DFI. World Bank personnel, as far as I can tell, have some idea of the problem and of solutions of this style; it's doubtful that they have the skills or mechanisms to pull together such an admixture. 

Admittedly, it's tougher than telling Bono to get stuffed.