Foreign Aid for Scoundrels

Foreign Aid for Scoundrels
November 25, 2010
William Easterly

Orban Thierry/Sipa Press

Cameroon’s President Paul Biya, center, with his wife Chantal Biya at a Bastille Day parade on the Champs Elysées, Paris, July 14, 2010

I was in a New York bar recently with a group of African intellectuals. To my surprise, I was sitting next to a democratic opposition leader whom I have long admired. He had been elected to a major office in his home country, but then the country’s leader sentenced him to life in prison. He eventually got out and left Africa, but he is still so fearful of the security forces of the autocrat that he asked me not to use his name or even his country’s name.

This opposition leader said one thing that will always stay with me. While he was in jail, he read The End of Poverty by Jeffrey Sachs.1 He found these words in the acknowledgments:

My work in Africa has been blessed by help and guidance from a large number of colleagues and African leaders…. In particular I would like to thank Africa’s new generation of democratic leaders who are pointing the way, including….

One of those Sachs included was the opposition leader’s jailer. He pleaded with me to communicate to Western audiences that Africans have the same standards for democracy as they do—not a double standard by which the prison warden of members of the opposition could be one of a “new generation of democratic leaders.”

The international aid system has a dirty secret. Despite much rhetoric to the contrary, the nations and organizations that donate and distribute aid do not care much about democracy and they still actively support dictators. The conventional narrative is that donors supported dictators only during the cold war and ever since have promoted democracy. This is wrong.

Certainly there has been far more talk among aid donors about “good governance” since the end of the cold war. During the cold war there was a taboo on discussing the politics of aid recipients such as Joseph Mobutu of Zaire (now the Democratic Republic of the Congo) and Jean-Bédel Bokassa of the Central African Republic. Now the World Bank states forthrightly on its website: “Aid is less effective in a weak governance environment.”2 It also includes a measure of “voice and accountability” in its widely used “governance indicators” that it has produced since 1996.3 The US government aid agency USAID declares its aims to be “promoting sustainable democracy” and “expanding the global community of democracies.”4
Little Bookroom / Amsterdam by Hand

Even this rhetoric seems to disappear when aid is explicitly under discussion. An important aid event, the recent UN Summit on the Millennium Development Goals (MDG) in New York, was telling in this respect. UK Deputy Prime Minister Nick Clegg gave a speech to the summit in which he did not mention democracy; yet two days later, speaking to the UN General Assembly, he said that we must “fearlessly project the ideals of democracy, equality and freedom.” Similarly, the UN itself issued a statement on World Democracy Day, September 15, 2010: “Democracy has the real potential to empower inclusive development.” Only five days later, three different senior UN officials gave opening speeches to the MDG summit without mentioning democracy.

In any case, dictators have received a remarkably constant share—around a third—of international aid expenditures since 1972. The proportion of aid received by democracies has remained stuck at about one fifth (the rest are in a purgatory called “Partly Free” by Freedom House). As for US foreign aid, despite all the brave pronouncements such as the ones I’ve quoted, more than half the aid budget still went to dictators during the most recent five years for which figures are available (2004–2008).

And there are still modern-day counterparts to Mobutu and Bokassa. Paul Biya, the dictator of Cameroon, is marking his twenty-eighth year in power in 2010 by receiving the latest in a never-ending series of loans from the International Monetary Fund with imaginative labels like “Poverty Reduction Growth Facilities.” Biya, whose government also enjoys ample oil revenues, has received a total of $35 billion in foreign aid during his reign. There’s been neither poverty reduction nor growth in his country: the average Cameroonian is poorer today than when Biya took power in 1982.

In February 2008, Biya’s security forces killed one hundred people during a demonstration against food price increases and also against a constitutional amendment that will extend his rule to 2018. Many of the victims were “apparently shot in the head at point-blank range.”5 The IMF justification for the newest loan in June 2009 noted laconically that these “social tensions” have not recurred and “the political situation is stable.”6

Helen Epstein recently described in these pages the support that aid donors give to Ethiopia’s tyrant Meles Zenawi, who has roughly matched Biya in aid receipts in a shorter period of time.7 Peter Gill in his excellent recent book Famine and Foreigners: Ethiopia Since Live Aid (2010) documents Meles’s misdeeds further, which rise to the level of war crimes in his counterinsurgency in Ethiopia’s Somali region (I reviewed the book for The Wall Street Journal on September 7, 2010).8 Other long-serving aid-receiving dictators include Idriss Déby in Chad ($6 billion in aid between 1990 and the present), Lansana Conté in Guinea ($11 billion between 1984 and his death in 2008), Paul Kagame in Rwanda ($10 billion between 1994 and the present), and Yoweri Museveni in Uganda ($31 billion between 1986 and the present).

The use of foreign aid to support dictators is not limited to Africa. Cambodia’s Hun Sen has been in power for twenty-five years and has received nearly $10 billion in aid during that time.9 Human rights groups have documented a progressive deterioration in rights during his rule, including forcible evictions of the poor from their land, repression of both the press and peaceful demonstrations, extrajudicial killings, and trafficking in women and children.10 Donors periodically protest, such as when the European Union “raised concerns” in August 2009, but aid continues to increase.

Another region of aid-financed tyranny is Central Asia, where the autocrats of Kazakhstan, Tajikistan, and Uzbekistan have been in power since the breakup of the Soviet Union in 1991. Each has received about $3 billion in aid while in power.

To be fair to the donors, they do sometimes show concern for democracy. Donor countries became involved in internationally supervised elections in formerly war-torn societies like Sierra Leone, Liberia, and the Democratic Republic of the Congo. Donors such as the US also applied pressure to Kenya to conform to democratic principles after the longtime autocrat Daniel Arap Moi left office, and again in 2007–2008 when there was a seriously flawed election.11 However, other flawed elections happened with little complaint from donors (such as in Nigeria in 2007), not to mention the farcical “elections” in the aid-supported dictatorships I have mentioned. Moreover, the democratic standards endorsed by donors have generally been inadequate, concerning primarily the mechanics of elections, while ignoring such important issues as protection of human rights and freedom of speech. How can voters have a fair choice if opponents of the regime live in fear of arrest and torture?

Why didn’t the end of the cold war change aid practices? One explanation is that something analogous to the cold war is still inducing donors to support some dictators: the “war on terror” that has been going on since 2001. This helps explain the support of tyrants in Central Asia—such as President Islam Karimov of Uzbekistan—whose cooperation is sought for the US/NATO war in Afghanistan. It also explains US support for Ethiopia, which it hopes will be a reliable Western ally in the terrorist war zone of the Horn of Africa. But other corrupt dictators who receive large amounts of aid, such as Biya in Cameroon, are not strategically important to the donors.

A more important political motive for aid is independent of cold wars or wars on terror. Aid agencies exist to give aid, so they must keep the money flowing. The department of an aid agency assigned to help a country may not get a budget next year if its officials don’t disburse to the country’s ruler this year; so they hand out funds no matter how autocratic he is. (The autocratic recipients know this and know they can ignore any “raised concerns” about democracy, including human rights.) Only the most well-publicized and egregious violators of democratic principles—like Robert Mugabe—get cut off.

Donor countries that claim they are politically neutral are not. Aid increases the slush funds available to the government, financing more repression of democratic opposition. The government can deny aid to opposition supporters, as a new Human Rights Watch report found occurred in Ethiopia in 2009–2010. As one farmer told HRW, “[Village] leaders have publicly declared that they will single out opposition members, and those identified as such will be denied…access to fertilizers, ‘safety net’ and even emergency aid….” Aid also increases the incentive to stay in power, making the government all the more unwilling to risk the voters’ verdict.12 The African writer and economist Dambisa Moyo in her book Dead Aid (2009) observes this tendency. “With easy access to cash,” she writes, “a government remains all-powerful, accountable (and only then nominally) to its aid donors.”13 How can donor countries and agencies live with such hypocrisy? From the very beginning, aid history is awash with rationalizations for donors supporting autocracy.

The existing aid system took hold during the late colonial era, at a time when colonialism (autocratic itself, obviously) was expected to endure. A longtime British colonial official named Lord Hailey pushed through the Colonial Development and Welfare Act of 1940. Hailey said, “A new conception of our [colonial] relationship…may emerge as part of the movement for the betterment of the backward peoples of the world.” This was at a time when the Colonial Office said that “most Africans are still savages” and “they will probably not be fit for complete independence for centuries.” This story is told in detail in an undeservedly obscure book, Lord Hailey, the Colonial Office and the Politics of Race and Empire in the Second World War (2000) by Suke Wolton, who summed up the prevailing view of the time:

The major powers would continue to be able to determine the future of the colonial territories—only this time the source of their legitimacy was based…on their new role as protector and developmental economist14

A recent book by Mark Mazower, No Enchanted Palace (already reviewed in these pages, but not from this angle), tells a similar story.15 A key figure in the founding of the United Nations was the South African Jan Smuts, who actually drafted the famous preface to the UN Charter that committed the organization among other things to “the economic and social advancement of all peoples.” In a speech to the UN Conference in 1945, Smuts said he was “including dependent peoples, still unable to look after themselves.” Smuts too expected colonial empires to last, and the UN Charter said nothing about the independence of any colony.

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