Development Effectiveness: Aid Comes under Scrutiny

12/11/2009
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Tunis, 12 November 2009 – Aid, in the form of Official Development Assistance (ODA) and other forms of charities channelled to Africa from the developed world have come under severe criticism in recent times.

Zambian-born Economist, Dambisa Moyo, for instance, asserts that aid to African nations was not just ineffective, but was worse than no aid. In her book, titled “Dead Aid”, Ms. Moyo argues that charity from Western nations cripples African governments by fostering dependency and corruption without requiring positive change.

In another recent book titled, “The White Man’s Burden”, New York University teacher, William Easterly, contends that “the West has failed, and continues to fail, to enact its ill-formed, utopian aid plans because, like the colonialists of old, it assumes it knows what is best for everyone”. Current aid strategies, Easterly argues, provide neither accountability nor feedback.

These arguments loomed large on Thursday 12 November 2009 in Addis Ababa, where mostly African economists are gathered under the aegis of the 2009 African Economic Conference (AEC) to discuss the continent’s development challenges under the theme: Fostering Development in an Era of Economic and Financial Crisis”.

Contributing to the discussion in a paper entitled “Aid and Income Stabilization”, Guillaumont Jeanneney and S. J-A. Tapsoba of the Auvergne University International Development Studies and Research Centre found that aid was indeed beneficial to needy countries.

They argue that official assistance copes with exogenous output shocks in recipient countries and stabilizes resources available to finance consumption, investment and net trade. “Stabilizing aid is effective in aid-dependent and vulnerable states. Aid volatility and disbursement lags are not significant determinants of the stabilizing impact of aid,” the paper says.