Jagdish Bhagwati, a Senior Fellow in International Economics at the Council on Foreign Relations and law and economics professor at Columbia University, reviews Zambian-born conservative economist Dambisa Moyo's best-selling book Dead Aid: Why Aid Is Not Working And How There Is A Better Way For Africa for Foreign Affairs magazine. Professor Bhagwati says that while there are a few problems with Dr. Moyo's thesis, it is overall a good indictment of the foreign aid industry and it's good that African voices are increasingly in the debate: "Moyo's analysis begins with the frustrating fact that in economic terms, Africa has actually regressed, rather than progressed, since shedding colonial rule several decades ago. She notes that the special factors customarily cited to account for this tragic situation -- geography, history, social cleavages, and civil wars -- are not as compelling as they appear. Indeed, there are many places where these constraints have been overcome. Moyo is less convincing, however, when she tries to argue that aid itself has been the crucial factor holding Africa back, and she verges on deliberate provocation when she proposes terminating all aid within five years -- a proposal that is both impractical (given existing long-term commitments) and unhelpful (since an abrupt withdrawal of aid would leave chaos in its wake)."
More from the pro-capitalist professor: "Neither China nor India, Moyo [pictured right] points out, owed their progress to aid inflows at all. True, India had used aid well, but for decades its growth was inhibited by bad policies, and it was only when aid had become negligible and its economic policies improved in the early 1990s that its economy boomed. The same goes for China. If history is any guide, therefore, the chief weapon in the 'war on poverty' should be not aid but [classical] liberal policy reforms. Aid may assist poor nations if it is effectively tied to the adoption of sound development policies and carefully channeled to countries that are prepared to use it properly (as President George W. Bush's Millennium Challenge program recently sought to do). Political reform is important, too, as has been recognized by the enlightened African leaders who have put their energies into the New Partnership for Africa's Development (NEPAD), which aims to check the continent's worst political abuses. But unfortunately, despite all these good intentions, if the conditions for aid's proper use do not prevail, that aid is more likely to harm than help the world's poorest nations. This has been true in the past, it is true now, and it will continue to be true in the future -- especially if some activists get their wishes and major new flows of aid reach the developing world simply because it makes Western donors feel good."
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BOOK REVIEW ESSAY: Banned Aid: Why International Assistance Does Not Alleviate Poverty
