Live Aid, Dead Aid and Smart Aid

“Live Aid”

This year saw the 25th anniversary of “Live Aid”, the 1985, “multi-venue” concert organised to raise funds for the relief of the famine in Ethiopia. For many people in the West, Live Aid was a seismic event, mobilising energy and funds on a scale not seen before – the concerts raised some £150 million.

The Live Aid Legacy, however, may not be all that positive, in that it was built on, and helped promote, an unbalanced picture of “third world” doom and disaster. Opinion polls of recent years have shown that for many, the mention of Africa triggers images of helplessness and hopelessness – images that in some ways are being fuelled by aid agencies.

The 2005 version of the Live Aid concerts tried to correct this. Billed as “Live8”, 10 concerts featuring over 1000 musicians from across the globe – “asked people not for their money, but for their voice” in support of the 8 Millennium Development Goals. This time, the emphasis was not on charity, but on Development.

“Dead Aid”

This is the title of a book published by Zambian economist Dambisa Moyo, which declares that “billions of dollars in aid sent from wealthy countries to developing African nations” have not helped to reduce poverty and increase growth. She argues that aid “has been, and continues to be, an unmitigated political, economic and humanitarian disaster for most parts of the developing world”.

As so much else in the book, this is an over-statement, but her argument that aid can have negative effect on the political and economic situation of a country is valid. There most certainly are problems with the current aid system, although closer analysis of the problems listed by Moyo show that her claims are exaggerated.

• Political: In countries with weak parliaments, dependence on aid can make it more difficult for good governance and political reform to succeed. Aid can contribute to a “strong President, weak Parliament” syndrome and distort political accountability.
• Economic: The effects of aid on economic growth are disputed, and possibly best summed up by this article: “Controversies over the impact of development aid: it works; it doesn’t; it can, but that depends…” The conclusion: “one way or another, aid does appear to work”, and economic “growth would be lower in the absence of aid”.
• Social: Poverty reduction requires sustainable economic growth, and sustainable growth requires healthy institutions. A stable middle class is both an input and outcome of such healthy institutions, and poverty reduction therefore requires the nurturing of a middle class. Aid, however, does not generally support the middle class, and is not intended to, either.
• Corruption: Moyo claims that aid facilitates corruption. This is wrong, and misleading: international research found that foreign aid decreases corruption, and well-targeted aid can support initiatives and mechanisms that reduce corruption. (see also these “Myths & Facts of Corruption”)

While it may, therefore, produce good sound bites when Dambisa Moyo claims aid is a disaster, the truth is that most aid is not a failure at all. The key issue is not to expect more from aid than it can deliver.

The truth is that much of today’s international aid is given in ways that suit the donors, more than it suits the recipients. Contrary to the popular belief that the main purpose of aid is to assist the poor, “substantial evidence points to political, strategic and welfare interest of donors countries as the driving force behind aid programmes”.

Rather than conclude, on the basis of this fundamental problem with today’s overseas aid, that we must end aid – like Moyo advocates – the solution should be to make aid work for the poor. Aid needs to be made smarter.

Smart aid

“Smart aid” is:

• Sufficient in scale and delivered in a predictable manner;
• Measurable so taxpayers and recipients can see results;
• Accountable to the poor for whom it is intended;
• Responsibly managed and coordinated at the highest level of donor governments;
• Transparent in presentation to allow scrutiny by civil society.

Ireland’s development NGOs are actively engaged in the international debate about making aid more effective. A debate that is not helped by simple one-liners à la Moyo, but that needs to be based on a genuine concern to do our utmost to end the scandal of extreme poverty. Don’t expect miracles, but do let us know if you have suggestions on how we can do better.

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Reactions to “Dead Aid”

From Africa:

• Dambisa Moyo about Dead Aid  and also here
• ‘Dead Aid’ – Dambisa Moyo, a detailed review
• ‘Dead Aid’ by Dambisa Moyo – a review
• Dambisa Moyo’s ‘Dead Aid’ – Africa’s PR disaster
• Dead Aid, or wrong approach?

From elsewhere:

• Bill Gates calls Dead Aid evil
• Gates v. Moyo: are aid critics getting trolled?
• Gates and Moyo: Assume the best first
• William Easterly on Dead Aid
• Thanks Bono, but No Thanks
• ‘Dead Aid’, Dead Wrong
• Dambisa Moyo goes stellar. Why? – Some reviews