Credit where it is due: President Bush made a speech about Africa yesterday. Two quick comments. First, I cannot see how the White House reckons it has trebled aid to Africa. President Bush said yesterday:
Over the last four years, the United States has stood squarely with reformers in Africa on the side of prosperity and progress. We’ve tripled our aid to Africa; we plan to double it once again.
The figures show that from FY 2000 to FY 2005 (estimated), U.S. aid to Africa will have increased by 78% in real terms or 93% in nominal dollars – not quite a doubling, much less a “tripling” of aid. Of this increase, 50% consists of emergency food aid (PL 480 Title II). You can see the full figures here. Second, it isn’t true that aid is only effective when given to good governments. President Bush said yesterday:
Over the decades, we’ve learned that without economic and social freedom, without the rule of law and effective, honest government, international aid has little impact or value. But where there’s freedom and the rule of law, every dollar of aid, trade, charitable giving, and foreign and local investment can rapidly improve people’s lives. (Applause.)
This sounds plausible; but none of the aid-growth regressions find that aid is completely ineffective in poor policy environments, and many of them find that the quality of the policy environment makes little or no difference to the effectiveness of aid. I have no objection to donors choosing to channel their aid to better governments where possible, but they should not mislead themselves or the public into thinking that this is justified by evidence that shows that aid is not effective in badly governed countries, or that it is substantially more effective where policy is good.