Our cover here was a joke, but perhaps one not too far from the truth. Bono writes today as an op-ed guest columnist in the New York Times about the “rebooting” of Africa, and in his lilting prose, he’s actually pretty right. Development economics is a contentious and irreconcilable field; there are infinitely more questions than there are answers. In fact, some might say that we have no answers at all. Institutions or geography? Debt relief or concessional loans? Privatization? Direct transfers? Does aid actually hurt the world’s least developed countries? Are the Millennium Development Goals unmeetable pipe dreams? It goes on and on.
Amid his distracting asides and Bono-isms, Bono hits all the right points. The Mo Ibrahim prize is probably one of the most innovative prizes ever created. Designed to incentivize good African leaders to step down peacefully and without looting their countries, it gives $5 million USD over 10 years and $200,000 every year after that to its laureates. And its laureates have been excellent choices (well, all two of them), the Presidents of Botswana and Mozambique, two African success stories to date. Last year, the prize was awarded to no one.
The Ibrahim prize is a sign of the slow shift in strategy for Africa. As the failed World Bank/IMF structural adjustment policies of decades past recede into the past, a new view on helping Africa has emerged, Bono pins it down: “Because most Africans we met seemed to feel the pressing need for new kinds of partnerships, not just among governments, but among citizens, businesses, the rest of us. I sense the end of the usual donor-recipient relationship.” There’s life out there besides massive government aid transfers and conditionality. We live in an aid landscape of the Grameen Bank, cellphone e-commerce, and Bill and Melinda Gates Foundation. Randomized trials and micro-projects are the name of the game, trying everything and seeing what sticks.
This is the era of smart aid. To Bono again, “Not the old, dumb, only-game-in-town aid — smart aid that aims to put itself out of business in a generation or two. “Make aid history” is the objective.” Yes, aid creates horrible incentives at home and abroad, but we still need it. Bono? “It’s crucial, if you have H.I.V. and are fighting for your life, or if you are a mother wondering why you can’t protect your child against killers with unpronounceable names or if you are a farmer who knows that new seed varietals will mean you have produce that you can take to market in drought or flood.”
So, we still don’t have the answers to create growth anywhere, but where old aid was shouting out answers, at least smart aid is guesstimating.
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