Another Call to End Aid to Africa

Rather than trust any one economist, whatever her gender or heritage, I'd rather trust a betting market estimating future African GDP conditional on various aid levels.

Eliezer, it's clear that Africa is in trouble. How compelling an argument does Moyo's book offer for believing that Africa is in trouble because it needs less aid, rather than because it needs more?

In this particular context it seems a bit strange to describe Moyo as an African economist. She lives in London and so far as I can tell has lived in the West for most of her adult life. In particular, the two most obvious reasons one might have for trusting an African economist more on this issue -- that her self-interest is more closely aligned with what's best for Africa than with what's best for the West, and that she's constantly exposed to the economic realities of life in poor African countries -- are less applicable than they would be to someone who actually lives in Africa.

Oh, and ... $1 trillion. Sounds like a lot. That's over the last 50 years, though. $20bn/year. Still sounds like a lot. The population of Africa is a little less than a billion. $20/year per person. Hmm. It's not quite so obvious that that would be enough to have a major distorting effect. Total GDP of Africa is something like $2T/year, which would make foreign aid to Africa something like 1% of its GDP. Again, would we really expect much distortion from that? Or, for that matter: If it's possible for aid to help Africa, would we expect aid at that level to have done much good?

(These are all without-even-an-envelope calculations, and could be badly wrong.)

Mayo's strategy makes sense to me. If she's right about the simple facts of the matter, then there might still be many things that can be done to help Africa, but first she has to oppose the knee-jerk approval of charity money - establish a burden of proof and skepticism that will shame the current donors if they keep on throwing counterproductive Africa-harming donations at the problem. Celebrities at parties must be made ashamed to confess their donations to Africa unless they can also claim strong logic and evidence that their aid is an exception to the usual rule of indirect harm. To do this, she has to be willing to stand up and say, "Stop the aid! Stop it entirely! You're hurting Africa! We would be better off without any aid at all than this." The phrasing of the message has to be simple or it won't carry publicly. That means "Stop the aid!" not "Stop aid W, X, Y, but perform studies to see if we should keep Z".

Moyo's calling for a full stop, barring emergency (non-repeating) aid. That includes things like mosquito nets - because it puts native African mosquito-net manufacturers out of business.

Pleasant? I don't find it pleasant that human beings are so incapable of helping one another. But with Africa in this much trouble, it may very well be a fact. There should be a limit to how much we suspect our own motives for inaction in the face of continued harm accomplished.

g, I think I have 2 responses to your comment.

1) After a trillion dollars of aid, we still hear appeals for mosquito nets, etc., where just $2 per family or some such low number, would save millions of lives. My question is, if after a trillion dollars, if there are still lives that can be saved for a couple of bucks, then isn't something terribly dysfunctional going on?

2) I don't think it matters what the continent's GDP is. Let's say it's $2 trillion. If a dictator is trying to retain power & gain wealth, an important tool would be the establishment of property rights that lead to domestic markets and attract foreign capital. But if by denying those rights to the citizens, the dictator has a good chance of skimming off the foreign aid, while keeping the populace powerless, then the aid actually prevents the establishment of institutions that will improve people's lot on a permanent basis. In the absense of aid, the GDP might have been $20 trillion. Even in America, I wouldn't be surprised to see a useless $100 million bridge constructed by the taxpayer just so a contractor with connections could earn a $2 million profit on the deal. So, I'd be even less surprised if a dictator gladly helped himself to a few million in skimmed aid proceeds at the expense of billions in the nations economic development. As long as the dictator retained a satisfactory amount of power & wealth, the amount of wealth destruction that resulted would not be related to or limited by his quest.

No, no, no. What about the crushing external debt? The service payments vastly exceeds the aid which is very meager and in many cases just money laundering for politically connected elites in the originating country. There are MANY cases were aid increased living standards significantly, Japans aid to Korea and the USSR to Cuba, which of course fell sharply when it got cut of suddenly.

Unconditional Charity like Oxfam etc. is almost a joke when averaged over the whole continent an utter pittance.

"Pure capitalism is so cruel at times that it cycles rebellion" "Deprivation theory is wrong, social construction is right. “Objective” conditions don’t predict the rise of movements, but problem construction." Fabio Rojas - Most Important Social Movement Findings

North Korea does not permit people to engage in "problem construction", so the objective conditions of deprivation do not pose as much risk of rebellion.

Perhaps I should point out one particular way in which I could be badly wrong: presumably aid tends to go to the poorest African countries, whose GDP may be way below the average, so 1% of GDP might turn out to be a substantial amount for the countries it actually goes to. Perhaps Moyo's book has the relevant numbers?

This sure seems like a pleasant thing for us wealthy folk to believe: by not giving aid to Africa, we're more virtuous than those who act out of pity.

There's a career to be made out of promoting such ideas.

I'll hope (without reading) that what's being promoted merely that aid should be given more rationally.

g,

I think you missed my point about the size of the economy. I'm saying that a very small amount of aid being skimmed by the people in power can be used to keep a very large group of citizens down. The people may earn $50/year, but if it only costs $1 per person per year to maintain dictatorial control that keeps them at $50/year, then that's a very powerful $1. And, if 30 cents of that dollar are attained as the result of foreign aid proceeds, then that is a very powerful 30 cents.

David,

The problem with self-sufficiency frequently isn't so much about lack of technology or information, but it's the result of a lack of property rights. If anything you have can be taken away, you're not going to develop any resources. If people have these rights politically & culturally, then they will quickly develop the tools. I think on the broad scale, seeing self-sufficiency as the problem is mistaking the symptom for the diagnosis.

Douglas,

It's $1000 per life not per net, because in most cases nets or treatment won't avert a death.

"This ethic is irrational because to follow reason is to follow cause and effect, therefore the person who caused the thing to be (who earned it) should suffer the effect (receive the thing)."

A bit of a non sequitur there?

General statements are used to push a political agenda. Aid is bad? Aid is good? Specific issues can always be addressed. The aid could be used to buy targeted products from local suppliers. Anthropologist studying the areas should be used to monitor local family needs and economic changes. Air drops of redesigned emergency daily rations could be used more in disasters to help bypass corrupt officials. Include complex educational materials on such things as economics, manufacturing and government structure written in local dialects. Drop some basic tools in there for Gods sake. Don't give up. Monitor and adjust. Corruption is not the only problem. Functionally fixed officials are also a big problem.

Logic and pity are by no means conflicting. Pity drives people to try to help Africans. Logic and evidence, when avalaible, show the results from any particular intervention. If people keep acting in a counterproductive manner, inertia and/or politics are running the show, not pity.

Granted giving money to large, centralized organizations--especially governments--stifles growth and stimulates corruption, a clear bad.

But with the size of the world aid budget, spent only on--say, literacy in the form of directly funded schools with free lunch--wouldn't that be better than no aid at all?

On the marginal effects of 1%: Median US personal income is around $30,000. How many offers do you think you can successfully complete of the form, "I will give you $300 if you..."? People will take moderate risks of humiliation, injury, and arrest for far less. Your problem might be offering too much and making people suspicious.

Zimbabwe's GDP is $2 billion. Even assuming 90% waste in claiming your 1% share, that is $2 million per year. I am suddenly surprised that we see so few atrocities; perhaps the potential despots are killing each other first.

My understanding is that the best interventions are $1000/life, if everything works as advertised. But big organizations complaining about 10^8 children without bed nets is pretty strong evidence that those particular organizations, at least, do not turn the marginal $2 into a net, which was kebko's point, I think.

(that's what I should have said the first time, but it drowned in other detail)

"Pure capitalism is so cruel at times that it cycles rebellion"

That just seems like a blatant falsehood to me. In capitalist societies, expectations tend to rise and expectations can be more complicated, so there may be for disappointment or indignation, but I'd like to see a factual backup of that statement. Where have capitalist societies been objectively more cruel than any alternative? And where do you see more rebellion in capitalist countries versus non-capitalist? Has there been an uprising in Singapore or Hong Kong that I haven't heard about? Is the destitute condition of much of Africa the sad result of well-defended rights to property & self-determination?

Helping people is a bit complex as the brain adjusts its' wiring with each passing event, possibly by-passing invention. Pure capitalism is so cruel at times that it cycles rebellion, yet it is the most free. It is even more tough with a percentage of every population having a bunch of power raving psychopaths to muck up even a little good effort. Still, we feed the poor or they will eat our us.

I talked to other people about such calls. They called me evil. Apparently, people don't see the proposition "Aid is good" as following from "Aid helps people" (a purely factual claim) and "Helping people is good" (which only evil people deny); it's all in the same mental bucket. So we're pretty much screwed explaining it. Moreover, even when people finally get the distinction, the claims tend to be rejected at the speed of thought - because we all know "Aid is good".

I read the interview, I haven't read Moyo's book. In the interview the distinction is made between systematic aid, usually provided by western govts to African govts, and emergency aid. Her beef doesn't seem to be with emergency aid but with systematic aid that distorts local economies and political relationships. Noone is actually against, for example, provision of basic emergency medical care to save lives in the short term, right? I doubt that individual contributions make up much of the systematic aid.

I her book is title and promoted the way it is for shock value - the same way she's not against emergency aid, few people are against the idea of real economic development and independence for African nations. Seems like a 'non-wood' argument: 'aid isn't helping Africa develop, what we need is non-aid!'.

Off topic, but Mayo also says: "NASA spends billions on a MARS project, but they don’t really think we’re going there." Which is wrong, unless you think remote controlled exploration isn't really 'being there'.

There has been a similar conversation going on for some time in Australia about welfare dependence in Aboriginal communities. It's a common view amongst a new generation of Aboriginal leaders that welfare dependence is at the heart of the social problems faced by remote communities, and they call for more restrictions on welfare and a greater emphasis on personal responsibility and entrepreneurship.

It seems to me that there is an implicit assumption in much of this that "charity" = "giving people money without teaching them to fish". But aid can exist in many forums including helping those who receive it to become more self-sufficient. I also find the original post humorous. "Dambisa Moyo, an African economist, has joined her voice to the other African economists..." I think that's some subtle editorializing with the hope of biasing us. Perhaps it should have read, Dambisa Moyo, an African economist, has joined her voice to the other African economists who live in fancy flats in London...:-)

I.e. I agree with your analysis that they (and artemisinin treatment) are great and worth doing if the local governments don't tax or steal them (in various ways) too intensively.

inventing for free: but don't bed nets fit that perfectly? spreading the technology is a big part of the cost. (what did it cost to convince charities that bed nets are a good idea?) A technology that is so obviously good that people copy their neighbors cuts out this step, but are there examples where this actually happened? (maybe the moneymaker pump?)

kebko & Carl's comments are largely compatible: if nets cost $1/person and save 1life/$1000, then giving nets to all billion Africans could save a million lives.

There is a serious problem if there is overlap between the popular interventions and those that are best--popularity should drive the intervention to diminishing returns. At least, I think so, but I don't know the numbers; I'd guess a billion has been spent on malaria, but not on nets specifically.

Carl Charcoal technology seems very much the wrong way to go about "helping" Africa. One of their problems is deforestation caused by heavy reliance on wood for cooking now. Updating the small scale coal mining technologies from the early 20th century would probably help more.

Also the big problem is democracy, which in practice amounts to keeping the cities quiet. I remember reading about a decade ago that most African countries controlled the prices of food so much to keep the city people on their side, that it was uneconomical (ie, a dead loss) for farmers to sell to the market, so they only grew enough for themselves. I don't know how much this may have changed recently in some countries, but given what's going on in Zimbabwe, probably not much.

g,

There's plenty of room to work on vaccines and drugs for tropical diseases, improved strains of African crops like cassava, drip irrigation devices, charcoal technology, etc.

http://en.wikipedia.org/wiki/Amy_Smith http://web.mit.edu/newsoffice/2008/lemelson-sustainability-0423.html

This topic was posted at Less Wrong (by Phil Goetz), but apparently Eliezer thought it would fit better here.

Wow - I didn't remember seeing this on LW, even though I have a comment there ("It might have been more on-topic for Overcoming Bias than Less Wrong, but I'm voting up because this is a data point in a topic that's frequently come up in both places"). My apologies to Phil Goetz for not linking to his post!

kebko, (1) doubtless there's something terribly dysfunctional going on; the question is whether it's better treated by giving more aid or by giving less. (2) If the continent's GDP might have been larger than it is, then the argument I was making applies more, not less. (Namely: the amount of foreign aid seems very small in comparison with the total size of the economy, which suggests that the amount of influence it can have had for good or ill probably isn't all that enormous.)

Carl, I like the idea of inventing things and making them free, but it might be unattractive to the people who'd need to do (or at least fund) it because it doesn't look like charity to, e.g., people looking at your accounts; and because unless the technologies are tightly Africa-focused they might lose a lot more in potential revenue than Africa gains in value. Also, it only works in so far as there are the necessary (human and material) resources in the poorest African countries to take advantage of the inventions.

Ian C, you either don't know what reason is or (at least in this case) don't know how to do it.

haig, if she's really calling for an end to all aid to Africa then that seems to go beyond what you suggest. (Eliezer could be right that she's keeping the message simple but really wants something more sophisticated. I am not convinced that this is the right strategy even if she's right about the underlying facts, and I'd also have thought that in a book-length treatment of the issue she could afford to present a less-simplistic version of her case.)

Again, ambiguous language seems to derail the conversation. I'm sure she doesn't mean stop caring about Africa, turn a blind eye and go about your way, and we'll take care of ourselves (though the data may suggest that such a course of action might have been more productive). She means stop blindly donating money and goods that at first seems to help but in reality does more harm than good with the exception of satisfying the donors commiseration. It would follow that she would love for people to think of more rational ways to help, to think about the end results of charity more then the act of being charitable.

This topic was posted at Less Wrong (by Phil Goetz), but apparently Eliezer thought it would fit better here.

If the goal is to encourage aid to become more effective and evidence-based, I don't think that shouting "Stop the aid!" will help. Setting yourself up in opposition to aid will just make the pro-aid team rally together against you, and in a head-to-head matchup the anti-aid side is at a huge disadvantage in winning over public opinion and celebrity culture (pro-aid forces have better ties to establishment power, emotions, common sense, and money). At worst, the pro-aid side will increasingly to see talk of logic, evidence, and counterproductive charity as the other side's buzzwords, or part of the other side's agenda. We have a better chance at getting more effective aid if the people arguing for more reasonable, rigorously-evaluated aid demonstrate that they're on the same side (the pro-helping side) by talking about (and emphasizing) what does work. Ideally, they'd even get involved to improve aid programs (like the MIT Poverty Action Lab), raise money for effective charity (like GiveWell), or run their own programs.

(Disclosure: I may be influenced by the fact that I think aid to Africa has been doing more good than harm, and that our best hope is to make incremental improvements and give more.)

"Her book ... asserts a direct cause-and-effect relationship between $1 trillion of aid and the rise in African poverty rates from 11% to 66%."

I have hardly skimmed the book but it does not appear to address the economic impact of population growth. Chapter 1 mentions that half of Africa is under the age of 15, but only so as to highlight the sheer number of young Africans lacking opportunities found elsewhere in the world. Wikipedia, paraphrasing UN estimates: "The total population of Africa is estimated at 922 million (as of 2005). It has doubled over the past 28 years, and has quadrupled over the past 55 years". It is still the fastest growing region on Earth, projected to double again by 2036.

I also see in Chapter 3 a remark about US aid to South Korea from the 1950s to the 1980s equalling all the aid that Africa has received (ever? from everyone? it's not clear, no source is given). South Korea is one of the most advanced countries in the world now.

It is almost certainly not the case that her "whole continent [was] wrecked by emotion and pity". The majority of the wasted or harmful aid would have been made by governments, many of them the former colonial masters, and with many conditions attached. I would think private aid is a very small part of the picture (so saying that "Celebrities at parties must be made ashamed to confess their donations to Africa" is wrongheaded). In another interview she mentions kiva.org as a good channel for private donation.

The current hope for Africa seems to be trade with China (and, I would think, with the other new powers like Brazil and India), which gets a chapter in her book.

kebko,

The best interventions today seem to cost $1000 per life saved. Much of the trillion dollars was Cold War payoffs, bribing African leaders not go Communist, so the fact that it was stolen/wasted wasn't that much of a concern.

I tend to prefer spending money on developing cheaper treatments and Africa-suitable technologies, then putting them in the public domain. That produces value but nothing to steal.

Thom, my guess is that Eliezer thought this post was sufficiently Hanson-esque to appeal to readers of OB that haven't been following Less Wrong. Characteristics of Hanson-esque blog posts: frequent external references, short, frequent questions to readers. I suspect this post wouldn't be voted up much on Less Wrong, so perhaps the OB/LW split makes some amount of sense.

Regarding g's point, I note that there's a well-established market niche for this sort of thing: it's like the popularity of Ward Connerly among conservatives as an opponent of affirmative action, or Ayaan Hirsi Ali (not to downplay the murderous persecution she has suffered, or necessarily to attack her views) among advocates of war against Muslim countries. She'll probably sell a fair number of books, get support from conservative foundations, and some nice speaking engagements.

Logic and pity are at right angles to one another. The former is a system for connecting premises to conclusions, and has nothing to say about the validity of either premises or conclusions, except to say that if you accept the premises, and can find no flaw in the logic, you also must accept the conclusion. Pity, on the other hand, is an emotion.

Of course aid appeals are going to be couched in terms of pity, because that is the emotion most likely to result in giving. How aid actually gets used is an entirely separate question. My understanding is that there is a long history of aid being a disguised subsidy to domestic business interests, in which case harm to local development would be a real possibility.

I must ask - what is the purpose of 'overcoming bias' now that 'less wrong' is launched? Why post this here instead of there?

Stopping aid to Africa? It won't happen. Even people who fancy themselves rationalist still follow the Christian ethic that it's better to give something you earn to someone else than to keep it for yourself.

This ethic is irrational because to follow reason is to follow cause and effect, therefore the person who caused the thing to be (who earned it) should suffer the effect (receive the thing).