Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africaby Dambisa MoyoThe Aid Trap: Hard Truths About Ending Povertyby R. Glenn Hubbard and William Duggan

Abstract

Click to increase image sizeClick to decrease image size Notes It has to be noted that the dam, like many such projects, has been associated with significant safety, population relocation, and environmental problems. The term was coined by John Williamson who also identified the measures I mentioned. See, for instance, John Williamson, “The Washington Consensus as Policy Prescription for Development.” Lecture delivered at the World Bank on January 13, 2004. Available on the Institute for International Economics Website. Joseph Stiglitz in Globalization and Its Discontents has been very critical of the one-size-fits-all nature of the prescriptions, also vehemently attacked by the antiglobalization movement, which has equated them with neoliberal policies. See also Moises Naim, “Fads and Fashion in Economic Reforms: Washington Consensus or Washington Confusion?” at ttp://www.imf.org/external/pubs/ft/seminar/1999/reforms/Naim.HTM. Moyo acknowledges the contribution of geographical determinists like Jared Diamond (Guns, Germs, and Steel) or Paul Collier (Africa: Geography and Growth); believers in institutions securing property rights and maintaining law and order like David Landes (The Wealth and Poverty of Nations), Niall Ferguson, and Dani Rodrik; or believers in cultural norms, social mores, or religious factors along lines like those followed by Max Weber. The 10 criteria are starting a business; dealing with licenses; employing workers; registering property; getting credit; protecting investors; paying taxes; trading across borders; enforcing contracts; and closing a business. The economic history literature listed in their bibliography is well known and of high caliber. I would have added Ronald Findlay and Kevin H. O'Rourke, Power and Plenty: Trade, War, and the World Economy in the Second Millennium (Princeton, N.J., 2007). The authors also object to the notion that science and technology permitted the industrial revolution in the West and that they can therefore eliminate poverty (an idea, I believe, shared by Keynes). Instead, they argue, it was “the rise of the business system” that “was the key that made the industrial revolution possible.” Also interesting is the authors' view that leading Nobel-prize-winning economists from free-market countries such as Wassily Leontief, Robert Solow, and Arthur Lewis, although “differ[ing] in many details…all agreed that economic growth came from moving from agriculture to industry.” More important still, these very same economists, as the authors add, with their analyses that were technical and applicable to any system basically sanctioned socialist systems and “influenced generations of aid professionals up to the present day.” See, for instance, Paul. N. Rosenstein-Rodan “Problems of Industrialisation of Eastern and South-Eastern Europe,” The Economic Journal, vol. 53 (1943): 202–211, and Albert O. Hirschman, The Strategy of Economic Development (New Haven, Conn., 1958). See also Jeffrey Sachs, The End of Poverty (New York, 2005). Sachs was the head of the task force commissioned to develop a viable action plan to achieve the Millennium Development Goals. Its final recommendations appear in Investing in Development: A Practical Plan to Achieve the Millennium Development Goals. See http://www.unmillenniumproject.org. One of the standard charges against the U.S. government is that its Official Development Assistance numbers in GDP percentage terms are very low compared to other Western countries (in absolute terms the United States is obviously the largest donor in the world). But if philanthropy and remittances from immigrants are factored in, Americans look vastly more generous. See, for instance, The Index of Global Philanthropy and Remittances 2009, the Hudson Institute. See Susan B. Epstein, “Foreign Aid Reform, National Strategy, and the Quadrennial Review.” Congressional Research Office. April 2010. The “three pillars” characterization is accepted by, among others, Senator John Kerry, chairman of the Senate Foreign Relations Committee.