africa

Yale Center for the Study of Globalization
Being more selective would mean particular support of countries where the political
economy favors development, in terms of growth and poverty reduction. At the other
extreme, in predatory states, selectivity would mean that little beyond humanitarian
support may be feasible. Most countries lie in between these poles, and selectivity
will mean doing things that support growth and poverty reduction but in ways that
explicitly take the political economy into account. It could mean supporting reformers,
or supporting investments that break some of the predatory powers of elites, or supporting
coalitions among players that enable long-term investment to be undertaken.
Whatever choices donors make, they should involve a careful attempt to take the
politics into account and to influence it for the better—at least in terms of the relatively
modest objective of supporting growth and poverty reduction in the country.
Acemoglu and Robinson (2013) offer a simple model and discussion for thinking
about economic policymaking where politics is endogenous. This is what we have
in mind: it is not enough to think of aid being constrained by politics, rather, politics
is inevitably affected by aid. 5
Second, donors should pick their themes and partners carefully for maximum impact
of development aid. The greatest rewards in African development will stem from
harnessing the proceeds from natural resource extraction so that they serve the
future needs of Africa’s people. To achieve this not only involves technocratic choices
but also has a huge political dimension. A future of poor governance, low growth,
stagnating poverty, and indeed conflict looms if the natural resource boom is not
handled better. Donors will continue to partner with governments, as seems right—
with the proviso discussed earlier on the political economy. They will be tempted to
work with alternative partners, including civil society and the private sector. But the
latter are not neutral players in a country’s political economy. Indeed, although the
private sector is often portrayed as the credible alternative in countries with poorly
functioning politics, private firms are often intertwined in the same elite network,
with politics shaping the private sector and private sector players also important
political players. Indeed, working with the private sector will require similar care and
selectivity for the same political economy reasons as discussed above, and naïve
portrayals of a clean private sector are equally as misleading in such settings.
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