More money, more madness

July 08, 2005|By Patrick Basham

WASHINGTON - The banner headline in Britain's News of the World read: "5 Billion People Can't Be Wrong!" Well, yes they can.

There's no question that the best-selling British Sunday newspaper captured the post-Live 8 media spin. Now that several billion people have watched Live 8, the biggest event in the history of entertainment, the planet is allegedly mobilized to "Make Poverty History."

But the conventional wisdom is wrong about public opinion and Live 8's politically fashionable organizers are wrong about the remedy for African poverty.

Live 8 constituted the first wave of Bob Geldof's populist assault on the leaders of the Group of Eight nations. Mr. Geldof is demanding a doubling of foreign aid to Africa. In the second wave, the founder of Live Aid called on demonstrators to travel to Scotland to attend an anti-poverty rally and put more pressure on the G-8 leaders, who are meeting near Edinburgh for their three-day summit.

Both the European Union and the United Nations have echoed the call by British Prime Minister Tony Blair and his finance minister, Gordon Brown, for developed countries to contribute 0.7 percent of their gross national income to foreign aid. Canada and 13 European countries have accepted this challenge.

Such collective pressure may bring its own reward. Last week, President Bush proposed doubling U.S. aid to Africa over the next five years, if Africa's despots commit themselves to honest government and the rule of law. This offer suggests that Mr. Bush is either incredibly naive about African political realities or a very patient man.

More foreign aid will do exactly what previous foreign aid has done for Africa: very little that's good and much that's bad. The $500 billion in foreign aid over the past four decades has actually reduced per capita income in Africa. Foreign aid has perpetuated a culture of dependency that impedes the economic and political liberalization necessary to eradicate African poverty.

Dictators and their political, economic and military cronies embezzle the vast majority of government-to-government foreign aid. In Africa, trickle-down aid economics has been a colossal failure.

The economically illiterate Live 8 campaign wildly misdiagnoses the poverty problem. Larger dollops of Western government charity won't reduce African poverty. The Ugandan journalist, Andrew Mwenda, warns that Mr. Blair is committing "one of the biggest disservices to the African continent. [He] is giving these ... corrupt dictators a blank check."

The socialist mindset clearly still resonates among the West's political elite. If throwing money at a problem proves unsuccessful, then throw even more money next time and irrationally expect better results. Instead, poor Africans would truly benefit from economic freedom (for example, free markets, free trade, privatization and property rights), the rule of law, independent courts, freedom of the press and democratically accountable governments.

Therefore, the foreign aid policy is economic madness. Nevertheless, surely our politicians ignore the demands of Live 8 at their peril. That's not necessarily the case. As usual, taxpayers are far more sensible than their political representatives on matters of public spending. When removed from the charismatic embrace of pop culture celebrities such as Mr. Geldof, Bono, Brad Pitt and Will Smith, most Britons and Americans disagree with their government's proposals.

Mr. Blair and Mr. Brown, the political Lennon and McCartney of poverty reduction, certainly don't have their own taxpayers on their side.

A recent survey published last month in London's Daily Telegraph newspaper found 83 percent of Britons don't have confidence that "money will be spent wisely rather than being wasted or finding its way into the pockets of criminals and corrupt governments." Four out of five surveyed correctly conclude that corrupt and incompetent African governments "have contributed most to Africa's problems."

Mr. Bush hasn't heeded the fact that a large majority of Americans believe there is so much waste and corruption in the foreign aid process that very little actual aid reaches the people who really need it.

In Edinburgh, our timorous political leaders shouldn't allow expensively orchestrated "public" pressure to turn the G-8, already an indulgent talking shop, into a very costly global decision-making body.

At Live 8, Paul McCartney told his worldwide audience that, "This is a moment that could change the world." Sadly for Africa's poor, by week's end he may be proved right.

Patrick Basham is senior fellow in the Center for Representative Government at the Cato Institute.

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