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Is Aid Really "Dead"?

Calling aid "dead" may sell books, but it does little to further the real debate. Too much is at stake for oversimplification. It's really her premise that should be dead on arrival.
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In her new bestselling book, Dead Aid, Zambian economist Dambisa Moyo seeks to drive a stake through the heart of foreign aid and its supporters.

Arguing that "millions in Africa are poorer today because of aid," Moyo says that the world's assistance has been "an unmitigated political, economic and humanitarian disaster for most parts of the developing world." If we believe her conclusion, international aid is a vampire that leaves dead countries in its wake.

It's time to put away the garlic. While her title is seductive, its main conclusion is wrong. The evidence just doesn't support it.

Let's take the case of Malawi, a country where I worked from 1988 to 1993. While still among the poorest countries in the world, there has been real progress because of strong cooperation between donor agencies, the government of Malawi, international organizations and local community groups.

Over the past decade, investments in improving the lives of women and children in Malawi have paid off enormously. Child deaths have been reduced by nearly 100 percent (from 221 per thousand in 1990 to 120 in 2007). More children are going to school than ever before, and the number who complete primary school has doubled. And, the number of women who now are using lifesaving family planning services has more than tripled, meaning that more women have the means to space pregnancies to healthier intervals and fewer will die in childbirth as a result.

These kinds of real results should not be ignored when we look at aid effectiveness.

It turns out that Moyo is really looking at only one particular kind of aid: the transfer of financial resources to governments. What she does not in fact talk about is what is at the heart of development assistance. Good aid involves more than money. It responds to locally-driven needs and includes technical assistance, institution building with governments and civil society, and the training of individuals.

Ironically, while condemning aid, she also makes the case for its value. Early in her book, Moyo mentions that "a well-functioning civil society and politically involved citizenry are the backbone of longer-term sustainable development." Strengthening civil society is, in fact, one of the cornerstones of most U.S. assistance programs.

Certainly, non-profit organizations such as mine (the Centre for Development and Population Activities - CEDPA) are working hard to help strengthen local communities and organizations, through training of leaders and on-the ground work to build local capacity. As a result, we see women joining together in countries as diverse as Nigeria, India and Nepal to push their governments to increase funding for maternal health. We see AIDS advocates pushing for an end to employment discrimination. These women and others are raising their voices on a growing array of issues. They are making huge differences in their countries - and "aid" has helped to strengthen their voices.

In pointing out the failures of aid - and indeed there have been some - Moyo should not generalize.

Aid is not only capital transfers. Much of the historic institution-building aid has in fact contributed significantly to economic growth in some of the best performing Asian countries today. That is certainly true of the Indian Institute of Technology, the Indian Institute of Management, the Indian agricultural universities, the Asian Institute of Management, and the Korean Institute of Science and Technology. Aid helped create and develop these groundbreaking institutions.

Moyo clearly points out some egregious examples of wasted aid. Is it a coincidence that those countries, such as Zaire, Somalia and Liberia, were proxy battlegrounds for the Cold War? Is it a coincidence that aid was given without considering whether or not it was effective or countries were well governed?

There is another, more substantive debate going on right now about reforming U.S. foreign assistance. Many have argued that we must learn from the past and remember some of the best examples of effective aid. What do the examples of "bad" aid from Moyo's book tell us about the best organizational structure for the U.S. Agency for International Development (USAID)? Is aid more or less effective when controlled by foreign policy priorities and the State Department, as it is today?

Calling aid "dead" may sell books, but it does little to further the real debate. Too much is at stake for oversimplification. It's really her premise that should be dead on arrival.