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Another Reason Why Aid to Africa Must Increase

Shanta Devarajan's picture

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Given its massive development deficits and the effects of the global economic crisis, many observers, included me, are calling for increased aid to Africa. Most of these appeals are based on Africa’s need for more resources.  But there is a different argument. 

Aid to Africa is today as productive as it has ever been. 

Craig Burnside and David Dollar identified a group of policies (including fiscal stability and low trade barriers) that strengthened the link between foreign aid and per capita income growth. These are the very policies that African governments have been improving over the past decade. 

 Even after the onset of the global economic crisis, and despite the fears that these

policies may be reversed, African governments have by and large been continuing to pursue prudent economic policies and, in some cases, even accelerating reforms. 

 In short, the policy environment to make aid productive in Africa has never been better.

To be sure, the Burnside-Dollar paper, like most seminal papers, has come under some criticism, mainly for its neglect of factors other than policy that make aid productive.  One of those factors, championed by Hansen and Tarp, and elaborated on by Guillaumont and Chauvet, points out that, independently of the policy environment, aid is productive when countries have suffered a negative shock. 

But this is what African countries have suffered in the recent past.  So whether it’s because the policy environment has continued to improve, or because of adverse external shocks, there is a strong case that aid to Africa should increase because it is productive.

Comments

Submitted by Anonymous on
I disagree, Africa needs to get rid of corruption and take care of its own problems, America (USA) and Europe needs to get out of there - and the MYLTINATIONALS too, China needs to get out there. We can not be helping Africa when our own citizens are in such need. We can forget all their debt and let it be. It is time for the truth to be told.

Submitted by Anonymous on
I am writing a research paper over our governments role in poverty in our country, and others. I am not having any luck finding reliable sources. If you have anything that would be of any use could you please let me know, it would be very much appreciated.

Submitted by Anonymous on
Hello, I wanted to ask if you found any great sources and that if it would be possible if you could share that with me. I would truly appreciate it. Thank you.

Submitted by Abiodun on
Dear Shanta, I apologise for failing to respond in time to the issues you raised. Good to discuss the issue of Africa. Aids.. aids to Africa.. and for how long? Is the continent that bad? In fact when one talks about Africa, the region of reference is Sub-Saharan Africa. I am stating that the region contributes large proportion of the elements of nature which support life. The region is well endowed in natural resources. The problem of the region is poor management by humans. In other regions of the world humans that inhabit the places have managed to develop the places even though they donot have the natural resources as found in Africa. These same human beings contribute to help countries in Africa to get out of their problems, and some people think it has to continue. It may not. Sure, Africa has its problems which stem from improper management and corruption. I am of the opinion that the object of focus should be these factors. Humans that are 20 years and older already have inbibed a set behaviour and may not change, but the younger ones can still be put on the right track. Possible solution to the problem in Africa is to educate the young generation. Part of the education must touch on the evils of corruption and the need to stay away from corruption, respect for order, allegiance to one's country and the need to leave the environment in a better form than it is for the coming generation. A subject should teach these and other relevant topics to the young population. The culture in large part of African countries have been destroyed and modified by wars and conflicts of varying dimension. This has created a lifestyle of thuggery and disorder. So the citizens have to be de-militised. It is the people of the continent that will change the situation of the continent, let them not keep looking for aids from outsiders.

Submitted by Joseph Mojoko Koroma on
The argument to increase aid in Africa can be viewed from two angles depending on one's school of thought. proponent of this argument believe that Africa should be rewarded through aids for any improvement made whether at the policy level or other socio-economic factors. Opponents on the other hand believe that increasing aid to Africa do not only create employment for citizens of the donor nations but also increases the rate of dependence on the power brokers. The latter view in my opinion stands a better chance of promoting African growth and independence. For long, the West has used aid as a remote control mechanism whereby African leaders have to dance to the tune of the power brokers. I think it is time for the West to partner with Africa instead of the Western world condescending to Africa. Africa has wealth and various resources. What is needed is capacity building, and creating an atmosphere of trust whereby Aids from the West mus tnot have a string attached that is detrimental to the receiving country. Take for instance the percentage of the aid money that go as salary for expatriates when such work could be done by nationals at a much lower rate. Wake up!

Submitted by Biadeg on
Dear Dr Shanta: I fully agree with you. This is perhaps the ideal time to reinforce the growth and help Africa. I don't claim to know better than you folks. With all due respect to these great institutions like the W. Bank, IMF and other international donors and development agencies, in the past, their aid for the most part was flowing to unproductive areas, with no proper evaluations or tied to political, sphere of influence and other underlying reasons. This was specially apparent during the cold-war era, where the Super Powers coupled with corrupt leaders submerged Africa into poverty and hopelessness for ages. Today, the global political equation has changed. Most importantly, many African countries seems to learn from their past mistakes and most of all from inspiring fellow nations and leaders like Mandella and S. Africa. They seem to be overcritical to themselves and outsiders. Africa has still a long way to go in the course of development. However, there is no doubt that it is on the right track now. This is therefore the ideal time for international development agencies like the W. Bank and IMF, and rich countries to really help Africa pull its resources, energy and optimism to lift itself out of poverty once and for all. Please continue to use your power and influence to echo this great call for help to Africa. My Best Biadeg for Ethiopia & Africa

Submitted by Patrick Jonathan Mwale on
I chose to disagree with the first comment. despite corruption and other things we may mention here, Africa is still in dire need of aid. a lot more dimesions and economic activities by developed world have affected africas development plans. it is high time indeed that truth has to be told. one thing to remember, economic activities of the north and the west have increased vulnerability of africans to global warming and climate change. in turn, africas reliability on rain fed agricuylture has been heavily hit. Africa is not all that an industrilised continent.

My point of view is that, aid to African countries must follow the country steps in good governance, democracy, fighting corruption, etc. It still really a big problem for some African countries to have a clear vision and leadership for their own development. Corruption and mismanagement still very high in many countries and few measures are taken. At another side, there is a good hope for some countries in African like Ghana, Mauritius, Rwanda, seychelles....which are demostrating a good will to improve good governance, good ressources management and leadership. Those countries of course must be supported. For exemple: Rwanda is among the poorest in the world. But with a high leadership and a clear vision, this country is doing miracles in service delivery, citizen participation, gender, and fighting corruption. Thank you.

Submitted by Udo Etukudo on
I do not agree that Aid to Africa must increase for the reason you have given - an improved policy environment. Simply carrying out reforms will not transform the average African economy into a Developed economy overnight. It all sounds too academic to me.The biggest operational challenge in most African economies today is securing adequate financing for the kind of investment spending that will form the catalyst for wealth creation and economic transformation critical for achieving national development objectives, and meeting MDG & poverty reduction targets. Aid, on the other hand, tends to be directed at non-catalytic soft targets that only helps to keep a bad situation from getting worse. Moreover, how realistic is it to pump in more Aid into economies that are massively underperforming, without jeopardizing macroeconomic stability? Historically, Aid flows have never been predictable no matter the policy environment. Raising levels of domestic resource mobilization is key ingredient that will put African economies on the path to sustained economic growth and development.

Submitted by Nadia69 on
Maybe we as Africans shouldn't stoop so low as to comment on anonymous's recent comment - but lest we allow the biased attitude to continue, let's put the record straight. Firstly, the 'civilised' Westerners raped Africa of its people through the slave trade. Then they divided up the continent amongst themselves - and now thay are wetting their pants because we will no longer allow the rape (resource) to continue as we forge new relations with the East. Go figure. The natives in Africa are revolting, but the neoliberalist attiude of the West stink to high heaven. Corruption in the West has been behind all the aformentioned traversties, so which hat are you wearing in your santimonious claims?

Submitted by Anonymous on
There is no doubt that under the current global economic environment, it is important to support the most vulnerable among us. However, we should not echo the need for additional aid without holding African's accountable for what has already been given. There is still rampant corruption and poor governance in Africa and while aid may be more productive now than it has ever been, actual impact from what is already being provided is still questionable. Aid is still highly fungible. So while I agree, Africa may need extra help coming out of this crisis but this should also be used as an opportunity to enforce good governance systems that can eventually reduce the regions dependency on aid.

Submitted by silvia on
i hope you are well...the article is very interesting..i think that africa is a very big country and it needs humanitarian help kind regards silvia

Submitted by Anonymous on
Poverty is not fought by aid but you fight poverty with health, education and jobs and this is where most of the African countries have failed, but most importantly, Africa does not need aid; Africa needs to get rid of this dependency syndrome on aid. Aid has created a moral hazard when it comes to Africa’s development. Aid should be in form helping Africa achieve the necessary economic growth and sustainability. Thus, Africa's aid should be in form of allowing Africa's exports into western markets without a high imposition of tariffs on exports, leading to a serious trade deficit in most of the countries. It is a fact that most of Africa's governments have indulged in mass corruption and military spending instead of improving the welfare of their citizens using Aid. Aid has perpetuated the existence of incompetent and highly wasteful governments and this would be the time African countries started thinking about ways to generate internal revenues to spare development. I'm not saying that aid is bad but it should only be accepted in times of emergencies such as disasters to help the needy.

Submitted by Mona Gupta on
Who wld appreciate this fact better than yourself that aid should be like a withdrawl instrument - a support which is there while the need lasts rather than last like a need forever. Like a surgeon plans his withdrawl on a patient operated upon his legs - ensures physiotheraphy right from day one so that eventually the patient can let go of the crutches. Depands how we are treating Africa- a cripple for life or a patient on the road to recovery. We need to break this vicious circle into a virtuous who would know better - the evils of grants and aid.

Submitted by Anonymous on
Flooding Africa with more money will not help. Africa does not need more aid. It needs better monitoring of where aid money goes and getting results. That includes fighting corruption.

It is but logical that under the current global economic environment, it is important to support the most vulnerable countries of the world. However history has proven that african developmental problems can not and will never be settle by flooding africa with more aid: Africans need to exchange thier natural resourses with technology ensure effective management of aid, fight corruption, and be fully intergrated, and active actors in the global economic systems. African countries also need to create an atmospher suitable for internal and foreign invertment to keep thier economy growing Best regards sanguv simon peter fomonyuy tel: 237 77932215 http://petersaguv.blogspot.com

It takes two to tango. Africa has always been an excuse for the few corrupt westerners to come and corrupt leaders in Africa. An African [politician is a resource hungry person and food is never shown to a famished person without them getting to salivate, eating after salivating is no sin. The body organs crave for it. I am not justifying corruption here. Am only saying that the people who bring development resources then entice the so called corrupt do so because they know that the poor fellows will be keen to steam so that when they themselves steal, they have someone to blame for it. Indeed, while so much talk on corruption subsists, so many wonderful pro-development efforts go unnoticed. I say like many that Africa needs funds for development. BUT the funds need to be channeled through the right institutions that are community driven and not driven by the ‘so called experts’. Some of us have been running programmes that focus on Agriculture where the level of community involvement tells tales when it comes to generating sustainability funds. Governance is not a concern and corruption is not common. I suppose the west is no honest than Africa. What the west has are accountability systems that have come to be by sealing operational loopholes. We therefore need to deliver to Africa, resources and systems to manage them transparently. Ingenuity will call for those starved of resources to look for opportunities and they will be trapped and arrested. Once that happens, the vice will die out. Unfortunately no one can create systems without institutions to own the systems, which calls for serious development of social and private institutions to drive development. A non haphazard approach to lending or development where so many resources run for little outcomes creates the confusion. I suppose there is so much institutional lacuna in Africa for anything to be condemned. Those that throw money to places without systems or strategies to achieve some desirable pro-people goals should be condemned as much as those who still gets condemned. America, the home of the private sector is also home for the most vibrant social enterprises. It is the social enterprises that drive honesty and development. It is not the private sector. Until the west comes with models of transparent development, there is need to say that this cannot be achieved through governments or the private sector. It has to be achieved through either a combination of both or the civil society. Investment has to be done. I urge all those who think that the money sent to Africa is lost to corruption to check the number of non-Africans who come to implement their benefactor programmes siphoning all the resources away in posh homes and vehicles while the pro-poor programmes they come to support cannot reach the monies even with their finger ends as the bottom of the till where the little money that the international staff have left is too far for the feeble hands. Yes there is need for funding, but the institutional models against which aid is channeled need to be changed. And I believe the people to be wary of are some government officers and 'international experts'. Transparency needs to be supported from a more automated perspective and project planning done in a manner that it takes care of all activities leaving nothing to discretion. Few understand Africa, yet they are very good giving ideas. That is corruption.

You seem to hold the truth in your hands, What better way to fix things than to give to Africa that which is needed. being able to exploit their own resource's with out the meddling of so called good intentions of westerners. Those westerners would need to send over the means of capitalism. They would need to license technology. Train the masses. and have an exit strategy upon successful implementation. Create futures for individualism and entire city's / country's. Which in turn allows them to hope for a better way of life. owned by individuals. That in turn builds governments and systems that can self stabilize. and the great trickle down theory reach's out to heal. (like a healthy immune system) I am aware of people with this exact theory in practice and would love to chat more on the subject.

Submitted by Anonymous on
I beleive the best way to help africa is to teach the people to think for themslves. This can be done by counteracting the effects of the many factors that are not allowing Africa in particular sub-saharan africa not to develop. Religion being the main factor, has played a great role in destabilizing the region in that it promotes larger families and 2000 years or more of values and traditions ( farming techniques) that do not correspond both in utility or neccessity to the challenges of the modern day world. Another factor is the aid itself in that in most cases it goes against the belief of prevention rather than cure. In the case of malria for example, i was working in a project in germany that wanted to help deaf children in uganda, and the main focus was on opening a school for deaf people cus of the effects of malaria. In one aspect this is important, in another aspect there was no initiation to use malaria prevention methods, bfr the mosquito breeding season. this , i believe ahs to change!

It is unfortunate that however bad the situation may be for the continent, policy recommendations seem not to be in favour of taking people out of misery. If we thought of increasing aid 40 years ago we could have been right. But thinking of increasing aid after delivering for 40 years and seeing no significant change may be difficult to sell. Why don’t we stop giving aid to Africa and instead champion the effective use of natural resources (in the true meaning) and eliminating if not reducing corruption. If we give corrupt countries aid while the neighboring countries with wars, rebels and pirates, what do we expect? We must expect corruption, wars, insignificant intra-trade, poor monitoring and evaluation and an ever increasing need for aid. If aid was effective in Africa we could have not needed aid by now. if we can measure the amount of money lost in the mineral exploration/business, oil, money kept by African leaders in foreign accounts, un-collected revenue (due to inefficiency) and compare it with the amount of aid from developed countries? If the amount of aid is greater then we need more aid. If not then we should stop giving aid to Africa and think of the right policy recommendations for the continent. The solution for Africa must come from Africa.

Submitted by Shabani on
To Sylvia (@social economy and philanthropy) Africa is not a country, it is a continent. I am very sick of seeing people discussing on Africa without even knowing the basis that even a baby of 1 day known. Again, Africa is a CONTINENT with more than 50 countries. Now, many of us are discussing the impact of foreign aid in Africa. I did not prefer to discuss the topic but to bring us just a little bit back in history, not the pre-Colombian time, just 20 years before Mobutu became President of Congo. Foreign Aid is not bad at all. Let us be clear with that. China, Greece, Italy, Poland, the Ukrainian SSR were beneficiaries of the UNRRA foreign aid. Spain, Korea, Brazil and many other countries have been (or still) some years ago recipients of foreign Aid from the international communities. In the 60's, DR Congo was more developed than South Korea. With foreign aid, remittances and technology transfer, all this built on a reliable government; South Korea is now the top leading country in the world. The DRC in going backward. I understood that in Africa, money per se is not the problem, but the governance is. No country can totally rely on foreign aid to build its economy, but if the governance and management of that amount of money in efficient and transparent, I think it can be more beneficial to the entire country and continent. In Africa we have some good examples of what a reliable government can do with Aid's money. But increasing Aid to countries that lack transparency, democracy and good governance would be a monumental mistake from development partners.

Submitted by Truth on
I'm getting tired of people who want to seperate North Africa from Africa!!! Come on, WAKE UP, Africa is a CONTINENT... and you know what? By saying that Egypt for example is not in Africa, you are just playing colonist's game! Come on, think wisely, Egypt is the country that used to be the black egypt (just type out black egypt in youtube and you will understand)... If you acknowledge that, you recognize, we have been a great nation, we, Africans used to rule this world!!! ... You just have to see the map in the top, left side that Mr Devarajan put on this page. I'm Egyptian! And MOST important thing I'm AFRICAN... people from north America who don't want to admit that are people ashamed of their roots and who don't want to be treated like "poor bla bla" because of all the stereotypes that we encounter HERE in Africa!

Submitted by david odhoch on
do kindly capture and publish more articles on youth development

Submitted by Alexandra on
My friend Madison is writing an peruasive essay for our English class on why we should send aid to Africa, do you have any opther goo reasons that she could use, or maybe some information on a counter agrument, about whatthe politicians would say. Also for me, what is your view on this whole Invisible Children Foundation, and the video that is taking the country by storm. Sincerly, and thank you for any feedback you send me, Alexandra

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