On the Financial Times blog, Steve Radelet offers a response to the question “Is aid working?” Radelet takes to task Dambisa Moyo’s “extreme views” by suggesting the more important question is “Under what circumstances does aid work, and what can be done to make it more effective?”

Excerpts below, full post can be found here

Ms. Moyo argues that “Millions in Africa are poorer today because of aid; misery and poverty have not ended but have increased.” But this storyline is at least a decade out of date. Since 1996 – twelve years now – economic growth across sub-Saharan Africa has averaged 2.3 per person per year. And it is not just due to oil. There are 18 strongly performing countries, none of them oil exporters, that together have achieved per capita growth averaging 3.1 per cent, meaning that average incomes have increased nearly 50 percent in twelve years. Most of these 18 countries are now democracies, including Mozambique, Tanzania, Ghana, Lesotho, Namibia, Mali, South Africa and others, and the majority are measurably improving governance. Across Africa literacy rates are up, infant mortality rates are down, and 34m more children are in school since 2000. And according to analyses by the World Bank, poverty rates (at $1.25/day poverty line) peaked at 59 per cent in 1996 and dropped to 51 per cent by 2005, a remarkable drop in nine years. Poverty in Africa has been falling, not rising.

What happened? The turnaround is primarily due to stronger leadership in Africa, much better economic policies, lower debt burdens, new cell phone and internet technologies, and an emerging and vibrant business class. What about aid? Aid has been neither panacea nor demon. Much has been wasted on sordid dictators, projects that didn’t fit local needs, and bureaucracies that ensure only a fraction of funding gets to those that need it. But much has helped support success.

-Chris Scott

Listen to this NRP piece from Thursday about McCain and Obama’s interest in boosting foreign aid. The beginning of the piece is transcribed below, but the full clip is just over 4 minutes and worth the listen.

The economy may be in trouble and the budget deficit growing, but supporters of U.S. foreign aid see some promising times ahead. That’s because both leading candidates for president have talked about the need to continue to help poor nations develop.

Every so often at town hall meetings on the campaign trail, Republican John McCain calls on people from a grassroots organization known as the ONE campaign. They ask him what he’ll do to help poor nations fight HIV/AIDS, malaria and illiteracy. McCain has said he sees foreign assistance as a key factor in securing America.

“It really needs to eliminate many of the breeding grounds for extremism, which is poverty, which is HIV/AIDS, which is all of these terrible conditions that make people totally dissatisfied and then look to extremism, particularly Islamic extremism,” he told a town hall meeting in New Hampshire last month.

At a speech in Washington this summer, Democrat Barack Obama also spoke about development aid as a strategic imperative for the U.S. in today’s world.

“I know development assistance is not the most popular of programs, but as president, I will make the case to the American people that it can be our best investment in increasing the common security of the entire world and increasing our own security,” he said. “That’s why I will double our foreign assistance to $50 billion by 2012 and use it to support a stable future in failing states and sustainable growth in Africa, to halve global poverty and to roll back disease.”

McCain has not been that specific about how much money he would spend, but he has set a goal of trying to eradicate malaria in Africa and fight corruption.

Steve Radelet of the Center for Global Development sees a total change in Washington’s attitude about development aid, and he’s hoping this will translate into some real reform….