Ms. Moyo does more than criticize foreign aid. She highlights alternative sources of revenue for developing countries: private capital markets, foreign direct investment, trade, micro-enterprise lending, remittances and private savings. Governments still could squander the funds collected but likely could get away with doing so only once. Private actors learn more quickly than government donors, which until recently, at least, never found an oppressive, corrupt, statist regime they didn’t want to continue subsidizing, irrespective of its past failures. The open aid spigot encourages the worst governmental irresponsibility.
Thus, in Ms. Moyo’s view, the starting point of helping Third World states is to stop pretending that the aid-based development model currently in place will generate sustained economic growth in the world’s poorest countries. She suggests telling Third World states that the financial flow will end in five years. Other than temporary disaster relief, there will then be no more Western cash to underwrite African failure.
Would Africans give up? No, she argues: Isn’t it more likely that in a world freed of aid, economic life for the majority of Africans might actually improve, that corruption would fall, entrepreneurs would rise, and Africa’s growth engine would start chugging? Give Africans a chance to make a better life, and they would grab it and go.
Dead Aid is a wonderfully liberating book. One of the most depressing aspects of the whole aid fiasco is that donors, policymakers, governments, academicians, economists and development specialists know, in their hearts, that aid doesn’t work, hasn’t worked, and won’t work, Ms. Moyo writes. They might not speak the truth, but she will.
In doing so, she shows us the way forward. Breaking the negative aid cycle would finally give the African people a chance to control their own destiny. Grievous political and social problems would remain, and success still would not be easy, but the opportunities so long denied Africa’s people finally would come within their reach.
• Doug Bandow is a Senior Fellow at the Cato Institute. A former special assistant to President Reagan, he is co-editor of Perpetuating Poverty: The World Bank, the IMF, and the Developing World (Cato Institute).