Did you think Africa is backwards because it started behind? World Bank veteran William Easterly, writing in the Wall Street Journal, chides the West for pushing in Africa “state direction by the states least able to direct.” Look at modern Africa’s history, Easterly says:
Sub-Saharan Africa. . . this month marks the 50th anniversary of its first nation to gain independence, Ghana (Kwame Nkrumah, Ghana’s father, pictured). . . There has been progress in many areas over the last 50 years. . . yet the same poor economics on sale to Ghana in 1957 are still there today. Economists involved in Africa then and now undervalued free markets, instead coming up with one of the worst ideas ever. . .African governments are not the only ones that are bad, but they have ranked low for decades on most international comparisons of corruption, state failure, red tape, lawlessness and dictatorship. . . the results of statist economics by bad states was a near-zero rise in GDP per capita for Ghana, and the same for the average African nation, over the last 50 years.
Why was state intervention considered crucial in 1957? Africa was thought to be in a "poverty trap," since the poor could not save enough to finance investment necessary to growth. Free markets could not get you out of poverty. The response was state-led, aid-financed investment. . .The U.S. in 1776 was at the same level as Africa today, yet it escaped the poverty trap. . . [Also] Western Europe, Australia, Japan, New Zealand and Latin America [left] poverty . . . without a state-led, aid-financed "Big Push." In the ensuing 50 years, there have been plenty more examples of poor countries which grew rapidly without much aid -- China and India (who each receive around half a percent of income in foreign aid) being the most famous recent examples. Meanwhile, aid amounted to 14% of total income year in and year out in the average African country since independence.
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