Real Aid to Africa

This is me resisting the urge to start this post with a joke about how many Somalians you can fit into X vanishingly small space.

Ahem . . .

I am not sold on the idea that aid to places like Sub Saharan Africa is as royally un-good as some libertarians claim. Still, I'm sympathetic to arguments such as those made by two of my former bosses, Chris Preble and Marian Tupy, in Reason Online this summer. They note:

The aid is ineffective because of the appalling way in which Africa is governed. In recent decades, of each dollar given to Africa in aid, 80 cents were stolen by corrupt leaders and transferred back into Western bank accounts. In total, Nigerian President Olusegun Obasanjo estimated, "corrupt African leaders have stolen at least $140 billion from their people in the [four] decades since independence." All that is left when these regimes eventually collapse is a massive public debt.

But this argument falls apart just as soon as we find un-corrupt African leaders. Or at least ones relatively so.

Preble and Tupy go on to argue that reducing trade barriers is a far more profitable way for the US to confer far greater aid to the developing world. I'll agree with them here too.

I do, however, think that there's much to be said for limited, wisely spent wealth transfers from rich Westerners to poorer people in the world. If the notion of welfare in the U.S. has any merit at all, where our "poor" almost all possess indoor plumbing and television sets, how much greater a thing is it to elevate someone from $1 to $5 per day in the third world? (And they're certainly more deserving than welfare payments to cattle, notes Sir Bob Geldorf - thanks to Marginal Revolution for the link.)

The New Zealand Herald recently took note of a success story in the former Soviet satellite of Mozambique. There, debt relief from the West was coupled with free market reform, and the result has been a decade of stunning growth (though I'd argue more from the free market reform than the debt relief.)

On an even more precision-guided note, I was recently introduced to Kiva.org, where one can make a contribtion (actually, an "investment") online, which turns into funds to loan venture capital to business people in Sub-Saharan Africa.

More free-market reform, reduced trade barries, and stuff like this and I don't know . . . I might have to think of jokes to replace the ones about Ethiopians and strong breezes.