Problems with endless aid and entrepreneurial solutions

There has been quite a bit of writing recently on African aid and the implications of continued aid to developing countries. There are two arguments and I am of the belief that continuing aid (without a termination date or exit strategy) hinders economic development, contrary to the popular belief that aid is beneficial to the country receiving it.

Now, before I put my foot in my mouth, let me say that I am not discrediting the value of helping others, especially those who are suffering. However, I think the approach to helping those people needs to be changed and viewed with the goal of creating change from within rather than sustainability from the outside.

If you give a child an allowance of 100,000 dollars a month they wont work a day in their life until they need more than 100,000 dollars a month, a day that for most will never come. The same can be said for aid to developing countries. The belief that constantly and continuously providing to developing will spur economic growth is an oxy moron. The saying that giving a man a fish is not as valuable as teaching him to fish (sorry I'm not one for famous cliches) could not apply more.

I believe that the correct approach is to teach the entrepreneurs within the target country to make their own change. Providing them with capital and/or the resources to do so is acceptable as long as such aid has a set limit or maximum amount as well as a terminal date beyond which the entrepreneur must be sellf sustainable. Almost like seed funding or angel investing seen domestically, when you fund a new idea, concept, or change, it must have a cap on the funding you give it. Issuing a blank check does no good to anyone because of the moral delima associated with doing so.

African economist, Dambisa Moyo, agrees with my thoughts and has made some interesting remarks regarding aid to Africa. Although Africa is not the focus of my thought stream necessarily, teachings from Africa can be applied to aid anywhere in the world.

Dambisa also wrote the book Dead Aid: Why Aid is Not Working and How There is a Better Way for Africa, an expanded thought process of this topic and a great read.