The Lords of Poverty: The Power, Prestige, and Corruption of the International Aid Business Paperback – 1994

Every socialist should read this book to understand how they are destroying Africa.

This book has the flavour of someone who has stewed over the question of foriegn aid for some time and then suddenly this book has been an outpouring of every bit of frustration ever felt by the author. From looking at his other books it appears that he is a person with a thorough background in the industry.
The book is one of the most daming that I have read. Although short the book marshals its facts and explains every argument with a clarity that is breathtaking.
The arguments are that the organisations which are involved in providing aid are incompetent. There are a number of reasons for the incompetance but all orginsations which deal with aid are incompetant and corrupt.
At the head of the list is the world bank. The world bank is willing to make grants of aid conditional on changes to monetary policy and dismanteling of anti competative market systems but it never wants to make aid conditional on introducing human rights or democracy. As a result changes to make the market more competative almost always damage the poor by for example the removal of food subsidies. The benifits of World Bank loans almost always flow to the middle class or urban dwellers. The Indian Economist Sen has shown that democracies do not have famines. If the world bank was to make democracy the condition of aid packages it would be more likely to reduce famines in these countries. In fact govermental corruption or incompetance is the real reason for the sorts of problems which require aid in the first place.
The world bank is addicted to large capital intensive projects. Most of these turn out to be white elephants and have unsustainable maintence costs. Again the benifits of electification or transport benifits mainly the urban centres.
Those who are responsible for aid projects are overpaid, come from foriegn countries and lack language skills to properly evlaute projects. The result is that huge amounts of aid are used to pay for incompetant staff at aid bodies.
The author says that the proof of the pudding is that those countries which have had huge amounts of aid have simply gotten poorer. Aid projects have generally failed. The world would be a better place without any aid at all.
Whilst this is an extreme position the book is a valuable addition to debate in the area.

This book is getting a little dated now, but remains a classic critique of the international aid business. Using colourful anecdotes and solid stats, Graham Hancock convincingly demonstrates how the IMF, World Bank and other international aid/development agencies effectively worsen Third World poverty. What they do is transfer wealth from the poor to the rich in donor and recipient countries alike. In the 1st world, taxes of mainly not-particularly-rich people finance these international organizations, whose administrators often lead lives of incredible luxury. In the 3rd world, money from the organizations helps to sustain corrupt regimes and swell the bank accounts of their leaders, while in many cases the money eventually has to be repaid with interest by taxes which again tend to come mainly from the poor, thereby creating an extra burden for the people it was supposed in theory to help. Meanwhile the projects financed by the money are often wholly irrelevant to the needs of the recipient country, e.g. expressways in countries where only a rich minority own cars, and often the infrastructure is built by companies from the donor country (tied aid) and proceeds to fall to pieces long before the debt incurred has been paid off. This book caused a fair bit of controversy when first published, but was soon forgotten. It's been business as usual for the IMF etc ever since. Meanwhile Graham Hancock got so depressed with uncovering corruption in big aid agencies that he abandoned the field entirely and switched to writing all those speculative books about lost cities of the gods etc. -- yep, it's the very same Graham Hancock in case you're wondering.

Hancock exposes the seedy underbelly of development/aid as few have dared in the past. Those who live off this industry or have vested interests in spouting an image of Western superiority will rightly feel threatened by a book that unmasks supposed philanthropy and disinterestedness as a shameless money-making and exploitative sham. Hancock is relentless in revealing not only the inefficacy of many major projects, but also the attached strings of big business as well as the morally bankrupt nature of many of its protagonits. In addition, Hancock tellingly explores the mentality and logic behind NGO's as little more than another way of making a buck at the expense of the poor. Where would an industry that depends on poverty for its survival be left if poverty it tackled were to be eradicated? Some who find this study too close to home will claim it is condescending and lacking in solutions (as one reveiwer here does). It is neither. Hancock vents moral indignity in a fitting context and offers alternative approaches which in some cases obviate the necessity for development/aid agencies as we know them altogether ("God forbid!" some will cry). This book deserves to be read by all who sincerely wish to see a change in the way development/aid is carried out and in the appalling poverty it is supposed to alleviate. The career-minded need not apply.