Does assistencialism hamper development?

YES indeed. At least that is what Zambian economist Dambisa Moyo suggests in her book Dead Aid. She claims that foreign support to Africa has “has not only perpetuated poverty but also worsened it” by fueling corruption, creating dependency and reducing the accountability of supported governments to their citizens. She says that the larger the support is, the larger the potential harm on development becomes. The Anti-Bono, as the New York Times calls her, is requesting that all types of foreign aid allocated in African countries be reduced by 50% in the following five years. Some of her statements whilst interviewed by the NYT:

(I am hotter than J. Sachs!) Photo: Chris Floyd for The New York Time

Think about it this way — China has 1.3 billion people, only 300 million of whom live like us, if you will, with Western living standards. There are a billion Chinese who are living in substandard conditions. Do you know anybody who feels sorry for China? Nobody. Forty years ago, China was poorer than many African countries. Yes, they have money today, but where did that money come from? They built that, they worked very hard to create a situation where they are not dependent on aid. NYT: For all your belief in the potential of capitalism, the free market is now in free fall and everyone is questioning the supposed wonders of the unregulated market. I wish we questioned the aid model as much as we are questioning the capitalism model. Sometimes the most generous thing you can do is just say no.

Needles to say, Moyo doesn´t like the apparatus built by the Sachs, the Geldofs, the Bonos and other super stars of development who have worked to attract more funds to Africa and other poor areas. Although she might have a point regarding the relationship of lack of innovation and entrepreneurship and development aid (and she´s African), I don´t see how Africa could have a breakthrough for the best without suffering a number of catastrophes in the short term if the support is cut. The urgency is real, the needs are huge, and the ability to organize and generate income generating opportunities is null in most of the continent (BTW, is Africa a country?).

What is also true is that mere assistencialism helps to cope with the effects of extreme poverty, but doesn´t generate sustainable growth. Perhaps the relevance of Moro´s research is to rethink the way that development aid is allocated. She suggests more microfinance projects; I say: also social capital.