Argument: Trade does not allocate resources effectively

Aid allows for money in a given country to be allocated well against need. At the micro- level as well as the macro, trade is an inefficient distributor of resources in a developing country. Under it, most if not all of the benefit of the trade will stay with a small elite of people who are often amongst the richest in the country in the first place. They may then move the money offshore again. Alternatively, if it remains within the developing country, it may well simply be used to buttress their own position in a way which further entrenches their social and economic position. So, the benefits of trade flow to few people and often they are the least needy. Aid, by contrast, may be targeted against specifically identified groups or areas on the basis of need, often being given through local groups, such as churches, mosques, health clinics, etc. If one looks at the Gini index (income and wealth equality) ranking, it is plain that the top (most inequality) is occupied by Sub-Saharan countries, fortifying the point 1.

1 Mongabay. (2010, January 25). Distribution of Family Income. Retrieved July 21, 2011, from Mongabay:

Candidate 1: "While aid appears unsuccessful for Africa, the approach itself should not be criticized on the basis of results in one continent. Western countries have simply provided African countries with generous payments allowing them to stabilize their economy. It many aspects of life, emphasis is not often attributed to what resources are available but how they are used. Though more guidance on how to invest the money may have been useful, Africa itself must take responsibility for how it has spent the money. The evil behind aid is allegedly overreliance: a country becomes dependent on receiving more and more aid. However, a focused approach to budget and organization of capital could certainly put aid to good use."
Candidate 2: "This argument borders on the absurd. Trade is much more likely to yield benefits for the ordinary men and women of Africa, than aid ever hoped to be. Aid and its unregulated flow are precisely what kept numerous dictators in power (Zimbabwe’s Mugabe, to name but one) allowing them to starve their people while taking weekend trips to the Ivory Coast in private jets. Trade, on the contrary, creates jobs, and those jobs create demand for other jobs - which is what matters to the ordinary person."
Candidate 3: "Aid money is often misspent, even when handled honestly. By imposing solutions from outside, it favors big projects, "grand gestures" and centralization - all of which may be inappropriate, only benefit a small number of people, and suffer from intended consequences. By contrast, the profits of trade trickle down to the whole population, giving people the power to spend additional income as they choose, for example by reinvesting it in worthwhile local industries and enterprises."
Candidate 4: "Resources will only be scarcer without aid; further chaos and corruption will ensue. There would be no need for fighting should resources be shared out equally. If aid is transferred to governments there is surely a centralized method of doing so; aid itself is not the problem. Africa could escape the issue of receiving payments according to donors’ vested interests by administering a list of causes for which it desires support, accepting contributions where demands fall exclusively within its categories. Again, aid is not detrimental but its careless distribution and allocation is."
Candidate 5: "Trade can be as short term as aid is; demand is very cyclical so if a country specializes in providing that good or service it can soon find that the product they are providing is no longer desired by consumers, or that there is a new product that makes what they provide obsolete. Even if there is a long term partnership between two trading partners it may simply mean tying the poor country into a different kind of dependency. Instead of the poor country being dependent upon handouts it is dependent upon the richer country buying its products or not trying to undercut it."
Candidate 6: "All countries have something to trade. Many of the world’s poorest countries have a lot of natural resources so they can take part in trade. Even if a country does not have sufficient natural resources it still has people. In order to be able to take part in the globalized manufacturing industry it need only be willing to accept lower wages than its rivals. Alternatively if it is landlocked and has not opportunity to trade in manufactures it can invest in education in order to become a services hub. All states have a comparative advantage somewhere, they just need to find it."
Candidate 7: "The opportunities for trade are severely limited because of barriers imposed by the international system. The arguments made by pro-trade proponents are often couched in the rhetoric of market economics. Yet the international trade arena represents anything but a free market. Instead, tariffs, taxes, subsidies, regulations and other restrictions operate to disadvantage some countries. Because of their weaker bargaining and economic power, it is typically developing not developed countries that are on the losing end of this equation. The agricultural protectionism of the EU and USA, in particular, means that developing countries are unable to compete fairly.

Furthermore, even if we were to accept that trade is more important, they should not be seen as alternatives; they can readily be complements. Trade is not inevitably magic and aid is not inevitably damaging. They depend on complementary policies. For example, aid-for-infrastructure programs that encourage trade could enable African exporters to compete with their Asian competitors 1.

1. UNIDO, Industrial Development Report, 2009."
Candidate 8: "Yes, trade might require infrastructure, but Asian countries required it just as much, maybe more than the African ones do. As Moyo argues in “Dead Aid” all of this is to be achieved not by clinging to aid, but by creating a stable enough atmosphere with favorable terms for FDI. The Chinese have already invested billions of dollars in Africa and are likely to invest much more. That way, the African countries get both trade and infrastructure, without being at the mercy of developed nations."
Candidate 9: "Even if that were true, people naturally want to trade with each other, seeking to turn their particular resources or skills to their advantage. All too often trade is limited not because government action is needed, but because the government actually gets in the way with restrictive rules and statist controls. For example, regardless of their terms of trade with developed nations, developing countries could all become more prosperous if they removed the barriers they have erected to trade with each other. Putting the emphasis on trade rather than aid redirects attention from what developed states should or could be doing for the developing world, to what developing countries can and should do for themselves."

This argument borders on the absurd. Trade is much more likely to yield benefits for the ordinary men and women of Africa, than aid ever hoped to be. Aid and its unregulated flow are precisely what kept numerous dictators in power (Zimbabwe’s Mugabe, to name but one) allowing them to starve their people while taking weekend trips to the Ivory Coast in private jets. Trade, on the contrary, creates jobs, and those jobs create demand for other jobs - which is what matters to the ordinary person.
