Dambisa Moyo Discovers Key to Ending Poverty

Last month I blogged a New York Times interview with Dambisa Moyo, whom the paper aptly dubbed the "Anti-Bono." A youngish woman who grew up in Zambia and holds degrees from Harvard and Oxford, she launches a frontal assault on foreign assistance in her new book, Dead Aid. For her, ODA is DOA. I worried in my post about her simplistic interview answers, which implied that aid has nothing to do with microfinance even though donors helped make it what it is today. I ended carefully:

I look forward to reading her book, where perhaps she recognizes these complexities.

Well, I did, and she doesn't. (Her publicist sent us a copy, so we got the Anti-Bono pro bono.) The book is sporadically footnoted, selective in its use of facts, sloppy, simplistic, illogical, and stunningly naive. I'll show you what I mean in a moment. But first, my characterization raises a question: why is anyone paying attention to this book? Well, I admired her pungency about rock stars:

Most Brits would be irritated if Michael Jackson started offering advice on how to resolve the credit crisis. Americans would be put out if Amy Winehouse went to tell them how to end the housing crisis. I don’t see why Africans shouldn’t be perturbed for the same reasons.

Touché. But in fairness, many activists propagating the idea that aid can save Africa know the world is not so simple---and that nuance doesn't win in politics. And Moyo's rhetoric is at least as simplistic. She has determined that aid is causing poverty: stop aid, and Africa will prosper. "We can put a man on the moon, so we can most certainly crack Africa's financing puzzle, jump-start economic growth and drastically reduce poverty" (p. 139).I have probably done more than anyone to challenge statistical studies showing that aid "works" on average. (This, this, this, this, this.) I sympathize less with Jeff Sachs than with Bill Easterly---though I eschew the extremism that both represent. I am not writing to defend the proposition that aid can save Africa. I am writing...in the name of evidence and rigor in the processes by which our politicians shape development policy. Don't laugh. That is what I do for a living.Seriously, in the Wall Street Journal's promotion of Moyo, we can see how intellectually irresponsible arguments play into ideological agendas. It would be a relief to know that aid is so useless we can dump it. But what if that kills kids?Here, adjective by adjective, is how the book bugs me:

• Sporadically footnoted. Someone worked hard to determine that Spain has defaulted on its debts 13 times since 1500 and Brazil 7 times since 1820. Moyo's book quotes such numbers without revealing sources.
• Selective in use of facts. Moyo hardly mentions how death rates among small children and babies have fallen in most of Africa since 1960---ditto for birth rates---thanks in no small part to aid.
• Sloppy. “Over the past twenty years aid to Africa has been on the decline ” (p. 74). On the contrary, aid to Africa recently set records. My colleagues Michael Clemens, Steven Radelet, and Rikhil Bhavnani "concede no long-term impact of aid on growth" (p. 46). Actually, they focus on short-term impact, leaving long-term for other studies.
• Simplistic. In Moyo's world, the Western donors can do no right and China no wrong. She criticizes the West for doling out aid to secure access to oil and other commodities (p. 14), but welcomes China's "new multi-pronged assault on Africa" born of the same motives (p. 104). She blames aid for propping up Mugabe in Zimbabwe---but omits that China provides much of it (p. 147).
• Illogical. The book's thesis has two parts. First, “Aid has been…an unmitigated political, economic, and humanitarian disaster for most parts of the developing world” (p. xix). Second, replacing aid with government bond issues, trade, and microfinance will lift Africa out of poverty. As for the first, she seems to mistake absence of proof (that aid helps) for proof of absence—and to confuse failure to prove benefit with proof of harm. To attack aid, she submits these facts to a candid world: the Marshall Plan is a bad metaphor for aid to Africa; aid was secondary to Botswana’s success; conditionality didn’t work; evidence that aid works in countries with good policies is unconvincing; aid has fostered democracy, which is over-rated in countries where people are just trying to survive; aid projects can have unintended and harmful side-effects; aid fuels corruption; and aid can cause inflation and Dutch Disease. I agree with most of these points, as far as they go. But the claim that aid has fostered democracy is a stunner—good news that ironically contradicts her emphasis on how aid reduces the accountability of government to the governed. It also has little basis in evidence.None of this proves that aid is the bane of Africa. Some people are allergic to penicillin. Others get well without it. So we should ban penicillin? Aid may be more dangerous than penicillin, but the logic is the same.And while bond issues, microfinance, and trade can be good, Moyo offers no evidence that the first two systematically reduce poverty. Trade certainly can, but pointing that out is as helpful as saying sales are good for profits.
• Stunningly naive. Moyo recognizes that aid and state oil windfalls both are pools of money that governments can tap instead of taxing their own citizens, potentially reducing their accountability to the public. But aid, she says, is much worse: “With mounting pressure for greater transparency in the oil, gas and mining sectors…the days of blatant looting and corruption in these sectors are surely numbered” (p. 49). Those petrocrats will soon be gone from Angola and Nigeria, but a little sunlight will never disinfect aid flows of corruption!Moyo wants donors to call African governments to tell them aid is ending, forcing the governments to reform. “Is all this as easy as it sounds? One phone call, and it all slots into place? Why not? Development is not a mystery” (pp. 148–49). Development is a mystery. That's why it's so important to study it carefully.

I could multiply examples.Moyo’s concerns are old and poorly argued, but I close constructively. For her concerns are also serious. She is passionate and authentic as she tries to tackle and explain big ideas. This is an early effort, and she can improve. Going forward, she must give up the search for easy answers.(For a couple of CGD works on these themes, see Moss, Pettersson, and van de Walle's Aid-Institutions Paradox and Birdsall's Do No Harm.  And watch CGD senior fellow Todd Moss speak at the Dead Aid DC book launch.)