TheNeedful

I won't argue with the following assessment of the original Live Aid:

It's an open question whether Live Aid did more harm or good. As David Rieff explains in the British magazine Prospect, organizations involved in delivering relief became complicit in the Ethiopian government's Stalinist program of forced agricultural collectivization and relocation, which helped create the disaster. Today, Ethiopia is significantly poorer than it was 20 years ago, and, as David Plotz explained in this 2003 dispatch, perpetually dependent on charity. This is, sadly, the story of aid to sub-Saharan Africa as a whole. While the developed world has contributed more than $500 billion over the last 40 years, Africans have continued to fall farther behind.

as I don't know enough about Ethiopia in particular to say how accurate a statement it is. Still, I think it's fair to say that the people who are actually driving this new aid movement forward are aware of these issues. Weisberg precedes this description with the following quote by Bob Geldolf:

get off the corruption thing and force our governments to get there.

Fair enough. I'll counter with this quote from Bono from the Meet the Press interview I mentioned previously:

This is the number-one problem facing Africa, corruption; not natural calamity, not the AIDS virus. This is the number-one issue and there's no way around it.

So corruption in Africa is not being blithely ignored, Bob Geldolf not withstanding.

Weisberg goes on to say that debt relief may actually do more harm than good:

Debt forgiveness is the notion that Bono has relentlessly championed, signing up everyone from Bill Gates to Jesse Helms.... But as critics like William Easterly argue, there are reasons for pessimism. Most African nations weren't servicing their debts anyway, so forgiveness at best codifies reality. At worst, it cuts developing countries off from capital in the same way that default does. Lenders will be more wary of extending credit to countries that have set the precedent of not paying back what they borrowed.

But again, this is not something those in favor of debt relief are unaware of. In The End of Poverty, Jeffery Sachs says the following:

Some aid is for cancellation of debts that were not being paid anyway. While debt cancellation may be very important for enabling a country to regain access to credit markets, or to regain hope, it does not add to actual resource flows if the debt could not be serviced anyway. (The End of Poverty, p296-298)

What Sachs (and others) are calling for is debt cancellation so that recipient nations can accept cash without having to then turn around and give it right back to their creditors. Does this just acknowledge the status quo? Of course! But how damaging would it be to continue onward without acknowledging the simple truth that the old debts will never be repaid? Banks write off bad loans all the time. Why is it so hard for nations to do the same?

Note one other thing Sachs says. "debt cancellation may be very important for enabling a country to regain access to credit markets". That's the opposite of what Easterly says. So who's right? Well, both. Lenders may well be wary of loaning money to countries with a history of not paying off their debts. But lenders certainly aren't going to loan more money to a nation that can't pay off its existing debts. Debt relief is simply a way out of the vicious cycle of bad loans. Once a nation no longer has to worry about servicing an impossible debt, it can devote whatever resources it has where it will do the most good. Once a lender can see the nation can actually use the money effectively, credit will flow in again. To use bad credit as an excuse not to cancel debt is simply counterproductive.

Weisberg goes on to say that increased trade "offers significant hope for African economic progress", and that what is needed is free trade, not the "trade justice" advocated by Blair and Make Poverty History (which I have linked to before). As a free trader myself, I don't argue with that in principle. In practice, though, I don't think that trade is the one and only answer. Sachs addresses this issue as well. Expanding trade certainly does help those in a position to take advantage of it, but it does little for those people at the bottom of the economic ladder. What good does expanded trade do for someone in a village with no roads connecting them to a major city?

Weisburg might counter that trade will eventually trickle down, in particular through new investment in infrastructure. But in the free trade only scenario the only organization left that can make these investments is the local government. Didn't we just say that these governments are too corrupt to be of any real help? And what about nations who are simply not in a position to take advantage of free trade? Sachs says:

In real geographical terms, the rising tide of globalization has lifted most economies that lie at the water's edge. Those societies are, quite literally, the places that have boats in the water. The free-trade zones that fueled the industrialization of Asia, for example, were all on the coastline. But a rising tide does not reach the mountaintops of the Andes or the interior of Asia or Africa. Market forces, as powerful as they are, have identifiable limitations, including those posed by adverse geography.

Free trade is part of the solution, surely, but it's hardly the entire answer.

Weisburg finishes by saying that aid is better off coming from the private sector.

At the moment, the most promising model appears not to be government-to-government grant-making, but a new style of targeted, goal-driven, private philanthropy. To take the most significant example, the Gates Foundation has spent more than $4 billion, with tremendously encouraging results, to combat HIV/AIDS, malaria, and other infectious diseases, primarily in Africa. It ruthlessly scrutinizes and evaluates its own programs in a way governments seldom do, with the aim of directing additional money where it has the best chance of success.

The Gates Foundation is a wonderful thing, of course -- Sachs even goes out of his way to praise it in his book -- but putting it out there as an alternative to government investment is just silly. It's not, after all, as if there are a lot of other organizations out there doing this work at the level the Gates Foundation does. Bill Gates himself says governments need to do more.

The private sector can, and should, do a lot to help, and governments could do more to encourage it. But to pretend that we can rely on private donors alone is simply nonsense. We need targeted aid with guaranteed increases over more than a decade. Can we really rely on the private sector to be so generous for so long? Isn't the real lesson of the Gates Foundation not that the private sector can do it all, but that governments need to learn how to direct their aid more effectively?

There is certainly room to criticize the politicians, rock stars, and economists rushing yet again to the aid of Africa. But to dismiss their plans and then offer only small pieces of a solution in return is hardly constructive. We need everything that Weisberg presents: free trade and more private investment. But only in conjunction with all the other ideas put forward. As Sachs says, there is no magic bullet. But a global, coordinated, multi-pronged effort can truly mean the difference between life and death.