22 July 2008

Giles Bolton - Aid and other dirty business

There are many questions that arise when considering the state of foreign aid to the developing world. How is it that Africa is still so poor when the continent has received an estimated $300bn over the last 30 years? Can aid money actually be counterproductive to an economy? Is there any point in giving a country money if their government is so corrupt it won't reach those it's intended for? Giles Bolton addresses these questions and others in this highly readable introduction to the issues affecting foreign aid.

Bolton writes as a practitioner rather than an academic, although the book is adequately researched. He worked for DFID for a few years in Rwanda and Kenya, and draws on this experience, not least in his amusing anecdotes that occasionally help to illuminate the text. He's very good at showing the effect of aid policies on the ground in Africa, but is also capable of drawing back and showing the economic arguments and the political realities, having worked for the British government and been exposed to the debate at the highest level.

It was a particularly pertinent time to read this, as the latest World Economic Summit in the Doha round of the WTO was underway. This was a critical event - there are trade barriers and subsidies, including the infamous CAP in Europe, that are ruinous to the attempts by developing countries to access markets for their products. Bolton gives examples of specific markets that are rigged against developing countries - sugar is a notorious one - and shows how they have arisen - initially out of the post-war need for Europe to become self-sufficient in food - and how hard it is to remove the subsidies now. For the uninitiated, some of the facts of the debate will be startling - European taxpayers pay $2.5 per day for every cow in Europe, while there are 300 million Africans living on under $1 per day (Japanese cows are even more pampered, getting $7 per day)

Bolton deals with the various different sources of aid - individual donations to charities, which are mainly spent on small projects, direct aid from governments, which are mostly spent on larger projects, and assistance from the World Bank. He draws distinctions between the sources and applications of these funds, and their effectiveness on the ground. His tone is refreshingly unhysterical, despite the seriousness of the problem, and he has a talent for presenting complex issues in a simple way.

This is a very good primer to foreign aid. There wasn't a huge amount in it I didn't know from other sources (he cites in the bibliography a book I helped to edit), but it was useful to have all the major issues presented together in a straightforward manner. One drawback is that the book is exclusively about aid to Africa, because that's Bolton's prior experience, but the same arguments are relevant to developing countries elsewhere.


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