Find us on Google+

Friday, 6 March 2009

Dead Aid, By Dambisa Moyo ( A Review)

By Chola Mukanga

The question of international aid to developing countries is one of the most controversial subjects in modern development literature. One simply needs to look at any local bookshop under the “current affairs” section and you are hit with many large and often time consuming volumes on the subject. So when I stumbled on Dambisa Moyo’s book at my favourite bookshop (Waterstones Charing Cross Station), I felt a mixture of delight and nervousness. Delight because here we have a Zambian academic weighing in on a subject that has been the preserve of self-appointed “development experts”. This should fill every Zambian with pride and admiration. God knows we have so few Zambian economists ready to engage such serious issues, let alone publish a book on it. That feeling quickly gave way to nervousness because with so much written on this topic by leading experts such as Easterly, Collier, Riddell and others, could Dead Aid really offer any fresh thinking on the subject?

I have always found it challenging to review papers or books penned by fellow Zambians as my natural propensity is to cheer every sentence and offer support. But of late I have found the call to review Dambisa’s book too loud to ignore and so here I pen my thoughts and establish what I hope will become a regular feature of this blog, where we will review new books that pertain to issues frequently discussed here. It’s right and proper therefore that our first book for review should be written by a fellow Zambian economist with the calibre to rival any. Dambisa Moyo has an exceptional CV having worked for Goldman Sachs for the last eight years and in possession of a PhD from Oxford University completed under the professorship of Paul Collier. Simply put, Dambisa has the qualifications and background to tackle this important issue.

So what is the Dead Aid proposal?

Dambisa is tired and frustrated by the aid apparatus that has not only come to “trap” poor and indebted African states but is, in her view, the root cause of poverty. The central argument of Dead Aid is that aid is the fundamental cause of poverty and therefore eliminating aid is critical to spur growth in ailing African states. Aid is the disease that we must treat to bring us back to full economic health. A bold and daring statement built around the central belief that aid distorts incentives among policymakers and society at large. It makes governments less accountable to their citizens and has led to civil wars, rampant corruption (electoral and otherwise) and has been central to an undercurrent of irresponsibility culminating in increased and self-reinforcing poverty since independence from colonialism. None of these arguments are new of course, but Dambisa is probably the first economist to boldly claim that aid causes poverty.

If aid is the disease that causes endless bleeding, to stop the bleeding you simply need to stop aid, the only challenge therefore is how to do it. The Dead Aid solution is a five year exit strategy built around the idea of incentivising poor countries to access finance on international markets, supported by the tripod of microfinance, trade/FDI and remittances. In the Dead Aid world there’s a stash of money out there on the international financial markets that is just waiting to be tapped by any African country willing to invest in a credit rating. If African countries can enter these markets and borrow, it would provide the right incentives to spark good governance since the international markets would be more willing to “punish” bad behaviour compared to those that provide aid at infinitum. In other words, borrowing through international financial markets is a sort of "self commitment mechanism" to good governance, and with that comes better long term prosperity. It is certainly likely to be slightly more expensive than “easy money” that concessional loans and grants bring, but by rejecting these overtures nation states will find themselves on a better path to prosperity. The trouble is that African governments have limited incentives to do this on their own, though some have made progress in this direction, so they need to be compelled through the Dead Aid proposal of terminating aid completely within a five year period.

Radical stuff indeed, but is it too radical? Depending on your view of aid, this is either the most ingenious idea you have ever come across or the most naive, if not downright reckless. At this present time when many western countries are tightening their belts and some are seeking aid (e.g. Iceland) due to the fallout from the credit crunch and many people are growing weary of Darfur, Guinea Bissau, Mauritania and Zimbabwe, the Dead Aid message is likely find some appeal not just in your Daily Mail or Fox News of this world but also with far right groups like the British National Party. It’s the seriousness of this issue and it’s far reaching implications that require us to examine objectively the radical Dead Aid ideas. I am afraid to say, and with deep sorrow, that the Dead Aid proposal falls far short in many areas, with atleast four worth highlighting.

First, there’s a general lack of clear analytical rigour evidenced by elementary confusion in key areas : correlation/causality issues; definitional problems; poor evidence on policy counterfactuals; incomplete and unbalanced citation of evidence; and, perhaps more worryingly lack of general familiarity with refined areas of existing literature. Too many problematic issues to cover within this short review, but some key examples are worth highlighting. In a number of instances Dead Aid embarrassingly confuses correlation with causality. For instance the correlation between foreign aid and savings, which Dambisa takes as strong evidence that foreign aid reduces domestic savings. It does not take a genius to work out that one expects poor nations to correlate with reduced domestic savings, and in so far as foreign aid is prevalent in poor countries, the issue of correlation between higher aid and low domestic savings becomes meaningless. Perhaps more worryingly is that in a number of places Dead Aid seems to rely on evidence just from single sources that always reinforces its general argument that aid is bad. So when Dead Aid posits that remittances are more effective than international aid, it ignores other studies that have shown remittances can also be a “curse”. Evidence of poor research abound, with one of the glaring examples being the lack of reference and consideration of new emerging literature led by Daron Acemoglu and others on the importance of drawing a distinction between proximate and ultimate causes for underdevelopment. In many respect if aid was going to be a factor it would be nothing more than a proximate cause because ineffective aid preys on inefficient states (or is it the other way round?), which are strongly determined by the existing distribution of power in society (ultimate cause).

Secondly, the treatment of aid in a homogeneous and aggregate way is particularly problematic. Dead Aid defines aid as the “sum total of concessional loans and grants”, but excludes “emergency aid” e.g. help for Darfur or the Asian Tsunami. There’s no distinction within Dead Aid between budget support, infrastructure aid, person to person aid, heath related aid, grants or concessional loans for discretionary spending. It is all discussed under one umbrella and handed the same fate. This is a remarkable assumption, especially given that the same book acknowledges the effectiveness of the Marshall Plan which largely focused on infrastructure spend. Surely the Marshall Plan demonstrates that a more nuanced assessment of aid has the potential to reach different conclusions? We may for example find that some of the aid is bad, some good and some requires further study. This distinction is also important because we are now seeing a plethora of literature that suggests that some mechanisms work better than others e.g. cash based incentives as recently argued by Göran Holmqvist . When Britain gave Zambia £40m in 2007, I remarked that "I hope the money was new but not given freely". It presented a new opportunity for Britain to think outside the box and consider the possibility of converting this "new cash" into long term Kwacha bond claims of Zambians on the Zambia Government. Such a move would have helped restore much needed accountability in our system as well as strengthening our debt management practices. Britain could have allocated a share of the bonds to civil servants as part of civil service pay increase and so forth. The underlying point here is that not all form of aid leads to perverse incentives and indeed not all forms of aid perpetuate dependency. To put all aid in one basket makes the book appealing to the uninformed but it does not make for convincing argument to policymakers.

Thirdly, Dead Aid is characterised by a plethora of inconsistent arguments. A key example that stands out is the emotive issue of Chinese investment. Dambisa dedicates a whole chapter explaining why the “Chinese are our friends”, largely arguing from their historical involvement in Africa and their renewed commitment to trade and FDI. However, against a backdrop of Dead Aid’s “anti-dependency” rhetoric , the chant for China appears odd. Let us be clear, China is not only bringing FDI to Africa but it has also brought concessional loans and long term dependency. Zambia’s external debt has now risen to about $2bn since the HIPC completion point, a significant part of that is through new agreements with the Chinese government and Chinese businesses. A closer look at Angola reveals the same truth. Not only is China investing heavily in that country but in exchange it is tying Angola and other countries to China for a long time reducing their options to renege in the future. That is not necessarily bad, but if the central worry is that dependency leads to ineffective governments with poor incentives we should be honest enough to consider the possibility that China’s closeness to many African governments (which are not all democratic) may have similar negative impacts as aid. In addition, a more refined assessment of the China – Africa relationship would reveal that the issues go far beyond simple FDI but also relates to military cooperation and sometimes creating instability in various parts of Africa (see Michael Sata’s paper). More recently we have witnessed General Nkunda during the recent upsurge of violence in DRC use the China-DRC deal as a pretext for his insurrection, part of the so-called Coltan wars.

Another glaring inconsistency relates to the preferred metrics of measuring the extent of Africa’s aid led failures relative to the assumed metrics for measuring the success of proposed solutions. In assessing the state we are in, Dead Aid relies on national indicators such as GDP, life expectancy, level of external debt and so forth. However when it comes to assessing the extent to which the proposed solutions might be useful the book does not always stick to a consistent set of measures. For example to support the argument for microfinance, we are told Grameen Bank has helped lift many poor people out of poverty through helping “bank the unbankable”. Regular readers will know that I am a fan of microfinance and a strong believer that aid properly directed at providing the right sorts of incentives, like IFAD are pursuing in Zambia to boost rural finance through the NARBARD style model , can produce positive results. What is particularly puzzling about the Dead Aid position is that if the metric for judging the effectiveness of microfinance is “lifting people out of poverty” at the micro level why not use the same measure for aid? If we are going to argue that remittances help bypass bureaucracy and can be effective in tackling schooling, not necessarily increase national GDP, why can’t we accept that the metric of “school attendance” is just as good a measure for assessing the effectiveness of certain aid interventions? Conversely if we are to judge the failure of aid interventions on their inability to raise national GDP (all things being equal) why don’t we accept that no empirical study to date has demonstrated that large initiatives of providing microfinance (e.g. in Bangladesh) has led to increases in GDP? The underlying point is that Dead Aid too often moves around between inconsistent measures for the problem and suggested solutions. This is not a robust way to undertake analysis. Incidentally the IFAD initiative is a good example of effective aid that is unfortunately ignored by Dead Aid.

Fourth and finally, the solutions proposed by Dead Aid are ineffective. This is not surprising because without a clear definition of the problem, it is inevitable that the solutions would not work. But even if one was to accept Dead Aid’s basic premise that aid is bad, its solutions come far short. It’s quite obvious to any ordinary analyst that in order to assess whether any proposals would present an overall improvement beyond the status quo, we need to define what happens in the counterfactual carefully and then judge that against proposed policy initiatives.

In our scenario the counterfactual is the situation where we continue with the current process. We know already that Dead Aid has not demonstrated that this situation would lead to more aid driven poverty . More importantly, evidence in recent years from Zambia, Uganda, Kenya Tanzania and other countries shows an improving picture in terms of economic performance. This doesn’t mean aid causes good performance, but it does suggest growth is possible in the presence of aid even for nations at the bottom. It is therefore possible that in the presence of aid we may witness an improving counterfactual over time.

Two important questions flow from the above discussion : (1) what would be the impact of turning off the aid tap on poor nations relative to the counterfactual?; and 2) would these developing nations be able to borrow on the international markets, as an alternative to aid?

On (1) there’s no doubt that the answer largely depends on the economic and political situation in relevant nation states. For those countries with 20 % – 50% of national budgets supported by donor partners the adjustment would be too difficult and politically unfeasible within the suggested five year time frame. The failure to implement their budgets would significantly weaken the human and physical infrastructures rendering these states ungovernable. More importantly locally targeted aid that is spearheaded by many aid organisations divorced from budget support would dwindle, possibly leading to multiple failed states. Dead Aid misses the point that even without aid, the incentive for military coups and emergence of vampire states would be remain because of the lucrative mineral wealth that exists. So the incentives for seeking alternative funding through financial markets as a way of survival are not always going to be as strong. Simply put for some countries turning off the aid tap would lead to chaos and breakdown in the rule of law.

On (2) it is quite obvious that with dwindling international capacity following the credit crunch which is likely to persist beyond 2011/12 there’s no immediate prospect of accessible markets with significant cash to spread around. Even if African governments had strong incentives to enter these sorts of arrangements and with good initial credit ratings (which is highly unlikely) the process may be too prolonged and the outcomes would be uncertain given prevailing global economic conditions.

In short on both theory and practice, Dead Aid falls far short of what is expected of a book advocating such a radical proposal of “turning off the aid tap”. If there’s any consolation in this assessment, it is that Dead Aid will hopefully not find any intellectual traction. The analytical consensus remains that aid is important and the challenge is how to make it smarter, better and ultimately beneficial to the poor. This question has never been more urgent given the limited aid resources around. Dambisa is certainly right about one thing, now is the time to examine these issues and we can certainly do better than the present!


Chola Mukanga is an economist and founder of the Zambian Economist which provides independent economic perspectives on Zambia's progress towards meaningful development for her people

Copyright: Zambian Economist, 2013

Facebook Page:

89 comments:

  1. Cho,

    Great review, and I have read it with interest.

    The central argument of Dead Aid is that aid is the fundamental cause of poverty and therefore eliminating aid is critical to spur growth in ailing African states. Aid is the disease, the treatment requires stopping the disease.

    I would like to see aid as part of a shell game, where countries in Africa hand their raw materials to the West, which in turn returns a fraction of that as 'donor aid' (continent wide a 1/4 of the value of Africa's raw materials exports).

    The purpose is control. If African governments were to receive the full value of their exports and without strings attached, the West would lose it's control over Africa's raw materials base and lands. In other words, Africa would go it alone. Now, they can 'withhold aid' at the drop of a hat.

    If African countries can enter these markets and borrow, it would provide the right incentives to good governance since the international markets would be more willing to “punish” bad behaviour compared to those that provide aid ad infinitum.

    So since when was 'bad governance' an obstacle to receiving 'aid'? The only bad governance that leads to an end to aid is challenging western ownership of African resources (Lumumba, Nkrumah, Kaunda, Mugabe), while the truly bad at governance stay in power forever (Amin, Mobutu, Bokassa, etc.).

    It will certainly be slightly be more expensive than “easy money” that concessional loans and grants bring, but by rejecting these overtures nation states will find themselves on a better path to prosperity. The trouble is that African government have no incentive to do this on their own and so to compel them to follow the Dead Aid path it is proposed that aid should terminated completely within five year period.

    The truth is not that African governments have no incentive to do this on their own. Popularity would be a huge incentive to a politician in an democratic system. The problem is that if they go against western interests, they end up as dead as Lumumba. That is the spectre hanging over African economic independence. That is also why politicians always look to the IMF, even before they look to their own electorate. This is direct violation of democracy itself.

    I would like to see a situation where African governments (or even properly taxed, African owned, private companies) receive full market value for their raw materials and redirect that money into other economic sectors like agriculture. However, in so many ways, it is not in the West's interst to do that.

    It's called neocolonialism, and it keeps Afric exporting raw materials, without even receiving full market value for them.

    ReplyDelete
  2. MrK,

    Thank you for your suggestion to review Bad Samaritans which sparked the interest to get this out of the way...as part of a regular colum.

    Since your comments, I have corrected some spelling errors, and added in a reference to a previous blog back in 2007, where I argued that instead of the British Government giving Zambia £40m (at the time) directly to government, they could have simply converted this "new cash" into long term Kwacha bond claims of Zambians on the Zambia Government. I believe there are many innovations one can make to aid to make it work.
    May be the real answer is as you say....foreign government perhaps don't want these government to be held responsible..if so, whatever mechanism African countries find..they will find ways for them to be undermined!!

    But I am an optimistic..so I'll put it down to poor thinking in aid departments!

    ReplyDelete
  3. Great review! Having not read the book yet, and having only seen short and shallow reviews, I now feel that I can happily leave it unread. Not because of her ideas, but because of the low level of arguments as you describe it.

    I'm however a bit surprised that you didn't discuss the possible differences in economic ideology, between economists like Moyo and the more typical "development" economists.

    To me Moyo's ideas are exactly the same that are gaining ground in domestic policy in Northern Europe (where I'm from), meaning a higher dependency on market mechanisms, at the expense of public solutions.

    ReplyDelete
  4. You have used you analysis based on a system which is widely regarded has an epic fail. Dambisa Moyo may have realised this already and I would like to think that's how she is highlighting the issue in this manner. You are probably experiencing that low feeling of suddenly becoming irrelevant. Sure, there is a better way!

    ReplyDelete
  5. Petter,

    Thanks!

    Yes, the question of ideology is an interesting one and an issue that is tackled at length in Bad Samaritans - the next book up for review.

    ReplyDelete
  6. smbale,

    okay! i don't fully understand your comment...perhaps if you came back with something more coherent...that will make for an intelligent conversation...

    ReplyDelete
  7. The government of Rwanda likes her ideas:

    http://www.radionetherlands.nl/currentaffairs/region/africa/090306-rwanda

    I doubt GRZ is interested in her ideas because they believe in the Donor Aid industry.

    ReplyDelete
  8. Thank you!

    I really like your writing and review style. As a Canadian, it is difficult to argue against a Zambian Economist about Zambia (though I fundamentally disagree with the premise of her book), so I really appreciate you reviewing the book. I will be sure to provide your review to any who hold up her book to me as a reason why the call for more and better aid should be stopped.

    Heather MacKenzie

    ReplyDelete
  9. Interesting review Cho. Not having much of an interest in "numbers", I ideally would not be drawn to reading anything close to Dead Aid. Admittedly, my interest in it has primarily been because it was written by a Zambian and (not unlike other authors that I may not be aware of I suppose), it is Afrocentric. My initial reaction to the book was to go with the flow following the Sky news interview that Dambisa had. Much to my displeasure, I found that I did not feel satisfied with the scanty knowledge I had obtained on Dead Aid - more questions than answers and I had a feeling of helplessness, to say the least.
    Not to bore you though, your review has somewhat got me interested again and intrigued as it is summarising core elements of what would otherwise have been a daunting reading of numbers for me. Clearly, it's not about numbers and it delves well in to Social aspects of development which I find appeals to me. It would be interesting if some of your readership out there would comment on your review as well as the book itself from the social sciences school of thought.

    ReplyDelete
  10. Cho,

    Great job on the review! Both thorough and informative, I hope that it will come as a relief to the publishers that your thoughtful treatment and elucidating argument have made it more likely that I will purchase a copy of the book for myself.

    While I admire the courage of Dr. Moyo for taking such a strong stand against perpetual dependency, I find that I must agree with Cho that for most African nations a five year timetable would be dangerously destabilizing. I should note that I have not read the entire text of the book, just excerpts and interviews with the author. For my part, I think that there needs to be a distinction between aid to poor people and the diversion of aid into the pockets of entrenched local powers.

    My understanding of the argument is that aid causes poverty to the extent that it enables those in power to ignore their own citizens. By the same logic, it would seem to me that if external aid can be delivered directly to poor people, then their overall share of economic power would increase, making them politically harder to bully or ignore. In response to queries as to what she would recommend instead of aid, Dr. Moyo seems to answer that the alternative is targeted direct investment in jobs and/or micro-finance for currently targeted aid populations. I don't see how this differs dramatically from aid to build infrastructure, support for public education institutions, or direct cash transfers to individuals.

    I think that removing dependency on aid is part of the ends, while the aid itself is a part of the overall means at our collective disposal towards the ultimate ends, namely achieving a lasting end to human poverty. I wonder how the general debate might change if the word aid, which appeals to the political sensibilities of voters in donor countries, was replaced with the word reparations . . .

    ReplyDelete
  11. Hi Cho,
    your provocative review has ignited a lively debate among our circle of Caribbean colleagues and inspired us to start our own blog on the topic. Have a look at the postings at http://www.normangirvan.info/the-debate-over-dead-aid-by-dambisa-moyo-mervyn-claxton-and-others/

    Thanks, Norman Girvan

    ReplyDelete
  12. Dear Cho,

    Excellent review. May I point the audience to another resource, a book published by the South Centre (the intergovernmental organisation of the developing countries), "Ending Aid Dependence".

    The book is authored by Dr. Yash Tandon (Uganda) and the former Executive Director of the South Centre.

    For more details, see www.AidExit.org

    ReplyDelete
  13. Cho,

    A discussion on the Dead Aid issue will take place at the Sunday Times Oxford Literary festival on Saturday 4th April at 6pm, in case you haven't heard already. More details on the Panel-on-Zed blog here

    "Join the discussion with Dambisa Moyo and Phil Bloomer, Director of Campaigns and Policy, Oxfam, with journalist and broadcaster Jon Snow in the chair," says the promo.

    Should be interesting.

    Cheers,

    Zedian

    ReplyDelete
  14. Some more websites and youtube videos from aid funded localized grass roots organizations that appear to defy the "Moyo Paradigm" associated with State-sponsored and directed aid.

    On a wide range of refugee issues throughout the country: http://www.forgenow.org/projects From FORGE, which seeks to help the refugees resident in Zambia (welcome to sanctuary as they are), into more productive and independent members of society.

    On beekeeping: http://www.youtube.com/watch?v=0JFpilLnu5A From the Kaloko Trust in Copperbelt.


    Diversified sustainable agriculture training in Eastern Province: http://www.youtube.com/watch?v=xhVn5egRu8A From the Swiss Franklin College student sponsored Baobab Initiative.

    Contrast these with this fascinating video courtesy of our Caribbean friends (Norman Girvan, Mervyn Claxton, and the rest of the debaters here), featuring Dr. Yash Tandon of Uganda, Executive Director of the South Centre: http://www.bakaforum.net/uploads/media/BaKa09_opening_02.mov (warning: not short, and in quicktime format (.mov), but I found it fascinating on a number of levels).

    ReplyDelete
  15. Hi Cho
    Very thorough review! But I see Dambisa's mission as a lot broader than economics per se. Let's face it she's working the media system very very effectively - Newsweek, Sky News, Wall Street Journal, Forbes Magazine....!
    It's just so refreshing hearing from someone (like Obama himself) who doesn't tick all the white/male/American boxes.

    ReplyDelete
  16. Julia,

    Are Africans so desperate for intellectual leadership that we now find refuge in mediocre books?

    I would like to think not...

    ReplyDelete
  17. Norman,Yikas

    Thanks for the links.

    I'll follow them up.

    ReplyDelete
  18. Yakima,

    Fascinating links.

    Thanks!!

    ReplyDelete
  19. I think that there is a lot of self-serving rhetoric flying around on US media sites, such as this seemingly innocuous comment on the npr.org Moyo story:

    "The economist Dambisa Moyo is right on two counts. Not only can traditional aid to Africa do more harm than good, by stifling innovation and entrepreneurship, but the relentlessly negative PR—portraying Africa only as a source of War, Disease, Corruption and Poverty—causes Westerners to overlook African innovation, entrepreneurship, and opportunity.

    "Anyone who wants proof that a new era of entrepreneurship and innovation is budding in Africa should look into a small college in Ghana, founded by a Ghanaian, called Ashesi. (Ah-shess-see means beginning in the local language.) The school stresses ethics and entrepreneurship, plus technology and business skills, and its graduates are now working to create innovative, practical, local responses to Africa's challenges and opportunities.

    "Interestingly, no major western foundations have funded Ashesi. Perhaps because, as Ms. Moyo notes, 'The aid model to Africa is definitely predicated on pity,' westerners spend billions trying to stem the effects of war, disease and poverty, but seem unwilling to embrace a modest, local institution that empowers young Africans to become innovative, ethical entrepeneurs.

    "Curious? See www.ashesi.org

    "Ruth Warren, Seattle

    "Tue Mar 17 21:56:55 2009"


    So, I go and see, and I find their annual financial report as a 501(c)(3) non-profit organization based in Seattle from 2007, and right at the top is this statement:

    "We Thank Our Generous Donors

    "To date, over 500 individuals, corporations and foundations have donated to Ashesi. We could not have come this far without them, and we offer our heartfelt thanks. This list acknowledges donors who gave in 2007.

    "2007 Alumni Association, Aetna Foundation, Bank of America Matching Gifts Program, Barclays Global Investors, Boeing Company Gift Matching Program, Children Count Foundation, East Shore Unitarian Church, Fidelity Investments Charitable Gift Fund, Magnus LLC, Microsoft Corporation, Neukom Family Foundation, Noble Foundation, Northwestern Mutual Foundation, RealNetworks Foundation Matching Gifts Program, San Francisco Foundation, Tellumind Foundation, United Way Special Distribution Account, University of Washington, Dept. of Computer Science, Washington State - Combined Fund Drive, William D. Radichel Foundation, Wyco Fund."


    It then goes on to list individual donors including, "Todd and Ruth Warren," who are presumably the same people mentioned in this article from the Seattle Times, right after they explain that, "Ashesi also is being evaluated for financing by the World Bank's International Finance Corp., a process that's validating the school's finances.":

    http://seattletimes.nwsource.com/html/businesstechnology/2008696526_brier02.html

    Mrs. Warren is likely typical of those who would apply the cut-throat tactics learned at Microsoft to the competition for donor funds. She obviously doesn't hesitate to lie to the public about her pet project, no doubt excusing herself on the basis of all the "good" which will come of it. The saddest part is that the organization itself seems to be quite effective at utilizing donor funds, and shouldn't require such cynical attempts to "bandwagon" onto whatever support Moyo's book may generate in certain quarters.

    ReplyDelete
  20. A devastating review of Dead Aid....

    This is the second most detailed critique.....after ours..

    So its good to see that it comfirm my conclusions..

    Especially coming from CDG who the daily experts in this area. As they say...the poor never study poverty...its too expensive!!

    lol!

    ReplyDelete
  21. The book has opened eyes and minds. It may not be the greatest book, but it certainly shocks the system. Truth is (and many will avoid saying this) that the belief is Africans are incapable of self-sustainance and are doomed to be second class. I reject that notion, and am willing to use my skills to figure out how to save ourselves. There is a fear that Africa will collapse into oblivion without aid. My question is, how far are we from oblivion now?

    ReplyDelete
  22. Hi Cho
    Thanks for your in depth review. However I think we need to take a broader view - Dambisa is cleverly working the media system to achieve her goals. She says in her Charlie Rose interview http://www.charlierose.com/view/interview/10175 :-
    "I don't claim to be the first person to come up with the idea of the bond market or micro finance... However what I was hoping to achieve is to broaden the argument away from the intellectual intelligentsia, from the pockets of policy makers, development specialists. I wanted ...people who actually do have good intentions to ostensibly help Africa to understand that they are NOT understanding Africa.... If my questioning of aid is so obvious and part of the discourse, why are we still pushing for an additional $50billion a year?"

    Those in UK - let's support Dambisa in Oxford next month!

    Julia Brown

    ReplyDelete
  23. I haven't read the book yet. But I don't believe it's going to be mediocre. It's just clearly not for the academics who apparently know all this stuff anyway. Think of it as a publicity campaign promoting empowering economic systems as an alternative development tool that is way more effective than patron-client type structures.

    ReplyDelete
  24. Julia,

    I appreciate your thoughts.

    I wish I was on the other side of the debate.

    As I note in my review, I reached the conclusions with 'deep sorrow'.

    The basic question was whether the book met the standard for something dealing with a life and death issue. It is not a matter of whether she is writing as an economist or not. It's an issue of whether are analysis stacks up or not.

    Africa has few voices. The book perpetuates the stereotype that we are incapable of thinking analytically.

    If this book was written by a White acadmic we would just laugh at it.

    Why can't we hold Africans to similar high standards.

    We should not practice intellectual affirmative action.

    ReplyDelete
  25. I agree with your last point absolutely - Africans do not need affirmative action. So you SHOULD laugh at it.
    But I don't - a) because I'm not an economist (just a development manager) b) because it's not an academic book (and not trying to be)- it's a publicity campaign.

    ReplyDelete
  26. First of all reviewing this book as a economic thesis is bad. If you wish to comment on the economic stand points and writing skills you should specifically mention that in your comments section....probably as a caution in RED BOLD FONT 18 :-)


    Author is trying to make a point and has utilized her credentials (Ph.D etc.,) to do the same. I find analysis and analogies and footnotes given are ok. if not great.


    Nothing is ever free in this world.
    Let me repeat.

    Nothing is ever free in this world.

    How people expect AID to be free and for good reasons? This is what she is trying point out in the book.

    AID given at the time of disaster is acceptable because you are struck with a hammer when you are asleep.

    But AID given as a way to uplift someone's living standards is pathetically planned crooked mentality to exploit and not help.

    As the author of the book obviously points out... then why only then people of Africa these people are there everywhere in the world even on the streets of philadelphia, London, Mumbai, ...

    cheers

    ReplyDelete
  27. i havent read the book dead aid but have read some excerpts. and going by your review, my view is that the book the book presents us an opportunity to seriously think about what can work for us. in addition, we need to seriously work on our discipline issues. frankly speaking, when it comes to managing our resources,we fall short on discipline.

    cheers

    ReplyDelete
  28. Sour grapes

    ReplyDelete
  29. cho
    do you have information that shows that african countries that have received the most aid are infact the most poor? even if my knowlegde of economic stuff is limited your review of this book is far the most informative and logical of all those i have read.

    ReplyDelete
  30. This continues to be a thought provoking discussion, my appreciation to all participants! From my reading, there seem to be two general perspectives on the book and its content: First, there is the scientific approach, which I think that the review presents quite compellingly, that attempts to test the assertions made in the book to see if they can be supported by the empirical data, "reproduced under laboratory conditions" if you will. Second, there is the political approach, which concentrates on what concepts filter through the overall media from both the book and the discussion surrounding it to the general public in both donor countries and recipient countries.

    Up until now I have mainly concentrated on the scientific aspect, which is perhaps the reason that I am a bit surprised at how much flak Cho has taken for reviewing a book from his own perspective as a working economist, rather than as a more anonymous African everyman. I think that there is quite enough of that floating around the world media as it is. That said, I am also not really surprised at the flak that Moyo has taken politically, nor the accolades she has gained for her statements, after all she is intentionally seeking publicity. The television appearances keep stacking up, and scientific accuracy aside, she has done a tremendous job of getting complacent populations in donor countries to actually think about what aid does or does not do. The fact that she is a very telegenic woman certainly isn't hurting her ability to get attention, and from what I have seen she presents herself in an admirably poised and intelligent way. She certainly is doing the image of Africa no harm from what I can see here in the US.

    For those of us who are seeking ways to put existing aid flows to better use, I think that the book will help to keep the emphasis on investing rather than maintaining. We can't forget that even if someone gives the money to build a thing, it is up to the receiver to ensure that the thing in question can at least pay for its own long term maintenance. For Zambia, one thing that badly needs building is transport infrastructure, but most of the available budget goes to rebuild roads and bridges that didn't last as long as planned. Seeking additional aid funds to build new roads should be predicated on reliable increases in domestic revenue to maintain them, as well as on better construction in the first place and better regulation of maximum loads. Otherwise the nation could end up with more roads than it can afford to maintain, for which it would require external aid or financing, which would foster more dependence. By contrast, I would encourage donor countries to hand over as much electrical generation equipment as they like, I have no doubt that that can be made to pay for itself in short order.

    ReplyDelete
  31. In her book "Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africa", Dambisa Moyo cites entrepreneurship and job promotion as solutions toward a better way for Africa. An example of this is in Rwanda where two businesswomen who own salons have come together to start a beauty school to provide a vocation and a future for Rwandans. Go to this site to learn more about the school and how you can help get it opened www.rwandabeautyschool.org. The two entrepreneurs, Jeanne and Sylvie, are being helped by the Business Council for Peace (Bpeace) - a New York based international network of business volunteers that help women entrepreneurs in post-conflict countries expand their businesses, create employment, and build a peaceful future for their communities. For more information on Bpeace, go to www.bpeace.org.

    ReplyDelete
  32. Yakima,

    As always you cut through the mud and get to heart of the matter.

    You have summarized the many angles to this very well.

    I never expected the review to ignite passions! It was after all aimed at this blog's readership which from experience is analytically inclined .

    As one lady at Kenya Imagine helpfully put it : there's the premise and the argument.

    I focused on the argument and it's strengths and weaknesses.

    The media, and sad to say, many African readers supported by far right audiences just focus on the premise.

    They don't even want to assess the robustness of her evidence.

    You can't have a rational debate with such people. I am sad to say it's further reason why Africa remains undeveloped. We are too lazy too hold anyone to account properly.

    ReplyDelete
  33. JoshShade@pacbell.net8 April 2009 19:23

    Just wondering if you or her had read:

    The road to hell : the ravaging effects of foreign aid and international charity / Michael Maren.
    Publication Info. New York : Free Press, c1997.

    I have lived and worked in overeseas for 10 years and thought I had an idea of what was going on. This book was a eye-opener.

    ReplyDelete
  34. IPS reports on how Millennium Challenge Account grants are being applied in Namibia, and the debate raging in the nation as to whether this aid will ultimately hurt or help.

    ReplyDelete
  35. Cato Institute Book Forum provides streaming video (75 mins) or downloadable podcasts of their live forum with Dambisa Moyo to discuss her book. From 3 April 2009.

    ReplyDelete
  36. Well, it would be a miracle if we all agreed with her but 60 years of failure is awfully difficult to defend. Dr Moyo knows the difference between economic growth and poverty alleviation - there is no inconsistency in her argument there. IFAD does not give free money in quite the same way that bilateral donors do but speaking as a political activist, Dead Aid is call for democracy. If you choose to read it as an economics textbook that is your prerogative.

    ReplyDelete
  37. Dambisa Moyo, Author Of Dead Aid (Sky News)
    http://www.youtube.com/watch?v=gBH47mByATcAid is not a reason to kill off the export sector, corporate 'free trade' is, and not just in Zambia or Africa.

    Many of the illegal immigrants into the USA are Mexican maize farmers who have been forced off their land by unfettered exports of maize to Mexico, by US agribusinesses, supported by massive agricultural subsidies.

    BBC HardTalk - Alison Evans and Dambisa Moyo
    http://www.youtube.com/watch?v=o1dZw6nItu4Also, this must be the first time I have seen a Hardtalk with 2 guests, not one. Is the BBC afraid that the neocolonial 'aid' point of view might not be represented?

    The problem with dr. Moyo is that her analysis seems ego (shame) driven. Nowhere does she question - where do these hundreds of billions of dollars in 'aid' originate? Is the west just inflating it's own economies and currencies to give aid to Africa? The real origin of this cash is Africa's own exports of raw materials.

    Why does the west never attach the right strings to aid - democratic accountability, transparancy and why does it never follow up how aid is spent? Because they don't care. As long as the raw materials keep flowing, 'aid is working'. When raw materials stop flowing, aid is stopped. When governments talk about natioanlizing the mines, they face character assassination in the corporate western press. We saw it against Patrice Lumumba, against Kwame Nkrumah, against Laurent Kabila, against Robert Mugabe, against Kenneth Kaunda in 1991 (all of a sudden the west had discovered 'multi party democracy' in Africa, after supporting Rhodesia and South Africa for decades), etc.

    Clip 1: Africa, the sentimentality of aid, and Bono. (Templeton Foundation)
    http://www.youtube.com/watch?v=lyV5KBl6siIOverall, I think her sentiments are heading in the right direction, but she does not go far enough.

    ReplyDelete
  38. MrK,

    I thought we both shared the Chang view that aid conditionslities go too far?

    I do not think aid should be used as a tool to export democracy or control African governments.

    We want our governments to be responsible but we must oppose someone forcing them externally to be so. My view is that rather than conditionalities simply give aid in a way in which governments would be directly accountable to the people. Find ways in which the people know it's their money. In the review I give one such example (bond claims).

    ReplyDelete
  39. Cho,

    I would even go further, and say that the West will always put the wrong conditionalities on aid, because they will always approach the issue from the point of view of selfinterest.

    So they won't make transparancy and accountability in the spending of aid a conditionality. They will make a reduction in social services like education and healthcare a conditionality (which the IMF always does, with predictable results), but not a reduction in the size of bureaucracy, or the streamlining of government.

    These conditionalities are never in the best interest of the people, and always in the interest in their own country's corporations (and by extension, their own economies).

    If only the people could set conditionalities on aid, that would change everything. :)

    One first step would be to debate every major loan and contract in parliament. Invite the press, even have a national referendum.

    ReplyDelete
  40. Jambolaye

    thank you! thank you! thank you! I am sure you have heard the expression, give a man a fish he eats today, teach a man how to fish he eats for life. We africans we don't need aid show us how to live or leave us alon.

    ReplyDelete
  41. I've just finished the book and found it to be a refreshing look at the tragedy of aid/Africa.

    I think your review lacks balance - for example you question the specific point of remittances that they "can also be a curse" but miss the specific point that the cost of getting them back is a problem. Similarly you point to the Chinese question but not FDI.

    It's interesting that you claim that it has a lack of analytical rigor but you don't question the vast sums quoted as being siphoned off by corruption on the one hand and mismanagement by the aid agencies on the other.

    Yes the book is imperfect but it's a counter blast to the usual "doubling of aid" cries of those who make a living from the aid sector. Which narrative do you prefer - the Bono/Geldof one or this one. Which will lead to a sustained assault on poverty - the begging bowl or the bootstrap up?

    The timing of the current financial crisis does not help but Moyo's thinking provides a possible medium-term solution.

    The mosquito net story encapsulates it all for me and fits with the wider unintended consequences of purposeful social action. No-one questions that aid providers mean well, but if their efforts are misplaced then we need to know.

    ReplyDelete
  42. ...this work reads like the author's own (personal?) catharsis/denial ...belongs on the Oprah circuit ...secures attention for her, with little else

    ReplyDelete
  43. http://news.bbc.co.uk/2/hi/africa/8215083.stm

    ReplyDelete
  44. After reading a few excerpts and the review I want to read Dambisa Moyo's book NOW. I will definitely look it up in bookstores around and read it thoroughly. Before then, I wish I could refrain from commenting but I cant help noting the inability of the reviewer and many commentators to see the big picture in which lies the truth. In some instances, aid is important but in others (probably more often than not), aid is the fundamental cause of the big gap between the rich and the poor (be they regions, countries or individual persons)with all the evils associated with this. Aid is complex and therefore the solution is therefore not as easy as doing away with aid in five years or making aid smarter and better (who will make it smarter and better?. Hope to get a copy of Dambisa Moyo soon.

    ReplyDelete
  45. Anon,

    I certainly do hope that you read the book soon, because you seem to have reversed Cho's and Dambisa's positions based on your comment. The chief criticism of the book's content in the review is that it treats aid as being too monolithic, when in fact aid comes in many forms and with varying degrees of effectiveness, and is therefore not amenable to "one-size-fits-all" solutions such as the five year deadline example. Seriously, read the book, then maybe re-read the review and see if you have the same appraisal. One thing that all sides seem to agree upon is that it is good to be talking about the real effects of aid on development!

    ReplyDelete
  46. This comment has been removed by the author.

    ReplyDelete
  47. Petter,

    Norther Europe, where I live, has a developed social system and too much state in general (+50% taxes in many cases...) That is why more liberalisation is neded is advocated. The sistuation in Africa is far different!

    This book is reckless and dangerous and ultimately will do more harm than good!

    ReplyDelete
  48. "Dead Aid" is a "Dead End" for rigor and reason.

    Ms. Moyo sounds more like a mouthpiece for the neocons than the economist we understand her to be.

    I have to say it is amazing how much time and effort is being spent on the seriously flawed notions in her book... This book has no rigor and only serves as a damaging distraction from the urgent issues facing Africa today.

    I have to congratulate Cho on his/her review, though. Very good work.

    ReplyDelete
  49. Anon,

    Thanks.

    Probably a good opportunity to remind people that this review was written before the "official UK book launch", as such it was before Dr Moyo appeared on many television shows.

    That is important because this review precedes nearly all of the reviews. Many of the reviews have mostly repeated what I said.

    ReplyDelete
  50. Thank you for the explanation and clarification, Cho.

    I am very hopeful that Ms. Moyo will write another book to make up for the "dearth of reason" that "Dead Aid" represents (Her own professor, Paul Collier debunks the premise and prescriptions of her book).

    Ms. Moyo, obviously, is a lady of some intellect as evidenced, hopefully, by the schools she has attended and by her PhD. "Dead Aid" is not worthy of her educational pedigree nor of her African heritage, for that matter.

    I strongly urge Ms. Moyo to write again with a view, this time, to demonstrating some capacity for rigor and independent thought. The betrayal of conscience represented by "Dead Aid" is a more sinister threat to Africa's development prospects than any existing deficiencies in development policy and its implementation on the continent.

    ReplyDelete
  51. Anon,

    I understand that her next project is on the credit crisis. Due out 2010 I think.

    ReplyDelete
  52. The best thing about the book in spite of its flaws was that it made everyone think.
    Some aid is good and some bad but if it is a loan we have to repay, whether or not we had any say in its use. I would gladly pay more tax to pay for the school that was built near me (but that was a grant) and I really hate that I will have to pay (with interest) for all the money the world bank overspent on Mukuni Park in Livingstone against residents wishes.
    Where in the world can you lend an individual more money than he can afford or handle, force him to spend it on what you want and then make him repay with interest? They do it to us all the time. We should learn to say no where appropriate.

    ReplyDelete
  53. Ruth,

    More importantly, I think its flaws shouldn't prevent us from seeking real alternatives to aid or better complements.

    For example, I think the big blind spot it misses is "tax fairness". I think many African countries would need less aid if they taxed the countries properly and ended the current "governement capture" by multi national companies..

    ReplyDelete
  54. Ruth:

    To make people think a book has to introduce some originality and creativity to an issue. "Dead Aid" merely parodies neocon thinking and is completely in want of any hint of an evidence-driven approach.

    "Dead Aid" has raised a lot of dust because it is, in reality, no more than a well-funded publicity campaign by people driven by rabid self-interest and not by any consideration for the wellbeing and welfare of Africans.

    For these and other reasons, "Dead Aid" is aptly titled... It was "Dead on Arrival" (DOA) as far as advancing anything of potential benefit to Africa.

    Now, Ms. Moyo is capable of much, much better. She is a very intelligent person who, once reconnected with the realities and needs of her people (and with her own conscience), should be able to put together some coherent arguments that will be of actual potential benefit to Africa's poor. To do this she will need to achieve the near-superhuman task of disentangling herself from the special interests who funded the "Dead Aid" farce and whom she so faithfully represents.

    I look forward with some trepidation to her next book...

    ReplyDelete
  55. Hi Cho!

    Thanks for this great review. I've just taken the liberty of echoeing it on my blog:

    http://koluki.blogspot.com/2009/10/dambisa-moyos-dead-aid.html

    Congratulations on the great redesign of your blog layout too!

    ReplyDelete
  56. Koluki,

    Great to hear from you, and thanks for your kind words.

    Will check your post right away!

    ReplyDelete
  57. Cho,

    great review! I haven't had time to read this review until now. I am pleased to see your critique because it reflects all my concerns about Dambisa's ideas in this her book.

    She uses a series of examples about countries which have made economic progress without aid. She cites Singapore, India and even China. I have never read any book about economics that does not make mention of fundamentals. She ignores the fact that Singapore's economy was as a result of long term planing since Lee Kuan Yew took office. Education became one of his central focus because regardless of the gains you make economically, it is impossible to sustain it with an ill educated populace.

    If we froze aid for the next five years, we will cut off aid to education and health. If that is a recipe for development then I would say Dambisa is highly delusional.

    Secondly, she ignores the fact that our inability as a country to diversify our economy in the late 1960s is the reason we have had such an economic decline. Many countries in Africa fail to leave their old way of doing business which makes our states uncompetitive internationally.

    Her book is heavy on intellectual arguments which are actually not realistic.

    ReplyDelete
  58. Hi Mindela,

    She uses a series of examples about countries which have made economic progress without aid. She cites Singapore, India and even China. I have never read any book about economics that does not make mention of fundamentals. She ignores the fact that Singapore's economy was as a result of long term planing since Lee Kuan Yew took office. Education became one of his central focus because regardless of the gains you make economically, it is impossible to sustain it with an ill educated populace.

    Neoliberals also selectively use the examples of Singapore and Hong Kong, even though these places are not countries but city states. They don't have tens of thousands of miles of infrastructure to maintain (taxation). On the other hand, one reason why the handover of Hong Kong in 1997 to Communist China happened so smoothly, is that Hong Kong to this day needs to import 80% it's food from Communist China. Free Trade success that it is, it cannot feed itself.

    If we froze aid for the next five years, we will cut off aid to education and health. If that is a recipe for development then I would say Dambisa is highly delusional.

    At least highly ideological. The problem I have with Dambisa Moyo is that as a replacement for aid, she does not defend taxation of corporations to make up the difference.

    In the year 2004, Zambia's now foreign owned mining companies exported $4 billion in copper, cobalt, and other minerals, of which $2.4 billion was pure profit. Zambia received $600 million in 'donor aid', while the mines collectively paid $6 million in taxes. So why does Zambia need donor aid? Because it does not tax the mines.

    She is trying to defend 'free trade' in an era when free trade has become toxic not only to Africa, but to the developed world itself. They no longer abide by or have the luxury to believe in this theory.

    However as former Goldman Sachs employee Dambisa Moyo claims, "we know what works".

    ReplyDelete
  59. Hi,

    Your review totally ignores the reality of Peak Oil, and its related sisters Peak Debt, Peak Gas, Peak Fertilizer, Peak Food and Peak Population.

    Oil is the foundation of any western industrial economy, and Peak Oil means that the concept of economic growth, has effectively gone extinct, in the long term.

    In that context, the quicker countries in Africa, and local or regional economies within such nations, treat AID like leprosy handouts, and become self sufficient on a far lower energy scale, than hoped for with 'industrial economic growth paradigms' the more likely is their chance of surviving the Peak Oil Die Off...

    See Michael Ruppert: Soundiing an Alarm on Oil, and his recently released stunniing documentary Collapse (trailer at link).

    To join an African Self Sufficiency and Good Governance Campaign, try Boycott 2010 World Cup

    ReplyDelete
  60. Andrea Muhrrteyn,

    Your review totally ignores the reality of Peak Oil, and its related sisters Peak Debt, Peak Gas, Peak Fertilizer, Peak Food and Peak Population.

    That are a lot of peaks.

    The problem is that this seems like just another fad - allowing markets to be generously manipulated by the likes of Goldman Sachs - the company ms. Moyo used to work for, and that managed to destroy it's competitors Lehmann and Bear Stearns in the so-called 'financial crisis', which was another one of their manipulations.

    There is no 'peak population'.

    'Peak Debt' is just the effect of Alan Greenspan keeping interest rates artificially low during the early 1990s, to compensate for the disastrous economic results of liberating the economy during the 1980s.

    'Peak Fertilizer' only exists in an economy that is driven by the petro-chemical industry, instead of organic and natural farming.

    'Peak Food' - the same thing. Food prices should not be as high as they are, if more arable land was used for growing food instead of luxury crops like coffee, tea and tobacco, or more land was under irrigation, or more land was in the hands of ordinary people. The population of the world can feed itself many times over - if that was where it's political priorities were.

    Remember the market manipulations in California by the likes of ENRON, which got Grey Davis fired, and Arnold Schwarzenegger installed governor?

    This is what happens if you do not regulate and constrain corporations. They become more powerful than governments themselves. They create the news, they manipulate prices, and they can destroy entire countries.

    That is the problem. And the answer is that we the people need to take back the process.

    Get corporations out of sponsoring elections, and owning news companies. Get corporations in Zambia to pay more in taxes than they take out of the countr in profits, so the rest of the economy outside of the mining sector can develop. And get land into the hands of the people on a permanent basis, which is a sound foundation for eliminating poverty, not the poor.

    ReplyDelete
  61. [1/2]
    Mr. K,

    Well I disagree with you those peaks are fads, and I am happy to agree to disagree.

    The peaks are all related -- call them Easter Island related.

    Simplistically they are the result of humanity's economists to create 'economic doctrine' based on a flat earth philosophy of infinite resources, and to ignore the mathematical principles of exponential growth of any factor within a finite resource exponential decline of such resources environment.

    Exponential Yewgenics:
    -- Arithmetic, Energy & Population, by Dr. Alfred Bartlett
    -- Energy, Economics and Environment Crash Course, by Chris Martenson, PhD
    or just see part three, if you don't want to see his entire course; part three is Exponential Growth and the Power of Compounding (Youtube 09min)

    I don't disgree that markets are being manipulated; and I suggest that the excessive ways in which they are recently being manipulated is because those doing the manipulation are very aware of the Peaks, and that they are fighting for the largest share of the declining resource base, as we head into the Olduvain gorge.

    They have used the 'financial crisis' to their benefit, because simplisitically they are unable to force God to put more oil in the ground, and western industrial economies RUN ON OIL. The FOOD YOU EAT IS MADE FROM FOSSIL FUELS. See Eating Fossil Fuels, by Dale Allen Pfeiffer.

    I disagree, i think there is most definitely a PEAK POPULATION.

    I am a farmers daughter and I know tht in order to grow healthy cows, you can only have so many cows organically grazing on so many hectares of land.

    Same applies to humans. Some countries leaders farmers, want free ranging cows with strong constitutions, and others want ethiopian cows, with tough meat...

    Again, Peak Debt, is a result of exponential fiat currency creation. Alan Greenspan knew this, and his interest rate policies fitted into once again grabbing a larger piece of the resource pie, for those he worked for, while manipulating the massess greed and ignnorance.

    I would agree that peak fertilizer only exists in industrial farming economies.., not organic farming ones.

    ReplyDelete
  62. [2/2]

    I am not a communist, who thinks that we should just grow more food for poor people whom we are too gutless afraid to confront to stop breeding like rabbits; but instead we just want to grow them more free food and more free food, so they can continue to breed like savages on viagra.

    They too may then be able to afford 'luxury' crops like coffee etc... if only they would stop acting like all they were given by god was a penis and vagina...

    The population of the world can feed itself many times over - if that was where it's political priorities were.

    A people get the goverment they deserve. Perhaps they may start asking themselves why they are too lazy to educate themselves, but arn't lazy enough to vote in corrupt leaders, who promise them they can be their slave and cannon fodder breeding production agents...

    I agree corporations need to be constrained... but they are not the only ones who could do some self constraining...

    If I can constrain my greed, so that those corporations don't manipulate me to buy their crap... then so can anyone else?

    How many citizens want to constrain themselves, from breeding unwanted children? From buying crap?

    I agree with "They create the news, they manipulate prices, and they can destroy entire countries."

    Although if you are dumb enough to look for your news in the mainstream media -- then you surely are massively ignorant...

    I agree with "That is the problem. And the answer is that we the people need to take back the process."

    But just like 'hope' and 'change'... give me fine print details..

    "Get corporations out of sponsoring elections, and owning news companies."

    I agree.. I attempted to start a political party in south africa, which would have 100% transparency in funding. It would not allow secret funding by anonymous sources!

    The only person who has been willing to make a 100% transparent contribution has been my brother!

    I am all for helping a poor person who wants to be helped to help themselves. I am not into some feel good self righteous campaign to help the poor who simply want to spread their legs and breed and be 'victims of racism'.

    And that was taught to me by former very poor people, when I worked with them at Delancey Street. They told me, as former very poor people, who had been drug addicts and criminals. DO NOT HELP ANY POOR PERSON WHO DOES NOT MAKE A VERY VERY FIRM COMMITMENT TO YOU FACE TO FACE, THAT THEY WANT TO HELP THEMSELVES.

    ReplyDelete
  63. Andrea Muhrrteyn,

    Simplistically they are the result of humanity's economists to create 'economic doctrine' based on a flat earth philosophy of infinite resources, and to ignore the mathematical principles of exponential growth of any factor within a finite resource exponential decline of such resources environment.

    Well I agree with you on that. What I disagree with, is the idea that this is an inevitable situation. And I don't think that there are too many people, certainly not in Africa. If Africa is going to develop, it is going to need a lot of labor.

    A country like Zambia is slightly over the size of Texas, and yet has slightly over half of Texas's population. If you would think of an American state that was overpopulated, I am sure Texas would not be the first to spring to mind.

    The problem is that behind those corrupt politicians are the same corporations the world over. That is the problem. In a continent where most arable land is not under cultivation, it is absurd to believe that we have somehow reached 'Peak Food'.

    ReplyDelete
  64. Mr. K,

    You say you agree that the worlds economists encourage a doctrine of population growth, within a resource paradigm of resource decline.

    What I disagree with, is the idea that this is an inevitable situation.

    What is not an 'inevitable situation'? 2 + 2 does not equal 4, you can make it to equal 35.6?

    As populations and their resource requirements (texas resource requirements currently stretch as far as iraq and afghanistan for energy) grow, they are like concentric circles.

    Read military strategy (Homer Lea). As those concentric circles rub more and more against each other, they eventually result in war -- CULLING OF OVERPOPULATIONS.

    These overpopulations colliding with scarce resources, can occur locally, in the form of crime wars, upto internationally.

    In a continent where most arable land is not under cultivation, it is absurd to believe that we have somehow reached 'Peak Food'.

    You critiize the corporations for their corruption and greed.. and in the next breath you want to encourage 'economic growth' (the increased use by more people of a finite resource base)....

    How 'different' from those corrupt (whether financial or intellectual) corporations are you in your economic doctrine thinking?

    But expecting an economist to enquire into their fundamentalist economic doctrine is about as futile as hoping an Al Qaeda shoe bomber would enquire into their fudnamentalist religious doctrine..

    Anyway.. Mr. K... I am not on this planet to accumuluate greedy material possessions, but to grow my soul... My identity does not lie in possessions, but in the quality of my character...

    I am here for 'spiritual growth'.. which is probably why I am immune to intellectually or financially or otherwise purchasing the crap that most ecnomists want economies to 'produce' -- RUBBISH...

    They are not interested in the production of HONESTY, CHARACTER, ETHICS, or LOVING RELATIONSHIPS, or HONOUR... they are interested in the production of 'PRODUCTS'...

    And they wonder why the world is going insane, because everyone is judged by the number of products they own... instead of the quality of thier character..

    I guess you ain't heard of chief seattle...

    Only after the last tree has been cut down. Only after the last river has been poisoned. Only after the last fish has been caught. Only then will you find that money cannot be eaten..

    ReplyDelete
  65. Andrea Muhrrteyn,

    As populations and their resource requirements (texas resource requirements currently stretch as far as iraq and afghanistan for energy) grow, they are like concentric circles.

    In theory (a theory not taking into account alternative energies to get off oil). Without getting to deeply into Malthus and how he has been proven wrong over and over. There was as saying - more chickenhawks, fewer chickens, more people, more chickens.

    People have a tendency to invent their way out of problems, so saying there are limited physical resources does not mean there are too many people.

    In fact you can look at many developed countries, where only 50 years ago, 50% of people worked in agriculture, where today only 4% of people work in agriculture, even though the population doubled. Standards of living massively increased at the same time.

    In many developing countries, most arable land is not even under cultivation.

    The mistake is to assume that because food prices are going up, we are somehow at the peak of our ability to produce food. This is incorrect. Instead, we should be looking why the system we do have is breaking down. Why do we ship food across the world for thousands of miles, instead of growing it where we live? Why do countries with a lot of poor and hungry people dedicate most of their cultivated land for the production of non-edible luxury goods for export like tea, coffee and tobacco? Why are there hungry people in the US, when it is exporting heavily subsidized food to developing countries as a power play - in the process putting local food producers out of business?

    Those are the things we should be looking at.

    There is an interesting article written on the issue by Stephen Gowans:

    William Blum: Neo-Malthusian
    By Stephen Gowans
    May 4, 2008

    I quote:

    If the crises that threaten capitalism occur predictably so too do the regular bouts of Malthusianism that break out whenever the system threatens to fall into disrepute among those who must bear the brunt of its inhumanity. It is then that intellectuals, both left and right, raise the over-population alarm. Beneath their apparent hard-headed realism lurks the system-conserving message: poverty and hunger are not systemic; they happen because there are too many mouths to feed. In 1936, when Blum’s intellectual predecessors were attributing the Great Depression to over-population, one opponent of this deeply reactionary view replied:

    “The plea of ‘over-population,’ of the ‘pressure of rising population on natural resources’… has demonstrably no basis in world facts, that is, in the physical and technical facts of world resources and world production. The alleged ‘over-population’ of particular countries is in the first place relative to the social relations within those countries, and is finally…relative to the existing system of division of the unity of world economy. On a world scale the advance of productive forces and even of actual production far outstrips the advance of population.


    Read more...

    Remember that in theory, anyone with a decent sized garden can feed themselves. We are a long way from there.

    ReplyDelete
  66. Mr. K,

    In theory (a theory not taking into account alternative energies to get off oil).

    It appears you can't be bothered to read Eating Fossil Fuels, that you do not understand the principles of Energy as the foundation for any industrial economy, and accordingly don't undrstand the principles of
    Energy Return on Investment (EROI).

    Here is an experiment to see whether an industrial economy runs on cheap energy: Switch off the electricity, and double the price of Petrol.

    Just take a look at any industrial city, if there is a blackout: computers don't work, factories close, restaurants close... everything grinds to a HALT!

    Alternative Energies EROEI/EROI.

    Declining EROI is mainly a consequence of the “best first” principle. This is, quite simply, the characteristic of humans to use the highest quality resources first, be they timber, fish, soil, copper ore or, of relevance here, fossil fuels. This is because economic incentives are to exploit the highest quality, least cost (both in terms of energy and dollars) resources first, as was noted 200 years ago by economist David Ricardo (1821).

    This concept of Energy Returned on Energy Invested is crucial. Historically, oil has offered returns of up to 100 to one. That is, for every barrel of oil used in exploration and production, 100 barrels were brought to market (although that figure is probably below 10 to one now).

    A society based on a resource that offers returns as low as 1.7 to one — one of the more optimistic levels claimed by ethanol promoters — would look profoundly different to anything we know today. In such a society, the biofuels industry and the essential services which support it would use 10 units of energy for every seven units available to the rest of society. So, even if we take the optimistic figures, we are still faced with a serious problem.

    Much of the 'alternative energy' market has the same problem. Their EROI, is very low, some of them perhaps even negative; i.e. the are ENERGY SINKS.

    In the absence of getting a decent return on your energy investment, on any alternative energies (of which none of them have a decent energy return currently)... industral civilisation is heading for the dustbin!!
    See: Getting a decent return on your energy investment

    Do you have a veggie garden Mr. K?

    We do, I make all our organic vermicompost, and we grow many of our own veggies, and intend to grow more?

    As for: People have a tendency to invent their way out of problems, so saying there are limited physical resources does not mean there are too many people.

    Hmmmm that sounds more like 2 + 2 = gazillion

    But you are correct..under the following condition:

    Humans don't require resources to live, to eat, to sustain themselves..

    if so, then declining resources, and exploding populations would not matter...

    Unfortunatley I have not come across any human being who is capable of living without the need for resources to eat, to travel, to be warm, etc...

    Anyway... with such economic thinking.. it appears I am in the wrong place...

    Take care

    ReplyDelete
  67. I have read your review and your comments with a great deal of interest and would like people to note that Dambisa Moyo is not really Zambian per se.

    Dambisa Moyo is of Zambian parentage but is not Zambian educated. She has not lived in Zambia for an extended period of time.

    For that same reason I have a lot of trouble with her being described as a Zambian economist.

    In my opinion Dambisa Moyo knows basically nothing of Zambia or the Zambian economy aside from what she reads.

    As much as aid money is misappropriated, misapplied and just plainly stolen that cannot be the basis upon which it is declared the root of all evil.

    Anyone who has travelled to rural Zambia will see the difference ODA funded water and small scale farming projects have made.

    The problem in Zambia is not aid but how we as Zambians choose to use what we have been given.

    It is exactly that kind of superficial analytical approach that the people from the IMF, World Bank and Dambisa Moyo apply to Zambia with dismal results.

    ReplyDelete
  68. Patriot,

    Am I correct in interpreting your comment, as you do not agree with Kenyan Economist, James Sikwati's justifications given in: For God's Sake, Please Stop the Aid to Africa

    He is of the belief, that Africans will only earn respect, when they earn it, and stop living like begging bowl children, and do what it takes to stand up on their own two feet.

    He practices what he preaches...

    ReplyDelete
  69. Andrea,

    It is a common misconception to talk about Africa as though it were a single country.

    Firstly, whilst James Shikwati's analysis maybe valid for Kenya it does not apply to the entire continent. Some of his views on aid may be biased by the fact that Kenya is one of the recipients of aid for "political" reasons. Zambia is not such an economy and those arguments do not apply to Zambia.

    Secondly, we really must have a clearer definiton of what aid is? Some forms of aid are useful, some more suspectible to abuse than others and others are simply useless. Anyone who is against the kind of aid that has provided virtually "free" ARV treament to millions of people suffering HIV&AIDS or has funded anti-natal screening is definitely not worth listening to. It would be good to note that Dambisa Moyo despite her views is a product of bilateral aid, her father was a beneficiary of aid in the form of a scholarship from the US government.

    Thirdly, if in reality aid is the source of all our problems why isn't Egypt the poorest country on the continent? Egypt received US$1.87 billion in 2004 from the USA more than the rest of Africa combined. South Africa is the biggest recipient of Japanese aid at US$1.3 billion. In 2007 9 countries (including Kenya) accounted for more than 53% of all overseas development aid to sub-saharan Africa amounting to US$21.5 billion; this shows the generalization about aid doing harm to all is grossly misguided.

    Finally, too many Africans simply do not want to accept the fact that the real problem African has is Africans. Virtually all of our problems are self inflicted and rather than accept responsibility for it, we find a scapegoat. Its the IMF, the IFC is to blame, its the World Bank you know infact its the aid money they are giving us; everyone is to blame but us. The notion that aid is to blame for our woes is farcical, who accepts this aid? WE DO who steals it? WE DO who fails to use it? WE DO and the donors are to blame?

    The begging bowl reference is simply the ramblings of an idealist with no understanding of reality and whilst it maybe convenient to play naive the truth is that aid is not given for free and it is generally not given out of the kindness of the USA, EU, Japanese, Chinese etc. hearts. Aid is paid for in full through a myriad of complex deals involving the sale of votes at the UN, oil exploration rights, military bases, preferential treatment etc.

    My opinion is that there is no need to fight the tide, what we need to do is to make the most of the aid offered and use it to gain as much self sufficiency as possible like Rwanda has done by developing an I.T. industry leveraging technical aid provided by other countries.

    ReplyDelete
  70. Patriot;
    There are many Zambians in the diaspora at the moment. Zambia hasnt got a developed graduate education infrastructure. Over 99% of Zambian MA/MSc/MBA/PHD graduates obtained their qualifications in foreign countries. Do they all cease to be Zambian on this account? Your 'patriotism' my dear is pathetic. I guess even Chola shouldnt have the right to blog about Zambia's economy because he is not Zambian based nor were all his qualifications obtained in his motherland! You wonder what Fundanga and Musokotwane are doing in their positions with their Germany education. Are they Zambian enough; you may ask? With views like Patriot's I honestly fear for my kids!

    ReplyDelete
  71. ....brilliant review..jes read the book and wat i acn say is..the issue of aid and poverty in africa is wat the health care reforms are to america..it goes beyond the ordinary, beyond wat we see and read in the papers and hear on the news.. it is a political issue..

    ReplyDelete
  72. Here's a humorous article suggesting that the Moyo-Easterly-Sachs "debate" is, in a sense, a function of careerism:

    http://spinearth.tv/report/dead-aid-by-dambisa-moyo-a-deplorable-imaginary-conversation-between-famous-economists

    ReplyDelete
  73. Dambisa Moyo's recommendations on attracting investment:

    http://www.daily-mail.co.zm/media/news/viewnews.cgi?category=5&id=979657258

    ReplyDelete
  74. Very astute review of Moyo's book. Best I've found online so far.

    ReplyDelete
  75. The deception of "Dead Aid" runs deep for most people to see it. in other words, the effects of it come to light, often many decades after being implemented,that even generations of people miss the source of the link that buries them in the spirral they find themselves.

    To fully understand this, you need to read books such as:
    None Dare Call it Conspiracy by Gary Allen;
    Better than Nostradamus by Barry Smith;
    Warning by Barry Smith;
    The Ugly Face of Neo-Colonialism in Africa - author unknown;
    Pawns in the Game by William Guy Carr;

    When you've digested the information, you may have a fuller picture to where the World is Heading guys....

    If you find yourself ignorant of this information, dont get angry or be surprised, there is time to catch up...
    Ciao

    ReplyDelete
  76. The book may have its flaws, but one point remains clear, and no one can refute it: aid dependency is not a sustainable solution for Africa, period. Dambisa's point is that you help us get sustainable solutions or leave us alone. Truth be told, most countries in the west are not ready to do that for Africa, because they'd rather have Africans depend on them for as long as they live. That's why NSSM 200 was written down. Dambisa has a point, whether she's out to publicize herself or not.

    ReplyDelete
  77. sorry i confess i am a little unclear on this ; are Moyo's qualifications and experiences based on work in business, or macro-economics ? Does this explain her point of view somewhat ?

    ReplyDelete
  78. Mark,

    Dambisa Moyo works for Goldman Sachs.

    I don't think that at any point she suggests that 'donor aid' is replaced by taxation, let alone taxing the foreign mining companies that keep all the profits from mining, which is the country's biggest money spinner next to agriculture.

    ReplyDelete
  79. yeah, it always seems to come back to the mines. Its a very thorny question - how do you convince your political leaders to tax the mines more, when they are being 'influenced' by foreign governments ?
    This is part of the problem i have with Moyo's thesis ; it's not Aid itself that is the problem ( i agree with Patriot's point on aid for the rural poor ) , it's more what the donors take in return for that Aid ( such as outrageous tax concessions etc) ...
    Patriot makes his points strongly, but i think he appreciates that Moyo lacks experience with the rural poor of Zambia, and these are people who would need a gradual phasing out of aid rather than a 5 year cut-off.

    ReplyDelete
  80. Hi Cho,

    I am an avid supporter of Dead Aid, and although i found your review to be quite interesting, I also found it full of generalized and inaccurate details.

    First, you state that Moyo failed to differentiate between (or acknowledge) different forms of international aid, however this is untrue - see pages 7-9.

    Second, her discussion of the Marshall Plan's effectiveness in Europe was intended to highlight the fact that aid works alongside EXISTING social, physical and industrial infrastructures - assets that many African countries have been deprived of (particularly through SAPs).

    Third, despite the new dominance of the Chinese in Africa, namely to secure their foothold on Africa's raw materials to support their industrial production needs in their quest for dominance - they managed to accomplish in a fraction of the time what billion of USD couldn't over 50+ years. Yes, I too, find their African presence troubling and problematic in ways, but how does one even begin to explain this feat? My friend recently returned to Ghana after one year to find that some previous dirt roads were now paved with asphalt, and signs alongside these roads clearly indicated that the government of China is responsible. Within one year? This is part of Moyo's point.

    Fourth, you state flat out that her proposal is "dead" in the water, as they say - or "ineffective", to use your words. However, aside from microfinance, her proposal is similar to the initiatives taken by the Asian tigers after the financial crisis in the 80s: simply put, insulate African economies by encouraging trade WITHIN African borders to boost growth, and create the economic groundwork necessary to accommodate and attract FDI and international trade.

    I understand this book explores a rather sensitive subject for a fellow Zambian, however, I've noticed that since this book was released, some of Moyo's greatest opponents have been Africans. I'm not sure why this is, perhaps because she is also very critical of African leadership and the general complicitness of government officials in perpetuating the aid trap among its people, and somehow this has been understood as critique of African people overall. I feel like most of her opponents have taken her criticisms very personally and to heart, rather than to share her concerns and be mobilized against Westernized poverty-reduction practices which do not produce long-term social and economic infrastructural supports in recipient countries.

    That is all for now....

    Imo

    ReplyDelete
  81. Imo,

    I guess this thread will never die. It's a while since I wrote the review but let me have a go at your points.

    On the Review.  I genuinely respect your views. No man knows it all. 

    On aid forms.  As the quote in the review says - she takes the SUM TOTAL. The analysis is built around that and there's no nuance on the various different contours of aid. This she has never denied. 

    On the Marshall Plan. Not sure what your criticism is there. The point is that the Marshall plan was aid. As I argue towards the end, the issue is how we make aid better not cut it off as Dr Moyo proposes. 

    On China. I fail to understand your point. My point is that Chinese aid is aid. Also China is pushing Africa into new indebtedness. I have written elsewhere about China and I do not wish to repeat myself here except to elucidate further on the review text.

    On the death of the Dead Aid 5 year plan.  I believe Dr Moyo has now accepted that it is impractical. She said she only wrote that to get people talking. She does not take that idea seriously. 

    On African critics. I want to remind you that I was asked to review this book. Also please check the date of the review. You will find that this was penned within a week or so of the release. Before Dr Moyo was popular. 

    I do not find this issue sensitive. I just found the book poorly written and lacking in substance. A subject as important as this deserves better analysis. 

    ReplyDelete
  82. Patriot was not saying that Moyo is 'disqualified' from claiming to be a Zambian ; he was saying it is misleading to lend her more credibility because of her origins. She clearly has little experience of real poverty in Zambia, and therefore her ' Africaness' is really irrelevant ( or should be ).

    ReplyDelete
  83. For those of us who live in Africa and as a way of making money apart from the formal employment in which we are engaged, as a “side business” we keep chickens at the back yard. By any chance do we ever hope that as we feed the chickens, one day they will be independent to feed themselves? We feed them so that we can feed on them. So it is with the donors – they aid in order to be aided. So in this regard, I don’t understand why it is called aid when in actual fact it’s a trap. The endemic debt problem is a historical problem. In Zambia, just like in other typical sub-Saharan country, the government, I understand has excessively borrowed so much that it cannot manage to pay back. The situation is exuberated by the fact that government is forced to enter into more debt to meet expenditure. Donors argue that although balance-of-payment payments are not the answer to Zambia's long-term debt problems, it will in the short term provide the government some breathing room to implement further economic reforms. However, although we have heard that balance of payment is donor funded, we should not be fooled or mistaken by verbiage. There is no donating here. The thing to lament about this mechanism is that to finance debt payment, the government borrows more to pay debt and its interest. What results is more-less like drilling another hole in the boat in order to drain out the water. The conclusion is that a country sinks deep into the savaging waters of endemic debt. Only wealth-creation local lead innovations can and should address the debt problem. Until such a time that the politicians are accountable to the electorates, we will not achieve development as we ought to.

    ReplyDelete
  84. i think the point about aid from China is that it actually gets done, and quickly. Whatever price the Chinese are exacting for aid, at least they are giving something back effectively. In this way their aid seems superior to western aid.

    ReplyDelete
  85. This book is badly researched and lacks hard evidence. The thing is most people are not trained in philosophy and let along history and therefore have a hard time dealing with correlation and causation. Dr. Moyo sets out a good thesis but fails to prove it. For example she ignores the role of the State in Africa and economic development. She does not engage her sources well and of all things misunderstands Marx Weber's Protestant Ethic thesis (page 31-32), dismisses arguments by Jared Diamond etc. Overall, I did not buy her argument, it is simply lacking.

    ReplyDelete
  86. Economists in general are sometimes disengaged from reality

    ReplyDelete
  87. Anonymous,

    " This book is badly researched and lacks hard evidence. "

    Neoliberal economics is rarely if ever based on economic history. It is merely presumed as a given that free markets are 'better' than regulated markets, and government is 'less efficient' than the private sector.

    They never show an example of a country that actually developed through 'free trade', or show an example of a country that was actually helped by the IMF/World Banks's pro-capital/anti-labour austerity policies.

    They push it because it is an extremely profitable idea to have. Look at Ms. Moyo. Would Dead Aid be accepted as the basis for a PhD thesis? And yet we are talking about it.

    ReplyDelete
  88. What Dambisa tells us is that aid is a tool of subjugation. In all honesty she's so right, It will render huge financial lending institutions obsolete if Africa became self-reliant. Trade and not Aid.

    ReplyDelete
  89. But she is also against fair taxation and supports China's bussiness practises which she she as a trade off for investing.

    ReplyDelete

All contributors should follow the basic principles of a productive dialogue: communicate their perspective, ask, comment, respond,and share information and knowledge, but do all this with a positive approach.

This is a friendly website. However, if you feel compelled to comment 'anonymously', you are strongly encouraged to state your location / adopt a unique nick name so that other commentators/readers do not confuse your comments with other individuals also commenting anonymously.