Time to reconsider how foreign aid is being spent

Spending money wisely and frugally is one of the keys to success in life, both on a personal level as well as at an institutional and governmental level. And in the current economic climate where even the world's capital intensive super powers are forced to tighten their money belts and budgets, all while running up staggering deficits, it is even more important to reconsider how money is being spent - more specifically, foreign aid.

Recently, Zimbabwe has struck an aid deal with China, and President Obama has promised to double the amount of foreign aid. To be sure, the importance of foreign aid should not be undermined. It has the potential to accomplish political, economic, and social achievements that simply would not be attainable otherwise. But how effective is it in bringing to fruition that potential?

Journalists and scholars from a variety of fields have recently documented and criticized the way foreign aid is being spent - leading to conclusions that it is much less effective than we think. For example, Dambisa Moyo writes in her book "Dead Aid; Why Aid is Not Working and How There is A Better Way for Africa" that over the past 50 years, over a trillion dollars has been spent on foreign aid to Africa and that the results have been lackluster at best. One of the reasons for this, at least in Africa, is that foreign aid is often times channeled through the State, and governments either through corruption or mere inefficiency end up wasting millions of the donations.

Celebrities and politicians continue to look at the conditions in Africa and wrongfully conclude that more is aid is the answer. And why wouldn't they? It gives them a veneer of compassion and concern which may or may not be done for their own image and political ambitions. Rather, the answer lies in being smarter about the aid, looking at factors like what apparatus it is being channeled through, what oversights need to be in place to insure it is being spent efficiently, or perhaps even abandoning some projects all together and transferring efforts and capital into the roots of problems as opposed to merely trying to remedy ills that are occurring in perpetuity.

Additionally, countries need to consider the strings that are attached to aid donations. To be frank, Africa needs more self-determination and less parental, "we know what is best for you" interference. There are hard and fine lines that must be drawn and balanced among the hundreds of factors at play when it comes to foreign aid. Each case must be highly contextualized and specific, not painting with broad brushes across the spectrum of issues.

But perhaps its time we consider that what Africa and the developing need is not more aid, but less. For another look at the ineffectiveness of aid expenditures, check out Walter Williams article arguing that freedom may be the real answer for Africa.

This article is the first in a three part series on aid in Africa. Part two will examine the AIDS epidemic. Part three will look at education as the most effective way to make progress in Africa.