My Problem With Dambisa Moyo's Dead Aid

Updated: Aug 26


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In her widely successful publication Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africa, Zambian economist Dambisa Moyo posits the following argument. Foreign aid to Africa needs to come to a halt before it continues its destructive path in her home continent. Having read Dead Aid, I could not help but identify several troubling accusations and conclusions that Moyo came to. As such, the following is my critical review of her work, solely regarding Dead Aid, and my thoughts on the concept of development as a whole. While yes, I am not of African descent, nor do I have any direct connection with the vast continent, I do believe Moyo's contribution to development literature is important. I just so happen to disagree (!). In summary, I argue that Moyo’s challenge of foreign aid, and her argument to replace it, is simply a continuation of a western hegemonic approach to development: neoliberalism. Her emphasis on economic growth, when opposing foreign aid, and her solution to it, is underdeveloped as she ignores a range of additional factors. It is in this context a broader critique on the nature of development discourse is considered to illustrate, how the neo-liberal reform model espoused by Moyo is less relevant, and effective, for the development of sub-Saharan Africa that she and her ‘epistemic-community’ assume. Rather, development in a sub-Saharan African context ought to directly consider the needs and wants of its inhabitants beyond the approach to development Moyo argues from. Moyo defines aid “as the total of … concessional loans and grants” (Moyo, 2009, p. 9). She refers to “systematic aid” as the direct payment to developing country governments from multilateral institutions “such as the World Bank”, or bilaterally, “through government to government” grants which together account for a significant proportion of a recipient government’s domestic revenues (Moyo, 2009, p. 7).” (Moyo, 2009). Hegemony refers to the Gramscian concept of effectively “common-sense knowledge” believed to constrain the ability of individuals to recognise the “real nature of the world” and to, therefore, generate meaningful change (Haynes, et al., 2013, p. 182; Gramsci, 1971). Moyo’s argument against foreign aid focuses primarily on its perceived negative impact on economic growth and the way it enables corrupt and weak institutions. Moyo claims foreign aid is damaging for Sub-Saharan Africa because it encourages corrupt governments with “freely usable cash” to misuse these sums. This thereby contributes to weaker institutions and undermines property rights and the rule of law. As a result, foreign aid is viewed as a deterrent to domestic and foreign investment, reinforcing economic decline and increasing poverty rates, leading to more foreign aid; thus, completing a “the vicious cycle” (Moyo, 2009, p. 49). She argues aid has a pernicious effect through its creation of rent-seeking-states that lobby for foreign aid and transfer resources away from the generation of revenue “without trade or production of wealth”. Moyo maintains how aid-dependent countries do not need to “pursue tax revenues” and so are unaccountable to their citizens, which facilitates more corruption, weaker institutions, and undermines the social contract. (Moyo, 2009, pp. 53-57, 66). Ultimately, foreign aid produces a culture of aid dependency preventing Africa from implementing its own “economic and political policies” because of the conditionalities set by donors of foreign aid and lack of transparent and accountable governance (Moyo, 2009, p. 69). Regarding a fictional African state, the aid-dependent Republic of Dongo, Moyo presents her solution to replace aid-dependency with an emphasis on the free market. This is because foreign investment generates productivity growth, incomes, and employment – its own ‘virtuous circle’ (Moyo, 2009, pp. 78-79). She notes markets “have rewarded reformers”, that if a country were to default would not mean “the end of the world”. So, she maintains, Africa can open up to the global market and expect growth to “naturally” materialise (Moyo, 2009, p. 85). Moyo emphasises export-led growth because this will allow Dongo to further develop and increase its economic growth through the development of local industry development, higher tax revenues, and development of infrastructure (Moyo, 2009, p. 122) Moyo’s solutions, she claims, will not only end foreign aid-dependency but also see the “natural emergence” of good governance. This will reinforce and sustain economic growth and the need for foreign aid – the cause per Moyo of non-development and corruption in Africa - will be eliminated (Moyo, 2009, pp. 142-143). Moyo’s contribution to the wider foreign aid debate is acknowledged, not least that her proposed solution to development in sub-Saharan Africa would mean eradicating foreign aid. This separates her from others she claims do not propose a concrete solution regarding economic growth and development in Africa (Moyo, 2009, pp. 67-69). Unfortunately, much of Moyo’s criticisms of foreign aid are underdeveloped and one-sided particularly when considering Collier and Sachs. Collier argues while foreign aid is not perfect it forms part of the solution to the growth conundrum faced by developing countries. He illustrates this by stating that aid-recipient countries have less “capital flight” - the rapid outflow of money and/or assets (Collier, 2008; Epstein, 2005, p. 11). Similarly, a more careful reading of Collier suggests that he takes a more nuanced view of Moyo’s references to the thousand tribes “across sub-Saharan Africa” (Moyo, 2009, p. 32). Moyo suggests citing ethnic differences to explain African underdevelopment is “futile” (Moyo, 2009, p. 33). Compare this to Collier whose emphasis on “traps” provides a more nuanced account for why the sub-Saharan region has failed to increase their economic growth/development (Watts, 2009, p. 54; Collier, 2008). For Collier, traps include resource deficiency, either natural or due to exploitation, conflict, particularly civil war, and weak governance structures. These traps combine to determine the economic nature of a country leading Collier to analogously refer to globalisation as essentially a game of snakes and ladders (Collier, 2008). Countries with better resource endowment, improved geographic location have better chances of development than those suffering from the presence of Collier’s traps (Collier, 2008). Collier believes that the primary driver of weak economic development in Africa is explained by the “robust relationship between resource wealth” and low economic growth. This is compounded by the traps noted above which, taken together better explains Africa’s challenge in developing parallel to the globalised economy (Collier, 2008; Watts, 2009, p. 79). Moyo acknowledges Collier’s critique of the one-size-fits-all approach to development in Africa but does precisely that with her over-emphasis on foreign aid as the determinant of weak economic development outcomes in sub-Saharan Africa. This is evident when considering Moyo’s approach to historical and geographical circumstances/traps. Her discussion on the role of colonialization is per functionary at best and does not extend beyond a single paragraph and a citation from Wikipedia (Moyo, 2009, pp. 31, 158). Moreover, her consideration of the geographic and locational challenges African countries face is such that she compares Africa to countries like Switzerland and Saudi Arabia, where one is landlocked and the latter’s climate arid and hot, but despite these factors have been able to “get on with it” (Moyo, 2009, pp. 29-31). This ignores, of course, the historical development of Switzerland as a financial and banking hub for Europe (a benefit of its location) or indeed the natural resource wealth (oil) enjoyed by Saudi Arabia. This is elaborated by Sachs, including through his comparison of Africa and India, in terms of development. Sachs highlights India has a “large scale” irrigation system while Africa is solely reliant on rain for its agricultural production with obvious cost imposts (Sachs, 2011, p. 1). Besides, Sachs notes how unlike Africa, India was able to benefit from aid from the US between 1980-1990. That contrasted sharply during the same period with the development policy prescriptions the World Bank and IMF espoused which imposed free-market reforms and almost no form of foreign aid (Sachs, 2011). Moyo’s argument that foreign aid has increased the poverty rate in Africa confuses causation with correlation – specifically how Africa in the 1970s had a 10% poverty rate compared to contemporary Africa with 70% of Africans living on less than 2 USD a day. A range of studies, however, show how impoverishment in Africa followed post-colonial independence in the 60s and 70s (Sachs, 2011; Watson, 2013). In particular, Sachs rejects Moyo’s argument stating “Aid did not kill Africa “with a supporting dissection of Moyo’s reference to a microeconomic example of a mosquito net vendor Moyo calls this example a “micro-macro paradox” as the supply of mosquito nets through imports funded by foreign aid, the ability for a domestic vendor of mosquito nets in an African country, to do business, becomes increasingly challenging (Moyo, 2009, pp. 44-45). Since this foreign aid is unsustainable in the long-term, once the nets are sold out and buyers require more, the same domestic vendor is already out of business and production and the state is forced to turn again to the aid donors creating further opportunities for corruption impediments to economic (Moyo, 2009, pp. 44-45). Sachs admits “confusion” because Malaria in Africa causes “1 million preventable deaths per year”, yet Moyo remains “opposed to urgent help” (Sachs, 2011, p. 2). Foreign aid has been a generator of “thousands of jobs” created to combat malaria. (Sachs, 2011, pp. 2-3). For Sachs, the issue of foreign aid is a matter of accountability, and because Moyo is unable to provide a developed or “evidence-based approach” to discussing this issue, Sachs remains unconvinced by her claims (Sachs, 2011, pp. 2-3). Instead of solely focusing – like Moyo and indeed Collier – on economic growth as the real measure for development, Sachs argues for a range of alternative measures. This highlights the broader point that Moyo’s solution to aid-dependency is informed by the hegemonic neoliberal view of development discourse, rather than an approach which better accommodates and accounts for the needs and wants of sub-Saharan African inhabitants. In Shock Doctrine Naomi Klein considers the implications of the neoliberal market solutions Moyo posits for African development. Klein describes how neoliberal policies developed the concept of “Shock Therapy” whereby exploiting national disasters and economic crises, fundamental and far-reaching economic reforms can be undertaken and be justified (Klein, 2007, p. 9). Considering Moyo’s radical suggestion that eradicating foreign aid will propel African policymakers to devise and implement her solutions to address the kind of shock imposed on an economy with no access to foreign aid, certainly aligns within the description of Klein’s ‘shock therapy’ (Moyo, 2009, pp. 37-38). Sachs confirms this point by stating how Moyo arguing for foreign aid eradication will cause substantial economic disaster leaving “millions to die” in the process (Sachs, 2011, p. 2). In such circumstances, Moyo, per Klein, could impose her solutions which reflect neoliberal free-market theory (Engel, 2014, p. 1385; Hilary, 2010, p. 79). This clarifies and reflects how for an underdeveloped region like sub-Saharan Africa Moyo’s solution, and opposition to foreign aid, derive from the same hegemonic perspective, that of neoliberal market policy. Moyo’s hegemonic approach to development can be specified in terms of an ‘epistemic community’ which has approached development in the same way, offering limited new or meaningful solutions in the process. An epistemic community refers to “..a network of professionals with expertise in a domain and policy-relevant knowledge within that domain” (Haas, 1992, p. 3) Bourdieu discussed how such networks influenced the dynamics of power in society through Habitus and Doxa in reinforcing and producing the conditions of perceiving the world in inherent truths informing inform the decisions and behaviour of agency (Bourdieu, 1990, pp. 52-54). In the context of development in Africa, the approaches by Collier and Moyo for example, along with the IMF and World Bank all appear to reflect an epistemic community approach focusing on neoliberal market policy reforms, which following the Cold War, has evolved dominated approaches to development (Moyo, 2009; Haas, 1992). Hilary illustrates this hegemonic point further arguing how implementing Moyo’s solutions “would repeat the catastrophic” period between the 1980s and 1990s due to the policy prescriptions of the World Bank and IMF (Hilary, 2010, p. 79). In this regard, Escobar highlights further how Moyo’s solutions and position within the wider discourse of development are problematic as they are situated within the wider hegemonic sphere of neoliberal market development approaches. Escobar claims development capital, such as that proposed by Moyo and her epistemic community members can be identified as a form of control or indeed neo-colonialism because foreign aid and development solutions are framed by wealthier countries that determine the lives of the inhabitants poorer countries (Escobar, 2011, pp. 53-54). Thus, while Moyo does contribute, albeit provocatively, to the wider literature on development, she is unable to offer solutions that break new ground or challenge the underlying premise of foreign aid and development in a way that is separate from the hegemonic neoliberal perspective. Taken together, Moyo’s approach to development in Africa is overly focused on a single set of solutions that eschews foreign aid’s potential for development. Hence, development, as framed and informed by neo-liberalism, needs to be rethought. While foreign aid and aid dependency are significant economic issues, the more important challenge is seeking alternatives to the neoliberal hegemonic model of development, shown to have set the conditions by which donor countries have had to live by. This is something, unfortunately, Moyo fails to recognise despite her provocative contribution in dead aid.



Bibliography:

Bourdieu, P., 1990. Structures, Habitus, Practices. In: The Logic of Practice. Stanford: Stanford University Press, pp. 52-79. Collier, P., 2008. The Bottom Billion: Why the poorest countries are failing and what can be done about it. Oxford: Oxford University Press. Engel, S., 2014. The not-so-great aid debate. Third World Quarterly, 35(8), pp. 1374-1389. Epstein, G. A., 2005. Capital Flight and Capital Controls in Developing Countries. Cheltenham: Edward Elgar Publishing. Escobar, A., 2011. Encountering Development: The Making and Unmaking of the Third World,. Second e. New Jersey: Princeton University Press. Goldstein, J. S., 2005. International Relations. New York: Peason-Longman. Gramsci, A., 1971. Selections from Prison Notebooks. London: Lawrence and Wishart. Haas, P. M., 1992. Introduction: epistemic communities and international policy coordination. International Organisation Cambridge Journals, 46(1), pp. 1-35. Haynes, J., Hough, P., Malik, S. & Pettiford, L., 2013. Critical Theory. In: World Politics. New York: Routledge, pp. 172-189. Hilary, J., 2010. Africa: Dead Aid and the return of neoliberalism. Race & Class, 52(2), pp. 79-84. Kindleberger, C., 1986. The World in Depression, 1929-1939: Revised and Enlarged Edition. Second ed. Berkeley: University of California Press. Klein, N., 2007. Shock Doctrine. Toronto: Randomhouse of Canada. Moyo, D., 2009. Why Aid is Not Working and How There is Another Way for Africa. London: Penguin Group. Paynes, A., 2005. The Politics of Unequal Development. Basingstoke: Palgrave MacMillan. Sachs, J., 2011. Moyo’s Confused Attack on Aid for Africa. Huffington Post, 03 November, pp. 1-3. Watson, M. C., 2013. The poverty of postcolonial theory?. Postcolonial Studies, 16(2), pp. 230-232. Watts, M., 2009. Whither Development?: The Struggle for Livelihood in the time of Globalization. Macalester International, 24(11), pp. 79-131.


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