Is Aid a Matter of Justice? | Marian L. Tupy | Cato Institute: Commentary

Is Aid a Matter of Justice? | Marian L. Tupy | Cato Institute: Commentary: "Africa is poor not because of Western consumption and stinginess, but because it produces too little. Most economists agree that Africa's low productivity is, in large part, a result of bad policies, such as restrictions on private enterprise, bad institutions, and inadequate rule of law. Unfortunately, far from stimulating growth and reducing poverty over the last 60 years, aid has served as a disincentive to economic and institutional reforms.

Governments that depend on income taxes are generally more accountable to their citizens and more responsive to their citizens' desire to advance economically than governments that do not. In Africa, the constant flow of aid has stunted democratic and private sector development.

Moreover, foreign aid that was not wasted on white elephant projects was often stolen by African politicians and bureaucrats. Corruption insulated the elite from the negative consequences of its own actions. When the ordinary people rebelled, as the Ethiopians did after the rigged 2005 election, they were suppressed by their own troops, who were partly financed by foreign aid. According to Paul Collier of Oxford University, between 1960 and 1999, aid financed up to 40% of Africa's military spending."