Алистер Смит - The Dictator's Handbook - Why Bad Behavior is Almost Always Good Politics

Indeed, to dispel any pretense that donors are having the wool pulled over their eyes, it is worthwhile to consider the Kenyan case. In her book, It’s Our Turn to Eat, Michela Wrong describes the exploits of an idealistic bureaucrat, John Githongo. He was appointed anticorruption czar by the new Kenyan president Mwai Kibaki.5 Given the notorious corruption of his predecessor, Daniel Arap Moi, Kibaki ran on an anticorruption ticket. International aid agencies began once again to lend to Kenya at attractive rates. When the IMF gave Kenya a $252.8 million loan, the Economist reported that the finance minister was overheard whistling “Pennies from Heaven.”6

Githongo quickly discovered that the government thought his agency’s function was more to cover up corruption than to root it out. When he realized the corruption went all the way to the president, he made secret tape recordings, then fled to Britain and provided international organizations and banks documentary evidence of the corruption. He was not alone in his claims. The British ambassador to Kenya, Edward Clay, in beautifully florid language, described the corruption as ministers eating “like gluttons” and “vomiting on the shoes” of donors.

Although some years later the IMF and World Bank would eventually stop lending to Kenya, this was not the immediate reaction. Indeed, the international financial community shunned Githongo rather than the wrongdoers. His information was ignored and he became a pariah at development meetings. Banks and bureaucrats acted like people so desperate to eat at a restaurant that they continued to ignore the health department’s warning that the kitchen was overrun by rats. Githongo now makes a meager living as a lecturer and consultant. Edward Clay became persona non grata in Kenya and was discreetly retired by the British government. Both Githongo and Clay effectively ended their careers by “doing the right thing.”

It is hard to believe that aid agencies remain so naïve as to not understand how misused their funds are. Perhaps the truth lies in another aim of the USAID—“furthering America’s foreign policy interests.” Perhaps the United States is more interested in having a reliable ally in its fight against global terrorism and needs assistance combating Somali pirates in the Indian Ocean.

Against this harsh view, that aid is about recipients selling favors overseas, is the rhetoric of Kenya’s first president, Jomo Kenyatta, who at his Independence Day speech in 1963, said:

We shall never agree to friendship through any form of bribery. And I want all those nations who are present today—whether from West or from East—to understand our aim. We want to befriend all, and we want aid from everyone. But we do not want assistance from any person or country who will say: Kenyatta, if you want aid, you must agree to this or that. I believe, my brothers, and I tell you now, that it is better to be poor and remain free, than be technically free but still kept on a string. A horse cannot choose: reins can be put on him so he can be led around as his owner desires. We will not be prepared to accept any aid that will tie us like a horse by its reins.7

As upright as this speech may initially sound, Kenyatta is in fact being disingenuous. Are aid agencies willingly throwing away money? Or are they getting something in return? We suspect that the key statement in Kenyatta’s speech was “whether from West or from East.” In spite of his idealistic words, he was covertly telegraphing that his government remained open to bids from both sides.

Political logic suggests that democratic donors are ready to turn a blind eye to theft and corruption when they need a favor. If you remember, Sergeant Doe of Liberia received over $500 million from the United States during his decade in power. And the United States got a lot in return: “We [US] were getting fabulous support from him on international issues. He never wavered [in] his support for us against Libya and Iran. He was somebody we had to live with. We didn’t feel that he was such a monster that we couldn’t deal with him. All our interests were impeccably protected by Doe.”8

With the end of the cold war, the United States had much less need for Doe’s support. Only then did it find its moral scruples. In 1989 it published a report, which we quoted earlier but is nonetheless worth repeating:

[Liberia] was managed with far greater priority given to short-term political survival and deal-making than to any long-term recovery or nation-building efforts.... The President’s primary concern is for political and physical survival. His priorities are very different from and inconsistent with economic recovery . . . President Doe has great allegiance to his tribes people and inner circle. His support of local groups on ill designed projects undercut larger social objectives.9

The truth is, foreign aid deals have a logic of their own. Aid is decidedly not given primarily to alleviate poverty or misery; it is given to make the constituents in donor states better off. Aid’s failure to eliminate poverty has not been a result of donors giving too little money to help the world’s poor. Rather, the right amount of aid is given to achieve its purpose—improving the welfare of the donor’s constituents so that they want to reelect their incumbent leadership. Likewise, aid is not given to the wrong people, that is, to governments that steal it rather than to local entrepreneurs or charities that will use it wisely. Yes, it is true that a lot of aid is given to corrupt governments but that is by design, not by accident or out of ignorance. Rather, aid is given to thieving governments exactly because they will sell out their people for their own political security. Donors will give them that security in exchange for policies that make donors more secure too by improving the welfare of their own constituents.

The fact is, aid does a little bit of good in the world and vastly more harm. Unless and until it is restructured, aid will continue to be a force for evil with negative consequences—moreover it will continue to be promoted by well-meaning citizens who in making themselves feel good are blinded to the harm they are inflicting on many poor people who deserve a better lot in life.

Let’s be clear, democrats act as if they care about the welfare of their people because they need their support. They are not helping out of the goodness of their hearts, and their concern extends only as far as their own people—the ones from whom they need a lot of supporters. Democrats cannot greatly enrich their essential backers by handing out cash. There are simply too many people who need rewarding. Democrats need to deliver the public policies their coalition wants.

Autocrats, on the other hand, can richly reward their limited number of essential backers by disbursing cash. Money, which good governance suggests should be spent on public goods for the masses, can instead more usefully (from the autocrat’s perspective) be handed out as rewards to supporters. And since private goods generate such concentrated benefits to the people who matter (and a good leader never forgets that who matters is all that matters), autocrats forsake the public policy goals of the people. It is not that they necessarily care less about the people’s welfare than do democrats; it is just that promoting the people’s interest jeopardizes their hold on power. Remember the story of Julius Caesar!

Herein lies the basis for making foreign aid deals. Each side has something to give that the other side holds dear. A democrat wants policies his people like, and the autocrat wants cash to pay off his coalition.

Suppose there are two nations, A and B, each with a population of 100 people. The leader in each nation has $100 with which to buy political support. Suppose nation A is a democracy and its leader needs to keep fifty people happy in order to stay in power. In contrast B is an autocracy and its leader needs to keep five people happy. Suppose the people of both nations care about some policy initiative taken up by nation B. For instance, to take a common cold war situation, the policy might be nation B’s stance towards the Soviet Union. The citizens in nation A prefer that B adopt an anti-Soviet stance. Suppose the value of such a stance to each of the people in nation A is equivalent to $1. The citizens of nation B don’t want socialism outlawed and they don’t want their government to take an anti-Soviet stance. Indeed, since it is their country’s policy at stake, let’s assume that the people of B care about their government’s policy much more than the people in nation A. To keep our example simple, suppose that if B takes the anti-Soviet policy, then this is equivalent to a $2 loss in welfare for each of the 100 people in B.