The article, ‘Can the West Save Africa’, by William Easterly is an informative and insightful analysis of foreign aid in Africa. In this article, William Easterly, addresses the surge in western aid efforts toward Africa in the new millennium.
In 2005 the West tried harder than ever to save Africa. At the World Economic Forum in Davos, Switzerland, in January 2005, British Prime Minister Tony Blair called for "a big push forward" to end poverty — to be financed by an increase in traditional foreign aid. He put that cause at the top of the agenda of the Group of Eight summit in Scotland in July. The G-8 agreed to double foreign aid to Africa, from $25 billion a year to $50 billion, and to forgive the African aid debt incurred in previous years to fund previous (unsuccessful) "big pushes." The previously obscure cause of African development burst into popular culture. Rock celebrity Bob Geldof assembled well-known bands, none of whom were from Africa, for "Live 8" concerts in nine countries around the world to urge G-8 leaders to "Make Poverty History." Other notable celebrity efforts were Angelina Jolie and Jeffrey Sachs touring the African continent. In 2007, the world's leaders gathered at the United Nations in September to further discuss ending poverty in Africa, despite the U.N. report highlighting the failure of the "Millennium Development Goals" to make any progress. They repeated a familiar refrain: If aid efforts aren't producing the desired results, then redouble those efforts. The year closed with the rock star Bono being named Time magazine's person of the year along with Bill and Melinda Gates for his efforts to save Africa.
The debate on whether the West can “save Africa” revives a long-standing debate in development economics. One side of this view sees very rapid and comprehensive social change as possible, emanating from political leaders and foreign experts who can push Africa out of poverty cycle. The other side sees only gradual social change as possible emanating from the emergent self-organizing order of many private entrepreneurs, creative inventers and political reforms. This debate has shown up in many forms over time. In the 1950s, Albert Hirschman and P.T Bauer were critics of the “Big Push,” while Paul N. Rosenstein-Rodan and Walt W. Rostow believed that everything would need to change at once leading to “balanced growth.” In the 1980s, the argument about comprehensive versus partial reform was revived by the advent of structural adjustments. In the 1990s, the debate was about shock therapy versus gradualism in the transition from communism to capitalism. In the new millennium, the “Big Push” has regained popularity in some foreign aid policy circles. The “Big Push” does not align with academic development literature, where such ambitions have been abandoned in favor of evaluating small incremental interventions.
Easterly analyzes the aid efforts of the West in Africa by contrasting two extreme approaches, the “transformational” approach and the “marginal approach”. According to Easterly, the former has been more predominant than the latter and he attributes this to the writings of well-known economists, celebrity mass advocacy and decisions by Western governments. The litmus tests he proposes to distinguish between the two approaches is in the ambition or the goal of the approach. If the goal of the approach is to achieve large and permanent growth in GDP per capita then it will be called a transformational approach. If the approach has the goal of solving a much more specific problem for a target group, then such an approach is considered marginal. Both approaches to what outsiders can do to lift Africa’s poor out of poverty have been studied in the academic literature on aid in Africa. The academic literature has indicated that it is harder to test effects of transformational programs than marginal ones. The difficulties are due to identification problems involving endogenous variables and selection biases in the data. In contrast to academic literature, there has been a rise in randomized evaluations (RE) of particular interventions. Duflo (2004) has argued that REs present a simple form of unambiguous evidence that is more likely to influence policy than other kinds of empirical development work. The great success story is of PROGRESA/OPORTUNIDADAES in Mexico, which was has yielded positive results from REs evaluation of PROGRESSA. However, most governments are unwilling to undertake REs, so most results are based on NGO projects, not government projects.
Some literature argues that Africa is in a poverty trap, more generally countries that are less developed are still in a poverty trap which other initially poor countries managed to escape. Easterly, disagrees with this hypothesis since selection bias renders the Africa-specific poverty trap test invalid. Other arguments for the transformational approach are that Africa needs systemic reforms due to weak property rights and corrupt autocrats. There are several themes that emerge from Easterly’s survey of Western efforts to “save Africa.” There is little evidence of learning over time within the aid circles on aid efforts to Africa. Instead, within each area of effort, there has been a cycling of aid ideas, with a particular approach going out of fashion to be replaced by a new approach which is in fashion, only to be later replaced by the old fashioned approach and once again be replaced with the new fashion. Easterly argues that this reflects the difficulty of learning when pursuing transformational programs.
The surge of literature using the RE methodology has arguably been a step forward in several important ways: taking identification more seriously, stressing the importance of evidence, and above all focusing on taking one step at a time and checking to see if that works; this could be considered the “marginal” approach. Unfortunately, this literature now seems more like a flawed beginning to a constructive marginal approach than a satisfying end. The RE studies have suffered from overpromising, overconfidence and dogmatism from their proponents, bold extrapolation from results in small samples in particular contexts to general conclusions, and lack of a link to widely accepted behavioral models. He suggests that a more constructive approach might target REs to shed light on behavioral variables, perhaps use them more to hold aid accountable for results, and to be more open to using diverse types of evidence from case studies, other micro empirical research, and micro and macro stylized facts and some of the more well-executed macro regressions. The conflict between the “marginal” and the “transformational” approaches will continue in the overall discussion of African development. Occasional swings to the more modest “marginal” approach seem to quickly result in a counter-swing to the more ambitious “transformational” approach, which has dominated the aid policymaking community in the recent years. Easterly has argued at the same time that it is difficult to resolve conclusively what the effects of the more ambitious programs are and that the better attempts at doing so give multiple signs of failure of these programs. Although the evidence has not been completely definitive on transformational approaches, there has in practice been widespread disappointment with each successive transformational approach. The current state of knowledge thus argues even more for caution in applying large scale foreign interventions that could have unintended negative effects such as corruption and exacerbation of civil wars.
Instead of retreating from the transformational approach, each successive disappointment has led to an escalation of outside intervention, from the project approach to improve sectoral outcomes, to Filling the Financing Gap with aid, to structural adjustment conditions on economic policies, to attempts to modify institutions such as corruption, democracy, and property rights, and finally, most ambitiously to prevent civil war and reconstruct failed states, including outside military intervention. The dangers of the transformational approach, such as the one that wishes to “save Africa,” can be described as the highest degree of disorder. One can only hope that the record of the past will chasten outsiders to be more modest and humble about what they can do for Africa. Such a correction and adjustment of expectations may make sizeable expansion of programs that deliver substantial benefits to poor Africans under the “marginal” approach possible. As for the “transformational” approach, its ambitions are certainly understandable given the realities of poverty in Africa. But these understandable ambitions seem to have created an intellectual bias that exaggerates the importance and potential for benevolent action of outside actors, as well as exaggerating Africa’s negatives and inability to fix itself. Even if the evidence fails to support the hypothesis that outside aid can create economic growth, it does not follow that growth and development in Africa is a hopeless cause. On the contrary, evidence has shown that developing countries worldwide have grown at about 2 percent per capita since 2000. It is too soon to tell whether Africa’s respectable growth since the mid-1990s means that it is joining the worldwide growth club, but there is no reason to think that it will be forever excluded. As far as the role of outsiders in such growth, it is suggestive that most sustained and largest surges in GDP per capita (notably the Asian tigers, and more recently, India and China) have been largely homegrown rather than the result of ambitious outside aid and intervention. It would be worth testing and exploring the hypothesis that most successful development is homegrown. And if so, research should concentrate more on homegrown determinants of development rather than spend so much time on outsiders’ actions. This might give evidence that Africans are the only ones who can “save Africa.”
In conclusion, I agree with Easterly that aid has not achieved goals such as: promoting rapid economic growth, changes to government economic policy to facilitate markets, or promotion of democratic governments. The west has given aid to Africa for nearly 70 years and there hasn’t been any positive indication that the aid has spurred Africa out of poverty. 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 homegrown African political reformers. It will not depend on the activities of bureaucratic, unaccountable and uninformed outsiders. In my opinion, the two key components necessary to fully understanding how aid can create a positive impact in Africa, and the absence of which has been fatal to aid’s effectiveness in the past, are feedback and accountability. Going forward, independent scientific evaluation of specific aid efforts and not overall evaluations of a whole nationwide development program is a possible area of exploration. Specific and continuous evaluation of particular interventions from which agencies can learn are pertinent to avoid the cyclic aid efforts that have not yielded positive growth in Africa. The evaluators should be independent groups that have no conflict of interest with multilateral development agencies such as the World Bank. The results of these evaluations should be used to determine the allocation of money to development agencies as well as the amount of money channeled to aid programs.