Influxes of funds also tend to stimulate inflation and speculative booms in the host economy, forcing the authorities to raise interest rates, and thereby adding to the difficulties of home-grown businesses. Moreover, aid is generally provided in the form of loans, so that the West's largesse also increases the indebtedness of poor countries. Worse still, by providing an external source of funds, aid creates an incentive for coups and rebellions, since anyone who manages to get his hands on power can expect to enjoy the benefits of this revenue, regardless of the condition of the country at large.
One of the critics' central arguments is that aid drives a wedge between the political elite and middle-class taxpayers, whose proportionate contribution to government revenue is diminished by the inflow of foreign cash. This means that, rather than being incentivised to encourage the growth of a prosperous and independently-minded citizen body, the ruling clique has every interest in prolonging a degree of misery at home, in the reasonable hope of maintaining the flow of foreign funds. Not only does official aid exacerbate corruption, therefore — it represents a serious form of public corruption in itself.
Indeed one of the least attractive features of the aid consensus in the West is its tendency to understate or deny the culture of venality in recipient states. The Kenyan whistleblower John Githongo, who fled to the UK bringing with him a comprehensive dossier on corruption in President Mwai Kibaki's regime, has spoken of official Britain's long-held "quietly racist, patronising view that Kenyan affairs are being managed as well as anyone could expect . . . in other words, that Africans simply don't have the intelligence or sophistication to manage very well." When Githongo met two senior DfID officials in London following his resignation from Kibaki's administration in 2005, far from being welcomed as a champion of transparency and good governance, he was subjected to a "sneering and provocative" interview: "They kept referring to my ‘allegations', basically saying, ‘You've upset our programme.' I realised afterwards I'd been talking to two very angry men."
Not all British officials showed such contempt for the truth. Sir Edward Clay, Britain's High Commissioner to Kenya at the time of Githongo's resignation, was indignant about DfID's behaviour, which in his view set the worst possible precedent. "By their negligence, DfID have shown that they don't wish to see this issue pursued to a kill. And that's unforgivable . . . The message we're sending the Kenyan people is that, on the whole, we'll always line up with those in power."
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