The Following Article was Written by Olumayowa Okediran, ASFL’s Programs Manager
Africa has been the focus of many studies by economists and development experts. Though there exist diverse views about the way forward for Africa, the continent has seen little development in contrast to the rest of the world. Peter Bauer (1915-2002) spoke with resounding clarity on solutions to the economic penury of the developing world and Africa in particular. Bauer’s interests were related mostly to development economics and foreign aid. He sought to show the demerits of central planning, foreign aid and protectionism. He criticized the idea that the disadvantaged had no motivation to improve their condition and that third world countries are underdeveloped due to limited resources available to them, a theory peddled by several foreign aid advocates.
Bauer was interested in Africa and based his study on first hand observation of the continent. Barun S. Mitra, director of the Liberty Institute in India in his preface to the book Peter Bauer and the Economics of Prosperity, stated that Bauer’s insight into poverty was a result of his intensive work in Africa and Asia in the 1950s and 1960s. By studying West African economies closely, Bauer published West African Trade (1954) where he emphasized the importance of trade for economic development. All his life, he debunked the supposed necessity of government-to-government financial interventions in developing countries and emphasized the benefits of trade as a more suitable alternative.
Despite Bauer’s careful study of third world economies and his warnings about the demerits of foreign aid, every year, Africa’s begging bowl is constantly replaced with a bigger one. Between 2000 and 2008, foreign aid flow to sub-Saharan Africa increased from $12bn to $36bn, a whopping 300 percent increase, without any significant visibility in real economic development as a result of these huge amounts of money. One would wonder why countries like the United States, which tops the list of foreign aid donors, continue to give, despite its obvious ineffectiveness. Subsidizing African governments inevitably increases the power of government, escalates corruption and as Dambisa Moyo in her book Dead Aid that she dedicates to Bauer states that it is neither necessary nor sufficient for economic development. Benevolence is not the reason why foreign countries give to Africa: it is simply economic control, not economic development.