Welcome back to our Book of the Month series, where we explore powerful works of fiction and nonfiction that have contributed positively to global discussions surrounding sustainable international development, education, equality and social change.

Our September Book of the Month is … Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africa, by Dambisa Moyo. ‘Dead Aid’ is a controversial piece of nonfiction, stimulating debate due to its depiction of foreign aid to African governments as an ineffective way to reduce long-term poverty. Dambisa Moyo is an acclaimed Zambian economist, with experience at the World Bank and Goldman Sachs, holding a PhD in economics from Oxford University and a Masters degree from Harvard University. She is currently a member of the United Kingdom’s House of Lords. In ‘Dead Aid’, Moyo argues that foreign aid has failed to reduce poverty or contribute to economic growth in a sustainable way: rather, it has fostered a culture of corruption, dependency and increased poverty. This book is interesting to read in conjunction with August’s Book of the Month (‘The Life You Can Save’ by Peter Singer) as it rests in opposition to Singer’s argument that foreign aid greatly benefits the economies of developing countries. Rather, Moyo argues that more sustainable changemaking methods are required to lead to effective results in the long-term. 

Detailed outline of the book’s contents:

Moyo opens by asserting that “in the past fifty years, over US$1 trillion in development-related aid has been transferred from rich countries to Africa”. Whilst this may seem like a positive figure, Moyo takes great lengths to undermine its positivity, highlighting how we live in a “culture of aid” and how our belief that foreign aid alleviates long-term poverty is in fact a “myth”. Despite flows of aid over the last several decades into Africa, most African countries remain heavily dependent on external assistance, thus rendering them unable to grow independently. Taking us through a history of foreign aid, she quickly challenges assumptions about the efficacy of historical governmental aid strategies. For example, she cites how the Marshall Plan (an American initiative enacted in 1948 to provide support to Western Europe following World War II), that is regularly used to show the power of foreign aid, cannot be applied to the case of supporting Africa’s growth as the economic ground states of the two continents are vastly different. She also critiques the aid industry in general, whose incentive to portray Africa as helpless and needy is not sustainable or empowering. 

Moyo outlines her problems with generic aid in Africa in general:

1. Dependency on donations and corruption – Historically, the legacy of unsustainable aid has led to increased dependency, where governments rely on aid rather than developing their economies. This creates a lack of accountability, as governments secure their primary source of revenue through donors rather than taxation, which leads to heightened corruption levels as governments do not need to be accountable to their citizens. 
2. “The Aid Trap” – Moyo argues that continuous flowing aid discourages entrepreneurial business ventures and local governance because it diverts talent and resources towards the management of aid programmes. She uses an example of an African mosquito net manufacturer who is put out of business by aid agencies giving out free nets. 
3. The impact on governance – Moyo also outlines how aid is often conditional on adopting certain political or economic policies, which is problematic as these may not align with the needs of the recipient country. 

She then resorts to a ‘shock therapy’ tactic and asks her readers, “What if, one by one, African countries each received a phone call, telling them that in exactly five years the aid taps would be shut off – permanently?”. According to Moyo, this would force countries to develop new financing mechanisms. 

Consequently, in the second half of her book, Moyo proposes some alternatives to current generic aid programmes in order to foster sustainable development in Africa:

1. Entrance into international capital markets – African governments should follow Asian emerging markets in accessing the international bond markets and taking advantage of the falling yields paid by sovereign borrowers over the past decade. 
2. The Chinese Model – by looking to the Chinese policy of large-scale direct investment in infrastructure, African countries can seek mutually beneficial economic partnerships and  stimulate growth in a more sustainable way. 
3. Trade – encourage trade particularly within Africa to generate wealth and foster economic independence. 
4. Private sector – businesses, both local and international, are better suited to drive economic growth than governments reliant on aid. The focus should be on creating an environment conducive to business growth with transparency in governance and stable legal frameworks. 
5. Microfinance and capital markets – empower individuals by promoting microfinance and access to capital markets, enabling individuals and small businesses to contribute to economic development.

Conclusion

Moyo’s argument demonstrates how the current foreign aid system is fundamentally flawed, as continually flowing donations to African governments can be harmful to local economies and foster dependency and corruption. Instead, the future of Africa lies in favour of development strategies that promote self-sufficiency, economic growth and independence, and government reform. 

Further questions to think about:

To stimulate further thought and discussion, perhaps reflect on the following questions: 

1. Do you believe that aid to governments in Africa should be stopped in favour of promoting local businesses, and economic policies that encourage trade, foreign direct investment and entrance into international capital markets?
2. Do you think that Moyo’s approach is too capitalist and economics-oriented? What do you make of her view in comparison to Singer’s effective altruism stance?
3. Do you agree that foreign aid leads to corruption in African governance?

Further reading suggestions: 

For further reading, perhaps explore the following resources:

• Why Dead Aid is Dead Wrong, Kevin Watkins, 2009, Prospect Magazine 
• Just Say ‘No’, Jane Wales, 2009, Stanford Social Innovation Review 
• The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good by William Easterly
  • Easterly advocates for a market-oriented approach in developing countries, emphasising the role of local actors and entrepreneurs. 
• The Bottom Billion: Why the Poorest Countries Are Failing and What Can Be Done About It by Paul Collier
  • Collier explores why the poorest countries are stuck in poverty traps despite aid efforts, highlighting reasons such as internal conflict, poor governance and resource dependency. He offers solutions like international cooperation, trade and targeted intervention. 
• Aid in Africa – The Idea of Development in Africa: A History by Corrie Decker and Elizabeth McMahon 
  • Two distinguished historians of East Africa explore the colonial roots of development and its postcolonial legacies, challenging prevailing international development discourses about the continent.