Saturday, October 08, 2005

Aid, Conditionality and a rather good point

Oxford academic Ngaire Woods has a good book review in Prospect discussing the potential that Aid has for reducing poverty. The article is here although, unfortunately, you'll have to pay to read it.

There is one particular quote in the review that made me chuckle. While discussing conditionality Woods makes the following point about certain countries not always practicing what they preach when it comes to economic policy:

But this objection assumes widespread agreement as to what constitutes competence in economic policy. Many would argue that a government which runs a massive budget deficit, spends a huge proportion of its budget on a non-defensive war, increases subsidies to major sectors such as agriculture and steel before elections, and lives off foreign capital inflows is incompetent, yet economists within the Bush administration make their own case for this.

chuckle chuckle Рtouch̩ Ms Woods.

1 comment:

Chris said...

Interesting cheap shot at Bush (though in some respects well-deserved, given his massive expansion of Big Government)--but the fact remains, Africa's problems are by and large internal. Five minutes at Kinshasa's airport will tell you that. True, agricultural subsidies must be lifted by the US and the EU, but simply throwing aid money at the problem will ultimately come to no good. After all, even when African countries do possess sources of great wealth--diamonds in Sierra Leone and oil in Nigeria, for instance--those resources often end up being a curse on 95% of the respective country's populace. On the other hand, a few nations have done better through internal improvements; Botswana is often cited as an example of this, but their 40% Aids rate--definitely attributable to rampant sexual activity--is impossible to overlook.
Ultimately, the best model for Africa can be found by looking to my beloved Somalia for guidance.