Can the West Save Africa? Debate on Aid Assistance

This article title is borrowed by a paper, written in 2008, by the elegant pen of professor William Easterly. His contribution, apart of being a very pleasureful reading, reviews key elements regarding the failure of the efforts of developed countries to push for development in Africa. Most policies, particularly those relying on liberalization and trade openness proved not to be the best tool to strengthen African economies, moreover Easterly blames those types of programmes that distribute money, through international aid assistance, to developing countries. Claming that too frequently the goals of the West are too broad and ambitious, he advocates for a marginal approach that favours small-scale and highly targeted projects that can be more easily monitored.


On paper, the great debate in development economics rests on the discussion over the effectiveness of aid disbursements from the rich and industrialized West to the poor “developing” South.

There are obviously several types of aid; first is the emergency aid such as the one offered from the international community to Haiti, secondly...

there’s the charity-based aid, frequently disbursed by foundations and NGOs. Then comes the Official Development Assistance (ODA) that systematically provides aid from donor countries to poor recipients. The latter consists in both government-to-government transfers, i.e. bilateral ODA, and transfers allocated via international organizations such as the World Bank and the United Nations agencies, i.e. multilateral ODA. And it is exactly this ODA, which transfers billions of dollars to the African countries, that is increasingly subject to debate. 

Easterly (2002). The Eusive Quest
for Growth - Economist's Adventures
and Misadventures in the Tropics

I will completely avoid listing data, giving impressive percentages on child mortality and statistics on absolute poverty since the need to push for development is rather clear. There is no further need to highlight why help to Africa is needed, if someone is interested can easily go trough a randomly selected -boring- report by the UN. The question is how to deliver that help. How to implement and disburse aid. 

When I first heard about Prof. Easterly’s strong critique of ODA and opposition against increasing aid assistance to Africa, I thought he belong to the hard-to-die Chicago school. I supposed he was one of those economists that believe in markets only, and see business freedom as the panacea for all evils. All the scholars, including those in Chicago, have as final professional goal: the well-being of people. They do care about our wealth improvements, on paper, they want to rise our income. Nevertheless, a  broad distinction can be made; most of the economists deal with the so-called enlargement of the cake to speed up the overall aggregate income, others focus on the distribution of the income trying to make the poor better off. The latter approach, in complete disregard of the size, stresses on redistributive policies and cares about how to split the cake. Well, in reading further Prof. Easterly masterpieces, I got aware that he is strictly against distributive inequalities and fully sensitive of the needs of poorest, nevertheless his recommendation is clear, before considering how to split the cake, we have to increase its size and, crucial point, ODA is everything but useful in providing economic growth in developing countries, particularly in Africa.

Addis, who for a weird homonymy, was my taxi driver in Addis Ababa once told me about his cousin. Addis managed to find a job for him thanks to a customer he drove around the city who was involved in the construction business. Well, the regular job as a worker in construction paid something around 10 birr – local Ethiopian currency – while continuing to be a beggar could yield a “salary” even higher, apart from preserving energy.  As a consequence, the cousin refused to enter the job and continued panhandling to the great disappointment of my driver Addis.    

I tried to reflect hard on this, but I haven’t found any argument supporting the thesis that this micro evidence should not work at the aggregate level. What is the incentive for a country receiving aid to work hard and make profitable use of that money so to exit from deep poverty and live without international assistance in the long run? 

Recently, a Zambian economist, Mme. Moyo, published an interesting book where ODA is addressed as the silent killer of growth.  Her position goes even beyond the criticism of Prof. Easterly: first of all she is African, although educated at Harvard and Oxford, then she is not advocating for a decrease or a reform of aid disbursement, she’s simply asking the West to stop giving aid. 

Moyo (2009),

Dead Aid - Why aid is not working 

and how there is another way for Africa

The question she addresses is reasonable and clear, and indisputable is the answer she gives.

Has more than one trillion of dollars in development assistance over the last several decades made African people better off? No.

Although her aim, consisting in an aid-free development for Africa, is standing to reason but I still question whether there is a chance to save this aid which she has declared dead. Is there any way to restructure the ODA in order to avoid feeding corruption and choking off inner growth? 

In this case, something came to my mind. What if donors allocate ODA taking into account the performance and efficiency of the recipient countries?

Steven Landsburg in «The Armchair Economist»

Speaking in terms of the micro example, it would signify to stop giving money to beggars while offering additional assistance to those opting for a job in construction. As a consequence, the income of a beggar is set to zero while the decision to work results much more attractive because it offers a salary plus additional assistance. How many countries and people will then opt to work?  

As stated by Levitt and Dubner, authors of the best-selling «Freakonomics», an incentive is simply a means of urging people to do more of a good thing and less of a bad thing. But most incentives don't come about organically. Someone - an economist or a politician or a parent - has to invent them. Maybe it is now time for economists and politicians to draw appropriate schemes to link international aid assistance to virtuous responses in developing countries. 

This article has been firstly publised for La Gazette Cournot (52), "Mama Africa", Strasbourg, March 2010, pages 20-21. [pdf]

Recommended Readings
William Easterly	Eclectic charisma, holds a Ph.D at MIT, consultant at the World Bank and fellow at the Global Centre for Development in Washington D.C., now full professor at the NYU.	The Elusive Quest for Growth ECONOMISTS’ ADVENTURES AND MISADVENTURES IN THE TROPICS MIT Press, 2002, 341 pages.
Dambisa Moyo	Zambian origin, holds a MPP at Kennedy School of Government, which, for those coming from another planet, is at Harvard University, and a Ph.D at Oxford. Substantial experience on finance with Goldman  Sachs and the World Bank.	Dead Aid WHY AID IS NOT WORKING AND HOW THERE IS ANOTHER WAY FOR AFRICA Penguin Books, 2009, 188 pages.