Dead Aid: Why Aid is Not Working and
How there is Another Way for Africa
Allen Lane, 2009
At Harvard in the mid-1990s, a young Zambian graduate student listened rapturously to Professor Jeffrey Sachs’s prescriptions to bring prosperity to developing countries through the free market. Sachs later abandoned many of his free-market prescriptions in favour of large-scale aid flows from the West to the developing world—and Dambisa Moyo, the former student in Sachs’s auditorium, felt deceived.
“It’s completely hypocritical and it was a great disappointment,” Moyo said at a recent event in Oxford. “I think he’s very dishonest… To me, as an African, the fact that he would dole out the prescriptions he does to other people [in Latin America, Poland and Russia] but doesn’t when it comes to Africa suggests to me he thinks we’re different.”
It is this sense of betrayal, not just by Sachs but by the larger international community, that fuels Moyo’s repudiation of aid as the solution to African poverty. It is the subject of her new book, Dead Aid, which makes a controversial anti-aid argument that should be read, if only to ignite discussion and force aid advocates to justify the status quo.
After setting out to debunk the “myth” that aid works, Dead Aid calls for an end to massive governmental and multilateral aid flows to Africa within five years, including all grants and heavily subsidised loans. Moyo’s claim is that turning off the aid tap will shock African governments into accountability by forcing them to innovate and find non-aid fundraising mechanisms. She spends most of the book describing the multitude of alternatives to “free money”, offering an exhaustive menu of free-market mechanisms that range from collective regional bonds and international debt markets, to small-scale development through domestic savings and microfinance. While she makes a strong argument for private sector strategies, she fails to explain how they can improve governance without the complementary emergence of viable democratic institutions and checks on executive power.
Moyo is the first to point out her argument is not new. Although it fails to engage with previous development theories and critiques, Dead Aid offers a fusion of classic dependency theory (blaming Africa’s underdevelopment on Western policies, namely aid) and free trade advocacy (promoting local growth through international trade and foreign investment). Though her ideas are clearly influenced by the tutelage of (a younger) Sachs and Oxford economist Paul Collier, Moyo dedicates her book to Peter Bauer, aligning herself with a martyr of classical liberalism, long maligned for his staunch criticisms of aid.
Despite her adept polemical positioning, Moyo’s actual diagnosis of aid’s ills remains painfully weak. In the preface, Moyo writes, “This book is a consequence of my thoughts and deliberations over the years.” Indeed, the book relies heavily on personal thoughts and deliberations rather than in-depth, or even cursory research. The first section rejects a litany of possible explanations for African poverty, leaving aid as the sole possible culprit of underdevelopment.
Instead of making a compelling empirical case for the detrimental effects of aid, Moyo launches a haphazard assault on alternative explanations for the continent’s economic stagnation. Without names or sources, she swiftly dismisses longstanding, well-researched arguments that have variously attributed Africa’s economic failures to the continent’s geography, climate change, colonial history, ethnic diversity, civil conflict and weak institutions. The reader is hardly convinced. For example, in order to shunt aside “historical factors, such as colonialism”, she proffers but a single paragraph (four sentences ending with a maddening footnote that cites the Wikipedia entry on the 1885 Berlin Conference).
Moyo repeatedly simplifies the complex challenges facing African countries today in order to overemphasise the extent to which aid is inhibiting economic growth. Ultimately, in bypassing context and the nuances of specific challenges, she weakens her own anti-aid argument. She decries aid for enabling corruption, engendering “laziness”, creating dependency, inciting civil wars and hamstringing civil society. These are important allegations, and familiar topics of conversation for any observer of Africa and development issues—but they are not grounded in evidence.
Throughout Dead Aid, Moyo insists on referring generally to the whole of Africa, and occasionally “Africans”, all the while describing Aid amorphously with a capital “A”. One cannot help but wonder what particular contexts and aid programmes Moyo has in mind, when the only “country” that appears in any detail in her narrative is an imaginary development hell-hole named Dongo, and when the only specific aid project she references is hypothetical, a malaria-net distribution scheme. Notably, this recurring hypothetical anecdote seems unlikely to fit Moyo’s own definition of “Aid”, as most “large-scale multilateral aid packages”, which go to governments, do not involve bed net handouts in rural areas. (The reference may refer to Sachs’s tireless advocacy for free bed nets throughout Africa.)
Despite serious shortcomings in Moyo’s dogmatic diagnosis, the book makes a compelling case for diversifying development funding by exploring private sector options. The list of free-market mechanisms Moyo recommends for financing growth is impressive, moving from the global to the individual scale. For example, she urges individuals to lend directly to African entrepreneurs through Kiva.org. Her big-ticket item for making the cycle stop is the international debt market, where African countries can work their way into investment viability.
Whether African countries can in the near future afford the sorts of loans that would create viable investment markets is unclear, particularly given the economic crisis that has dried up available credit across the globe. Yet Moyo reminds the reader that millions of dollars already sit on the continent in savings, money that could be invested at home, were attractive markets to emerge.
Once Western governments buy the argument that aid does not work, Moyo suggests they look to China for a development model that promotes growth. Moyo’s claim that, “in the last sixty years, no country has made as big an impact on the political, economic, and social fabric of Africa,” is dubious. But she is more focused on applauding China’s public and private “investment assault” than shoring up any sort of historical argument. Protectionists who detest the flood of cheap Chinese goods into African markets and human rights advocates who abhor China’s contentious non-interference policy will hardly be placated by Moyo’s somewhat bizarre presentation of opinion poll data, which is supposed to confirm that China’s presence is good rather than exploitative for Africans. (They may also be interested to know that Moyo was recently proposed  as a board member of Lundin Petroleum, one of the Western oil companies active in Southern Sudan.)
As contentious as her arguments are, Moyo herself looks poised to become a lightning rod for debate. She vociferously decries the “glamour aid” culture, faulting it for disenfranchising African politicians and their constituencies. Yet the hubbub surrounding the release of Dead Aid reveals the irony of the book’s endeavour: if Moyo hopes to persuade Western donors and African recipients to abandon aid, she can succeed only by catapulting herself into the heart of the glamour-aid fray she so fervently condemns. So far, the former Goldman Sachs investment banker seems to be doing just that; the society pages of the Guardian recently attended  one of Moyo’s book launches at the (glamorous) H√¥tel Balzac on the Champs-Elysées.
At her recent book talk in Oxford, Moyo said that Dead Aid was “designed to open up dialogue”. To this end, the book is already a great success. But a “clarion call for change” Dead Aid is not. Lacking evidence and specificity, and completely disregarding the disparate, though uniformly difficult political realities of Africa’s countries, Dead Aid is neither prescription nor plan. Readers excited by the free-market optimism and private sector solutions presented in Dead Aid are left wondering just how to get involved in the apocalyptic and opaque Africa the book describes. Add the challenge brought by the global financial crisis, and surely Moyo has plenty of fodder for her next book contract (publication set for 2010).
Zoe Marks is reading for a DPhil in Politics at St. Cross College, Oxford.