Do No Harm: Aid, Weak Institutions, and the Missing Middle in Africa

Abstract

The implicit assumption of the donor community is that Africa is trapped by its poverty, and that aid is necessary if Africa is to escape the trap. In this note I suggest an alternative assumption: that Africa is caught in an institutional trap, signaled and reinforced by the small share of income of its independent middle-income population. Theory and historical experience elsewhere suggest that a robust middle-income group contributes critically to the creation and sustenance of healthy institutions, particularly healthy institutions of the state.

Social Protection and Climate Change: Emerging Issues for Research, Policy and Practice

“…There is now a large body of scholarship that explores the conditions under which international actors (including donors) can build or undermine the capacity of state and non-state actors to formulate policies that may be used to reduce poverty and vulnerability to global environmental change (Birdsall, 2007;Chhotray and Hulme, 2008;de Haan, 2009). 2 Within the donor community, there is also a strong consensus that the most effective way of incorporating disadvantaged groups into policies that have a bearing on poverty and well-being is to work within existing systems and structures, particularly ones controlled by the state (de Haan, 2009).…”

“…The history of Western welfare-state formation suggests that ambitious social-welfare policies emerged as a result of important historical movements aimed at securing universal labour rights, income guarantees and other social benefits (Esping-Andersen, 1990). Whether donors can influence the kinds of mobilisation that would lead to more institutionalised forms of SP depends in large part on the nature of the aid relationship, including especially the extent to which donors are able to support state capacity to mobilise domestic resources, enact legislation and implement policy (Birdsall, 2007;de Haan, 2009). …”

Development Progress in Sub-Saharan Africa: Lessons from Botswana, Ghana, Mauritius, and South Africa

“…The economics literature suggests that the most important causes of this sluggishness are due to various combinations of policy failures-or policy 'syndromes' 3 (e.g., Ndulu et al 2007aNdulu et al , 2007b, institutional weaknesses (e.g., Birdsall 2007;Sachs et al 2004), adverse history (e.g., Acemoglu et al 2001Acemoglu et al , 2002Nunn 2008), political instability and civil conflict (Easterly and Levin 1997;Collier and Hoeffler, 2004;2005), and geographical constraints (e.g., Gallup et al 1999;Naudé 2004Naudé , 2009. A large number of studies have also been concerned with sub-Saharan Africa's trade orientation and performance, and the impact of globalization on Africa-including consideration of foreign direct investment and regional integration (e.g., Carrère 2004;Foster 2006;Fosu 1990;Naudé and Krugell 2007).…”

The BIP Trilogy (Bipolarization, Inequality and Polarization): One Saga but Three Different Stories

“…The concept of bi-polarization is clearly related to that of the middle class (see, Wolfson, 1994) and there have been quite a few attempts at measuring the importance of the middle class, since a sizable middle class is supposed to be an important factor in economic development (see, Thurow, 1984, Foster and Wolfson, 1992, Landes, 1998, Easterly, 2001, Birdsall, 2007aand 2007b, and Pressman, 2007. There is however no agreement on how the relative importance of the middle class should be measured.…”