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Friday, July 06, 2007

William Easterly: What Bono Doesn't Say about Africa

I've been pretty tough on William Easterly, and part of it may be the way his message is delivered. As Dani Rodrik states:

I agree with many if not most of the details of Easterly's argument, but would not have packaged them in quite the way that he does, which I think gets too rhetorical and counterproductive at times...

Development is not my main area, so a couple of days ago I took some time to talk to a development economist, someone I respect and trust completely, and asked where development economists are as a group, closer to the Easterly 'let markets work' position, or closer to the Sachs more 'interventionist' approach.

The answer was that the profession is probably closer to Easterly if the choice is framed so simply, as free-market versus interventionism, and only between those two economists (there are other choices), but it's more nuanced than that. I guess if I had to give a simple takeaway line from the conversation, it would be that it confirmed my belief that institutions matter and are fundamental to development success.

Markets don't just spring up out of nowhere, they need the support of proper legal and institutional foundations, and aid doesn't necessarily do the most good, or any good, if the institutions to deliver help aren't in place and functioning. To me, the Easterly-Sachs debate as it's usually portrayed, as a struggle between a free-market approach and an interventionist approach, misses an essential point. What is needed are functional institutions and far too little attention is placed on that part of the development equation, at least in public debates on this question. I suspect that if you talked to either Easterly or Sachs they would agree with the importance of institutions, so I don't mean to infer this is a fundamental disagreement with either of them, but I would like to see the development of foundational institutions stressed much more than it is in discussions of the Sachs or Easterly approaches. With the proper institutions in place, the particular development path that is taken may not matter quite as much.

In any case, here's William Easterly with a more upbeat view of Africa than usual:

What Bono doesn't say about Africa, by William Easterly, Commentary, LA Times: Just when it seemed that Western images of Africa could not get any weirder, the July 2007 special Africa issue of Vanity Fair was published, complete with a feature article on "Madonna's Malawi." At the same time, the memoirs of an African child soldier are on sale at your local Starbucks, and celebrity activist Bob Geldof is touring Africa yet again, followed by TV cameras, to document that "War, Famine, Plague & Death are the Four Horsemen of the Apocalypse and these days they're riding hard through the back roads of Africa."

It's a dark and scary picture of a helpless, backward continent that's being offered up... But in fact, the real Africa is quite a bit different. And the problem with all this Western stereotyping is that it manages to snatch defeat from the jaws of some current victories, fueling support for patronizing Western policies designed to rescue the allegedly helpless African people while often discouraging those policies that might actually help.

Let's begin with those rampaging Four Horsemen. Do they really explain Africa today? What percentage of the African population would you say dies in war every year? What share of male children, age 10 to 17, are child soldiers? How many Africans are afflicted by famine or died of AIDS last year or are living as refugees?

In each case, the answer is one-half of 1% of the population or less. In some cases it's much less... That doesn't lessen the tragedy, of course, of those who are such victims, and maybe there are things the West can do to help them. But the typical African is a long way from being a starving, AIDS-stricken refugee at the mercy of child soldiers. The reality is that many more Africans need latrines than need Western peacekeepers — but that doesn't play so well on TV.

Further distortions of Africa emanate from former British Prime Minister Tony Blair's star-studded Africa Progress Panel (which includes the ubiquitous Geldof). The panel laments in its 2007 news release that Africa remains "far short" of its goal of making "substantial inroads into poverty reduction." But this doesn't quite square with the sub-Saharan Africa that in 2006 registered its third straight year of good GDP growth — about 6%, well above historic averages for either today's rich countries or all developing countries. Growth of living standards in the last five years is the highest in Africa's history.

The real Africa also has seen cellphone and Internet use double every year for the last seven years. Foreign private capital inflows into Africa hit $38 billion in 2006 — more than foreign aid. Africans are saving a higher percentage of their incomes than Americans are (so much for the "poverty trap" of being "too poor to save" endlessly repeated in aid reports). I agree that it's too soon to conclude that Africa is on a stable growth track, but why not celebrate what Africans have already achieved?

Instead, the international development establishment is rigging the game to make Africa ... look even worse than it really is. ...

Why do aid organizations and their celebrity backers want to make African successes look like failures? One can only speculate, but it certainly helps aid agencies get more publicity and more money if problems seem greater than they are. As for the stars — well, could Africa be saving celebrity careers more than celebrities are saving Africa?

In truth, Africans are and will be escaping poverty the same way everybody else did: through the efforts of resourceful entrepreneurs, democratic reformers and ordinary citizens at home, not through PR extravaganzas of ill-informed outsiders.

The real Africa needs increased trade from the West more than it needs more aid handouts. A respected Ugandan journalist, Andrew Mwenda, made this point at a recent African conference..: "What man or nation has ever become rich by holding out a begging bowl?" asked Mwenda.

Perhaps Bono was grouchy because his celebrity-laden "Red" campaign to promote Western brands to finance begging bowls for Africa has spent $100 million on marketing and generated sales of only $18 million, according to a recent report. But the fact remains that the West shows a lot more interest in begging bowls than in, say, letting African cotton growers compete fairly in Western markets (see the recent collapse of world trade talks).

Today, as I sip my Rwandan gourmet coffee and wear my Nigerian shirt here in New York, and as European men eat fresh Ghanaian pineapple for breakfast and bring Kenyan flowers home to their wives, I wonder what it will take for Western consumers to learn even more about the products of self-sufficient, hardworking, dignified Africans. Perhaps they should spend less time consuming Africa disaster stereotypes from television and Vanity Fair.

    Posted by on Friday, July 6, 2007 at 12:06 AM in Economics, Policy | Permalink  TrackBack (2)  Comments (50)


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