A Brief Note On Dead Aid And Its Effects On African Economy

On one side of the issue the supporters of developmental aid believe that the United States is doing more than a great job by offering economic assistance to countries that need help to develop. These individuals are aware of the unfortunate poverty levels in many countries abroad. They believe that it is the duty of the American people to help reduce the poverty levels in countries in which people live with less than a dollar a day. In fact, some supporters believe that the U.S. is not offering enough support to the poorer countries. Many have

Whilst raising money for African charities at school I developed an interest in global inequality and alternative policies that can help low-income nations escape the poverty trap. Reading ’23 Things’ by Ha-Joon Chang, I was intrigued by his view on blaming free-market policies like SAPs that exposed sub-Saharan Africa to international competition, slowing economic growth. Hence, this extended my research to the other side of the

Riddell, Roger C. 2007. Does Foreign Aid Really Work? 1st ed. OXFORD: Oxford University Press, USA.

Modern African states have various problems ranging from corruption, to armed conflict, to stunted structural development. Africa’s ongoing political instability and economic crisis have hindered the improvement of Africa. Thus, the lack of money, advancement in technology, and climate has hampered economic development. Despite European mistreatment and oppression African’s have endured hardships that have encouraged economy, education, and political

The JSTOR Review by Kristian Hoelscher on the book Dead Aid elaborates how Moyo “half-right” in her critique of foreign aid nonetheless Hoelscher mentions how “her review is unfortunately shallow and lacking nuance” in the areas of acknowledging the successes of aid in Africa. Additionally, another review of JSTOR by S.U. Fwatshak reiterated how “aid could not have been the fundamental reason why Africa poor… African’s problem are rooted in a mosaic of a factors (157).” These two reviews provided to be good sources to shed light on the issues of foreign aid and to counter-balance the Moyo’s critique on aid. Lastly, the book is quite short with only one-hundred and eighty-three pages therefore it seemed so like some concepts needed to be elaborated more but were not. On the other hand, the reason I choose this as a source because it does a suitable job in showing the history of aid, speaking on aid effectiveness, and exemplifying the stagnant economic growth (e.g. ten percent Africans are living in poverty in the 1970s compared to seventy-percent now (Moyo 33)). While, I wished the book concentrated more in a section of Africa, such as Sub-Saharan, it was an insightful and factual

The large cash injection would then create a “greasing the gears effect” and allow for the jumpstart of economic development. Between the years of 1948 and 1952 the U.S. granted $13 billion to revamp the European economy (Dambisa, 2009: 35). This particular method achieved great success in post-World War II Europe and was known as the Marshall Plan. Due to its effective and unquestionable success in this era, the model was applied to economic development in Africa with the confidence that the same outstanding results would ensue. However, the application of the Marshall Plan to Africa is problematic for three reasons. One, the Marshall Plan had a rigid duration period of five years while, the concessional loans and grants to Africa over the last 50 years have been unending (Dambisa, 2009: 36). Two, European institutions were already in place to receive the aid efficiently and effectively. In Africa, however, these same institutions are either non-existent or grossly ineffective due to corruption (Dambisa, 2009: 37). The vast amounts of corruption have been heavily documented. Mobutu Sese Seko, President of the Democratic Republic of the Congo from 1965 to 1997, for example, stole an equivalent of U.S. 5 billion dollars from his people (Dambisa, 2009: 48). However, even the less corrupt rulers of many African countries had few options as to what to invest the aid money on. Consequently, the bulk concessional aid goes directly into consumption without a variety of investment outlets. This process does not solve the problem but instead, allows for the cycle to continue. Lastly, three, the money from the Marshal had specific targets to repair physical infrastructure such as, roads, communications, sewage, factories, and electric systems (Dambisa, 2009: 37) In Africa today, the scope of the

The main point of Banerjee and Duflo’s Poor Economics (2012) is that aid is neither good nor bad: there are instances where it can help greatly and instances where it can fail those it seeks to help(4). Aid is a powerful tool, therefore it’s imperative that we carefully select the right types of projects (Banerjee & Duflo, 2012, p. 4-5). Banerjee and Duflo (2012) present a few key points of action as a framework for approaching aid, with the broadest issue being the idea that too much responsibility is placed on the poor in making the most basic decisions (268-69). One example that Banerjee and Duflo (2012) offer is the fact that many of the poorest people don’t have sanitary water

One of my main arguments being how people do not believe that foreign aid helps, meaning they stop donating all together, creating immorality. This idea is supported in Banerjee and Duflo’s Poor Economics; they discuss the general reaction when faced with a major issue like poverty. Generally, our first instinct is to be generous and then our second thought is that there is no point to our generosity. Banerjee and Duflo are able to describe the general feeling that “our contribution would be a drop in the bucket, and the bucket probably leaks” (Banerjee and Duflo, 2). Regardless of the fact Banerjee and Duflo are trying to fight the assumption that we cannot do anything to help, it does not change the fact that this is the common belief when it comes to large issues like poverty. While I still believe that the frustration with inequality and poverty breeds immorality, I now believe that the bigger issue is on the global scale. In his book Encounter Development, Escobar makes the point that “development was – and continues to be for the most part – a top-down, ethnocentric, and technocratic approach, which treated people and cultures as abstract concepts, statistical figures to be moved up and down in charts of ‘progress’” summing up the immorality created by development thinkers who are there to “help” eradicate poverty (Escobar, 44). The inequality between the first world and the third world

In came into vogue that economic theory could benefit Third World countries, so humanitarians began to evaluate the best ways to help Africa through the markets [Barnett 100]. Furthermore, leaps were made in bolstering the efficiency of aid efforts, and it was discovered that the most effective systems were conglomerations of the state and NGOs [Barnett 107-108]. This may suggest that humanitarian efforts were transformed into vehicles for disseminating governmental and economic agendas, but conversely, aid organizations wished to increase their impact by cooperating with governments and the markets. Humanitarians were growing to appreciate the codependence of these avenues and that “everything was connected to everything else,” so they leveraged this new insight to the Africans’ benefit [Barnett

Some people speak against U.S foreign aid being sent to Africa for humanitarian reasons. Others speak out in favor of such actions. All of us have seen the news tickers with vital headlines about “people being devastated by droughts in Zimbabwe and unhygienic water in Sudan”, but what is their government doing about it. Personally, I’ve asked myself several founded inquiries about where is this foreign aid going to and what are some of the achievements being made. I’ve acquired over time well-built knowledge in relation to the United Nations and the work they perform globally to promote stability and development. I will be bringing in several valid arguments to get to the bottom of this controversial subject of

Every year sub-Saharan Africa receives around $134bn in loans, foreign investment and development aid, according to the UN. Nonetheless, sub-Saharan Africa is still the poorest region in the world. For many years the international community has debated over the reasons why every year billion and billions of dollars are not taking sub-Saharan Africans out of poverty. Three major groups have prevailed in the discussion. First, the people who totally blame Africa for not doing its job right, completely forgetting that most of the funds are not administrated by Africans. Second, the people who believe that even though aids are not working, the international community should keep investing funds in Africa even if is failing; one day they will work.

Western aid is known to fail to reverse poverty in poor nations for many reasons. The poor nations cannot continue to provide the aid that the western nations were able to give them. There is no real source of income from the poor nations to provide for the aid talked about in our textbook Think Twice such as pesticides for crops or contraceptives. These things were only ever able to be provided through assistance and donations. The aid provided by the westerners ultimately fails because it cannot be sustained. The aid also takes away the control of the poor because they are no longer able to provide for themselves. This causes them to feel helpless which has no positive effect on reversing poverty. Although the Western Aid only has good intentions

Most of the developing countries are mired deeply in economical obstacles, which prevent them from development significantly. In order to overcome those embarrassments world’s society struggles to find the efficient solution for poor countries’ economies. Historically, developed countries undertook policy of giving aid to their colonies, afterwards by the end of The Second World War the United States and United Nations embarked the global sponsorship to the developing countries and countries of the Third World due to humanitarian considerations. Since then many other countries have joined in the effort to provide financial aid to lesser developed or poverty ridden countries. But none of those countries that received an aid had experienced a prosperity phase and rapid economic growth.

Over the last 50 years, the world has struggled to maintain an economic balance and stability, while flourishing countries try to maintain a steady income to support its people and relations with other countries. Therefore, when a continent like Africa fails to maintain a stable government and economy, super powers such as America decide to intervene with its relations. Africa has great potential to become another pillar of the world’s economic structure with its mass amounts of uncultivated land. Unfortunately, corruption and irresponsible governments hinder that progress. Foreign aid while helpful should be limited to a yearly amount because it allows the government to repudiate responsibility and gives room for corruption; it creates a

Harvard Business School’s Case Study “Aid, Debt Relief, and Trade: An agenda for fighting World Poverty” outlines the steps, and missteps, that the world community has taken since World War II to address the efficacy of international assistance. The study focuses on international financial institutions (IFIs) and their ability to help poor nations break out of poverty and the possible obligations of rich, developed countries to assist the heavily indebted poor countries (HIPCs). Additionally, the study seeks to see if this assistance has been and can be parlayed into growth and investment for the HIPCs.