Very little, argues one book; quite a lot, says another; a huge amount, contends a third. It all depends on the quality of both the donor and the recipientby Ngaire Woods / May 21, 2005 / Leave a comment
The World’s Banker by Sebastian Mallaby (Yale University Press, £19.95) The End of Poverty by Jeffrey Sachs (Penguin, £7.99) Overcoming Stagnation in Aid-Dependent Countries by Nicolas van de Walle (CGD, $23.95)
After decades of scepticism about development aid, the west is embracing it again. In 2001, a roadmap to the UN’s ambitious millennium development goals was launched, with governments signing up to the targets of halving global poverty and reducing disease and illiteracy. Tony Blair and Gordon Brown have just launched their Commission for Africa report, arguing for a doubling of aid for Africa over the next three to five years. So how much good would result from a big increase in aid? Three new books give competing answers. Very little, says Nicolas van de Walle in Overcoming Stagnation in Aid-Dependent Countries, unless we deal with the political malaise in poor countries. Quite a lot, says Sebastian Mallaby in The World’s Banker, as long as we keep NGOs away from the World Bank. An enormous amount, says Jeffrey Sachs in The End of Poverty, which makes the case for a big and immediate increase in aid.
Optimism about aid was last widespread in the late 1970s, exemplified by the Brandt report. But an even bigger wave of scepticism followed. By the mid-1980s, aid was being described as a monstrous way of transferring money from the poor in rich countries to the rich in poor countries. Aid does not work, it was said, only self-discipline and market forces can help solve developing countries’ problems. It seems to have taken two decades for that orthodoxy to wear off.
The new determination of politicians to reduce poverty and disease in the poorest parts of the world could produce extraordinary results. Some aid already has. Almost $100m in aid helped to eradicate smallpox by 1977. Many hope that the new determination to fight HIV/Aids in the poorest parts of the world will bring about some similar successes.
But not all scholars of aid welcome the prospect of a doubling of aid to Africa or anywhere else. Like lottery winners, these countries could suffer a number of ill-effects from such a sudden windfall gain. It could play havoc with their exchange rates, their internal markets and their budgets, increasing the risks of corruption and mismanagement. Until now, says van de Walle, aid has been used by politicians in poor countries to prolong…