Resources and Aid, any Similarities?

I downloaded Andrew Mwenda’s TEDTalks presentation and watched it last night. One of his main arguments was that aid makes the government fat, and that because of aid, governments are more attentive to the World Bank and the IMF than to their own citizens. Let’s elaborate on the argument a bit: governments know from whom they get money, and so strive more to satisfy their benefactors than their citizens. Mwenda makes the point that governments do not call the entrepreneurs among their citizens to discuss the development of the economies of the countries; instead, they listen to the people from whom a large chunk of the budget comes. I thought about this in relation to my country, Nigeria. I tried to imagine what percentage of the budget aid is. Just as I started thinking about this I remembered that Nigeria has oil, and that oil keeps the government rich.

Oil and Democracy
A political scientist, Michael Ross, wrote an article about resource curse. In the article, he builds a case for his argument that resources – chief of which, by the way, is oil – retard the development of democracy, partly because it frees the government of any dependence on the citizens. To bring this point home, let’s think about the percentage of Nigerians who are not employed in the organised private sector or in government, and then let’s think about how many of them pay any tax. Now, a government that does not have any resources has to depend on taxation from its citizens, and so has to look inwards. This is where aid comes in. If a country does not have resources but has a large chunk of its expenses taken care of by aid then that inward look does not seem to be needed

Another thing Mwenda pointed out was that government is the most attractive business in Africa. Again, let’s look at this in relation to Nigeria. There are people who get a job with a government ministry, go to work at about 11 in the morning and leave at about 1 in the afternoon. (I should throw in a quick word about many of the workers here. Most of the people who work in the ministries have to earn some money by the side to be able to take care of their families. Ingenious people that they are, while not working at the ministries most of them are busy at work on their own, most often trading.) The point is linked to a point made by Ross in his article: a government with resources is a rich government, something really attractive to a young person. The same point is also made by Mwenda in his presentation: since government makes money from aid, it is a rich and attractive option for young people who want to money. This point also ties in with the rent-seeking argument. With resource money, people in government can afford to keep a loyal team around themselves. If aid money provides more money for government it stands to reason to think that it might provide more money for politicians to attract more hangers-on.

Fears and Overreactions
If there are this many similarities between resources and aid, are there going to be more fatal similarities? Are we going to have people struggling to control government so that they can have access to aid (like in the case of civil wars that break out because of the desire of factions to control resources in a country)? Are we going to have governments buying arms and ammunitions with donor funding for the suppression of oppositions? Do we already have these situations? Am I simply overreacting. Actually, I hope I am overreacting.