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The Future of Development Aid

Sri Mulyani Indrawati's picture

Even skeptics admit it: effective aid works. In the last 25 years, the share of poor people in developing countries has been cut by half, and the last decade has witnessed impressive development successes in countries once thought beyond help. read more...

Copyright: Project Syndicate, 2011.

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Submitted by Simon Jennnings on
The article says "Even skeptics admit it: effective aid works. In the last 25 years, the share of poor people in developing countries has been cut by half, blah blah .." It stands to reason that "effective" aid works - it's like saying "red paint will impart a reddish colour to whatever it's painted onto". Who cares about "effective aid"? It's the ineffective aid we should be worried about. Or the DEAD Aid as Moyo terms it. What bit of aid has worked? Or have countries developed in spite of aid, not because of it? Isn't the best way for a country to succeed to be independent from aid and all the associated clientelism, distortion, paternalism and delusion? A poor country hit by a natural disaster and in need of disaster relief needs aid to deal with that discrete problem. But once that is sorted out the case for classic budget support etc is less well made. But isn't this a bit like the story of advertising where one exec says to the other, "We believe 50% of our advertising budget is a complete waste of money; we just don't know which 50%"? Why not just buy (or offer to buy or underwrite) its bonds if you believe in the future of a country? or invest in it as China does? better than saying we believe in your future so we are offering you some more aid, even though over the last 40 years this has made virtually no material difference to your circumstances.

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