In This Review

Development Without Aid: The Decline of Development Aid and the Rise of the Diaspora
Development Without Aid: The Decline of Development Aid and the Rise of the Diaspora
By David A. Phillips
Anthem Press, 2013, 234 pp.

Phillips takes a dyspeptic view of development aid. He acknowledges that countries and international institutions deliver development aid for many purposes and that aid can be useful, even necessary. But after a fulsome review of aid giving in recent decades, he argues that most aid, even in its new and allegedly improved forms, has not contributed to economic development or even to the alleviation of poverty. Sometimes, it has even been counterproductive, especially in Africa. Aid agencies and nongovernmental organizations have proliferated, their aid programs overwhelming the administrative capacity of some recipient governments and resulting in high transactions costs and perverse incentives for officials and others. This tends to alienate recipient countries -- an unfortunate outcome, since economic development requires their high motivation and active engagement. The author sees hope in the growing diasporas made up of emigrants from many developing countries, which often provide their home countries with funds, entrepreneurial energy, technical and managerial experience, and marketing knowledge gained abroad. He argues that with help from such emigrants, private foreign investment is more likely than development aid to lead poor countries out of poverty.