RD: I would certainly agree with you that there is no sign anywhere in Africa that aid will actually transform an economy. But what I looked for in your book was the direct connection between aid and poverty. You showed really well that this is how much aid has gone in and this is how things have got worse - but I wanted to be absolutely sure that the aid was the real cause and not something else. That's where I would suggest that it's African politics that have messed it up. Everywhere I go in Africa I think, "It should be, could be, quite easily so much better." You've got fantastic potential, great thirst for education, great thirst to make life better and yet somehow there's no delivery. What I can't work out was how aid plays a role in this that seems to prevent people just getting on with it.

DM: I do try very hard to make this connection. Maybe I could be criticised for taking very much an economics perspective on the way the world works, but, for me, the political establishment and the political system in Africa are directly artefacts of the aid model. You cannot expect there to be a system where governments are beholden or accountable to their people if they don't need to be.

For example, if you are a government and you have as much money as you would like to maintain the military, then you don't actually worry about being kicked out of office because the military is on your side all the time. Essentially, that is what has happened across Africa over the past 50 or 60 years. I can give you many examples of how aid comes in and supports a massive bureaucracy to work in the civil service. For example, in many African countries, it can take two years to get a licence to start a business.

RD: Is that a job-creation scheme?

DM: Absolutely. So what tends to happen is, not only does it take two years, but also there are a number of procedures - get a stamp from here, take a form there, go and meet so and so. There are layers and layers of bureaucracy, which kills off entrepreneurship, leaves people out of jobs and when a government turns around and says there are people out of work, there are no jobs and people are poor, what is the first thing that the West decides to do? Oh, we'd better give people more aid. The aid system has got people locked into this cycle, where everybody sits back and thinks there is no need to try and raise taxes because we are going to get foreign aid. Or there is no need for anybody to be entrepreneurial because there is going to be more aid. The crux of the matter is that there are no countries on earth that are growing by 10 per cent a year, as China and India have been doing for the past few years before this whole crisis, that have relied on aid. These countries have quickly weaned themselves off foreign aid. They have encouraged domestic savings, they have attracted direct foreign investment, they have fostered trade. That is really the elixir that I am proposing for Africa.