President Obamaâ€™s focus is on Africa this week, and while his intentions are undoubtedly good, he should keep in mind that we canâ€™t fix Africaâ€™s problems externally. The worst of the continentâ€™s seemingly intractable problems arenâ€™t caused by insufficient Western aid; theyâ€™re kept in place by government corruption and mismanagement.
In fact, Western policies (including some well-meaning rules about assistance) have actually hurt Africaâ€™s development in recent years.
â€śTo sustain and accelerate the current growth of African economies, African leaders need to focus on domestic structural and institutional reforms,â€ť writes Cato Institute scholars Marian L. Tupy and Dalibor Rohac. â€śThey also need to make more tangible progress removing existing barriers to trade and investment on the continent. But African leaders should demand that the West help too, by abandoning its agricultural protectionism, including the wasteful programs of explicit and implicit support of domestic agricultural production, which hurts agricultural sectors in developing economies.â€ť
Letâ€™s begin with some basic economic principles.
â€śCountries that improve their policies and institutions â€” by increasing their trade openness, limiting state intervention in the economy, building a business-friendly environment, and emphasizing protection of property rights and the rule of law â€” tend to grow faster than others,â€ť the Cato scholars point out. â€śSuch countries are also better at attracting foreign capital, which helps to increase economic growth. Credible improvements in policies and institutions increase confidence and foster investment and economic growth.â€ť
Reforming such policies goes much further in lifting a nationâ€™s people out of poverty than traditional aid does, particularly in countries where corruption is rife. Corruption canâ€™t be fixed from the outside, but paradoxically, it can be sustained from the outside. And thatâ€™s what traditional aid can actually do, by legitimizing the elites in power and giving them Western largesse to distribute at their whim.
Other Western policies have also proved harmful. Those include food assistance programs that donâ€™t take advantage of Africaâ€™s diversity. A famine in one part of the continent is usually offset by a season of plenty in another. Free trade between African countries could help alleviate much of the hunger. But instead of encouraging African nations to trade with each other, we send Kansas wheat and Nebraska corn. This kind of aid also depresses African commodity prices, as African farmers are forced to compete with free U.S. commodities.
The bottom line, the Cato scholars say, is that Africans can do more good by dropping tariffs they have against each other and reforming their institutions than by seeking additional Western assistance.
â€śAfrican problems cannot be solved in Western capitals, and the region need not rely on the West to develop,â€ť the scholars say. â€śPersistent poverty in Africa is caused primarily by flawed domestic policies and institutions. As such, it can be overcome only by changes made by Africans themselves.â€ť
President Obamaâ€™s focus on Africa is appropriate; the region is filled with both problems and promise. But he shouldnâ€™t be quick to offer more of the kind of assistance that hasnâ€™t helped thus far.