George Ayittey on "Dead Aid"

Posted by: Tedstaff

us195x284.jpgEconomist George Ayittey gave a blistering talk at TEDGlobal 2007, laying out his case that not only has Western aid not helped in most African countries — it’s actually hurting.

We asked Ayittey for his thoughts on the new book Dead Aid, which has lately been burning up the talk shows and opinion columns with a message similar to Ayittey’s. Author Dambisa Moyo says that aid is killing the very countries it’s supposed to help. She singles out for criticism the celebrity crusades to “save Africa,” and the skewing view they present of African life. Here’s a snippet of what Ayittey says about the issues Moyo raises; for the full interview, hit the jump:

If you want to help American farmers, you ask them what sort of help they need and whether such assistance is working. Why don’t Americans ask Africans what type of aid they need and whether the aid Americans have provided is working? So what is wrong with an African, Dambisa, telling Americans that the foreign aid they are providing isn’t working and it is “Dead Aid”?

Read the full interview, after the jump >>

Download the unedited notes for this interview, including reading list, sources and much more >>Dambisa Moyo’s new book is drawing new attention to the question of aid in Africa, and her thesis is quite like yours, but aimed at a mass-market audience (as she said on Charlie Rose). Do you think it is risky to sensationalize the issue?

I don’t think Dambisa is sensationalizing the issue strong enough. Americans were justifiably outraged when AIG, which received billions in U.S. taxpayer money in bailouts, paid out hefty bonuses to its executives. So where is the outrage when African leaders, who receive U.S. taxpayers’ money in foreign aid, build palaces for themselves while their people wallow in abject poverty?

More important, the presumption that Africans don’t know what is good for them and that Americans or other foreigners know what is best for Africans is extremely offensive. If you want to help American farmers, you ask them what sort of help they need and whether such assistance is working. Why don’t Americans ask Africans what type of aid they need and whether the aid Americans have provided is working? So what is wrong with an African, Dambisa, telling Americans that the foreign aid they are providing isn’t working and it is “Dead Aid”?

It’s clear that Moyo’s thesis draws from your work. How would you respond to those who assert that her views and yours are idealistic and ideological?

Our critics have not been paying attention to the literature on foreign aid. Our views are neither idealistic nor ideological but rather factual. There are three types of foreign aid: humanitarian relief aid, given to victims of natural disasters such as earthquakes, cyclones and floods; military aid; and economic development assistance. We have no qualms with humanitarian aid, and I am sure our critics would agree that military aid to tyrannical regimes in Africa is the least desirable. Much confusion, however, surrounds the third, also known as official development assistance or ODA. Contrary to popular misconceptions, ODA is not “free.” It is essentially a “soft loan,” or loan granted on extremely generous or “concessionary” terms.

The consensus that emerged decades ago was that foreign aid had not been effective in reversing Africa’s economic decline. Dambisa and I are simply restating a fact. And it is not just Africa. That foreign aid has failed to accelerate economic development in the Third World generally was also accepted. In 1999, the United Nations declared that 70 countries — aid recipients all — are now poorer than they were in 1980. An incredible 43 were worse off than in 1970. “Chaos, slaughter, poverty and ruin stalked Third World states, irrespective of how much foreign assistance they received,” wrote the Washington Post, on Nov. 25, 1999. Except for Haiti, all of the 13 foreign aid failures cited — Somalia, Sierra Leone, Liberia, Angola, Chad, Burundi, Rwanda, Uganda, Zaire, Mozambique, Ethiopia and Sudan — were in Sub-Saharan Africa. The African countries that received the most aid — Somalia, Liberia and Zaire — slid into virtual anarchy.

Is there a fundamental place where you diverge from Moyo?

Though we are both on point regarding the failure of aid programs in Africa, we diverge in two respects.

First, Dambisa wants all aid to Africa stopped in five years, which won’t happen. Over the decades, various African civic groups and persons, including myself, have called for a cutoff of aid to Africa. In a report drafted during a five-day forum hosted by UNESCO in Paris in 1995, more than 500 African political and civic leaders urged donor nations to cut off funds to African dictatorships and called for free elections in such nations within two years. If the West could impose sanctions against Libya and South Africa, then Africans could also call for sanctions against their own illegal regimes.

Second, I believe that the foreign aid resources Africa desperately needs to launch into self-sustaining growth and prosperity can be found in Africa itself, not in China as Dambisa believes.

Moyo’s work speaks to that deep urge among Westerners to “do something” — even something that may be deeply unproductive. What’s a more productive way to “do something”?

I think Westerners should resist that urge to “do something,” because the worst type of help one can receive is that which doesn’t solve your problem but compounds it. If Westerners want to help, they must carefully scrutinize and reform current aid policies to make them more effective. Both the Clinton and Bush administrations tried to but failed. Business as usual is no longer an option, which is what both Dambisa and I are against.

Foreign aid should be tied not on promises of African leaders but to the establishment of a few critical institutions:

+ An independent central bank: to assure monetary and economic stability, as well as stanch capital flight out of Africa. If possible, governors of central banks in a region, say West Africa, may be rotated to achieve such independence. The importance of this institution resides in the fact that the ruling bandits not only plunder the central bank but also use its facilities to transfer the loot abroad.

+ An independent judiciary — essential for the rule of law. Supreme Court judges may also be rotated within a region.

+ A free and independent media to ensure free flow of information. The first step is solving a social problem is to expose it, which is the business of news practitioners. The state-controlled or state-owned media would not expose corruption, repression, human rights violations and other crimes against humanity. In fact, it is far easier to plunder and repress people when they are kept in the dark. The media needs to be taken out of the hands of government.

+ An independent Electoral Commission to avoid situations where African despots write electoral rules, appoint a fawning coterie of sycophants as electoral commissioners, throw opposition leaders in jail and hold coconut elections to return themselves to power.

+ An efficient and professional civil service, which will deliver essential social services to the people on the basis of need and not on the basis of ethnicity or political affiliation.

+ The establishment of a neutral and professional armed and security forces.

The establishment of these institutions would empower Africans to instigate change from within. For example, the two great antidotes against corruption are an independent media and an independent judiciary. But only 8 African countries have a free media in 2003, according Freedom House. These institutions cannot be established by the leaders or the ruling elites (conflict of interest); they must be established by civil society. Each professional body has a “code of ethics,” which should be re-written by the members themselves to eschew politics and uphold professionalism. Start with the “military code,” and then the “bar code,” the “civil service code” and so on. These reforms, in turn, will help establish in Africa an environment conductive to investment and economic activity. But the leadership is not interested. Period.

Effective foreign aid programs are those that are “institution-based.” Give Africa the above 6 critical institutions and the people will do the rest of the job.

Africa is poor because it is not free.

George Ayittey responded to emailed questions from TEDAfrica Director Emeka Okafor and TED.com editor Emily McManus. Download the unedited notes from this interview, an 11-page PDF with reading lists, noted sources, and much more. TED intern Mischa Nachtigal prepared this edited blog post.

Comments (15)

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  • Terence Milbourn commented on May 1 2011

    Two questions have played on my mind recently.

    How can aid be made to achieve the purpose all recipients would want, instead of primarily or even only the outcomes the wealthy donors would prefer? And how, at the same time, could donors provide that aid, be seen as cool and earn status and recognition, improve their ‘brand’ if you will, and generate a genuine positive response from all recipients?

    The idea I came up with is called Cool Aid. Here’s my definition of what Cool Aid is, and what its not.

    Cool Aid is environmental, economic, equity and social progress all within the limits of the world’s natural resources.

    Cool Aid is help pure and simple. Aid with attitude. Voluntarily transferred or given from one country to another or from one or more donors to the citizens of a country; given with the exclusive objective of benefiting the recipient.

    Cool Aid may have no other function: it may be not given as a signal of diplomatic approval, or to strengthen a military ally, to reward a government for behavior desired by the donor, to extend the donor’s cultural influence, to provide infrastructure needed by the donor for resource extraction from the recipient country, or to gain other kinds of commercial access.

    Enshrined in Cool Aid is the idea that humanitarianism and altruism are the only equitable motivations for the this type of giving. In line with this ideal, Cool Aid promotes the development of giving aid and providing help with the goal of improving each individual’s freedoms to develop their own capabilities and of ensuring good governance.

    The road from where we are now and where we want to be is perhaps a million miles long. But as I have said elsewhere, the journey starts with one foot in front of the other.

    The question for me to answer now is, who’s coming with me?

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  • Wanir Barroso commented on Jan 2 2011

    • “Malaria control on the planet, so neglected diseases such as tuberculosis, we need many eyes, many ears and many hands to have some expectation of better days. We need to leave the condition of human suffering spectators.” Dr Wanir Barroso, sanitarian.

  • Duncan Green commented on Jun 2 2009

    Ayittey’s absolutely right on the kinds of institutions that Africa (or any other country for that matter) needs to prosper. But well designed aid can (and in some cases is) be part of that process. By caricaturing aid as old style Cold War handouts to dictators, Moyo actually detracts from an important debate – how to improve the quality of aid, and make sure it helps, rather than hinders, state building and the social compact between state and citizen. Here is my own review/commentary on Moyo, for those who are interested (http://www.oxfamblogs.org/fp2p/?p=273). I think the really interesting question is why the interest has been so phenomenal, given that the book is so mediocre, even compared to some of the other critiques of the aid industry.

  • Stacy Ewan commented on Apr 14 2009

    They need business opportunities, NOT sympathy. This is where I side with Moyo on China’s approach in Africa.

  • Kobina Arkhurst commented on Apr 11 2009

    Leila, you’re right to argue, following Pogge and Singer, that you have a duty to help those whom your actions affect. But I’ll also refer you to Hegel’s Philosophy of Right in which he argued that humanitarian actions would not be sufficient to alleviate the suffering of the exploited. If you genuinely feel concerned about the impact of US subsidies on African farmers, the solution, to my mind, lies more with tackling the problem at its source (cause) rather than treating its effects or symptoms. That is, you’ll be helping African farmers more if Americans and Europeans mount pressure on their governments and powerful lobby groups to scrap farm subsidies. Otherwise, all your efforts in Africa will be DEAD, and DEAD AID will more than ever be DEAD RIGHT! The farmers you help still won’t be able to compete, and you’ll be pouring money into a leaking bowl!

    On Ayittey’s call for institutions and freedoms, he couldn’t have been more right than that. Anybody who has closely observed Africa’s informal markets won’t fail to be amazed by the entrepreneurial dynamism of Africa’s people. What these people need are peace, stability, supporting market and legal institutions and the freedom to do what they do best. They need business opportunities, NOT sympathy. This is where I side with Moyo on China’s approach in Africa. China approaches Africa as a business proposition, not as a basket case for salvivic actions. The roads, railways and telecommunication systems Chinese firms are building in Africa all provide business opportunities for poor people in Africa. Farmers along the routes will be able to transport their produce to the urban market centres after harvest. That’s money in their pocket (apologies to Mr. Obama)! The fibre-optic systems provide opportunities for young graduates to spin-off internet-based businesses. That’s hope for future generations. It is worth noting here that the UK-based Vodafone recently acquired the national operator Ghana Telecom and the assets transferred to Vodafone included fibre-optic systems bankrolled and built by China. Perhaps if Africa’s Western partners begin to see Africa the way China sees it, there would be more fibre-optic cables, railways, energy plants and other productivity-raising infrastructure built in Africa. That is what will unleash Africa’s potential. Of course, this is not to say everything about China’s commercial strategy in Africa is welcome. But the challenges China’s commercial ambitions raise can be turned into opportunities with pro-active, coherent strategies. This is where African policy leadership becomes important. Unfortunately, African leaders have for long been so dependent on policy-driven aid from the West they are at their wit’s end how to respond appropriately to both the threats and opportunities presented by China’s expanding presence in their countries. This is one of the bad effects of aid: it helps African leaders not to learn to take tough policy decisions, it removes the incentive to be creative.

    Aid creates a multilevel patronage-clientage that distorts the proper functioning of the principal-agent structure and, in consequence, democracy in African societies. African leaders become clients to foreign donors and local officials and other non-state actors to the national executive, with responsibility flowing backwards to the top in the hierarchy. In this system hardly is anyone accountable to the local people, except perhaps in election years when politicians suddenly find the need to listen to the community. Even so, most would rather buy or coerce votes as it so often happens in Africa’s electoral autocracies. But many may have observed that in African countries where electoral competition between political parties is really keen there is often love lost between donors and their state clients in Africa because the latter suddenly finds its interest threatened by listening more to donor policies than to their own people. Unfortunately, though, this realisation only leads to unproductive spending in the election year, followed by a return to aid after the elections. Is Moyo not justified to argue that we put a stop to this vicious cycle and make African governments truly dependent on and accountable to their people? I think she is, and her thesis was the subject of a dissertation I wrote three years ago at a leading Western university. The criticism I received from one of the examiners is very similar to the criticisms I’m hearing of Moyo’s better argued case. But Dambisa Moyo should ignore some of these NGO workers; they are only protecting their livelihhods,but alas! at the expense of Africa’s future.

  • Leila Chirayath Janah commented on Apr 10 2009

    While I generally agree with Ayittey and Moyo, I have a few issues with this line of reasoning when it is applied to areas other than the type of bilateral aid discussed here:

    1. Poverty is everybody’s problem– we live in a global community. My actions as an American consumer and taxpayer play a role in the well-being of people in Africa (for example, farm susbisidies, which my government supports, make it impossible for African farmers to sell their goods to people on their own continent.). Thus, I have a moral obligation to do something about poverty. The philosophers Thomas Pogge and Peter Singer have written extensively on this.

    2. Given that I have to do something, I should be focused on doing things that poor people actually want in a way that doesn’t destroy existing markets. Sometimes this comes in the form of charity. Moyo supports donating money to Kiva.org, which can be viewed as a form of “aid” designed to meet a genuine need of the poor: access to microloans. All aid is not dead aid.

    I’m the founder of a social business, Samasource, that helps small African firms sell their services in US markets. We have taken donations to launch our business, and most members of our management team are American. If USAID would fund us, we’d happily take this money and expand our programs. Does that make our method “dead”? I don’t think so– just ask the Africans who’ve found work through Samasource.

  • Ebony Tan commented on Apr 10 2009

    It’s high time that African people be heard. They should be ask what they really need.This way, nothing is wasted.

  • RANDY LARROW commented on Apr 9 2009

    Empowering Africans to instigate change from within with an independent media and an independent judiciary are true starts. Is it realistic to assume giant institutions like these can be stood up without the leaders or the ruling elites? Who will lead the “civil society”.

  • Ebony Tan commented on Apr 10 2009

    This is so true..why not ask the people of Africa what they truly need ? that way help will not be wasted.

  • Saundra Schimmelpfennig commented on Apr 16 2009

    “Donor led” instead of “owner led programs” will always lead to unnecessary, inappropriate, or even harmful aid. Not only is this an issue with development aid, but is also a huge problem with disaster relief. Without a regulatory body overseeing international aid, aid agencies depend on pleasing donors for survival, therefore the assistance provided after a disaster can make things worse rather than better.
    Because decision making is based on pleasing donors, aid will not improve until donors change their expectations and behaviors. The US government and the US people need to fully understand the impact of international aid before giving. Giving poorly is worse than not giving at all.