The always interesting Policy Innovations recently excerpted from William Duggan and R. Glenn Hubbard’s article “The Forgotten Lessons of the Marshall Plan”, which originally appeared in Strategy & Business. Duggan, author of Strategic Intuition: The Creative Spark in Human Achievement, and Hubbard argue:
A thriving business sector is the key to improving political and social conditions in Africa today. And Africa today needs that sort of help. The first Marshall Plan accomplished even more than its creators had hoped; if its successor is designed with the same conceptual base, then history could repeat itself in another part of the world.
Many policymakers have suggested using the Marshall Plan to improve conditions in Africa. Duggan and Hubbard agree that such a plan is necessary but
most of the existing proposals represent a great misunderstanding of the intention of the original Marshall Plan and the way it worked. It was less a sweeping program of foreign aid to governments and agencies than a large-scale effort to restore the power of business as a growth engine. A true Marshall Plan for Africa could ignite growth and reduce poverty, but only through a set of institutions that are different from those the current aid system is currently using.
While recognizing that Africa today is far different than war-ravaged postwar Western Europe, Duggan and Hubbard believe that elements of the original Marshall Plan, properly understood, can be successfully applied. They suggest:
* An effective Marshall Plan for Africa should focus exclusively on business development
* There should be a focus on creating local financial institutions, business schools and associations, anti-corruption units, and courts
* An international commission should be create to oversee, collect, and manage funds from governments and donors
* African countries should be encouraged to create policies to foster business development
* Funds should be dedicated to a variety of purposes. Above all, they should not go for government-designed economic development plans, whose track record has not been successful
Duggan and Hubbard also wrote about this issue in an editorial that appeared in the Financial Times.