Aarti Masand

The Issue of Aid in Sub-SaharanAfrica

Before traveling to Sub-Saharan Africa (SSA) Americans are required to be

vaccinated against yellow feter (in addition to a host of other inoculations) and carry
any and all medications as medical care is unavailable is most areas. Once there they
are to refrain from driving at night especially in rural areas due to car-jackings, dress
appropriately due to the prevalence of malarial mosquitos,and drink only bottled water
due to the prevalence of schistosomiasis.(state.gov 2001) Theserequirementshightight
various problems affecting the countries of SSA today namely the lack of health care
provisions for the population. The increasing violence in many urban and rural areas.
Theprevalence of diseasefrom air and water borne vectors. In addition to theseanother
m,for health concern is the AIDS epidemic.

I.Introduction

Africa is the secondlargest continent, containing 770 million people and much of
the world's natural resources. And yet in popular discourseit is termed negatively as a
land in "chaos" (Ayittey l99S). Its economy is reflected in terms of a "growth disaster"

(Easterlyand Levine 1998). Why has SSA continuedto exhibit slow growth? This was
my initial investigation. According to Ghanaianeconomist,George Ayittey, there are
domesticand externalcauses.The postcolonialAfrican nationscannotreconcile"the two
Africas," one traditional and one modern (or "Western"). That split, causeschaoson the
African people. He holds the elites culpable. He states"the elites,the parasiticminority
group [operate] by an assortmentof imported or borrowed institutions" to devastatethe
economy in their quest for power. The elites namely comrpt politicians, seekpersonal
gain and don't work to createorder but insteadfoster instability in social,economicand
political realms. The external causesare inefficient forms of assistanceby international
organizationsand countries. The focus on this paper is on the latter, namely the role of
aid in the Sub-Saharaneconomy.

This is due to the fact that comrpt politicians are

primarily the first to receive any foreign aid before it ever reachesa person in need.
(Ayittey 1999) Consequently this paper shows that despite the intentions of these
organizationsassistanceprograms of the International Monetary Fund/World Bank have
failed to spur positive growth for the past two decades. It further urges for an analysisof
the core causes of why aid from these organizations has failed.

Alternatively it

challengesthe validity of foreign aid to spur economic growth in developing countries

like Sub-Saharan
Africa. Finally, it calls for a new model for giving aid to SSA, one that
takesthe current situation in the country into consideration.
A measure of economic growth is the aggregatedamount of production of a
country. This is known as the Gross Domestic Product or GDP. Since 1980,GDP per
capita (GDP divided per person) in SSA has declined at almost lYo per annum. The
decline has been widespread:32 countriesare poorer now than in 1980. (Easterly 1999)

This has taken place despite intervention from the intemational community to spur
economic growth. Aid in the form of loans has been granted to Sub-SaharanAfrica
increasingly for decades. Yet there has not been increasedgrowth. This paradox is the
focus of my researchproposal. Why has Sub-SaharanAfrica had slow growth since the
1980s despite the increasedinvolvernent of the International Monetary Fund (IMF) and
World Bank? This is puzzling as conditionality requires that countries follow policy
prescriptions in order to get future loans. This would imply that the countries have
followed the policy prescriptions and have not exhibited positive growth. Therefore the
policies namely conditionality are a failure. In addition, this is apuzzle as the IMF and
the World Bank are by definition institutions that aid developing countries ro spur
economic growth.

The IMF is a cooperative institution of 182 member countries

(dominated by Westem countries i.e. the United States holds the most votes). The
primary goal of the IMF is to maintain stability in the world economy. In line with its
aims it temporarily makes available its resourcesto a mernber country dependentupon
them meeting key criteria. These criteria, often termed conditionality, areconditions that
specific changesare implemented in the country. Another institution that has aided SSA
and works in conjunction with the IMF has been the World Bank. The World Bank
provides development assistancein the form of loans. Its aim is to facilitate positive
growth for developing countries. (pbs.org).

As Table l, shows despite increased

involvement of these two organizationsthere has been continued economic stasnationin

Sub-SaharanAfrica.

Table I
Country

Benin
Botswana
Cameroon

GNP Ave. World Bank

Loans
annual
&
growth Credits
%
r96s-t997 1980
52
7 .7
66
r.4
298

Central African -t.2

Republic
Chad
0 .1
Congo
C6te d'Ivoire

Sierra Leone

-r.4

SouthAfrica

0 .1
-0.2
-0.6

Uganda
Zambia

l0s0

36

488

3t4
246

2279
r345

304

r632

t9

75
2990
2364
1568
1335

r.7

-0.9
Dem. Rep. Of -3 .7
Conso(Zaire\
Ethiopia
-0.5
Gabon
0.4
Ghana
-0.9
Kenya
1 .3
Malawi
0 .5
Mozambique
-0 .1
Mali
0.5
Niger
-2.5
Nieeria
0.0
Rwanda
0 .1
Senegal
-0.5

Sudan
Togo

World
Bank Loans
& Credits
1998
543
46

2t3
528

r56
0

554
58
156
43
0
236
47
47
348

2841
639
1309
299
0
t232
620
1947
t628
941

-2.0
a
J
0 .5
Source:Easterlv2001& Saitoti2002
Zimbabwe

In the above table growth rates are measured as GNP. GNP stands for Gross
National Product it is the total dollar value of all final goods and servicesproduced for
consumption in a society during a particular time period. (Jhingan 1997). The above

table shows how the growth rates of Sub-SaharanAfrican countries have stagnatedor
declined since 1965. It also sho'*r'sthat the number of loans given by the World Bank
have increasedon an averageof 5 times over a period of two decades. The increasein
loans have not correlated to an increase in economic growth. This is evidence for the
existenceof my dependentvariable. As despite the assistanceof the IMF and World
Bank, SSA hasnot exhibitedincreasedgrowth.
This is important as the failure of these organizationsto spur economic growth in
SSA, for the past two decades,indicatesthat there are existing issueswith the way in
which theseorganizationsassistSSA that needto be addressed.Accordingto Table l, of
the sampleof 27 SSA countries,26 countriesare economicallystagnantor have declining
growth rates. Despitea drasticincreasein World Bank loans and credits. It is important
to addressthe specific concernsof the countries of SSA and reform the flawed operations
of the World Bank and IMF within these countries. As without reform there will be
continual inefficiency and no growth as evident by the data.
In this paper I present two hypothesesto answer the researchquestion: why has
Sub-SaharanAfrica had slow growth since the 1980sdespitethe increasedinvolvement
of the International Monetary Fund (IMF) and World Bank? The first hypothesisis that
the operations carried through by these organizations are inapplicable to SSA. These
organizations operate on neoclassical economic policies that within the framework of
SSA are not conduciveto growth. The secondhypothesisis that aid in the form of loans
(over long periods of time) does not help improve the economic performanceof a
country. As this can lead to factors that stymie economic growth. Thesetwo hypotheses
focus on the implications of aid in the form of loans. My first hypothesisdeals with

institutional aid specifically from the World Bank. My secondhypothesis deals with a
more generalizedassessmentof aid. These two hypothesesform the core of my research
proposal.
The following section of this proposal elaborates on hypotheses and the
parameterswith which to test these hypotheses. The contextualizationof my hypotheses
takes place here. Next I propose methods to test the effectivenessof my hypothesesin
the ResearchDesign. Finally I conclude with a reassessmentof my main argumentsthat
challengethe notion of aid to spur economic growth in sub-SaharanAfrica.

II. The Ineffectiveness of Aid in SSA: Conditionality

Hl: The IMF and World Bank have applied policies namely conditionality that were not
conducive to growth in the Sub-SaharanAfrican context and resulted in slower growth
and an increasein loans.
"Many of the countries of SSA have long been the most aided in the world. They
are also among the world's poorest economic performers. It is difficult to ignore the
apparentfailure of aid to promote development in Africa." (Saitoti 2002) This quote by
Lancasterrecounts the fact that aid in SSA has not spurred economic development. My
hypothesis focuses on the IMF and the World Bank and their prescribed policies. The
World Bank works closely with the IMF and only gives loans to countries that are
"cleared" by the IMF. Loans are dispersedonly if specific conditions of the IMF are met.
These conditions require a country to primarily rely on markets for the allocations of
resources. These policies are basedon theories of Adam Smith on liberal economicsand

his idea of the invisible hand of the market. However marketsleft to their own devices,
unregulated.can causegross volatility (i.e. the Great Depression). In line with the IMF,
Conditionality requires countries to reduce spending on social programs, eliminate or
reduce government subsidies, abolish tariff and non-tariff barriers to international trade
and liberalize money and capital markets. (Easterly 2001). A modern expert on the
operationsof the World Bank is JosephStiglitz, who servedas World Bank Senior Vice
President and Chief Economist between Februarv 1997 and Februarv 2000. He states
that developing countries that have opened themselves to trade, deregulated their
financial markets, and abruptly pivatized national enterprise have experienced more
economic and social disruption than growth. Foreign direct investment has destroyed
potentially viable domestic companies. And liberalized internationalfinance has made
emerging-market economies more vulnerable to erratic shifts in investor sentiment
without conferringany visible benefits. He is also a proponentof increasedtransparency
at the World Bank and the IMF. This would make them to a certain respectaccountable
for the fates of developing countries that have taken their prescriptionsand not achieved
positive growth. The countriesof Sub-SaharanAfrica do not have the institutionalbasis
to adequately follow through on these policies. The IMF and World Bank focus
primarily on financial liberalization and consider institutional reform outside the scopeof
their mandate. (Kilman 2002\
This is literaturethat challengesthe core basis for conditionality in SSA. As the
IMF does not think it is required to deal with institutional reform the World Bank
continuesto give out loans to non-performing Sub-Saharancountries. These loans are
given based on predeterminedconditions, the conditions require trade liberalizatron and

harm domestic industry there is reduced economic growth, and no reform takes place on
the institutional level to better apply this aid towards development.the environmentis not
conducive to growth and the cycle continues without change in the results. Here is an
arow diagram:
I.V.

D.V.

IMF andworld Bank conditionality-++-)-)-)-+-+-++-+reduced

growthrates-

more loans,conditionality
startsanothercycle
o reducing trade barriers
o harm to domestic industries

. countryis subjectto erraticmarketforces

o not conducive to growth
o no institutional reform takesplace

In the arrow diagram, the independent variable is IMF and World Bank
conditionality, the dependent variable is slow growth and increase in IMF and WB
involvement. I have the intervening variables of trade bariers, domestic industry, rnarket
forces, and institutions.

In posing this hlpothesis I am committing the fatlacy of

responsibility as cause. I am holding these institutions responsible for negative growth

and increasedloans as conditionality is ill suited for SSA as it lacks the institutional basis
to carry out those policies. Yet conditionality has a direct role in the economiesof these
countries it does have an impact on growth rates. This hypothesisis falsifiable. It can be

proven false if there are developing countries that have benefited from conditionality and
have not had slow growth and an increasein loans from theseorganizations.

III. The Ineffectivenessof Aid: Dependency and Indebtedness

H2

Foreign aid leads to dependencyand indebtednessthat impedes economic growth

this results in economic stagnationand an increasein IMFAVB loans.

"Since World War II the United States has contributed more than $1 trillion in
assistanceto other countries. Other nations and international organizationshave provided
more ... decadesof financial transfershave not fosteredeconomicgrowth. ... Seventy
countries are poorer today than they were in 1980, and 43 areworse off than they were in
1970. Aid levels do not correlate with economic growth." (Saitoti 2002). This quote by
Doug Bandow (senior fellow at the Cato Institute in Washington, D.C.) points out facts,
across time, on the devastating effects of aid. Across developing countries (including
SSA) foreign aid has not spurred economic growth. (see Graph in Appendix 2) In her
book titled Aid as Imperialism TeresaHayter makes the casefor foreign aid used as a tool
by countries guided by their economic, strategic interests. As PresidentKennedy said in
1961, 'aid is a method by which the US maintains a position of influence and control
around the world and sustainsa many good countries which would certainly collapse or
pass into communism.' (Hayter, I97l)

This illustrates the primary motive for donor

countries to give aid to developing nations. In addition aid is given in direct relation to
the geo-political interestsof a donor country. According to the United StatesInstitute for
National Strategic Studies, a Washington-based research center, in its 1995 strategic

assessment:"The US has essentially no serious militarylgeo-strategicinterestsin Africa

anyrnore,other than the inescapablefact that its vastnessposesan obstacleto deployment
in the Middle East and South Asia, whether by sea or air." (Economist 1996) This may
help explain why after the Cold War aid from the US to SSA has fallen to its lowest
levels. (Economist 1996) Thesetwo quotesreflect a key reasonbehind cross-countryaid
- for donor countries to promote their own geo-political interests. This provides the
framework from which to challengethe theoretical basis for aid, as it is primarily a tool
for countries to maintain their power. There are also economic implications of aid for
Sub-Saharan
Africa.
According to Prof. Watts of the University of California in Berkeley,SSA today
has been reduced to the "political economy of begging". This is due to its immense
dependency on aid.

This increased dependency on foreign aid makes a country

dependenton the economy of the donor country. As if the donor country's economy is
not growing it effects the economy of the recipient country. In this way the recipient
country is more vulnerable to shocks in the international economy. Also, SSA or any
developing country that is dependenton aid cannot determineits own Oo-.r,r" destiny as
it has to be subject to the requirementsof its donors (see discussionof conditionality
above). In addition to a lack of self-sufficiency, economic growth is negatively impacted
by the debt-burdenof aid. As countries continue to take loans and have decline in growth
rates they cannot repay those loans this causesthose re-paymentsto accruewith interest.
When a country has positive growth its primary function is to reduce its debt burden,
these monies are directed away from investment into the country that could spur future

10

economicgowth. This resultsin reducedfuturegrowthand an increasein loans.(Black

2001) Hereis the arrowdiagram:
I.V.

D.V

ForeignAid -+-+-+-)-+-)-)+++-+-+-++-)-)-)-+-+

slow growthrates- more

loans,anothercycleof
furtherindebtedness

o dependency
is createdasloansaretakenup andgrowthdoesnot happen
o new loans are required to repay the original debt - indebtednessresults

1 anyfuturepositivegrowthis divertedto reducethedebtburden

In the arrow diagram, the independent variable is foreign aid, the dependent
variable is slow growth and increasein loans. The intervening variables are dependency,
and indebtedness. Today 34 of the Highly Indebted Poor Countries are in Africa and
make up much of SSA.

(worldbank.org).

I am not committing the fallacy of

responsibility as cause. As I am not claiming that aid caused slow growth initially in
SSA but I am saying that aid creates dependencyand indebtednesswhich does hinder
economic growth and could have a huge impact on growth rates and cause further
indebtedness. Developing nations (esp. in SSA) require foreign aid. But aid is taken
under the belief that this aid will spur growth, not further the interests of the donor
country. This hypothesis is falsifiable. It can be proven false if there are developing
countries that received aid and did not have dependenceand indebtedness.
In posing these two hypotheses,I am avoiding other factors that effect growth
rates. I could have looked at SSA's high diseaseburden due to tropicality and the vast

ll

majority of the population being landlockeddue to geography. Thesetwo accountfor a

.o4oh redtction in growth rate in relation to other poor countries. (Collier and Gunning
1999) But this is negligible in comparison to aid that has a direct effect on the economy
and would have a much greaterquantitative impact on growth rates. My two hypotheses
could be proved false if there are countries that have received conditionality or aid over
long periods of time and have good economic perforrnance. Yet there would be a key
distinction that makesmy hypothesisvalid, namely that SSA lacks the institutionalbasis
to follow through on liberal economic policies and administeraid efficiently. In doing
research I would prove conditionality and aid in countries with poor institutions would
result in the same way as SSA.

They would have reduced growth and increased

indebtedness.

III. ResearchDesign - Testing the two hypotheses

The researchdesignenablesme to test my two hypotheses.The primary objective

for testingmy hypothesesis to determinecausality. Under what conditionschangesin
one observationwill be followed by changesin a secondobservation.The research
design determinesthe degreeto which there is a causallink betweenmy independent
variables (IMF/WB conditionality or Foreign aid) and my dependentvariables (slower
growth and increasedloans). The purposeof testingis to prove or disapprovea
hypothesis. In order to start my researchI choosemethodsfor testing. After choosing
methods for testing I can define the casesto include in my casestudy. The method of
choicefor both hypothesesis Mill's Joint Method of Agreementand Difference.(see
Appendix 1) I will be doing comparisonsacrosscountriesaccordingto the parameters

t2

outlined in eachhypothesis.Mill's Joint method enablesme to comparecountriesthat are

as similar to Sub-SaharanAfrica as possible and countriesthat are different basedon
particular parameters. By looking at similar and different casesI reducethe chanceof
having bias in my results.
Hl: The IMF and World Bank have applied policies namely conditionality that were not
conducive to growth in the Sub-SaharanAfrican context and resulted in slower growth
and increasein loans.
My independentvariable is IMF and World Bank conditionality, the dependentvariable
is slow growth and increase in IMF and WB involvement. The parametersfor this
hypothesis are trade barriers, domestic industry, market forces, and institutions as a
constant(no change). This hypothesisis falsifiable. It can be proven false if there are
developing countries that have benefited from conditionality and have not had slow
growth and an increase in loans from these organizations despite there being poor
institutions. This will be where I will start my research. For my casestudy of similar
casesI will include developing countries that meet the requirementsof being subject to
conditionality and having poor institutions. For my case study of different casesI will
include countrieswith stableinstitutions. Next, I will usethe parametersto determinethe
effectiveness of my hypothesis namely the causal link between my independent and
dependenthypothesis. It will be interesting to note the effects on growth rates and the
number of loans taken up by a country despite having strong institutions in light of
conditionality. This would be interesting as conditionality requires a reduction in trade
barriers something that even developed countries such as United States (that heavily
guards its domestic industry) are not willing to do. (Kilman 2002).

l3

Hoop Test #1: Does the developing nation have a reduction in trade barriers (as per
conditionality)?
In accounting for trade barriers I can mitigate the difference in results between open and
closedeconomies.
Hoop Test #2:

Does a reduction in trade barriers lead to destruction of domestic

industries?
The degreeto which this occurs is of importance as it would indicate the extent to which
a reduction in trade barriers hurts the domestic economy and the increaseof dependency
on the foreign economies. Which indicates increasedvulnerability.
Hoop Test #3: Are the political institutions poor (non-performing)?
This is a key test as the effectivenessof economic policies dependson the stability of its
political institutions.

If the political institutions of a country are poor before

conditionality and remain poor after than the results of conditionality should be increased
loans and increased indebtedness. But if the political institutions are strong than the
country cannot be put together in a study with other similar casesas a stable institutional
base often results in a stable economy.
H2: Foreign aid leads to dependencyand indebtednessthat impedes economic growth
this results in economic stagnationand an increasein IMF/WB loans.
The independent variable is foreign aid, the dependent variable is slow growth and
increase in loans. The intervening variables are dependency,and indebtedness. This
hypothesis is falsifiable. It can be proven false if there are developing countries that
received aid and did not have dependenceand indebtedness. This will be where I will
start my research. For the my case study of similar cases I will include developing

I4

countries that meet the requirement of having received foreign aid (country to country
andlor institutional organizations)and have poor (non-performing) institutions. For my
study of different casesI will include countries with stable institutions that have received
aid. Next, I will use the parametersto determine the effectivenessof my hypothesis
namely the causallink betweenmy independentand dependenthypothesis.
Hoop Test #1: Is the country dependentupon aid?
This can be measureddirectly by looking the proportion of GDP taken up by aid. If the
proportions over time are high then it would indicate that the country has high
dependencyon aid. This high degreeof dependencywould indicatethe reducedlevel of
self-sufficiency and increasedvulnerability of the country.
Hoop Test #2: Doesthe countryhave a debt-burden?
This too can be measuredover time. It can be quantified by looking at the number of
loans a country has been given and the number of loans it has paid back. There are other
ways to measurea country's debt burden such as looking at what proportion of the GDP
is diverted to paying off debt. This would also indicate the extent to which money that
could be reinvestedinto the economy to spur growth is diverted away.
In looking at similar casesI could confine my study to the countriesdefined by the World
Bank as the Heavily IndebtedPoor countriesor HIPC (world bank.org).
Overall my research in finding similar and different (based on levels of the
parameters)caseswould be confined to developingor leastdevelopingcountries(LDCs).
Developed countries are not applicable, they do not require foreign aid and are not
subject to conditionality by the IMF (IMF Survey 2002). In using a counterfactualI
could go againstthe bias of using only developingcountriesor LDCs but this would not

15

be useful in proving the causal link between my independentand dependentvariables

as
none of the parameterswould be applicable and the existenceof the independentvariable
itself would not hold.

IV. Conclusion

Why has Sub-Saharan Africa had slow growth since the 1980s despite the
increasedinvolvement of the International Monetary Fund (IMF) and world Bank?
This
is puzzling as conditionality requires that countries follow policy prescriptionsin order
to
get future loans.

This would imply that the countries have followed the policy

prescriptions and yet have not exhibited positive growth. Therefore the policies
namely
conditionality ate a failure. It is important to understandwhy thesepolicies persist. This
is important as millions of dollars have been going to poor (non-performing) countriesin
the form of "development assistance",resulting in increasedpoverty. There is increased
poverty as the GDP in these countries is stagnant or lower and yet the population
continues to grow.

It is eminently important to understand this paradox as despite

continued failure theseinstitutions continue to operateusing the samemethods.

The questionof'SSA's stagnanteconomyis due to domesticand externalfactors.
The elites namely comrpt politicians of SSA, seekpersonalgain and don't work to create
order but instead foster instability in social, economic and political realms. The external
causes are inefficient forms of assistanceby international organizationsand countries.
The focus on my researchwill be on the latter namely the role of aid in the Sub-Saharan
economy. This is due to the fact that comrpt politicians are primarily the first to receive
any foreign aid before it ever reachesa person in need. (Ayittey lg99) And it brings to

t6

light the especially important issue of aid namely that the poorest never see a penny of
theseloans.
The primary issue of aid in Sub-Saharancountries is that it never reachesthe
poor. This issue of aid is especially important in the Sub-Saharancontext today. This is
important as Sub-SaharanAfrica has 38 million people headedfor starvation. This is due
to the reduction over the past ten years in aid for agricultural projects in Ghana and other
Sub-SaharanAfrican countries. Africa could feed itself if it had the food grants for
fertilizer and seedsbut donor countries do not provide it with the required agricultural
grants. This would hurt the flow of exports of crops from rich countries to Sub-Saharan
African countries. This just illustrates another issue that Sub-Saharancountries face. As
evident, donor countries have no interests in providing SSA with aid. Agricultural
projects are not on the top of the agendaof any donor country. Except on the minds of
the starving families who don't have enough food to eat. (Kilman 2002) People there
need the right support from benevolent international organizationsand countries. This is
what my researchaims to prove. The persistenceof aid in its current form is a threat to
the livelihood of Sub-SaharanAfrica today and for generationsto come. In doing this
researchI aim to uncover the real reasonsbehind the persistenceofthese policies and do
a cost benefit analysis,to prove that lives are invaluable.

t7

Appendix 1
John Stuart Mill's Methods comefrom the article "Causal Connections:Mill's Methods
of Experimental Inquiry "
Mill's Method of Agreemenl statesthat if severaldifferent experimentsyield the same
result and theseexperimentshave only one factor (antecedent)in common, then that
factor is the causeof the observedresult. Mill's Method of Dffirence statesthat if a
result is obtained when a certain factor is presentbut not when it is absent,then that
factor is causal. As eachmethod individually entails someprobability towards the
conclusion, the method together entails greaterprobability. It is theJoint Method of
Agreement and Dffirence andthis is my method of choice. This method essentially
pairs the results of comparing differenceswith the results of comparing similar cases.
There is also Mill's Method of Residues,in Mill's words, "Suppose,as before, that we
have the antecedentsA,B,c followed by the consequentsa,b,c and that by previous
inductions (founded, we will suppose,on the Method of Difference) we have ascertained
the causesof some of theseeffects, or the effects of some of thesecauses;and are thence
apprisedthat the effect of A is a, andthat the effect of B is b. Subtractingthe sum of
theseeffects from the total phenomenon,there remains c, which now, without any fresh
experiments,we may know to be the effect of C." I do not use this as it focuseson the
residual effects of antecedentconditions, ffiy researchfocuseson the effects of the
conditions themselves. Also becauseI can't actually do a positive test and deducethat
it's not any of the other factors. And finally there is Mill's Method of Concomitant
Variations. In using this method it is difficult to determinepermanentcausesand
establishdefinite causality. This is why I opted not to use this method. I mention the

18

methodof Counterfactuals.In orderto usecounterfactualsa key componentassumedto

exist doesnot exist. The effectson interveningvariablesandthe dependentvariableare
determinedand a causallink is establishedwithout the existenceof a key factor. This
methodwasusedby Copemicusin verifuing the location of the Sunasthe centerof the
Universeinsteadof the earth. I explainwhy the useof this methoddoesnot work for my
researchdesign.

T9

Appendix 2
The data is extrapolated from the information in the article by Easterly. It shows how
over time developing countries (including SSA) has continued to receive loans from the
IMF/WB.

These even though there has been a steady decline in GDP over the same

period as loans have increasedin number. This graph is a clear illustration of how GDP
growth and IMF/WB loans have not association. They are divergent and headingtowards
opposite directions. There is a huge disparity between growth rates and IMF/WB loans.
In fact the increasein loans has resulted in a decreasein growth over time. This is true
for most developingthird world countries. This is key to my hypothesis. This also is
evidence further graphical for the existence of my dependentvariable. That persistence
of IMF and WB loans has resulted in decreasedgrowth over time.
Graph of growth (GDP/capita) vs. IMF/llB

loans in the third world (including Sub-Saharan Africo)

IMF/[A/B loans/yr

Growth (GDP/capita)

0.57o

GDP/
capita

20

Annotated Bibliography
Books
l) AyitteS GeorgeB. N. 1999. Africa in ChaosNew york: St. Martin press

o Thisbookdetailsthe reasonsfor Africa'sconditionit holdsdomesticagents

suchas elitesprimarilyresponsible.Thisties intothe institutional
inadequacy
of
SSAwhichare importantin bothof my hypotheses.
2) Davidson, Basil. 1974. Can Africa Survive? ArgumentsAgainst Growth without
Developmenl Toronto: Little Brown & Co.

of development
to include
' In this bookDavidsonarguesfor a redefinition
"commonwell-being"
insteadof the westerneuro-centric
versionthatmaintains
a
strictfocuson economicgrowthimprying
development.
Thisquestions
the
validityof the dataI haveto illustratemy dependentvariable.lt requiresa reconceptualization
of the indicators
of development
that I havedetailedin my
research.
*The above author was found in a
bibliography in the following book Kennet, David, and Lumumba-Kasongo,Tukumbi. lgg2. Structural Adjustment and
the Crises in Africa. New york: Edwin Mellen press

o This bookgaveme key characteristics

of the effectsof structuraladjustment
(IMFA/VB
policiesbasedon conditionality)
on Sub-saharan
Africa.lt is usefulto
illustrate
the problemswiththe policiesof the IMFAruB
in Sub-Saharan
Africa.
3) Easterly, William. 2001.Elusive Questfor Growth: Economists'Adventuresand
Misadventures in the Tropics Boston: MIT press.

2l

o In Easterly's
bookhe challenges
a keynotionthataid leadsto growth.He
illustrates
howthe year$of aidfromforeigninstitutions
havenot helpedSSAand
the frameworkbehindthoseorganizations
is not appropriate
for SSA. Theseare
keylinksto the problems
of my independent
variable
for myfirsthypothesis.
He
alsoarguesthateconomicgrowth(GDP)is keyto improving
livingstandards
and
indicatesan increasein the incomeof eventhe poorest.Thisvalidatesmy data
for the existenceof my dependentvariable.
*The abovebook was in the list of selectionsin the following reader:
Miguel, Edward [compilation].2002. Economics172: Issuesin African Development
Reader. University of California, Berkeley Spring 2002.
o The reader focuses on development of SSA. lt is a compilation of various

economists
historians
and socialscientists
who are expertson the subjectof
economicdevelopment
andfocuson the impediments
to Sub-Saharan
Africa's
development.
The selections
in the readerare helpfulto illustrate
my dependent
variable.And also,the effectsof the two independent
variables
thatcorrelate
to
my two hypotheses.
3) Hayter,T.197I. Aid as Imperialism New York: PenguinBooks

. Hayterarguesthataid is a newformof imperialism.Especially

by the Weston
the poorercountries
in theworld.Thisdiscusses
the ideological
implications
of
foreignaid andtiesintoissuesbehindthe basisfor aid in developing
countries.
Thisbookprovidesme witha theoretical
framework
for my firsthypothesis.
4) Hope, K.R.,Chihculo Jr., B.C. 2000. Corruption and Developmentin Africa:
Lessonsfrom Country CaseStudiesLondon: Macmillan Press

22

o Thisbookdetailsthe roleof corruption

in hindering
development
in
of countries
Sub-Saharan
Africa.Thisbookis important
to provideevidencefor the existence
of my independent
variableand linksit'seffectson my dependent
variable.
Namelythatcorruption
has quantifiable
effectson economicgroMh.
*The above two books were found in the bibliography of the following book Saitoti, George. 2002. The Challengesof Economic and Institutional Reformsin Africa
Vermont: Ashgate Publishing.

. Thisbooktakesa broadapproachandtacklesa widerangeof issues

concerning
Africa. lt detailsthe challenges
practical
thatarefacedin actualizing
and soundreformsin the politicaleconomyof Africa.Thistiesdirectlyintothe
validityof the existence
of my dependentvariable.But it alsohelpsto shedlight
on the problemsof disaggregating
the factorsthatimpededevelopment
in SubSaharanAfrica.
5) Jhingan,M. L. 1997. The Economics of Developmentand Planning, 3rd Edition.
New Delhi: Vrinda PublicationsLtd.
. This book analyses the theoreticalframework behind development and

planning.Theeconomic
policies
thatare in placecurrently.lt helpsto putmy
researchin contextwiththe theoryat workbehindthe actionsof eachinstitution.
6) Yergin, Daniel, and Stanislaw,Joseph.1998. CommandingHeights:TheBattlefor
World Economy New York : Simon SchusterInc.

. Thisbookdoesa globaloverviewof the worldeconomy.The causesof the rise

and fall of someeconomies.The "keyplayers"in the currentworldeconomywho
dominateand setthe standardfor lesserdevelopednations.Thistiesintothe

23

suchas the IMF/VVB

unquestioned
hegemonyof certaininstitutions,
thatarethe
independent
variablesof my firsthypothesis.
xThe sourcefor the abovebook is the websitePBS.orgby the Public Broadcasting
StationWGBH. The citation follows:
Public BroadcastingStation. 2001. CommandingHeights: The Battlefor World
Economy. Internet on-line <http://www.pbs.org/wgbh/commandingheights/lo/index.html>[October 14,

20021

Book Reviewsof Elusive Questfor Growth by Easterly:

l) Bartlett, Bruce. 2001. "TheHazards of Throwing Money at the Problem" Review of
Elusive Questfor Growth: Economists'Adventures and Misadventuresin the
Tropics, by William Easterly. The Wall StreetJoumal. 7129/2001.Accesson
World Bank site <http://www.worldbank.org/research/growth/Easterlf/o2}booko/o20reviews.htm#
F oreigno/o20Affairp I I 7 Novemb er 2002]
2) Francis, David R. 2001. "New stepsneededto spur third-world growth" Review
of Elusive Questfor Growth: Economists' Adventuresand Misadventures
in the Tropics, by William Easterly. The Christian ScienceMonitor.
Accesson World Bank site <http:llwww.worldbank.org/research/growth/Easterlf/o2}bookoh20review
s.htm#Foreign%20Affairs> [ I 7 November 2002]
4)

Warsh, David. 2001. Review of Elusive Questfor Growth: Economists' Adventures

24

in the Tropics,by William Easterly.The BostonGlobe.

andMisadventures
Accesson World Banksite71291200I.
eviews.htm#
<http://www.worldbank.orglresearch/growth/Eas
terlf/o2}b o okYo20r
F oreignYo20AffairpI I 7 November 2002]
Book Review of Commanding Heights by Yergen and Stanislaw:
Heightsby YergenandStanislawWired
Baker,Chris 2002.Review for Commanding
MagazineIssue10.04ApnI2002. Interneton-line?p54> [ I 7
<http://www.wired.comlwir edlarchive/I 0.04/streetcred.html
November20021

Dissertations
1) Bamuamba,Clement Bota.2002. Political corruption in Congo Zaire: Its impact on
development.Canada:Saint Mary's University. Publication number: AAT
MQ65726 ProquestDissertation databaseon-line < http:/iwwwlib.umi.com/dissertations/fullcitlMQ65726>.120 November 20021

. The abovepaperc{)versthe situationin CongoZaireandthe teamingup of

Mobuto'scorruptregimeand IMFMB loansthatenableddeviationof fundsto
corruptpoliticians.
2) Lartey, CharlesRichmond. 2001 Globalization and the Paradox of Incorporation &
Marginalization: An exploratory note on Sub-SaharanAfrica. Virginia: Old
Dominion University. Publication number: AAT 3008223ProquestDissertation

25

>.[20
database
on-line- < http://wwwlib.umi.com/dissertations/fuI1cit|3}}82z3
November20021
. Thispaperdoesa case-study
Africaandchallenges
analysisof Sub-Saharan
framework
as definedby the ideological
aspectsof globalization
the redemptive
of neoliberalism.
3) Fernholz,FemandoR. 2001. Zambia:Missedopportunities
for growrftMasschusetts.:
BostonUniversity. Publicationnumber:AAT 9983625ProquestDissertation
on-linedatabase
< http://wwwlib.umi.com/dissertations/fu11cit19983625>.
[20 Novernber2002]
. This dissertationuses a multi-sector
modelof
computablegeneralequilibrium
the Zambianeconomyto estimatethe effect of alternativeeconomicpolicy
scenarioson its growth trajectories.
Africa: Privatization,moral
4) Diakhate,Medou,Thebankingsectorin sub-Saharan
hazard,andgovernmentregulation The AmericanUniversit5 2002. Publication
online number:AAT 3048281ProquestDissertationdatabase
< http://wwwlib.umi.com/dissertations/fullcit/3048281>.
[20 November2002]
o This paper looks at the role of the governmentin the economy- primarilythe
currenttrend of privatization.This ties into my second hypothesistyingthe role
of the governmentnamelydue to it's undemocraticpracticesthat support
cronieism. This paper illustratesthe challengesof privatizationunderthe climate
of an authoritarianor failed statesof Sub-SaharanAfrica.

26

Articles
l) Black, Stephanie.
2001."More About the Issues"from POV: Life andDebtby Public
Broadcasting
Station. Intemeton-line<www.pbs.org/pov/pov200lllifeanddebt/moreabouttheissues.html>
127October
20021
o This articleprovidesbrief critiquesof internationalinstitutionsnamelythe lMF,
WB, WTO. lt ties into my first hypothesisand the issuesconcerningaid in SSA.
2) Collier,Paul,andGunning,Willen. 1999"Why HasAfricaGrownSlowly?"Joumal
of EconomicPerspectives
l3(3) Summer1999,AmericanEconomic
Association.
o This articleprovidedme with the data for the existenceof my dependent
variable. lt showedhow SSA has had negativegroMh ratesover the past two
decades. lt also looksat differentcausesfor it's slow growthdividingthe causes
into domesticand externalcauses.
3) Easterly,William andLevine,Ross1997.*Afica'sGrowthTragedy:Policiesand
EthnicDivisions."OuarterlyJoumalof EconomicsI 12November19971203t250.
o This articleties in my second hypothesisnamelycommunalpoliticsand it's
impacton slow economicperformancein SSA. lt does an internalanalysisfor
the causesof Africa'sslow growth.
*The abovearticleswerein the list of selectionsin the following reader:
Miguel, Edward[compilation].2002.Economics172:Issuesin AfricanDevelopment
Reader.Universityof Califomia,BerkeleySpring2002.

27

. The readerfocuseson development

of SSA. lt is a compilation
of various
economists
historians
and socialscientists
whe are expertson the subjectof
economicdevelopment
andfocuson the impediments
to Sub-Saharan
Africa's
development.
The selections
in the readerare helpfulto illustrate
my dependent
variable.And also,the effectsof the two independent
variables
thatcorrelateto
my two hypotheses.
4) Hilsenrath. Jon E. 2002. "Globalization Gets Mixed Gradesat United States
Schools" The Wall StreetJoumal. 2 December,20l2

. Thisarticlesumsup the viewof leadingeconomists

suchas JosephStiglitzand
theteachingdevelopment
studiesin University
Campuses.lt focuseson
ColumbiaUniversity.The professors
haveviewsfor andagainstglobalization.
lt
againlooksat the neoclassical
liberalidealsbehindeconomyin the West. lt ties
intotheoryhelpfultoexplainmy independent
variablefor hypothesis
one.
5) Kilman,J.2002.'oAfricaCouldFeedItself. ShouldIt?" Wall StreetJournal
3 December,2002
6) The Economist.1996"Surveyof Sub-Saharan
Africa - Africa for theAfricans"
7 September,1996

Government and NGO Docs.

l) International
MonetaryFund.2002."CanStronger
Institutions
andBetterTraining
SpeedAfrica's Development?"The IMF SurveyVol. 3l #19. Oct.21,2002.

28

Imf.orgsiteon-line<http://www.imf.orglexternalipubs/fi/survey/20021102102.pdf>
[27October
20021
o Thisis one of manyarticlesput out by the IMFthat looksat it'spolicysituation
in Africa.All policiescurrentlyare basedon tradeliberalization
andthe principles
of free marketsleadingto economicgrowth.Thisparticular
articlelooksat the
roleof institutions
and trainingin "neo-classical
liberaleconomicprinciples"
to
boostAfrica'sdevelopment.lt ties intothe puzzlebehindmy initialinvestigation
intoSSA'sslowgrowthas thesepolicieshaverepeatedly
failedin SSAandyet
continueto be implemented.
2) Ministry of Finance and Planning, Government of Kenya. 2001. Poverty Reduction
StrategyPaper 2001 - 2004lntemet on-line <http ://www.treasury.go.ke/prsp.html> [ I 2 Novemb er, 2002]

o Thisis a paperby the Government

of Kenyathatchartsout it'scourseto
reducepovertyin Kenya. lt looksat variousinstitutional
changes.Thistiesinto
my secondhypothesis
that looksat the roleof government
andtiesintothe
puzzlebehindSSA'sslowgrowthfor sucha longtimeeventhoughthe
governments
havecontinually
chartedout waysto reducepovertyandensure
economicgrowth.
3) Willem, Jan and Collier, Paul. 1998."Explaining African EconomicPerformance"
DSE ConferencePaperson Opening and Llberalization of Markets in Africa.

29

Revised June 19, 1998. Website of Inwent.org, an organizationthat works in

conjunction with the German Foundation for International Development.
<www. dse.deleflp apers/coll-gun.htm>[ I 2 November, 2002]

o Thispaperdoesa quickoverviewof Africa'sproblemsin the contextof trade

liberalization.
lt ties intothe causesof it'sslowgrowthwiththe implementation
of
"freetrade"policies.lt ties into my first hypothesis.
4) UnitedStatesStateDepartment2001"Tips for travelersto SubSaharanAfrica"
Departmentof State- Bureauof ConsularAffairs March2001availableonline
from state.govsite.<http:lltravel.state.gov/tips_sub-saharanafica.html>
[4 December2002]
5) TheWorld Bank2002."Heavily IndebtedPoorCountries"availableonline
<www.worldbank.orgftripc>
[ 12 May 2002]

30