David Lammy is right about Africa (but wrong to make it about skin colour)

David Lammy is the worst sort of politician - lots of sound and fury, avalanches of slogans pretending to be wisdom, and a complete absense of any considered or measured assessment. You only have to watch how he attacked, without any evidence, the police over the Grenfell tower tragedy to understand the basis of Lammy's politics. And at the heart of everything from him is race - it is always (sometimes hilariously) about black or white.

The problem with this is that, when there's an underlying truth in something Lammy says, his painting it black and white means we lose sight of that truth - here's an example in a Tweet:

The world does not need any more white saviours. As I've said before, this just perpetuates tired and unhelpful stereotypes. Let's instead promote voices from across the continent of Africa and have serious debate.

I pretty much agree with what Lammy is saying here - our portrayal of Africa is trapped in images of semi-naked black children, in the memory of Live Aid, and in the pictures drawn by aid charities touting for cash. Through agencies like Oxfam, and our faux-virtuous obsession with international aid we perpetuate the idea that, without our help, Africa will not 'develop'. But it is not about the colour of anyone's skin, its about how we in the developed world perceive Africa.

The problem is that the 'help' we've given Africa has, in large measure, led to the problems people there face. After 100 years of exploitative colonialism we left and gave Africans socialism which when applied in Ghana, Tanzania and Ethiopia resulted in more poverty, starvation and death. In other places it led to hyperinflation and economic collapse. As noble ex-colonialists we then galloped in to the rescue with aid programmes designed to allow subsistence agriculture - the hard, brutish and short life too many Africans endure - to continue. What we didn't do was point Africans at what it was that made us rich (and is making the Koreans, Chinese and Indonesians rich too) - open markets, enterprise, free trade and the idea of business.

Today, despite the best efforts of us in the west, African countries - some of them at least - are turning themselves round in that proven capitalist manner - six of the ten fastest growing economies in the world are in Africa with Ghana and Ethiopia topping the pile. It's true that Africa still faces problems - the persistence of insect-carried disease, the scourge of AIDS - but it's biggest problem is still the stupidity of government:

The number of people paying the tax for sites listed as “Over the Top ” (OTT) – chosen by the government because they offer voice and messaging services – fell by 1.2 million.

The value of mobile money transactions also fell by almost a quarter, to 14.8tn Ugandan shillings (£3.4bn) between June and September.

So I agree with Lammy that, instead of British celebrities (even celebrity investigative journalists) indulging in poverty tourism we should perhaps use the occasion of a national telethon to get Africans to tell their success stories. Step through the marketing-speak here to see that, given a chance, business is thriving - and African business sounds just like business everywhere, driven, exictable, enthusiastic:

3 Wise Pixels (3WP) is a creative technology company dedicated to reimagining Nigeria’s digital landscape through curated technology and bespoke design. Based in Lagos, the company mirrors the ever-evolving landscape of the continent’s largest city – rapid growth, innovation, targeted problem-solving and distinct overtones of a rich cultural identity. 3WP champions innovation and authenticity at its core, resulting in a creative yet highly functional hybrid approach that cuts through the noise and congestion of the modern world.

This is where Africa's future lies and what we should be saying isn't "have some aid money" but rather "how can we help your businesses". Plus, I hope, helping resolve Africa's biggest challenges - set out clearly by the guys from 3WP:

Most of the risks we face come from the unstable political landscape in Nigeria. A lack of proper basic utilities like clean water, steady electricity, and waste management (to name a few) all contribute to a very tough living situation, which affects the physical and mental health of employer and employee alike. Not to mention the lacklustre education system, poor public transport solutions and even poorer roads, and the corruptible government agencies that oversee these things.

....

A glimpse of another Africa

Nairobi

You're all familiar with the Oxfam picture of Africa. The starving children, the smiling farmers kept from death's door by the good work of one or other 'aid programme', the wells dug and the women with bundles on their heads.

This is the Africa of development charity marketing and of the politicians' justification for the international aid budget. It's a rural, poor Africa where food crises are only a dry month away and where fair trade evangelists bring the good news - you can stay on your smallholding barely scraping a living for another year!

And the image is something of an insult - dare I say it, a rather neo-colonial insult. The implication is that, without the expertise of us rich, clever Europeans those Africans are condemned to a life of malnutrition, disease and desolation. It is wrong.

Think back to the terrible events in Kenya back in October - not the terrorism but the target of the terrorists. It was a Westfield shopping mall. Hardly the Oxfam image of Africa. This is another Africa, an urban Africa that isn't filled with subsistence farmers and big-eyed hungry children but with trade, with making, buying and selling things and with entrepreneurs:

I present to you Africa’s brightest young entrepreneurs. These are the ones who are making the most dramatic impact in Africa today in manufacturing, technology, real estate, media & entertainment, financial services, agriculture, fashion and the service industry. They are impatient to explore new possibilities and slowly but surely, they are building empires. 

OK, it's a bit gushing but this is a positive, exciting, growing Africa not the supposed basket case that the likes of Oxfam would have us believe. An Africa with people like Christian Ngan:

After working in financial services in France, first as an analyst at French investment bank Quilvest Group and as an associate at Findercord in Paris, Christian Ngan returned home to Cameroon to start his own business in 2012. With $3,000 of his savings, he founded Madlyn Cazalis, an African hand-made bio cosmetic company that produces body oils, natural lotions, creams, scrubs, masks and soaps. Madlyn Cazalis products are sold and distributed across more than 30 chemist stores, beauty institutes and retail outlets in Cameroon and neighboring countries in Central Africa. 

And with Seth Akumani:

Akumani, 30 is a co-founder of ClaimSync, an end-to-end claims processing software that enables hospitals, clinics and other healthcare facilities all over the world to automate patients’ medical records and to process records electronically. Claimsync’s solution allows these healthcare providers to easily prepare medical claims and send electronically to health insurance companies. In 2013 ClaimSync was the sole African company to participate in the high-profile, IBM, Novartis, GlaxoSmithKline backed Accelerator program HealthXL in Dublin. ClaimSync was recently acquired by GenKey, a Dutch-based biometrics company.

These men and women - more than all the international aid, fair trade campaigns and guilt-tripping charity appeals - are the future hope for Africa. But we never talk about them preferring instead our cosy little colonial myth. Believing it when we're told - again and again - that Africa is filled with poor farmers whose only protection and hope is the caring, kind and white face of Oxfam. That somehow the sort of society we enjoy - of urban wealth rather than rural poverty - is not something Africa can attain.

Africa has a long way to go - it's still too rural and too poor. But the answer isn't propping up poverty with subsidy but rather promoting business, entrepreneurship and trade. Backing the continent's entrepreneurs to do what entrepreneurs did for Europe, Japan and the USA - make us all, compared to today's Africans - rich.

....

Helping Africa (well sort of...)

****

This is brilliant - and so true:



....

Real international aid...

****

We are supposed to pat ourselves on the back because we're handing over £11 billion or thereabouts in aid to needy countries. Much of this either props ups government budgets (and in doing so reduces any incentive to actually collect some taxes) or is spent on politically-correct environmental and education programmes. But that's as maybe - there's a much more important support going from the UK to those needy countries:

Just one in 20 households in the UK make remittances, which are transfers of cash back to countries of origin to either families or communities. Yet, even though they are small in number, with an average remittance worth £31 per week, the World Bank estimated that last year some $23.16bn was transferred in remittances from the UK.

This money goes directly to real people, it doesn't need officials to administer it or aid workers to manage it. There's no need for grand plans or strategies. And it works - the people getting remittances spend it on improving their lives. On building better homes, on buying a bicycle or paying bus fares.

This is real international aid:
 

Analysis of household survey data show that remittances have reduced poverty and resulted in better development outcomes in many low-income countries. Remittances may have reduced the share of poor people in the population by 11 percentage points in Uganda, 6 percentage points in Bangladesh and 5 percentage points in Ghana. Studies in El Salvador and Sri Lanka find that the children of remittance recipient households have a lower school drop-out rate. In Mexico, Guatemala, Nicaragua and Sri Lanka children in remittance recipient households have higher birth weights and better health indicators than other households.

....

Yep, the Guardian does want poor people to stay poor.

****

As I observed the other day after a piece of nonsense about Peru and asparagus, the Guardian really does think that poor folk in the developing world should stay poor. A position they share with Oxfam and much of the international aid vampires.

The Guardian has confirmed this belief:

And it is pushing in an established direction of travel. At Davos last week, the World Economic Forum launched a report, Achieving the New Vision for Agriculture, advocating supporting subsistence farmers as "change agents". The peasant, declared dead only a year or two back, has been miraculously revived.

You see, the great and good daren't criticise the "100 charities and religious organisations" - they are sainted, above criticism. Were a prime minister, EU commisar or business leader to suggest that maybe a little more capitalism would be a better idea - that we apply the thing that made us rich to the task of making Africans rich - then a torrent of criticism and abuse would rain upon them.

The problem is that those "100 charities and religious organisations" are wrong and my (imaginary) prime minister is right. The prescription of the aid mafia is to subsidise poverty - to keep poor peasants as poor peasant.  Whereas I know that capitalism made us rich and it will make Africans rich too.

....

Hunger will disappear IF...we stop subsidising poverty and promote free trade

****

This year, many of the world’s most powerful leaders will meet in the UK. They must change the future for millions of people who live with the day to day struggle against hunger. But that will only happen IF we get together and make them act.

So goes the blurb from the latest campaign to feed the starving and hungry. As ever, the campaign has roped in a cavalcade of the great and good – Desmond Tutu, Bill Gates and even pretty pop boys, One Direction. And we are enjoined – nay, demanded – to take part in the great campaign to feed the hungry! To take this message to the G8 – that hunger will disappear if:

• IF we give enough aid to stop children dying from hunger and help the poorest families feed themselves
• IF governments stop big companies dodging tax in poor countries, so that millions of people can free themselves from hunger
• IF we stop poor farmers being forced off their land and we grow crops to feed people not fuel cars
• IF governments and big companies are honest and open about their actions that stop people getting enough food

All sounds pretty good stuff doesn’t it folks! Until of course you actually think about it for a minute.

Firstly, this is 100 organisations – NGOs they like to call themselves until they ask us for money when they suddenly become charities – that are very interested in how much aid is given. And, of course, most of the aid does very little to “stop children dying of hunger” since governments prefer instead to prop up badly managed national budgets, lecture poor countries about climate change and, more of this in a minute, keep subsistence farmers trapped in subsistence farming.

Corporate tax-dodging is the issue du jour – no progressive campaign would be complete without a call for action on tax-dodging by “big” companies. It may be the case that large companies aren’t paying enough tax in Kenya or Peru but where is the connection with getting people out of hunger? Unless you live in a sort of Stalinist world where only the benign state can feed people (which didn’t work in the Ukraine or China, I seem to recall).

Now we get to the big issue – those big companies, secretly backed by the World Bank “behind the scenes”, as Oxfam put it, are buying up land and forcing farmers off that land so they can grow commercial crops (too many of which, because of our bonkers response to climate change are bio-fuels). Yes folks, you’ve guessed it – the reason for all those taxes is so we can pay poor farmers to stay poor farmers.

This is a monumentally stupid proposal – that very subsistence farming, dirt-scrabble and back-breaking, is the main reason why people in these places fall repeatedly into famine and starvation. We should be encouraging more efficient farming – after all Oxfam and their mates aren’t suggesting that we G8 residents step away from our computers and return to the land! Nor are these NGOs proposing that the big British or Canadian farms are broken up and handed out in parcels to city dwellers – doubtless with a hoe, a horse and a plough.

So why on earth do these organisations want to condemn this and future generations of Africans to live a short, unpleasant life scraping a bare existence from a tiny farm? Why do Oxfam and others believe that subsidising subsistence is the way to proceed? Why do all the great and good – the bishops, pop stars and philanthropists – think it fine for them to live a comfortable life with soft hands but that those Africans cannot aspire to be web designers, software writers or management consultants?

Why does this alliance for good not campaign for the G8 to make some changes that really will help those Africans out of poverty – things like removing agricultural tariffs and trade barriers, ending the subsidising of industrial agriculture and promoting trade rather than the dependence of aid?

I can only conclude that these campaigners believe Africans to be somehow different – that free markets and free trade won’t make them rich as they made us rich. Only through state direction and intervention will people be fed and the resources for this feeding will come from our taxes distributed to the grateful peasants of Ethiopia and Laos through the agency of Oxfam and others in the aid industry.

So I won’t be supporting this “If...” campaign – not because I don’t care but because the best way to stop Africans – and other poor people around the world – from starving is to do business with them, to set them free from the tyranny of subsistence and to promote free enterprise and free trade.

....

Millennium Villages - the wrong kind of aid?

****

I have an abiding interest is the great trade or aid debate. I've always - since my days studying development economics thirty years ago - tended to favour trade as the best route out of poverty. Indeed part of me suspects that aid programmes may even crowd out local development.

The Millennium Villages project seems such an appealling idea:

The Millennium Villages Project addresses the root causes of extreme poverty, taking a holistic, community-led approach to sustainable development. Our work unites science, business, civil society and government in these efforts by empowering communities and partners alike to become a part of the solution to ending extreme poverty.

And that appealling message - wrapped up in the UN's Millennium Goals - has attracted a huge investment from charities, philanthropists and, of course, governments.  The idea of creating new villages with excellent infrastructure, schools, health centres and the benign advice of development experts seemed just right. A challenge met, resources directed and Africa freed from poverty!

But there's a problem. For all the grand talk, the list of great and good 'partners', endorsement from bilateral and multilateral aid agencies and the gushing words of politicians and celebrities, these Millennium Villages are not making the difference Professor Sachs claims:

Documents recently made public by the UK government reveal the cost of poverty reduction in the Millennium Villages Project, a self-described “solution to extreme poverty” in African villages created by Columbia University Professor Jeffrey Sachs. The project costs at least US$12,000 per household that it lifts from poverty—about 34 times the annual incomes of those households. This highlights once again the importance of independent and transparent evaluation of development projects. 

"So what" you might say - the benefit to those families helped by the programme in incalculable. That may be so but what of the opportunity cost? We know that relatively small cash transfers can transform lives:

There is robust evidence from numerous countries that cash transfers have leveraged sizeable gains in access to health and education services, as measured by increases in school enrolment (particularly for girls) and use of health services (particularly preventative health, and health monitoring for children and pregnant women). Effects are typically larger in LICs with lower baseline levels. Cash transfers also have a proven role in supporting specific vulnerable groups (people living with HIV and AIDS, orphans and vulnerable children). (DFID 2011)

The Millennium Villages programme represents a huge transfer of resources (34 times average incomes in the receiving country) but any evaluation lacks balance - indeed Sachs has made a virtue out of measuring only the impact in the villages themselves:

...Jeff Sachs noted in a 2006 speech that they were not doing detailed surveying in non-MV sites because—he said— “it’s almost impossible—and ethically not possible—to do an intensive intervention of measurement without interventions of actual process.” A paper the following year went on to explain that not only is there no selection of control villages (randomized or otherwise), there is also no attempt to select interventions for each village randomly in order to isolate the effects of specific interventions, or of certain sequences or combinations of interventions.

What we've discovered is that if you throw huge amounts of money at a relatively small number of families, you can transform their fortunes. The problem is that this can't be done for the entirety of Africa's poor families and, more worrying, the approach acts to embed susbsistence farming which is not in the long term interests of these families. And, as Michael Clemens points out:

...causing short-term improvement of some kind with charity does not make a development project successful. A successful development project does more with the money than an alternative project can—otherwise diverting money to the former makes everyone worse off than if that project didn’t exist. And that has ethical dimensions.

The Millennium Villages programme is perhaps the last of the grand Victorian ventures, a hangover from an approach to development that assumes poor Africans can't do it for themselves and have to be helped. Maybe its failure will change our approach to development and we'll realise that patronising the poor is wrong and appreciate that our protectionism, green exclusivism and home preference kills more Africans than we save with aid.

....

Evidence that bilateral aid is wasteful?

***

Not that it's a surprise:

Documents recently made public by the UK government reveal the cost of poverty reduction in the Millennium Villages Project, a self-described “solution to extreme poverty” in African villages created by Columbia University Professor Jeffrey Sachs. The project costs at least US$12,000 per household that it lifts from poverty—about 34 times the annual incomes of those households.

In fact, as this author makes clear, the level of dissembling by the DFID on these projects is even greater:

Can the Millennium Villages Project permanently triple the incomes of many people, or even any people, at the sites where it works? We can’t even say whether or not that has happened temporarily, much less permanently, because the project has never released any data about what has happened to the incomes of the people it experiments on. The project has been collecting income data for the past seven years. But hasn’t released any data about how incomes have changed over time. It has chosen to release other data on changes in non-income social indicators, but not the income data.

Can we guess that this high profile project promoted by a celebrity academic and funded by the British government simply isn't working?  Indeed the project appears to be little different from simply handing over cash:

The Millennium Villages Project is probably causing short-term improvements in things like access to clean water and skilled birth attendance at the sites it works in. My co-author and I showed this in a paper (available here, peer-reviewed version here), while we revealed that the project typically says those short-term effects roughly twice as large as they really are. But causing short-term improvement of some kind with charity does not make a development project successful.

...

What aid might teach us about quantitative easing

****

In times past we used to think that one effect of international aid was to act as an economic stimulus. And, in orthodox economics, this rather makes sense – we get an increase in cash within the local economy thereby stimulating demand.

The main role of foreign aid in stimulating economic growth is to supplement domestic sources of finance such as savings, thus increasing the amount of investment and capital stock. As Morrissey (2001) points out, there are a number of mechanisms through which aid can contribute to economic growth, including (a) aid increases investment, in physical and human capital; (b) aid increases the capacity to import capital goods or technology; (c) aid does not have indirect effects that reduce investment or savings rates; and aid is associated with technology transfer that increases the productivity of capital and promotes endogenous technical change.

However, the research into the effects of aid on growth are mixed – there is no consistent evidence that international aid stimulates economic growth. For example:

(1) The effect of direct foreign investment and aid has been to increase economic inequality within countries. (2) Flows of direct foreign investment and aid have had a short-term effect of increasing the relative rate of economic growth of countries. (3) Stocks of direct foreign investment and aid have had the cumulative, long-term effect of decreasing the relative rate of economic growth of countries. (4) This relationship has been conditional on the level of development of countries. The stocks of foreign investment and aid have had negative effects in both richer and poorer developing countries, but the effect is much stronger within the richer than the poorer ones. (5) These relationships hold independently of geographical area.

There remains a debate about the effect of aid but it is very clear that the simple fact of stimulus – the mere presence of the aid money – is not sufficient to promote growth. Some argue that the policy environment is important (and here there is a debate as to whether macro considerations such as trade openness and fiscal policies are more or less important than micro considerations such as protection for property rights and labour market flexibility). But whatever the details, the fact remains that simply chucking in a load of new cash -  in return for absolutely nothing – won’t do the stimulus job.

Which begs a question – there’s ample evidence of ‘Dutch Disease’ resulting from aid transfers. In simple terms, aid creates inflation making it more expensive to export and therefore harder for the recipient country to grow.

It seems to me that any policy designed to promote inflation in an economy – for example quantitative easing – runs the risk of having the same effect as international aid. Namely a significant risk of inflation and its associated brake on real growth. If we pretend – by the use of legerdemain and jargon - that quantitative easing isn’t inflationary, then we are kidding ourselves that billions in new money can be created and poured into the economy without that money having any effect.

The latest bout of quantitative easing is akin to giving the economy – worn down by years of self-abuse – a large espresso and hoping that will do the job of waking it up. For a short while it will feel OK and then the underlying hangover will kick back in – maybe worse than before.

....

Why we should question the value of bilateral aid

I’ve always believed in the value of international aid, that it is right that wealthy nations should assist less wealthy countries. I absolutely believe that, most of the time, governments are better placed to provide emergency assistance than private individuals or private organisations.

However, the problem with bilateral aid – where country X gives money to country Y – is that it becomes quickly a tool of realpolitik rather than a genuine act of philanthropy. Even where, as is the case with the UK, the use of aid as, in effect, an exporter subsidy is no longer allowed we can see how decisions relating to aid become wrapped up in other considerations – votes on international bodies, support for military action, clamping down on migration, and even investment decisions in the home nation.

The idea that Government is a benign, innocent compared to non-governmental bodies or international bodies is a complete misperception. And this self-interest extends to the people employed – the hundreds of people administering our huge aid contribution to nuclear armed India will be working tirelessly to try and prevent that subvention being cut.

Finally bilateral aid has to go via the government – there is no alternative as it is a sovereign transfer. And this means that, however well meant the decision to support a struggling place might be, the corrupt government there will take its cut of the aid before it arrives with those it is intended to assist.

Sadly, we do not apply ourselves enough to these considerations, to making the aid we give effective. Instead – much like the “I buy fair trade” argument – we shout around about how big the budget is rather than about the real outcomes of the work funded by that budget. I really don’t care whether the UK spends 0.5% or 0.7% of GDP on aid – what I care is that the money actually does some good.

Taking this view doesn’t make me some kind of moral leper, someone who doesn’t care about the development of Africa or the suffering of the world’s poor. Indeed, those who advocate increased aid budgets but support the subsidising of western agriculture should look to their own contradictions – the Common Agricultural Policy does more damage to Africa than our aid programmes do good. And much the same can be said for other market distorting actions of the developed world – the structure of financial regulation (making it ever more difficult for developing countries to build a financial sector – even massive countries like India), the subsidising of basic industries, the dumping of production surpluses in the name of “aid” and much else besides.

If we really cared about helping Africa transform we would start removing these barriers, we would concentrate on opening up our home markets to the products of poorer countries, we would incentivise moving production upstream (processing and packaging the coffee in Ethiopia rather than Banbury maybe) and we would concentrate our aid on disaster relief, educating women and disease prevention.

Instead we choose to wave and shout about how good we are and how much money we spend. I find this sad.

...

Banks, budgets and the Archbishop calling for unethical behaviour

****

Every now and then national newspapers – in what I guess is some form of social service – hand over prominent columns to senior churchmen. Mostly the resulting mushy thinking can be ignored or ridiculed in the same manner we treat thought for the day but sometimes the opinions expressed are thoroughly disturbing.

The Sunday Telegraph published a column penned by the Archbishop of Westminster – England’s top catholic priest – in which he urges the banks (or more specifically the leaders of banks) to behave unethically.

A key part of the change needed is to forge a cultural consensus in the financial sector that its licence to operate depends on a clear and demonstrable commitment to service. Of course, profits have to be made if an efficient and thriving financial sector is in fact to serve society. But the ethical judgment, which has to be transmitted right through the organisations concerned, is that profit must only be a means to this end, and not an end in itself. We have a long way to go to achieve this.

What the priest is saying is that managers within banks should make decisions that are not about securing the maximum return on the capital invested in the business. So what, I hear you all saying? This is wrong – not just against the interests of the business but straightforwardly unethical. Those managers – however much they are paid – are merely agents of the business owners. And the business owners require that the business focus on maximising return on investment (I know this because I am one of those business owners).

Secondly this priest says that financial organisations operate only under licence. Where on earth he gets this idea from (perhaps it comes from on high) but it is again suggesting that there should be some other relationship of significance beside those between owners and managers and between the business and its customers. Again it is unethical to suggest that a business should only operate under some unspecified entitlement rather than as a consequence of the free use of property.

The article then descends into typical priest-speak about social justice, equality and demonstrating a profound ignorance of economics and the point of measuring economic performance. And up pops the mushy thinking:

A great deal of the support which any government needs in such difficult circumstances will depend on the extent to which it is seen to be acting impartially and prudently, with a demonstrable care for basic human needs and a continuing sense of our responsibility in the wider world. A powerfully positive message will be sent if in Tuesday’s Budget the overseas aid programme to assist the development of the world’s poorest people is not cut.

Sorry Archbishop but the support for the government will come if it’s seen to be sorting out the mess – that’s it really. Where it matters – the bond markets, the stock exchange, the real economy – the positive response will come if the deficit is eliminated and the debt begins to fall. And not giving India £300 million thereby allowing them to buy up our manufacturing industry might be a good start towards achieving that aim.

...

Thoughts on why bilateral aid doesn't work

****

I have always tried to avoid writing about international aid – not because it’s a subject without importance but because, frankly, my neighbours in Cullingworth don’t put it in their top ten areas of concern. Indeed, there are plenty of folk out there who believe that charity starts at home. But I sense, in the debate about cuts, an imminent upwelling of righteous anger at the audacity of ordinary people who’d prefer their taxes spent on schools, hospitals and coppers rather than on buying 4X4s for ‘aid workers’ to drive around Africa.

Although to be honest, that’s not where the aid cash goes as the biggest (by far) recipient of UK aid is India (nearly £300 million in 2008). You know, that poor country that owns Jaguar and our steel industry (at least the bits it hasn’t closed down yet). Perhaps we should have sent some of that aid to Redcar instead?

OK, I hear you saying that all this can be fixed, a good government will shift the aid programme away from supporting Britain’s foreign policy to targeted support for the poorest countries. Somehow, I doubt this – the purpose of the aid budget is not to alleviate poverty but to purchase the continued support of the recipient countries (although how much this actually works remains moot). That and bilateral aid programmes continue to distort the development of poor country economies because they are not associated with requirements for policy changes.

It is in this last point that multilateral aid differs as the intervention of the World Bank and IMF is always associated with requirements to change economic policies, develop better legal enforcement structures and perhaps try to collect a few taxes. The aid is still market distorting but it provides the recipient nation with a pathway to better governance. That pathway includes things like ending arbitrary land seizure, repatriating overseas sovereign funds, collecting taxes and repaying (yes, repaying) some of that debt.

But when the donor nation doesn’t like the medicine prescribed it just sidles up to a giver of bilateral aid, reels out its sob story and lo, the aid is forthcoming. And nothing is done to give people property rights, no efforts are made to end graft and governments continue with market distorting programmes of urban food subsidy, price-fixing and nationalisation.

The changes that are beginning – slowly – to improve Africa are happening in spite of aid programmes. In truth aid programmes can actively discourage the development of a strong business culture – why bother developing the necessary infrastructure of a free economy when the aid fairy will drop some cash on you tomorrow? If we worried less about so-called fair trade, social justice and other such nonsense – and concerned ourselves with promoting free markets in Africa then we’d be doing a damn sight more for poor folk than all the billions of bilateral aid money.

But if we’re going to spend that money let’s use it to change things rather than prop up corruption, graft and the old third world disorder.

....