Why Africa Is Still Poor

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New York University professor and author of The White Man's Burden: Why the West's Efforts to Aid the Rest Have Done So Much Ill and So Little Good, William Easterly has a thought-provoking op/ed about who needs to save Africa in today's Washington Post. Over the past 50 years the rich countries have thrown more than $2.3 trillion in development aid at the world's poor countries and most of them are still poor–why?

Easterly is surely correct when he asserts:

Economic development in Africa will depend—as it has elsewhere and throughout the history of the modern world—on the success of private-sector entrepreneurs, social entrepreneurs and African political reformers. It will not depend on the activities of patronizing, bureaucratic, unaccountable and poorly informed outsiders.

Development everywhere is homegrown. As G-8 ministers and rock stars fussed about a few billion dollars here or there for African governments, the citizens of India and China (where foreign aid is a microscopic share of income) were busy increasing their own incomes by $715 billion in 2005.

Easterly's point is increasingly obvious, but his solution that local people and entrepreneurs be encouraged by aid groups seems a bit naive. He even cites the case of Kenyan Robert Keter who created the successful telecom company CDR which offered consumers voice over internet service. As Easterly notes, CDR "ran profitably until the Kenyan government shut him down for no apparent reason."

That's the problem of African poverty in a nutshell. Anyone who creates a little bit of wealth risks having it seized at any time by kleptocratic governments. Until that dynamic is somehow stopped, tens of millions of Africans are condemned to unending abject poverty.

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  1. That’s the problem of African poverty in a nutshell. Anyone who creates a little bit of wealth risks having it seized at any time by kleptocratic governments. Until that dynamic is somehow stopped, tens of millions of Africans are condemned to unending abject poverty.

    Yet we are all opposed to any military intervention to stop said kleptocratic governments. “Somehow”, indeed.

    (Not that I’m suggesting that toppling regimes is a viable solution in all, most or many situations. Just saying there seems to be a knee-jerk reaction to the idea outside of the “libertarian hawk” fringe. Just that nobody seems to have any good ideas on how that “somehow” is supposed to work outside of popular insurrections somehow *not* being crushed by said kleptocrats.)

    Flame on

  2. Too bad it is too soon to link to Tim Harford’s article in the latest Reason. The article, adapted from his book The Undercover Economist, elucidates the kleptocratic issue nicely.

    And rafuzo, although the crushing of kleptocrats is likely the best solution, it then becomes a “it’s not our problem” issue. For the more sympathetic out there, it is also a “that’s a solution that’s too expensive for me to pay for” issue.

  3. rafuzo: As a confessed “libertarian hawk,” I’ve wondered about the possibility of helping to shape and support liberal insurgencies to overtheow kleptocratic regimes. My worry, of course, is that any government program aimed at creating such a project would screw it up. For example, the US would end up supporting “our” insurgents when they took control just because they were “our” insurgents, not because they had established honest governments.

    Still it seems right for free people to help other people yearning to liberate themselves from tyranny.

  4. I don’t think we should worry about the Kleptocrats in Africa, when the governments in the West are trying their best to imitate the Aftrican Kleptocrats.

    I mean, there is plenty of cheap land in inner city Detroit… plenty of people out of work, who would work cheap… and the crime rate is low despite the sensationalist media fearmongering (certainly lower than most areas where work is being outsourced to). And the transportation, energy, waste disposale infrastructure is already in place. So why aren’t companies building factories in Detroit to take advantage of these situation? If you can answer the question for the Congo, you can answer the question for Detroit – The Kleptocratic government.

    We will be lucky if we don’t end up being like Africa… We are halfway there now. We got to save ourselves first, before we save Africa.

  5. MP: You’re right–the Harford article is superb and yet another good reason for subscribing to the magazine.

  6. Do-gooders like Bono and others want a no-strings-attached approach to aid: Send the cash but not the military. Sign the checks but spare us your imperialist Western philosophy. Down the rathole it goes.

  7. …the US would end up supporting “our” insurgents when they took control just because they were “our” insurgents, not because they had established honest governments.

    I’d say that accurately captures the history of US foreign policy.

  8. Kleptocratic governments aren’t the only problem. A big issue in lots of cultures is a parasitical family structure. If you manage to start a business and start making money, you’ll end up swarmed by so many relatives making demands on your earnings that your choice is basically to go bust, get disowned, or leave the country, which you probably can’t do. So there’s no point in even trying to get started.

    And if you like Easterly, watch for his lead essay in the hard hitting April issue of Cato Unbound on “What Foreign Aid Can (and Can’t) Do for the World’s Poor.”

  9. Kleptocratic governments aren’t the only problem. A big issue in lots of cultures is a parasitical family structure. If you manage to start a business and start making money, you’ll end up swarmed by so many relatives making demands on your earnings that your choice is basically to go bust, get disowned, or leave the country, which you probably can’t do. So there’s no point in even trying to get started.

    And if you like Easterly, watch for his lead essay in the hard hitting April issue of Cato Unbound on “What Foreign Aid Can (and Can’t) Do for the World’s Poor.”

  10. Just to make sure that nobody thinks I’m running a popularity contest, I’ll bring up “IQ and the Wealth of Nations” by Lynn and Vanhanen.

    The main thesis is expanded upon here:
    http://www.lagriffedulion.f2s.com/sft.htm

    I’m curious to hear your many objections.

  11. “Still it seems right for free people to help other people yearning to liberate themselves from tyranny”

    People get the governments they deserve.

  12. RexRhino,

    You can’t be serious. [The Detroit] crime rate is low despite the sensationalist media fearmongering.

    I suggest checking out this link:

    http://newtonma.areaconnect.com/crime/compare.htm?c1=Detroit&s1=MI&c2=San+Jose&s2=CA

    I am pretty sure Detroit’s crime rate is the second highest in the country, behind only Camden New Jersey.

    I am not sure how the US government defines “city”, but Newton MA has the lowest crime rate of any city in the US, for three years running I believe. It is not an accident. The police chief was a police captain in NYC under Bratton, and has administered the exact same “recipe” for crime fighting in the Boston suburb of Newton MA that he used in NYC. I remember a story (in the past year or two ago) on crime in the Boston Globe that showed a recent “healthy” crime increase in all of Boston’s suburbs except for Newton. Scandously they didn’t bother to explain why Newton was marching to a different crime drummer.

    The police chief also targeted more than traditional crime. He also targeted auto accidents, and the Newton auto accident rate subsequently fell by a lot.

    The moral of the story? Crime can be fought with dramatic effectiveness by design anywhere, even in the “safe” suburbs.

  13. I am pretty sure Detroit’s crime rate is the second highest in the country, behind only Camden New Jersey.
    Detroit’s crime rate is partially due to statistical anomoly and the way it is calculated. In the 1920’s in Michigan, the farmers were scared that Detroit would have all the population and political power, so they made a law that Detroit couldn’t absorb any other adjacent cities (the way New York did Queens, Brookland, etc), right when Detroit was at it’s hight of absorbing nearby cities. So, Detroit proper is surounded by low crime “suburbs” that if things were allowed to develop naturally would be part of the city of Detroit (and they ARE the same city for most practicle purposes, they simply have their own token city governments).

    So, a city like New York has a super wealthy low crime parts, and very poor high crime parts, and they average each other out. Detroit, because of artificial political barriers, has fewer wealthy lower crime areas.

    When I lived in Detroit, I felt a lot safer than I do where I live now, in Toronto. In Toronto, there are fewer murders, but murders take place in downtown areas, to random people – where as in Detroit murders are largely relegated to the drug trade in a few very small but very violent neighborhoods. In Toronto, it is not uncommon for a group of armed men to invade home and assault people, where in Detroit it is very uncommon (no criminal worth their salt is going to invade a home where a person is armed and not afraid to fight back. Most of the home invasions in Detroit are done by people who know the victim and know they are a pushover – not the totally random violence that takes place in Toronto).

    The image of Detroit as some violent horrible distopia is more media hype then reality. It has more to do with the irrational fear of a skin color of the people than it has some rational fear of crime.

    ——————————————-
    But, all that is beside the point. Look at the rate of crime in the places where we are outsourcing jobs to, and you will see that U.S. companies aren’t outsourcing jobs because they are afraid of crime in the U.S. … And they aren’t outsourcing jobs because land is too expensive… or because equipment is too expensive (the U.S. and Europe make most of the machines in Chinese industry)… And they aren’t even exporting jobs because of cheap labor (although they is definitly a secondary concern)… there are plenty of places, like Detroit, where people are desperate for jobs and would work very hard for not a lot of money.

    My point is the same sort of Kleptocracy that is chronic in Africa, is becoming chronic here! We are operating the same way as all those corrupt African countries we like to judge. WE are building the kleptocratic machinary to turn ourselves into a third world, third rate country.

    We don’t need to be lecturing Africa on the need for free market institutions and responsible government, we need to be lecturing America on the free market and responsible government. If we can’t stop G. W. Bush, how are we going to stop Robert Mugabe?

  14. Ed: Send the cash but not the military. Sign the checks but spare us your imperialist Western philosophy. Down the rathole it goes.

    As opposed to what happened in Iraq where it is: sign the checks that end up in Halliburton’s coffers?

  15. “Detroit, where people are desperate for jobs and would work very hard for not a lot of money.”

    hehehe…

    Also, Halliburton’s the new Kthulu.

  16. As opposed to what happened in Iraq where it is: sign the checks that end up in Halliburton’s coffers?

    So you are equating African dictators putting the aid they receive into Swiss Bank accounts to Haliburton being paid to rebuild Iraq?

    $2.3 TRILLION has been given to Africa and what is there to show for it other than declining living standards for the average African?

  17. Rafuzo:

    Hawkish Libertairn here… and I gots an opinion.

    I think that we could militarily crush any kleptocratic regime we wanted… it’s the ‘post crush’ that we have trouble with. Military solutions are often extremely effective, but what follows is, at best, a clusterfuck. And the reason is that after the tanks go home, what you end up with is a replacement government run like Amtrak and the Post Office.

  18. Bear with a peaceful anarchist trying to explain the Catch 22 here.
    Organizations and governments waste their resources battling each other.
    If people are unwilling to help on a person-to-person level, fuggetaboutit.
    And the main reason people are unwilling to help on a person-to-person level is because organizations and governments are impediments.

  19. The colonial borders have to come down. There’s no other way forward.

    – Josh

  20. If you want to help some rebels in Africa overthrow their government, well, knock yourself out. But don’t use my money to do it. Frankly, I just don’t trust your judgement.

    And that’s the appropriate libertarian policy, in my opinion.

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