The Aid Trap
Commentary
When rich nations fall into recession, their governments do what they can—but after 100 years of socialism (the entire 20th century), those governments know now not to intervene in the economy. To prevent a financial crisis, yes, they loan money to banks, but otherwise, they stay back.
Poor nations haven’t learned this. Recession or no, they always look to government.
Even when the citizens are entrepreneurial, their economies are so regulated, so manipulated by a few families who own the important businesses and resources, that they have to look to government. They have to ask for foreign aid.
They know their leaders will grab a good portion for themselves, yet they know they’ll also get something—food or employment—because otherwise they’ll riot. Their leaders won’t let that happen; there’d be no foreign aid….