Foreign Aid for Scoundrels

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

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.

Of course, the colonial system itself fell apart soon after these statements. But this had less to do with any change in these ideas than with the postwar collapse of Britain and France as military powers. And as Wolton noted, the old colonial powers were reborn as aid donors who still today have the role of “protector and developmental economist.”

After all, the idea of aid is that, along with the necessary funds, the donors have superior knowledge—about health, agriculture, technology, institutions—that they are conveying to the recipients. Why let the ignorant recipients vote on what to do when the donors already know? As the future Nobel laureate Gunnar Myrdal said in 1956: “Super-planning HAS to be staged [with]…a largely apathetic and illiterate citizenry…this is why [planning] is unanimously endorsed by experts in the advanced countries.”

Of course, today’s “experts” can no longer be so frank, and have to use code words. One code phrase is “benevolent autocrats,” a concept sometimes disguised even further with code words like “developmental state” or “strong leadership.” The World Bank Growth Commission Report in 2008 gave as one of its few unambiguous conclusions: “Growth at such a quick pace, over such a long period, requires strong political leadership.” Unfortunately for this view, as Dani Rodrik of Harvard has recently summarized the academic consensus, “authoritarian growth” is not a generally workable formula but a “myth.”¹⁶ For every Lee Kuan Yew there is a Paul Biya.

On the above list of aid-receiving autocrats, the one most likely to be seen by outsiders as a “benevolent autocrat” is Paul Kagame of Rwanda. Meles Zenawi in Ethiopia previously had this role, before a few too many jailings and shootings. Before that it was Yoweri Museveni in Uganda, until it became clear that there was too much corruption in Uganda and that he had an unseemly determination to stay in power at all costs. Now Kagame seems to be going the same route, as shown by the Rwanda elections in August, which were preceded by repression of the opposition and mysterious assassination attempts. Benevolent autocrats have the distressing habit of not staying benevolent.

It is always possible that an autocrat will be able to advance development. But the donors’ use of this possibility is inherently undemocratic—they presume to evaluate the ruler instead of the citizens (usually based on questionable information), and thus undemocratically decide who should have democracy.

A similar presumption informs Paul Collier’s book Wars, Guns, and Votes(2009), in which he goes from an empirical proposition that democracy in poor countries increases political violence (a conceivable conclusion, even though based on dubious criteria for defining democracy in this case) to a recommendation that donors oppose elections in the “Bottom Billion” in the aftermath of civil wars. There may indeed be tradeoffs between democracy and other development goals, but why should outside aid donors be the ones who make these tradeoffs?

The concept of development helps rationalize the position of autocrats by postulating an unstoppable transition toward a bright future. This is why donors call all poor countries “developing.” Once the donors started paying lip service to democracy, they could label undemocratic aid recipients as “democratizing.” Let’s call this the Gerund Defense for supporting dictators. Thomas Carothers, an expert on the connections between aid and democracy, described the Gerund Defense in a classic article. He quoted a USAID description of the Democratic Republic of the Congo in 2001 as a country in “transition to a democratic, free market society.”¹⁷ (Such “democratizing” is still notably weak in 2010.)

The World Bank’s response to Helen Epstein’s article in these pages accusing the bank of supporting Ethiopian tyranny is a classic Gerund Defense. The World Bank’s country director for Ethiopia and Sudan, Ken Ohashi, replied:

We start…with a belief that in every country people want…to develop a transparent, accountable…governance system. Ethiopia is no exception. Our task…is to support that innate tendency.

However, building institutions… takes a long time…. Changes are incremental, and at times they may suffer serious setbacks….¹⁸

The Gerund Defense has the attraction of being irrefutable. We don’t know the future, so we don’t know whether a particular event is a “setback” to “building institutions,” or whether the “building” is a myth. We could of course observe the actual trend in “democratizing”—but this has been discouraging in Ethiopia, where parties and politicians that seriously challenge the government risk prison. Donors could conceivably overlook anything, even the 1994 Rwanda genocide, as a temporary “setback” to an “innate tendency.” Such a view is not as easily dismissed as you might think.

The World Bank in 1991 concluded that “Rwanda has made a creditable effort toward social and economic development,” although the Hutu government was already complicit in massacres of hundreds of Tutsis by Hutu mobs in separate incidents in October 1990, January 1991, and February 1991.¹⁹ The World Bank gave several aid credits to the government between 1991 and 1993. To be fair, this looks worse in hindsight, because the bank could not have anticipated such a rare event as genocide. Yet in what must be the historic record for a tone-deaf conception of aid, the World Bank saw no reason not to issue an anodyne report on Rwanda on May 16, 1994—when, by the report’s own admission, the genocide had been going on for six weeks. The report made recommendations like:

As immediate steps to control the budget deficit the Government needs to (a) re-establish budgetary controls and discipline, (b) reduce spending in non-productive areas including the military….²⁰

The World Bank did at least finally suspend aid during the genocide, but the French government continued to aid the Hutu government even after the genocide had become public knowledge.

Faced with this indifference to tyranny of even the most lethal kind, African intellectuals are increasingly beginning to protest. In her book Dead Aid, Dambisa Moyo struck a nerve because she protested so eloquently against the paternalism, presumption, and double standards of the donor countries’ aid agencies. In many cases, foreign aid, as a review of her book put it, “fostered dependency, encouraged corruption and ultimately perpetuated poor governance and poverty.”²¹ One of her central points is that aid can, in effect, disenfranchise Africans, since the population cannot “hold its government accountable.” The courageous journalist Andrew Mwenda started an independent newspaper in Uganda and has already survived several attempts by the autocratic Museveni to silence him for his criticisms of corrupt and ineffective practices. The Sudanese entrepreneur Mo Ibrahim has created an “index of good governance” in Africa and awarded an annual prize to a democratic leader who has voluntarily left office. Far from bending to any lower standard for Africa, Ibrahim has refused to award the prize the last two years for lack of an adequate candidate.

The history of democracy is that of a fight against double standards, of recognizing equal rights for black men and white men, Jews and Gentiles, Protestants and Catholics, women and men, Muslims and Hindus, the rich and the poor. When will aid donors cease support for unequal rights in their actions as well as their rhetoric?

Recognizing the double standards in aid, perhaps also speaking for the opposition leader who was a victim of “a new generation of democratic leaders,” Mo Ibrahim said:

All Africans have a right to live in freedom and prosperity and to select their leaders through fair and democratic elections, and the time has come when Africans are no longer willing to accept lower standards of governance than those in the rest of the world.²²

He knows that recognition of democratic values eventually leads to their realization; lack of recognition continues the subjugation of the poor.