Will money solve Africa’s development

problems?

Yes. Ashraf Ghani 2

No. Dr. Donald Kaberuka 4

No. Edward Green 5

OnlyIf... Iqbal Z. Quadir 6

NoWay. James Shikwati 8

Yes. Professor James Tooley 9

IThoughtSo... Michael Fairbanks 11

No. William Easterly 13

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TheJohnTempletonFoundationservesasaphilanthropiccatalystforresearchonwhatscientistsandphilosopherscalltheBigQuestions.Wesupportworkattheworld’stopuniversitiesinsuchfieldsastheoreticalphysics,cosmology,

evolutionarybiology,cognitivescience,andsocialsciencerelatingtolove,forgiveness,creativity,purpose,andthenatureandoriginofreligiousbelief.Weencourageinformed,open-mindeddialoguebetweenscientistsandtheologiansastheyapplythemselvestothemostprofoundissuesintheirparticulardisciplines.And,inamorepracticalvein,weseektostimulatenewthinkingaboutwealthcreationinthedevelopingworld,charactereducationinschoolsanduniversities,andprogramsforcultivatingthetalentsofgiftedchildren.

ThisbookletneatlyembodiesourapproachtotheBigQuestions:thecontributorsarescholarsandthinkersofthefirstrank,theyaddressaperennialandmuch-disputedsubject,andtheybringtobear—incivil,elegantprose—arangeofdifferentperspectives.Byassemblingthis“conversation,”weintendtopromoteadialoguethattranscendsfamiliarrhetoricandstockanswers.WeaimtoturndiscourseontheBigQuestionsinamorethoughtful,considereddirection.Itisourhopethatthisbookletwillbealastingresourceforstudents,teachers,parents,scientists,clergy,andanyoneelseengagedwiththegreatissuesofhumannatureandpurpose.

Twoadditional“conversations”onBigQuestionsatthecoreoftheFoundation’smandatemayalsobeofinteresttoreaders.Theycanbefoundonlineatthefollowingaddresses:

Does the universe have a purpose? www.templeton.org/purpose

Does science make belief in God obsolete?www.templeton.org/belief

Yes.IfitisinvestedinenhancingAfricancapabilitiestointegratethecontinentintoglobalnetworksofknowledgeandcreatingprosperityandstability.Thiswillmeanconfrontingandovercomingatriplefailure:corruptionandabuseofpowerbyAfricangovernments,predatorypracticesbyextractiveindustries,andthewasteofresourcesbyanuncoordinatedandineffectiveaidsystem.Africawillacquireastrongvoicewhenitisrepresentedbycredibleleadersandmanagers.Suchpeoplecannotbeproducedwithoutinvestmentintheappropriateinstitutions.Currently,about$5billionperannumisprovidedintheformoftechnicalassistancetomeetdonorrequirements.Directingasignificantportionofthismoneytowardinvestmentininstitutionswillproducestakeholdersfocusedoncreatingapositivechange.NewgroundhasbeenbrokenwiththeExtractiveIndustriesTransparencyInitiative(EITI).Sinceruleoflawiscriticaltoaccountabilityandtransparency,short-,medium-,andlong-termmechanismsforinsuringproperuseofnaturalresourcesinAfricaarerequired.Tocreatealevellegalplayingfield,Africa’sinterestsmustberepresentedbythebestlegalmindsintheworld,andtheproceedsfromextractiveindustriesmustbepubliclydisclosed.Africanentrepreneursencountersignificantnationalandinternationalconstraintstobusinessdevelopment.WhilethereisfavorablelegislationinEuropeandNorthAmericaforAfricanexports,accesstoinformationthatallowsAfricatobenefitfromtheselawsislimited.Thenecessaryknowledgefortakingadvantageoflegislationexistswithincorporationsthatareleadingtheglobaleffortincorporatesocialresponsibilityandsocialentrepreneurship.TheseorganizationscouldpartnerwithAfricanbusinessmentoensure

exportsmeetthestandardsnecessaryfordevelopedcountries.InfrastructureplanninginAfricahasnotallowedforsub-regionalandregionalintegration,orimprovedAfrica’saccesstoglobalmarkets.Asreliableinfrastructureisaprerequisiteforparticipationintheglobaleconomy,thestrategichorizonforAfrica’sinfrastructureneedstobebetweentenandtwentyyears.Suchastrategyrequiresmovingfromthecurrentonetothree-yearbudgetcyclesoftheaidsystemtopredictable,long-termfinancingmechanisms(suchastrustfunds)thatwillguaranteetheeffectiveuseofresources.Thereissufficientevidencethatpoorpeopleareabletobothprioritizeandmanagetheuseoflimitedresources.Aprogrammaticapproach,alongthelinesofthesuccessfulruraldevelopmentprogramsinAfghanistanandIndonesia,wouldenablethemostexcludedsegmentsoftheAfricanpopulationtobecomestakeholdersinsystemsofgoodgovernanceandcarry-outdevelopmentthemselves.Aftermanydecades,someAfricanleadersaresettinganexampleforothersbyleavingofficevoluntarily.However,governanceinAfricaisstillnotutilizingastate-buildingapproachthatemphasizesthefactthat

Ashraf Ghani Chairman of the Institute for State Effectiveness.Adviser to the UN for the construction of the Bonn Agreement for Afghanistan.Finance minister of Afghanistan from 2002–2004.

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stateshavebothrightsandobligationstotheirpeopleandothercountries.Africanstatesmustenterintoadoublecompact:withtheircitizens,onmeasurablecriteriafortheperformanceofstatefunctions;andwiththeinternationalcommunity,onsystemsofaccountabilityandtransparency.Onlythencanwejudgestateeffectivenessandensurelong-termstate-buildingstrategiesareinplaceforsustainedinvestmentovertheminimumoftwentyyearsnecessaryforlastingchange.ItistimetoaddresstheneedsofAfricaseriouslyandharnessthepotentialithasthroughacommitmentbytheinternationalcommunity—acommitmentsimilartothatmadetodecimatednationsafterWorldWarII.ThecircumstancesmaybedifferentinAfrica,buttheimaginationandresourcesnecessaryarethesameandthecostsoffailurewouldbeequallyasdevastating.

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No.Notaslongasthereareissuessuchasprolongedviolentconflict,badgovernance,excessiveexternalinterference,andlackofanautonomouspolicyspace.Alone,moneycannotsolveAfrica’sdevelopmentproblems.Proof,ifanywasneeded,isthefactthatmanyofAfrica’snaturalresource-richcountriesscoreverylowonhumandevelopmentindicators.Africa’sdevelopmentchallengesaremultifaceted.Colonialhistorystillloomslarge.Moneycannotundothathistory.Fivedecadesafterindependencewearestillgrapplingwithbuildingthenation-state.Ontheonehand,wholenationsweresplitupbyartificialboundariestoformseparateindependentcountries,whileontheotherhand,severalnation-stateswerelumpedtogetherwithinthesesameartificiallydelineatedborders.TothisalreadycomplexpicturewasaddedtheimpactofColdWarrivalriesamongmajorpowers,whichextendedtotheAfricantheatre.Noamountofmoneycanbuildthedamagedtrustbetweenagovernmentanditscitizens.Decadesofdefectivepoliticalandeconomicgovernance,andthefailurebyearlypost-independencegovernmentstodeliveronthepromisesofindependencespundisillusionmentandledtounfulfilledexpectationspavingthewaytoundemocraticdictatorialrule,thedemiseoftheruleoflaw,ethnicstrife,andeconomicandsocialchaos.

Inextremecasestheseconditionsledtoastringofveryweakorfailedstates.Thissaid,wemustrealizemoneyisstillneededandAfricawill,forawhile,requireexternalsupportbywayofconcessionalfinance,givenitslimiteddomesticsavings.Remember,40%ofAfricansliveinlandlockedstates,oftenasfarawayas�,000kilometersfromamaritimeport.Buildinginfrastructurethatlinkscountriesandexpandingmarketsizeanddiversityrequiressignificantresources;sodofightingHIV/AIDSandeducatingAfrica’schildren.ThegoodnewsisthatanewgenerationofAfricanleadersisdeterminedtomakeadifference.Inthelasttwoyears,Africahasmadesubstantialprogressontheeconomicandgovernancefronts.Weareencouragedbythesustainedstrongmacroeconomicandstructuralreformsononehand,andimprovedgovernanceontheother.Thesewillgoalongwaytowardreducingtherisksandcostsofdoingbusiness-prerequisitesforstimulatingbothdomesticandforeigninvestment,theonlymeanstocreatewealth.Lastly,Africamustbegivenachancetomeaningfullyintegrateintotheglobaltradingenvironmentinordertosustaingrowthperformance.ItwillnothappenifinternationalcommitmentssuchasthosemadeattheGleneaglesG8Summitarenotmet.TheDohaTradeRoundnegotiationsneedtosucceed.ThesenegotiationshavebeencalledaDevelopmentRoundbecausetheyfrontloadtheinterestsofdevelopingcountriessuchasthoseinAfrica.Attheendoftheday,weareallGod’schildrenandhegaveusoneworldinwhichweareinterdependent.

Dr. Donald Kaberuka President of the African Development Bank.Former minister of finance of Rwanda.

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No.Bynowweshouldhavelearned.Donornationshavespentbillionsofdollarsfordevelopmentschemesinpost-colonialAfrica,yetthereislittletoshowforthisbeyonddependencyandcorruption.Yetcurrentpolicyandsentimentseemtoadvocatemoreofthesame.Popmusicandmoviestarsjoincelebrityacademicsintryingtoshamewealthynationsintocommittingever-expandingfundstoaddressAfricanpovertyandillhealth.Thisgrandschemementalityhasremainedimmunefromthefeedbackthatfailedprogramsoughttohaveprovided.Asfortheintendedbeneficiaries,wefindapsychologicalcolonialismthathasbrainwashedthepoorintobelievingthesolutionstotheirproblemsaretobefoundinthetechnicalknow-howandlargesseofwealthycountries.Arecentbook,TheWhiteMan’sBurden,byWilliamEasterly,challenges“utopiansocialengineering”byinternationalde-velopmentexpertshecallsplanners,forwhompovertyisanengineeringproblemwithtechnicalsolutionsonlytheycanconcoct.Neededinsteadaresearchers,whogotoAfricawithhumility,openminds,andability,tolearnanddiscernwhatworksandwhatdoesn’tindifferentculturalsettings.Publichealthisoneofthefewareasofdevelopmentthathasachievedsomegenuine,sustainedresults.YetweneedonlyexaminetheWesternresponsetoAIDS,oneofAfrica’s

worstproblems,toseereplicationofeverymistakemadebyplannersoverthepasthalf-century.EvidenceismountingthattheWesternbiomedicalmodelofAIDSprevention—condoms,antibioticsforsexuallytransmittedinfections,andtestingpeopleforHIVinfection—hasbeenlargelyineffectiveinAfrica.Morerecently,billionsofdollarshasgoneintotreatingAIDSwithexpensiveantiretroviraldrugs,anunprecedentedpublichealthinterventionwithas-yetunknowneffectsonthefutureofthepandemic.AvailabilityofthesedrugshasnotreducedtherateofnewHIVinfectionsintheU.S.AfricanAIDSisdrivenprimarilybythosemenandwomenwhohavemultiple,concurrentsexualpartners.Theglobalpreventionmodelfocusesonmedicaldevicesanddoesnotactivelypromotepartnerreduction,orevenaddressmultipartnersex—dismissingthisinaccuratelyasanabstinence-onlyscheme.Yet,largelybeforeWesterntechnicaladvisorsshowedup,UgandadevelopeditsownresponsetoAIDSbasedoncommonsense,soundpublichealthprinciples,andcultural/religiouscompatibility.Itsemphasisonpartnerreduction(zerograzing)wasappropriatetothetypeofgeneralizedepidemicUgandafaced.HIVprevalencefellbyanunprecedentedtwo-thirdsbetween�99�–�004.Thecost?Duringtheearlyyearsofmajorbehaviorchange,$0.��perperson,peryear.Meanwhile,theAIDSpreventioninvestmentpercapitainSouthAfricaandBotswana,whereWestern-favoredapproachesarefunded,ishundredsoftimeshigher.YetthesecountrieshaveamongthehighestHIVprevalenceanywhereandithasbeendifficulttodemonstratetheimpactoftheseexpensiveprogramsonHIVinfectionrates,whereitcounts.Alas,mostWesterndonorsseemtohavelearnednothingfromallthis.Untilthereasonsforthisareexaminedopenlyandobjectively,thewealthynationsarelikelytocontinuerepeatingthemistakesofthepast.

Edward GreenDirector of t he AIDS Prevention Research Project at Harvard’s Center for Population & Development Studies.

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OnlyIf..Itempowerscitizens.AfricanentrepreneursarethekeytosolvingAfrica’sdevelopmentproblems.Itistheywhocandrivetheircontinent’seconomicgrowthanditistheywhocanmaketheirgovernmentsbetter.Ifmoneyisinvestedengagingtheorganicandtransformativepotentialoflocalentrepreneurs,Africawillflourish.Ifmoneyispouredintogovernmentbureaucracies—whichholdbacktheseentrepreneurs—Africawillcontinuetolanguish.BigmoneytogovernmentsinAfrica,asitdoeselsewhere,empowersbureaucracies,promotesstatism,andweakensgovernmentincentivestoincreasetaxrevenuesthrougheconomicgrowth.Furthermore,economicassetsareoftenkeptinthehandsofthestate,leadingtomonopolies,stagnation,andtheopportunityforextortion.Asabittercherryontop,themoretheredtapeincreases,themorediscouragedentrepreneursgetandaviciouscycleensues.Therearemanyinstanceswheremoney—fundingentrepreneursandnon-governmentalbodies—doeswondersinAfrica.TheseexamplesareoftencitedbydevelopmentguruswhothenclaimthataidingeneralishelpingAfrica,justifyinganyaid—includingthattogovernments.Butthereisaclearpattern:moneytoentrepreneursandnon-governmentalbodieshelps;moneytogovernmentshurts.AlookatthehistoryofEnglandexplainswhyoutsidemoneytogovernmentsisdamaging.Inthe��thcentury,aftertheadventofpropertyrights,themonarchwasforcedtoconveneagroupofcitizensasatax-legitimizingdevice.Thatgroup’sname?Parliament.

Overseveralcenturies,parliamentcapitalizedonthemonarch’schronicneedformoneyand,indeed,madesurethecrowndidnotgainfinancialindependence.Everytimeamonarchcametoparliamenttopassanewtaxbill,parlia-mentobliged,butonlyafterexactingmorelibertyfromtheCrown.Overtime,parliamentemergedasthemorepowerfulbranchofgovernment.Inhindsight,thetwokeystothesuccessfuleconomicanddemocraticgrowthofEnglandwere:(a)themonarch’sshortageofmoney,notitsadequacy;and(b)thelackofaidfromoutside.Likewise,intoday’ssub-SaharanAfrica,theopportunityexiststoputintomotiontrueeconomicdevelopment.ItwillnothappenbydelugingAfricanleaderswithaiddollars,butratherbyadoptingpracticalwaystohelpAfrica’scitizensthrive.Theirincreasedstrengthisthebestwaytoremoveblockagestoprogressinthelongrun.

Iqbal Z. QuadirFounder of GrameenPhone in Bangladesh.Founder and executive director of the Legatum Center for Development and Entrepre-neurship at the Massachusetts Institute of Technology.

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First,richcountriesmustbechallengedtoremovetradebarriersforAfricancountriesnow,irrespectiveofAfricantradepolicies.Withglobalmarketaccess,Africanswouldautomaticallyattractprivateinvestmenttotheircountries,despitetheirinstitutionalweaknesses.Theseinstitutionswouldbecomestrongerovertimeasbusinessesbegantoflourish.PrivateinvestmentscapitalizingonaccesstoglobalmarketswouldnecessarilyemployAfrica’slow-costlabor,thuscreatingjobs.ThisisinstarkcontrastwithcompaniesextractingmineralresourcesinAfrica,employingveryfewpeoplerelativetosizeofthebusiness.Next,smallentrepreneursmustbehelpedwithseedmoneyinincrementsof$�0,000to$�0,000(incontrasttotheapproachofmega-institutionswhotendtodirectbillionsintostatebureaucracies).Eventheserelativelysmallcashamountscanbebrokenupintoseveralinstallments,eachofwhichisprovidedundercertainpre-determinedperformancecrite-ria.Justliketheydoeverywhereelseintheworld,theseentrepreneurswouldcreatejobs,products,services,and—letusnotforget—choices.Itispreciselysuchjobs,entrepreneurs,andchoicesthatformthebedrockofflourishingdemocracies.Whatgoesnaturallywithsupportingsmallentrepreneursisintroducingtechnologiesthatcost-effectivelyempowerindividuals,anareawhereWesternknowledgecanobviouslyaddvalue.Suchtechnologiesmultiplypeople’sabilitiesanddelivergenuineaidtocitizensdirectly.Apairofwheels,forexample,providesinvaluableassistanceinmovingaheavyloadofbricks.Heightenedproductivitygivesrisetofourexcitingbenefits.First,asindividualscontrolwhattheyproduceandconsume,theirlivesimprove.Second,whencitizensaccrueincreasedeconomicclout,institutionsareforcedtobecomemoreresponsivetotheirneeds.Third,bybecomingmoreproductive,usersareabletopayforproductivitytools,creatingopportunitiesforentrepreneurstolaunchprofit-seekingenterprisestoprovidesuchtools.ThisiswhybusinessessellingcomputersandcellphonessprangupnaturallyinAfrica.Finally,profitablebusinessesattractimitators,unleashingcompetition.Competitiongivesrisetoinnovation,specialization,scalability,lowerprices,higherwages,andahostofothergoodthingsincludingcurtailingpotentialabusesbybusinesses.It’savirtuouscycleoforganiceconomicgrowththat,likeamightywheel,canmovetheentirecontinent.Wemustalsotakepracticalactiontowardbuildinghealthcareinfrastructurebyworkingwithlocalgroups.ImagineifPresidentBushpromised,onbehalfoftheUnitedStates,togive$�milliontomatchanygrassrootsgroup(meetingcertainorganizationalandself-sustainabilitycriteria)thatcancomeupwith$�millionofitsown.Withonly$�billion,onethousandsuchclinicswouldspringupwithrealrootsintheground,possiblyattractingAfricandoctorsbackintotheirhomelandfromWesterncountries.Thisisonlyoneofmanykindsofgrassrootsenterprisesthatcanbeeffectivelyencouraged.Finally,thoseofusindevelopedcountriescanalsogivedirectaidtoAfricabypurchasingAfricanproducts.AndifrichcountrieswanttofurtherhelpAfrica,theycanissuevoucherstotheirowncitizenstoencouragethepurchaseofAfricangoodsinWesternstores.Thetimehascomeforustostoppouringbillionsofdollarsintobureaucracies.Instead,wemustactivatethebillionbrainsinAfrica,eachofwhomwilltamethosebureaucraciesandmakethecontinentaglobaleconomicpowerhouse.

NoWay.TheprobleminAfricahasneverbeenlackofmoney,butrathertheinabilitytoexploittheAfricanmind.PictureabananafarmerinaruralAfricanvillagewithaleakingroofthatwouldcost$�00tofix.Ifonepurchased$�00worthofhisbananas,thefarmerwouldhavethepowerandchoicetodeterminewhethertheleakingroofishistopspendingpriority.Ontheotherhand,ifheisgiven$�00asagrantorloantofixtheroof,hischoicewouldbelimitedtowhattheownerofthebigmoneyviewsasapriority.Outof9�0millionAfricansin5�states,thereareinnovatorsandentrepreneurswho,ifrewardedbythemarket,willaddressthechallengesfacingthecontinent.Ifmoneywasthekeytosolvingproblems,bankswouldsendagentsonthestreetstosupplymoneytoafflictedindividuals.Butbanksonlyoffermoneytoindividualswhosuccessfullytranslatetheirproblemsintoopportunities.A$�millionBritishcompensationto��8SamburuherdersinKenyain�00�didnotstopthemfromturningintopaupersby�00�.Moneyinitselfisneutral.Bigmoneyviewedascapitalhasledstrategists(whodepictAfricaastrappedinacycleofpoverty)toargueformassiveinflowsofmoneyastheonlymeansofescapefrompoverty.Viewingmoneyasareceiptforvalue,acreation,andaresultanteffectofexchangebetweendifferentpartiesoffersachancetotranslateAfricanproblemsintoopportunities.AsLordPeterBaueraptlypointedout,“Moneyistheresultofeconomicachievementand

notaprecondition.”HowcanAfricansengageinactivitiesthatwillleadtoeconomicachievement?Thekeyistotransformthemindsetofthe50%oftheAfricanpopulationbelowage�0tofocusonturningAfricanproblemsintoopportunities.InAfricatoday,thereareentrepreneurialopportunitiestofeedanestimated�00millionhungrypeople,killbillionsofmalariacausingmosquitoesthatthreatenthelivesofanestimated500million,anddevelopinfrastructure.Africahasenormouscapitalintheformofnaturalresourcesthatincludeoil,hydroelectricpower,diamonds,uranium,gold,cobalt,�0%oftheworld’sColtanand�4%ofitscassiterite.Coltanandcassiteritearestrategicintheproductionofcellphones,laptops,andotherportableelectronicproducts.IfAfricansemployedthepowerofreason,theglobalcellphoneindustrythatchurnsout�5cellphonespersecondwouldprovideahugesourceofrevenueforrespectivecountries;therebywideningtheirmenuofchoices.FocusingontheAfricanhumanmindascapitalwillhelptranslateresourcesintowealth,therebyhelpingtosolveAfrica’sproblems.Money’susefulnessandvaluewillonlyspringfromrationalresponsestothechallengesthatfacethecontinentthroughexchangeofproductsandservicesatthevillage,national,continental,andinternationallevels.

James ShikwatiFounder and director of the Inter Region Economic Network.CEO of The African Executive business magazine.

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Yes.Butonlyifthemoneycomesasinvestment.Africadoesn’tneedaidfromgovernmentsandinternationalagencies.Overthelast40years,aidtodevelopingcountrieshasreached$�.�trillion,�5%ofwhichhasgonetosub-SaharanAfrica.Ithasnotablyfailedtoeliminatepoverty.Philanthropyshouldhaveonlyalimitedrole—fordisasterrelief—andhelpingpolicymakerspromotegoodgovernance,theruleoflaw,andpropertyrights.WhatAfricaneedsinordertoovercomeitsproblemsisthesameasthatofanyotherregionorcountry:flourishingenterprisesthatprovideemploymentandcreatewealth.Thisistrueeveninmyfield—education.Lessthan�0%oftheadultpopulationofsub-SaharanAfricacanreadandwritewithunderstanding.Andforevery�00men,only��womenareliterate.Likearagingbonfire,adultilliteracyisfuelledbylackofschooling,orpoorqualityschooling.Anestimated40millionprimary-school-agechildreninsub-SaharanAfrica

arenotinschoolandinhalfofthecountrieslessthan�0%finishthefullcourseofschooling.Butstayingthecourseisn’tsuchagreatideaeither.TheUnitedNationsrecentlyreportedthat,“Mostpoorchildrenwhoattendprimaryschoolinthedevelopingworldlearnshockinglylittle.”Acommonresponsetotheseproblemsistocallforbillionsmoreinaidforpubliceducation.Thepoormust“bepatient,”thedevelopmentexpertsopine,becausepubliceducationneedsfirsttobereformedtoriditofcorruptionandinefficiencies.Butthereisanotherwayofsolvingthisproblemanditisbeingilluminatedby,ofallpeople,someofthepoorestparentsonearth.Theseparentsareabandoningpublicschoolsenmassetosendtheirchildrentobudgetprivateschoolsthatchargelowfeesofafewdollarspermonth,affordableeventofamilieslivingonpoverty-linewages.IntheshantytownsofLagos,Nigeria,forinstance,orthepoorruralareassurroundingAccra,Ghana,orinAfrica’slargestslum,Kibera,Kenya,themajorityofschoolchildren—upto�5%—areenrolledinprivateschools.Recentresearchhasshownthesebudgetprivateschoolsaresuperiortogovernmentschoolsbecauseteachersweremuchmorelikelytobeteachingwhenresearcherscheckedinonclassroomsunannounced,facilitieswereoftenbetterequippedwithdrinkingwaterandtoilets,andacademicachievementwasmuchhigher,evenaftercontrollingforbackgroundvariables.Allofthiswasaccomplishedforafractionoftheper-pupilteachercost.Theexistenceofthisburgeoningprivatesectorrevealswaysinwhichbigmoney—actually,evensmallmoney—couldhelpsolveAfrica’sproblemsifchannelledasinvestmentratherthanaid.Thekeyistofollowtheleadofthepoorparents.Theydonotwantpublicschools,whereteachersdonotturnupor,iftheydo,donotteach.Theywantprivateschools,whereteachersareaccountabletothemthroughtheschoolprincipal.ThisentrepreneurialbreakthroughinprivateeducationhasopenedupacreativenewfrontierforinvestorsinterestedinhelpingimprovethequalityofAfricaneducation.OrientGlobalhascreatedits$�00million

Professor James Tooley President of The Education Fund, Orient Global.

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EducationFundwhichisinvestinginprivateeducationopportunitiesindevelopingcountries,includingtheresearchanddevelopmentforalowcostchainofschools;OpportunityInternationalhasjustannounceditsMicroschoolsofOpportunityprogramtodisburseloansofafewthousanddollarsorless,atcommercialinterestrates,tohelpschoolentrepreneursbuildlatrines,refurbishclassrooms,orbuyland.Inthepast,aidagencieshaveliterallythrownbillionstryingtogetschoolstoimprovetheircurriculumorteaching.Theseinterventionsarenotsustainableandfadeawayassoonasthedonor-fundedexpertsmoveon.Youwilloftenfindthesuppliedcomputersandvideosinthegovernmentheadteachers’homes,nottheschool.However,privateschoolsareoperatinginintensivelycompetitivemarkets.Theyarehungryforinnovationifitcanbeshowntoimprovestandardsandincreasemarketshare.Investorscanbackresearchanddevelopmenttofindoutwhatworkstoimproveeducationaloutcomes,thenpartnerwithentrepreneurstoensuresuccessfulmethodsarebroughttomarket.Theproblemsofsustainabilityandscalabilitythatsobedevilaidinterventionaresolved.Investorscangoevenfurther.Buyingintotrustedbrandsenablesthepoortoovercomeinformationasymmetriesthatexistinanymarket.Whynotineducation,too?Alreadysmallembryonicbrandsareemerging.Someeducationalentrepreneurshavefourorfiveschools,andareeagertoextendfurther.Investorscouldassistexpansion-mindedproprietorsinaccessingloancapital,orcreateaspecializededucationinvestmentfundtoprovideequitytolimitedliabilitycompaniestorunchainsofbudgetprivateschools.Orinvestorscouldengageinajointventurewithlocaleducationalentrepreneurstosetupachainthemselves.Manyoftheprivateschoolsalreadyofferfreescholarshipstosomeoftheneediestchildren,helpingsolvetheproblemofeducatingthepoorestofthepoor.Recentresearchhasfound5–�0%ofplacesprovidedfreeofchargeinprivateschools,sootherschoolscouldchannelsomeoftheirsurplusinthesameway.EducationisoftenheldupasakeyareawhereAfricaneedsbigmoneyfromgovernmentsandinternationalagenciestosolveitsproblems.That’snotwhattheexperienceofthepoorinAfricaseemstobetellingus.It’stimewelistenedtothem.

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IThoughtSo..ButnowIdon’t.Thereisthatthreadbaremaxim:Ifyouholdahammerinyourhand,everyproblemlookslikeanail.Whathappens,then,whenallweholdinourhandisacheckbook?CheckbookDevelopmentsuggeststhatpoornationscannotbuildtheskillsnecessarytosolvetheirownproblems.Thereis,however,anotableexception.ThePresidentofRwanda,PaulKagame,calledmetohisofficetoassisthimtobuildprivatesectorcapacityandimproveexportcompetitiveness.IinformedhimthatitwouldnotbepossiblefortheamountofmoneyandtimehebudgetedtodomyjobandtrainRwandansatthesametime.Hetoldmethestoryofwhenhehadfinallyaccumulatedenoughmoneytoprovidebackpayforhistroopswhowerefightingtoendthegenocide.Heaskedthemifhecouldusethemoney,instead,topurchasehelicopterstohelpendthewarsooner.Notasinglesoldierobjected.PresidentKagamepurchasedtheaircraftfromcountriesontheconditionthattheyalsoprovidepilots.Hethenpersuadedthosepilotstoflymissionsintoenemyterritory,and,atthesametime,trainRwandanstofly.Histactics,inalandofnoroadsandathousandmountains,shortenedthewar,andsavedlives.

Everynationneedsmoneytoupgradeandimprovethelivesoftheircitizens;anditisgoodwhenarichnationhelpsapooroneafteradevastatingactofGod,ortomeetabasichumanneed.But,toooften,whenonenationaidsanotheritisbasedonamassiveinfusionoffinancialcapitalinreturnforchangingmonetary,trade,investment,fiscal,sectoral,andwagepolicies.Thisisoftentherightadvice,butthereisatrade-off,too.Thenationwithallthemoneyoftenassumesthedecisionrights;andtheresponsibilityforanation’sfuturemustalwaysresidewiththecitizensofthatnation,notwithforeignadvisors,andcertainlynotwithitscreditorsanddonors.Thissortofcheckbookdevelopmentconfusescompassionandgenerositywithover-responsibilityforfellowhumanbeings.Explicitlyorimplicitly,thedonoristellingthemhowtoruntheircountry,andintheprocess,withoutmeaningto,canrobcitizensofemergingnationsoftheirmostpreciousassets—dignityandself-reliance.Rwandareceiveslittleforeignaid.TheleadersoftheWorldBankhadintroducedmeandseveralotherexpertstoPresidentKagameandpromisedtopaythecostofourwork;buttheyneededtwoyearstoprogramit,andRwandadidnothavetwoyears.PresidentKagameunderstoodthatpovertywasdestroyingthecornerstonesofhiscountry’ssociety:tolerance,trust,aspirations,andhope.Hedecidedtopayoursalariesfromtheproceedsofhisprivatizationprogram,buthestipulatedthatwebeginimmediately,andthatwepayhimbackifwedidnotdowhatwesaidwecoulddo.Hefurtherdemanded,

Michael Fairbanks Co-founder of OTF Group and the SEVEN FUND, which provides grants for enterprise solutions to poverty.

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M I C H A E L F A I R B A N K S

“IwantyoutobelikethosepilotswhoflewtheaircraftandtrainedRwandans.”Iasked,“Doyouwantmetohelpyoukilltheenemy,too?”Hesaid,“Iwantyoutohelpmekillpoverty.”Rwandadoesn’thavemoney,butitisanationwithouttherampantfatalismoftenfostered(howeverunintentionally)bybenevolentpeople.Itsleadershiphashadthecouragetochallengetheunderlyingassumptionsofinternationalaid,andthathasledtogrowthofalmost�0%peryearinsubsistencewagesinitskeyexportsectors.Theresponsibilityforitsownfutureliessquarelyontheshouldersofitsmenandwomen.NotasingleRwandanobjects.

NoInfact,afterfiftyyearsoftryingand$�00billionworthofaid-giving,withclosetozeroriseinlivingstandardsinAfrica,Icanmakethecasefor“No”prettydecisively.Aidadvocatestalkaboutcheapsolutionslikethe�0-centoralrehydrationsaltsthatwouldsaveababydyingfromdiarrhealdiseases,the��-centmalariamedicinethatsavessomeonedyingfrommalaria,orthe$5bednetsthatkeepthemfromgettingmalariainthefirstplace.Yetdespitetheaidmoneyflowing,twomillionbabiesstilldiedfromdiarrhealdiseaseslastyear,morethanamillionstilldiedfrommalaria,andmostpotentialmalariavictimsarestillnotsleepingunderbednets.Clearly,moneyalonedoesnotsolveproblems.Whatisneededinsteadarebusiness,social,andpoliticalentrepreneurswhotakeresponsibilityfor,say,makingsuremedicinesreachvictims,ratherthanmoregrandioseslogansaboutcomprehensiveadministrativesolutionsthatonlyserveaspublicityvehiclesforraisingyetmoremoneyforineffectualaidbureaucracies.Entrepreneurswouldbeaccountableforresults,incontrasttotheaidbureaucratsandrichcountrypoliticianswhomakepromisesthatnobodyholdsthemaccountableforkeeping.AsforfacilitatingAfricandevelopment,freeenterprisehasbeenthetriedandtruevehicleforescapingpovertyeverywhereelse(seeChinaandIndiamostrecently)anditispatronizingtosuggestthatitwon’tworkinAfrica.ThehopeofAfricacomesmuchmorefromsomeonelikebusinessmanAlieuConteh,whostartedahugelysuccessfulcellphonecompanyintheDemocraticRepublicoftheCongoamidthechaosofcivilwar,thanitdoesfromcelebrityaidadvocateslikeBono.Africansarefarfrombeingcondemnedtobehelplesswardsofrichdonors:homegrowneconomicandpoliticalfreedomswillallowAfricansthemselvestosolvetheirownproblems.

William EasterlyProfessor of economics at New York University, joint with Africa House.Co-director of NYU’s Development Research Institute. Non-resident fellow of the Center for Global Development in Washington, DC.

W I L L I A M E A S T E R L Y

A T E M P L E T O N C O N V E R S A T I O N

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