Shannon Beebe, one of the founding members of and a high class officer in AFRICOM, said that one of the biggest problems in the African continent is the uncertain nature of life there. This applies both to bad things: new diseases, unpredictable weather effecting an agrarian economy, unstable rather than merely corrupt and authoritarian governance, but it also applies to good things, namely what I call '60 Minutes Aid', or when I'm a little bit more intoxicated, 'sympathetic white kid aid'.
Quick explanation of the concept: By the labyrinthine processes of popular culture, a piece about some horrible event occurring in Africa sifts to the top of the public consciousness, maybe through 60 Minutes, maybe through tumblr or a chainmail. But what ends up happening is a ton of well off Americans with disposable income see the somethingtastrophe and since, heck, they didn't know anything about the problem before an hour ago, they throw money at the problem, generally through Western NGOs.
What's wrong with this? many would ask. Even a little bit of money and attention going to a problem must be good, right?
Kinda no not really no, is the answer I'd give. See, Jane Jacobs, in her fantastic study of urban economics, had a thing called disastrous money. It generally came from government or massive corporate sources into poor neighborhoods, all at once, and had disastrous effects. Why? Let's take building as an example. Normally, you would build one small building at a time in a city because, well, that's what most people can afford to build. However, let's say Robert Moses decides to build a colossal building that takes up more than a superblock. This building will then dominate the area around it, economically: it will start with high rents (because it's a new building) and eventually start taking in high maintenance (because it's an old building). The point I'm getting at is that disastrous money can end up dominating a local economy.
Why is that bad? I would go so far as to say that '60 minutes aid' is a worse form of disastrous money, because it comes in to an economy once and there is no guarantee that this money will continue to come in. So you have a massive amount of money (or food or whatever: money is actually infinitely worse because it's easier to steal for warlords) coming in to an area that very well may not have a money economy. Noting that a lot of these resources are probably going to be picked up by the warlords that we're funding against anyway (sub-Saharan Africa has the highest use, by region, of private military forces), and noting the horrible effect that massive food aid can have on an economy that primarily makes food, this money will probably have little or negative effect.
An economy can't sustain itself on one massive 'hit' of money, it needs a constant flow of smaller transactions. This massive 'hit', whether it's people volunteering, money coming in, or food, may, if successful, create a successful microeconomy in the short term. But the problem is, that economy is reliant on this money you've thrown at it. After a while that money stops coming in, and only the people who made long-term decisions with that money pan out. Well, that and drug barons and warlords.
And this hits at the biggest problem of African aid (outside of government aid): we have a huge bias against established African institutions in the US. Their military is corrupt, their government is corrupt, their civil society groups are probably corrupt. So instead we give our money to Western aid groups who have nowhere near the knowledge of these established organizations, and we don't put any money into security because that's yucky and goes against our idealistic whatever.
And then that money comes to nothing, but at least we get to pat ourselves on the back
Agreed on the point about how foreign aid to governments are often badly wasted and mismanaged. I remember the military junta in Burma during their 2008 cyclones made the relief organizations give the aid to them, and let them distribute it (at of course a higher price).
ReplyDeleteStill, I disagree with the notion that the extra capital, goods and money added to the economy at no cost in some way inhibits development. Even a candy rush of kit-kat bars are good if you're struggling to consume enough calories at all. It's free stuff without price, its up to them to use it properly. Of course, it every now and then leads to a Norwegian electricity-less fishing 'meathouse', but generally i would see this as a positive externality(used in the wrong way :P) to GDP in those developing nations.
I say we all get together (us developed western guys) and target one or two countries in Africa to make for regional economic success stories. I say, Senegal and Mozambique... throw in Kenya maybe. Make them our entryway of goods into the African continent.
A study of urban and microeconomics can show us the negative effects that badly managed money can have. For instance, super-block style projects were a progressivist project during the mid-20th century. However, those projects, which limited human interaction by limiting the use of the streets, ended up causing a lot of crime. Money thrown blindly into an insecure African economy can increase insecurity if it ends up in the hands of warlords or drug barons.
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