In Africa, effective aid is local aid

Bring up the topic of Africa to most Americans and their minds will race through images of slums, hungry children, undrinkable water, and war. For some, it’s comforting to know that the United States government invests huge sums of cash and capital in the continent, even if the goals aren’t always clear. Many Americans even contribute to those efforts privately via charity or participation in “one-for-one” purchases which, like TOMS shoes, provide a matching donation of your product to someone in need.

We care. And doing something is better than doing nothing, right?

We all know the parable which suggests that we should teach a man to fish rather than simply give him a fish. But in the United States, where extreme poverty and lack of access to adequate nutrition, medical care, and clean water feels a world away, giving a man a fish often seems the best way to help.

But is giving a man a fish really the best we can do?

Aid as a Problem?

Africa is flooded with billions of dollars in humanitarian aid from the United States alone each year—so it makes sense to assess the outcomes of that astronomical sum to see if our best is doing any good. Is Africa better off as a result of this influx of cash, programs, and assistance? Are its economies becoming more mature and its people less dependent on aid?

In recent years, more and more scholars have tackled the question of whether our development aid efforts are succeeding or failing. Just last year, Dr. Dan Honig launched the Project Performance Database (PPD), “the world’s largest database of development projects.” The database contains outcomes assessments of more than 14,000 aid projects from around the world. Disappointingly, based on aid agencies’ self-assessment, this database showed that nearly 40 percent of those projects failed. Only a small percentage of projects achieved their expected results.

More troubling than this is the increasing concern that our humanitarian aid efforts are not only failing, but they are actually harming local economies by disrupting existing incentives and ignoring local context. Atlas Network President Matt Warner provides a vivid example of this in his recent article for The Foundation for Economic Education, “Can Local Solutions Succeed Where Foreign Aid Has Failed?”

"In Ruhiira, Uganda, an international aid project once offered villagers $300,000 to grow maize instead of matoke, a banana-like starch. Maize, the aid experts reasoned, was better to farm because it is nutritious, drought-resistant, and produces high yields. The experts were right. At harvest time, the villagers found themselves with a bumper crop of 3,840 tons of maize.

What happened next, though, cut short any celebration. No one could figure out what to do with all the excess maize. Transport costs to distant markets were too high to be profitable, and the village lacked the kind of storage facilities needed to preserve the corn for future use.

So, it rotted. As one widow and mother of nine explained, “Maize is everywhere! Under the beds, in the living rooms, in the kitchens—everywhere! And the rats are everywhere, too.” What began as a hopeful, well-funded effort by foreign experts with good intentions ended in disappointment and even resentment on the part of those it was meant to help."

Stories like this are all too common in the world of economic development. And while free-market advocates are quick to criticize government aid efforts, the problem is not limited to government projects. The trouble comes when outsiders fail to consider they might not have all the information and, that without local knowledge, their efforts could harm rather than help people in impoverished communities–and that reality applies to both private and government aid efforts. Warner calls this problem “the outsider’s dilemma”; the problem that arises when outsiders are not equipped with the local knowledge and insights necessary to help people lift themselves out of poverty. Warner reasons that the outsider’s dilemma is the main reason traditional aid projects are so often met with failure and, as was the case in Ruhiira, actually do harm.

TOMS Shoes

In a famous example of well-meaning private initiative gone awry, TOMS shoes and its “One for One” effort has been deeply criticized as not only focusing on the wrong issue (as the Harvard Review put it, “Is donating shoes an effective way of aiding impoverished communities when an estimated 800 million people worldwide lack access to basic nutrition?”), but also for creating aid dependency with handouts that ultimately disenfranchise local shoe cobblers and vendors. TOMS commissioned a study on the “One for One” model. The results, published in the World Bank Economic Review, confirmed two major concerns: There were “insignificant impacts on overall health, foot health, and self-esteem” and “the overall impact of the shoe donation program appears to be negligible” in that the TOMS shoes simply replaced the shoes people had previously gotten elsewhere.

So, what are we to do? A world away from the real consequences on the ground, people in rich countries continue to flock to the traditional aid model because doing something has to be better than doing nothing at all.

But economies, cultures, and communities are infinitely complex, and what works for one country might not work for another. At Atlas Network, we believe there is a better way to help—a way that is grounded in locally-grown solutions that call for local knowledge, local leadership, and local empowerment.

Our team often quotes Lant Pritchett, a Harvard University development expert who asserted that “There are no poor people. There are people living in poor places.”

And what makes those places poor?

Economic Rights and Institutions

Increasingly, research has shown that poverty stems from a lack of economic rights and the institutions that support those rights. And that’s where Atlas Network and our associated partners in more than 90 countries are playing an important role.

Atlas Network serves as the center of gravity for a worldwide effort to create freedom and opportunity by helping local organizations develop and implement local solutions that are helping people improve their lives. Most of these organizations are think tanks that use research and data to establish the need for public policy reform, and then work with local stakeholders—including legislators, businesspeople, and others who care about change—who become advocates for progress.

Today, there are nearly 500 Atlas Network partners who operate independently with support from a diverse base of voluntary supporters, meet a minimum budget requirement, have a professional online presence, and are working toward a shared vision of a free, prosperous, and peaceful world where limited governments defend rule of law, private property and free markets. We are capacity builders, and our unique model, known as “Coach, Compete, Celebrate!” helps our partners create a stronger, more effective foundation for lasting change.

This network of extraordinary organizations led by intellectual entrepreneurs is growing each day, and nowhere is that growth more energized than in Africa. That’s encouraging because, with extreme limits on economic freedom in Africa, there is a lot of work to be done there.

Most of Africa’s countries perform poorly in the Economic Freedom of the World report, which annually measures the economic freedom environment of each country and ranks them in relation to one another. The 2018 report ranks 162 countries around the world, including 40 countries in Sub-Saharan Africa. The ranking shows that 80 percent of Sub-Saharan African countries place in the bottom half for economic freedom; 58 percent of them are in the bottom quartile and categorized as “least free.”

The Economic Freedom of the World report is widely used to analyze the impact of economic freedom on economic growth and poverty, and, according to its authors, “virtually without exception, these studies have found that countries with institutions and policies more consistent with economic freedom have higher investment rates, more rapid economic growth, higher income levels, and a more rapid reduction in poverty rates.” Africa’s poor performance in this ranking and others relating to economic rights, like the World Bank’s Doing Business Report, begin to give us a picture of why so many countries in Africa are, in the words of Lant Pritchett, “poor places.”

While the average American may frown in consternation during a discussion about Africa’s struggles, we are hopeful that the future is bright because our partners in Africa are creating meaningful and lasting change to secure economic rights and freedoms.

Rights and Freedom

It’s happening in Burundi.

A few years ago, a young intellectual entrepreneur named Aimable Manirakiza asked if we could share books about the principles of liberty. Armed with material, he has done tremendous work with thousands of students in Burundi, Rwanda, and the Democratic Republic of Congo, hosting events and teaching students about the virtues of a free society.

Last year, Manirakiza officially launched Center for Development Enterprises Great Lakes (CDE), raising $8,000 from local and international donors—which is, incidentally, 26 times the GDP per capita of Burundi. With Manirakiza at the helm, donors can rest assured that their funds are making a difference. CDE Great Lakes recently played a major role in reducing the mandatory fee for registering a business in Burundi from $78 to $22. In a country where average yearly income barely reaches $300, a $78 registration fee meant that many poor entrepreneurs couldn’t scrape together enough capital even to get started. But as a result of CDE Great Lakes’ work, that barrier to entry has been reduced by 72 percent.

Sometimes reform is decades in the making. Property rights have long been recognized as an essential key to economic development, as well-defined and secure property rights allow individuals to trade and maximize the use of their resources.

Property Rights

The Economic Freedom of the World, 2018 report points out that especially in Sub-Saharan Africa, “weakness in the rule of law and property rights is particularly pronounced.” An example of this was highlighted in 2015, when the Free Market Foundation in South Africa tackled a huge local problem: between five and seven million black families living in apartheid-era housing had no official titles to their homes, effectively making them squatters even if their families had lived for generations on that land. For people with few resources, there is no incentive to invest in improvement if the land you live on doesn’t belong to you. Free Market Foundation’s Khaya Lam project addressed this problem by helping hundreds of black South Africans access fully tradable titles to their property. Through their efforts, tenants living in poverty have been able to unlock nearly $4.5 million in dead capital and create new opportunities for trade and sale.

Our partner in Côte d’Ivoire, Audace Institute Afrique (AIA) also prioritized secure property rights in a country where only four percent of rural land was legally registered. Historically, the lack of defined property made rural villages vulnerable to disputes because it was nearly impossible to establish who owned property and thus who had the right to sell it. AIA launched a project to formalize land ownership with the Ivorian government, relying on local knowledge and village customs. Using GPS and other digital technologies to set boundaries, AIA now publishes the results digitally and physically and creates secure contracts that can be used in land transactions. Its work has been replicated in villages across the country, and new national legislation requires similar procedures for unregistered land.

Is it Legal to Fish?

All three of these examples, and especially the Ivorian case, demonstrate the necessity of local knowledge in creating lasting change that can position communities and countries in Africa for economic growth. Atlas Network stands alongside these local experts as a cheerleader and supporter, all the while recognizing that our position as an outsider prevents us from calling the shots that lead to reform. Our goals are to increase our partner capabilities’ and help inspire and support their ambitions for greater impact while staying deferential to their vision of what makes the most sense on the ground.

The “Coach, Compete, Celebrate!” model that Atlas Network has pioneered has proven to be an excellent way to inspire, engage, and elevate our partners’ achievements. The power of network effects is well documented, and we’ve seen it at work with our partner think tanks. We coach our think tank partners with world-class training that helps them set clear, achievable goals, learn how to be effective change agents, and discover how their efforts can improve the quality of life for people in their communities and countries. Our partners compete with one another for grants and awards, challenging each other to improve and achieve extraordinary outcomes. And as their projects result in policy reforms that make a difference for people around the world, we celebrate their efforts by featuring their successes in events, promotional materials, and case studies that allow organizations to learn from one another.

By interacting with peers and learning how others are creating substantive, lasting change, our partners discover the many ways they can up their game. And armed with new skills and energized by the efforts of their global peers, Atlas Network’s partners are driving economic prosperity across Africa and the rest of the developing world.

So, the next time you’re tempted to give a man a fish or teach him to fish … remember to ask whether it’s even legal for him to fish there in the first place. And if not, take heart. Someone is doing something that is actually making a difference. There is probably an Atlas Network partner out there working hard to liberate him.

This article was first published by the Jewish Policy Center.