”Everyone knows that aid is not working as intended, and that something must change” – Lindsay Whitfield argues in her paper “Reframing the aid debate”. The many attempts by national and international donor agencies to increase the effectiveness of aid document that even the actors of international development cooperation are uneasy about its usefulness. Lindsay points to the following factors undermining aid’s effectiveness:
Aid does not stimulate agricultural productivity and processes of industrialisation. Instead, it focuses on the social sectors without putting these in a broader context of economic transformation. Aid should focus on the key constraints preventing the transformation of economic structures, and this means addressing the inadequate infrastructure, the low agricultural productivity, the insufficient use of modern technology, etc.
Aid relationships produce dependency. Donor agencies press for almost permanent negotiations of policies and their implementation, and institutions for dialogue in many different policy areas complicate governments’ planning procedures. Moreover, aid is an important resource in the struggle for power.
The everyday practices of aid have significant negative implications. These practices include uncoordinated donor projects, project implementation units undermining public institutions, donor driven designs of projects, lavish use of expensive consultants, frequent rotation of donor staff in country offices, and poaching of civil servants to work in aid agencies.
Given this diagnosis, Lindsay proposes five changes of current aid practices:
1. Reduce the intensity of engagement
2. Reduce the numbers of donors in a country
3. Reduce the size of donor organisations and reorient their staff and expertise
4. Ensure that different types of donor agencies give different types of aid
5. Reduce the areas of donor intervention and number of projects in a country
Read her paper here: http://www.diis.dk/sw87889.asp
How bad is aid? Is Lindsay’s diagnosis correct? Will the five proposed changes remedy the situation? Are conditions ripe for a change? How do the changing international relations affect aid? And will the donor agencies themselves be able to reform the system? These are questions that we hope to get debated in this blog.
Lars Engberg-Pedersen
I warmly welcome Lindsay Whitfield’s discussion of aid. There is an urgent need to shift the aid debate beyond polemics and superficial sound-bites which dominate contemporary discourse. The central question is not whether aid is works or not, but why it is needed and how it should be provided – in what forms, in what amounts, by whom and for how long – and how the still significant gap between what it currently does and what it could do can be substantially narrowed.
That is why Lindsay is right both in calling for a (fundamental) change in the way we think about aid and in arguing that the discussion about aid needs to be rooted in understanding development processes and what impedes them in different aid-recipient countries.
She is also right in highlighting the large number of donors in a country and the duplication and overlap of skills as major impediments to aid effectiveness which need to be urgently addressed. However, there are other structural and systemic problems with the way of giving aid which I would have on my list.
One is the way that aid is provided. To my mind it is no longer acceptable that the amount of aid given is so loosely connected with the amount of aid needed. The amount of aid each country receives each year is largely a matter of luck rather than design – it comprises the cumulative total of the different amounts of aid each donor individually decides it will give to a country. If one donor, even a major donor, decides to suddenly stop giving aid to a particular country, there is no system in place for other donors to make up the shortfall. Indeed, the way individual donors think about providing aid are so divorced from meeting aggregate aid needs that few donors seriously consider the failure of other donors to provide aid they have pledged to give to be a problem – certainly not “their” problem.
Another major and growing problem of aid-giving has been the cumulative and systemic effects of continually creating new cross-global aid funds and mechanisms, each established to address particular, thematic or sectoral problems, such as HIV/AIDS, low levels of educational enrolment, the absence of clean water and sanitation, or, most recently, economic growth paths that contribute to global warming. While each fund has been created (by donors) with the best of intentions to address a specific and urgent need, the systemic effect is to increase the share of aggregate aid whose purpose and use is decided by donors and to reduce the amount of aid that recipients are free to choose to allocate to meet their development priorities – directly at odds with the core thrust of the Paris Declaration.
How can or might these fundamental problems of the contemporary aid system be addressed? Lindsay is surely right in arguing that effective reform is far more likely to come from forces within donor countries rather than by “internationally-driven bureaucratic processes and agreements such as the Paris Declaration” – though international agreements can work if championed by influential political leaders and agreed to by key nation-states.
For me, the crucial question is how pressure for changes in how aid is provided can be built up within and across the main donor countries as so to influence the way politicians and key decision-makers approach aid. This is an issue which needs to be the focus of far more attention, debate and discussion. I think a large part of the answer lies in the attitude and approach of the “aid lobby”.
For too long, the work of the supporters and defenders of aid in donor countries has been so dominated by lobbying their governments individually to provide more aid that the structural and systemic effects of expanding the current aid system have been underplayed or, often, completely ignored. Reform within donor countries is unlikely to come about unless and until the “aid lobby” is willing to publically acknowledge how the structural problems of aid undermine its impact. And this will only happen when aid’s supporters are able, in turn, to argue that the case for aid can be made – and needs to be made – in the knowledge that at present plenty of aid doesn’t “work” as intended.
For decades, the central argument the aid lobby has used to try to convince the public that they should support the provision of aid is that “it (always) works”. Changing this starting-point is going to be a huge challenge. If the aid lobby is unwilling to begin to travel down this path, I fear that the far-reaching changes which both Lindsay and I believe are necessary, and which we hope will occur, are unlikely to happen soon.
Reframing the aid debate without dodging the central question
Lindsay Whitfield’s paper is very helpful in several respects and makes an excellent jumping-off point for a debate about the way forward in aid policy. In particular, her plea that we stop arguing in simple ‘for and against’ terms, and start breaking the issues down into more manageable pieces, is spot on. I agree with her that this is actually a more radical proposal, as well as a more realistic one, than simply ‘stop aid’.
The changes Lindsay proposes are spelt out with commendable discipline as just five points. The paper lays out well known arguments and some new ones concisely and persuasively. The author is, on the whole, realistic both about the nature of the problem and about the prospects of her solutions being taken up. In one significant respect, however, I think her argument displays a lack of realism. It has a blind spot, a weakness I also find in her otherwise excellent edited book (2009). This leads me to suggest that some of her proposals for change are in some ways the opposite of what needs to be done, and the main obstacles are in different places than she implies.
It will probably help to say how I differ with her proposals, and work backwards to the reasons why. I do not reject the general idea that aid needs to become more humble, honest and pragmatic. The question is what this implies in practice. Here are her proposals (in italics) and the gist of my concerns:
1. Reduce the intensity of engagement: I would say it’s the form of the engagement that is the problem, not its volume, and in key respects we need more engagement, not less.
2. Reduce the number of donors in a country: Certainly; but for the Europeans who are the main culprits, abolishing EC aid seems a perverse kind of solution.
3. Reduce the size of donor organisations and reorient their staff and expertise: Scale may be a problem in some cases, but reorientation is more important, and not primarily in the way Lindsay suggests.
4. Different types of donor agencies should give different types of aid: Maybe, but Lindsay’s proposals about aid modalities are weakly argued and reveal her blind spot.
5. Reduce the areas of donor intervention and number of projects in a country: Yes; and a number of the associated points, about priorities and agriculture, are also right in my view, but I cannot see how they are consistent with the proposal that donors become less engaged.
I agree fully with Lindsay’s proposition that the Paris Declaration has not taken us far forward, and that we need to think about different avenues. But, more substantively, it seems important not to tip out the baby with the bathwater. Paris synthesised several fundamental insights about what is conventionally tagged ‘country ownership’ which accumulated from good research and hard experience during the 1990s. It combined these with a lot of diplomatic fluff. Surely, the current rethinking should be aiming not to junk these insights but to liberate their radical implications, while blowing away the fluff.
In my view, the fluffiest part of the Paris/Accra agenda is also the weakest part of Lindsay’s argument. Neither takes a scientific approach to the recipient side of the aid relationship. Paris/Accra rests on a diplomat-friendly concept of ‘partnership’ between donor and recipient organisations. This exaggerates the community of interest between the parties and sweeps under the carpet the interest divergences that are the starting point of any serious institutional analysis of aid (e.g. Gibson et al., 2005; Martens, 2005). Lindsay’s analysis has a related kind of flaw, the kind that used to be called Third-Worldism. Although in her comments on Yash Tandon’s book she distances herself from the unreconstructed version of the ‘aid as imperialism’ view, she still has a tendency to portray African states and their rulers as powerless victims. She seems to have difficulty with the notion that the aid relationship is a two-sided game in which both sides have significant strengths.
In most respects, Lindsay’s paper represents a refreshing effort to bring serious scholarly work on historical development processes into policy debate about aid. I would commend the points she makes, drawing on the work of economists like Chang and Khan, about the centrality of agriculture, the relevance of Asian experience to Africa and the need for a more historically informed perspective on corruption. But why limit this to the insights of the economists? With due allowance for space constraints, why not make equivalent points about the importance of institutions (formal and informal, imported or invented) in development processes? What about the rather particular strengths and weaknesses of African political systems? We might not reach a consensus on this topic, but surely it is relevant!
Certainly, it is not a simple topic. The kind of political-economic research being undertaken in programmes led by DIIS (http://www.diis.dk/sw79386.asp), ODI (http://www.institutions-africa.org) and the University of Leiden (http://www.trackingdevelopment.net) among others is much needed. However, we already know quite a lot about the basics. For example, most African states are not like Botswana, so using the Botswana experience to make the argument that ‘project support is a better way to give aid’ does not make good sense. As Lindsay argues, politicians in Africa have strong disincentives to challenge donors openly; but we also know that this does not mean that donors control them. They are subject to other and often more weighty incentives too, arising from a mixture of domestic and global factors; and they have a host of devices which enable them to steer around, and in practice largely to ignore, what donors would like them to do. They are far from powerless. The problem is not that they have no ‘policy space’.
For donor staffs – I would propose – being more humble, honest and pragmatic means above all working harder at understanding the country reality and its specific developmental challenges. Then it means devoting time to working out with likeminded actors in the country how to address the identified problems. This suggestion is not inconsistent with Lindsay’s damning portrayal of how donors typically act in-country. But it is sharply inconsistent with the conclusion she draws: that it would be better to close country offices and concentrate on providing funding from a distance, with technical assistance of a more purely technical kind or hived off to UNDP.
I would say – and I think many experienced country residents would agree – that the obstacles to progress in aid-dependent countries are largely about institutions (including, of course, aid-influenced institution). Shortages of funds and technical knowledge are derived problems, not fundamental ones. If, as Lindsay argues, there is a need for greater specialisation and technical competence on the donor side, this is mainly about getting greater institutional sensitivity and better country knowledge. She makes well the case against large numbers of donors giving small amounts of budget support and spreading themselves around sectors and topics for the sake of ‘a seat at the table’. But I would submit that those donors that do have a major stake in a country or sector need to become politically more sophisticated, more institutionally attuned and more seriously engaged. That means, as a minimum, being based in-country, and as a maximum making a lifetime commitment to it, or at least to the part of the world to which it belongs.
Grounding propositions in operational experience is important. Lindsay is persuasive about the thing she knows best – the weaknesses of agricultural projects and sectoral policy in Ghana. Much of this is probably generalisable to projects and agriculture in other aid-dependent African countries. But it is not a good basis for wider conclusions. In particular, her dismissal of all forms of budget support on the grounds that it is ‘not a panacea’ is in my opinion quite cavalier.
A recent multi-country evaluation study of sector budget support provides a better basis and particularly good example of the benefits of breaking down the ‘question of aid’ into manageable parts (Williamson and Dom, 2010). It is relevant that the study is strictly about service-delivery sectors and not about sectors in general. It reaffirms the superiority of SBS (over projects or common basket funds), especially when the donors enter wholeheartedly into using country systems. The reasons supporting this argument correspond quite closely to Lindsay’s account of the harmful effects of the way donors are currently embedded in Africa, indicating that there is nothing automatic about the link from her diagnosis to her recommendations. The authors of the SBS study also argue for a major refocusing of the policy dialogue and technical assistance that go along with SBS funding – away from sector planning and financial management and outwards to the front line of service delivery. They go on to spell out a message that is the opposite of one of Lindsay’s central propositions (unless she just means it to apply to agriculture). There is no way progress is going to be made in service delivery sectors if donors retreat back to headquarters; the movement, indeed, needs to be in the other direction: more local discretion, and out of the office and into the ‘field’.
Because she prefers not to discuss the parts of the aid problem that have to do with the deep politics on the recipient side, Lindsay tends to overestimate the degree to which the solution depends on changing minds and incentives in the donor countries. The reason there has been so little real change in the aid business despite the flurry of interest around ‘aid effectiveness’ has much to do with bureaucratic and political interests. However, at least as important as pursuit of self-interest is an unspoken but accurate perception among people on the donor side with serious field experience (of which there are a few) that aid is in a log-jam.
In other words, real policy in poor developing countries is not controlled by the techno-diplomats who front the proceedings in ‘aid effectiveness’ discussions. It is in the hands of politicians who respond primarily to domestic political pressures in ways they, donors, frankly don’t understand and can’t predict. This is what makes aid a risky business, and risk is at the root of a good many donor bad habits. So it is to some extent genuinely difficult for one side to move without the other.
No sensible reframing the aid debate can dodge the central issue I have outlined here. Any proposals for aid reform that fail this test will not command support and will not work. Many of the proposals in Lindsay’s paper are important and right. They need to be supported by a more rounded argument.
References
Gibson, Clark C., Krister Andersson, Elinor Ostrom and Sujai Shivakumar (2005) The Samaritan’s Dilemma: The Political Economy of Development Aid. Oxford: Oxford University Press.
Martens, Bertin (2005) ‘Why Do Aid Agencies Exist?’, Development Policy Review 23(6): 643-63.
Whitfield, Lindsay (2009) The Politics of Aid: African Strategies for Dealing with Donors. Oxford: Oxford University Press.
Williamson, Tim and Catherine Dom (2010) Making Sector Budget Support for Service Delivery. ODI/Mokoro Project Briefings 36-38. London: Overseas Development Institute.
I welcome the discussion that DIIS are launching through Lindsay Whitfield’s think piece ‘Reframing the Aid Debate’. Specifically, I support her wish to see a more detailed and disaggregated approach to this debate than the often rather simplistic assertions that aid is some kind of entity that is either ‘good’ or ‘bad’.
I should declare an interest up front as a former aid practitioner, as one heavily involved in the development of the Paris Declaration, and now as Vice-Chair of the Replenishment of the Global Fund for AIDS, TB and Malaria.
The first point to make is that I see the problems which Lindsay rightly raises as essentially manifested in states which are moderately or heavily dependent on aid. One could argue about the ‘threshold’ of aid dependence. Pragmatically, where aid is less than 5% of public spending, the problems of aid dependence are probably in most cases minor; when they are over 10%, they are certainly very significant – and of course in many African countries (and a limited number of countries elsewhere, usually relatively small in economic size) aid is a good deal higher than that in relation to public spending.
States which are not dependent on aid, as her Botswana example makes clear, and as middle income countries in many parts of the world have shown over the years, are usually able to make pretty good use of aid to supplement domestic resources and to experiment with new ideas, which they can in principle then invest in themselves. Policy space is not usually a major issue. Ownership is strong. Aid is often highly productive in such circumstances, especially where institutions are reasonably competent but also themselves keen to benchmark their policies and practices against experience from elsewhere.
The problem is how to manage aid in relatively aid-dependent environments.
My starting point is that aid is a second-best solution, certainly as compared to self-reliance – which is pretty much what Dembisa Moyo is arguing. But pure self-reliance is not a serious option in many of the poorest countries, since the tax base is so low. It might have been ‘acceptable’ 30 years ago to have one fifth of children under 5 die each year, but this is no longer the case, as the Millennium Development Goals (not, by the way, by any stretch of the imagination a framework for planning) make clear. The kind of minimum standards of life that the world (including the public in developed countries) increasingly wishes to see, for reasons both of humanitarian feeling and of a realisation of the dangers of gross deprivation, cannot be achieved without a substantial measure of concessional resource transfers – which for the poorest countries will be needed in the form of recurrent transfers for decades not years.
Expectations of aid also need to be realistic. Aid is never going to be some sort of magic bullet: at best, it can (and does) help to accelerate changes that countries themselves are prepared to invest in. This squares with Lindsay’s call for a more humble, honest and pragmatic attitude on the part of donors.
The harder question is how can this evidently second-best situation be managed to produce the best results.
First, there needs to be a strong focus on measures that limit aid dependence, notably by promoting growth and increased domestic revenue. Africa has shown significant progress in this over the period 2002-2008, domestic revenues outpacing the (relatively rapid, though less than promised) increases in aid. It is to be hoped that rapid growth will resume after the downturn in 2009. African leaders are right to be tackling the heavy costs imposed on producers by poor infrastructure and corrupt institutions. Investment in all stages of the education system and in health are also directly relevant to sustaining growth. Success in growth and revenue-raising is a key way to address Lindsay’s very proper concerns about policy space.
Increased agricultural productivity is, as she suggests, certainly a key element in almost every African country: it is less evident that manufacturing is going to be a key focus in those African countries that are relatively well-endowed with natural resources and less so with large population clusters. In some of these countries, as suggested by Adrian Wood (‘Could Africa be like America?’ in B Pleskovic, N Stern (eds), Annual Bank Conference on Development Economics, 2003), a different development path from that of much of Asia may be appropriate.
The agenda which Lindsay sets for donors is, in my view, rather more problematic and not fully self-consistent.
Rather more problematic:
• Encouraging bilateral donors to take a greater role in projects, despite the commercial pressures which she admits. As one who attempted to make the UK’s Aid and Trade Provision work for development in the 1980s and early 1990s, I fear that commercial factors may well end up promoting inappropriate technology. I would suggest that multilaterals with untied funds will do a better job (though it is evident that China at least is following Lindsay’s advice).
• It is a nice concept that the UN organisations can specialise in TA, and certainly they have an ability to be seen as ‘on the government’s side’. There must however be doubts as to whether the UN system as currently constituted can deliver what is needed in this area. The direction of travel here should surely be for recipient countries increasingly to contract expertise themselves, with donor support where necessary, as indeed Botswana has successfully done, and for the donor community also to help enable governments to be competitive purchasers of their own national expertise in a globalised market for skills. (This will also require significant ‘de-compression’ of salary scales in some countries, as well as some self-restraint by donors, including INGOs, about poaching some of the best staff.)
• Proposing to wind up collective European aid rather than rationalise aid by individual European countries.
Not fully self-consistent:
• Lindsay is critical of general and sector budget support, the latter not least in the social sectors; but at the same time calls for ‘large, sustained support……..that will address issues such as teacher pay and quality of education, not building a school here or there’
• At one point she states that the Bretton Woods Institutions should specialise in balance of payments support, and in another she wants the World Bank to finance ‘big public goods projects and providing technical assistance’ (I may be misjudging her thesis, however, since she does want the IMF to provide balance of payments lending and she does refer also to the Bretton Woods institutions providing concessional lending, which may of course be intended to refer to World Bank project lending. If so, I would question the judgement that the Bank should get out of programmatic lending altogether).
• She wants country offices to be run down, but (with some justice) criticises HQ-designed projects.
Nevertheless, much of her agenda for donors deserves proper discussion. For sure, there is too much ‘permanent negotiation’, in many countries and (particularly) sectors too many donors, certainly too many projects, and too little impact of agreed good practice in harmonisation and alignment.
I’d suggest that two ways of approaching the problem are
• A strong push on genuine mutual accountability processes underpinned by greater transparency on aid flows (initiatives such as ‘Publish What You Fund’ and the International Aid Transparency Initiative are worth study)
• Greater willingness on the implementing country side to ‘say no’. Several implementing countries, even if apparently having a high degree of dependence on donors, have been willing to be quite assertive in their relationships with the donor community. In my view, a willingness to ‘say no’ on well-thought-out grounds is one of the most important signs of a mature relationship between the implementing country and its donor community. Individual donors, or even groups of donors, cannot in the end call the shots in most cases. (It is obviously a different matter if decisions by an aid-dependent implementing country cross ‘red lines’ of the donor community as a whole; and some of these lines may be worth defending.)
The debate should certainly continue.
I agree with much of Lindsay Whitfield’s essay on aid, and will focus on the claims with which I disagree, but I will start with a brief comment regarding at least one of the essay’s sins of omission.
Much of the public policy literature on aid adopts a tone of dark pessimism about Africa (it is interesting that a debate about aid has now turned into a debate about Africa, even though Africa still gets well under half of aid flows), and Lindsay’s is no exception. No one has ever accused me of Panglossian optimism, but this pessimism seems to me misplaced. When I first went to the region in a professional capacity, some 25 years ago, the modal African state was run by a mediocre president for life dictator, and the entirely bankrupt economy was in the death throes of a misguided ISI development strategy. Today, much of the region is, if not democratic, at least much less autocratic, with a thriving NGO community, civil society and media. Notwithstanding the current world recession, African economies have enjoyed their best decade of economic growth of the post-colonial era, and are attracting significant foreign investment for the first time ever.
None of this is mentioned in Lindsay’s essay; now, to be sure, I am not suggesting that the donors had much to do with this turn around, though I think at least part of the growth can be credited to the much delayed and unnecessarily painful structural adjustment policies promoted by the much derided IFIs. I’m not sure if the current growth is sustainable or not, and I do not mean to suggest that African economies are on the cusp of “economic miracle” types of growth; But I do think this is an odd time to talk of wholesale crisis and the need to rethink development strategy.
I agree with Lindsay that the western donors have been too fixated on a “welfarist” approach to development, and need to refocus on production and economic growth, though I would add that Lindsay undermines this argument by suggesting that most growth is of the “bad” variety, and that particular care must be taken to align growth and development (presumably with special attention to welfarist concerns?). On the other hand, this greater focus on production has made much headway in recent years and, today, a very large share of aid already goes to infrastructure. Lindsay closes her advocacy of a new development strategy with too vague comments about the need for a big push on manufacturing. I do not necessarily disagree, but since a state driven ISI strategy already failed miserably in the region in the 1960s and 1970s, it is important to spell out how a new push in this direction would avoid the pitfalls of the past. It is simply not useful to just point to East Asia for evidence that this strategy will be successful in Africa.
On to the reform of aid: I agree very much with how Lindsay characterizes the problems with the aid industry – notably the issues of coordination, proliferation and donors’ micro-management of projects. Lindsay’s recommendations of reducing the size of the donor organizations and closing down missions are interesting, though I think that donors are already too centralized in their decision-making, and moving people out of resident missions would almost certainly serve to further devalue country knowledge and local ownership. My own recommendation has long been to move to a “foundation” model, in which much more of the work around the project cycle is the recipient’s responsibilities, which I view as the only way to promote a real sense of local ownership. The foundation model is far from perfect, would initially result in a massive slow down of aid implementation, and would have the unfortunate effect of disfavoring the neediest recipients, who would also be the most likely to lack the capacity to take over the project cycle. In time, however, it would encourage governments to invest in this capacity and would strengthen the hands of the technocrats in government. I don’t see how donors could cut back on staff, in the absence of moving to a version of the foundation model.
Lindsay is right that the failure of all attempts to reform the aid system is striking, though it does give her own suggestions for reform a lack of credibility, since she says very little about how these changes will come about. Fundamentally, there is no coalition for reform. The general public is woefully ill-informed about aid issues, and the people and organizations who understand the issues typically have a stake in maintaining current arrangements. The Paris Declaration’s impact is a good indication of these dynamics; there were absolutely no pressures on the aid business to carry out any of it. My students at Cornell all know about the calls for big increases in aid volume from such luminaries as Angelina Jolie and Bono, but they have never heard of the Paris Declaration, and their understanding of different aid modalities is limited. One suggestion would be to undertake more effective outreach to the general public. Another would be to lock up these Hollywood stars and talk sense to them. I’d volunteer for the latter.
Finally, there is an odd anti-multilateral bias in Lindsay’s essay. Closing the World Bank’s research department sounds great, but its share of the Bank’s operating budget is miniscule, and its intellectual output is actually not bad, considering its limited resources. Whether you approve of them or not, one of the IFI’s real successes has been the consistent production of ideas about development, and the notion that these ideas matter. Of which bilateral aid organization could one make the same claims? Rather than closing it, the trick is to make the IFI’s research capacity more open to heterodox ideas about development.
In fact, there is every reason to think that the multilateralization of aid would be a good thing. It would not only lessen the proliferation and coordination problems Lindsay rightly invokes, but would also lessen the commercial and foreign policy objectives that too often get in the way of bilateral donors’ developmental objectives. My counter proposal to Lindsay would be to recommend closing European bilateral aid programs, and have all European aid go through the UN system and/or the European Commission. Why not shut down DANIDA? Its great staff could be moved to Brussels and various UN headquarters and improve the mostly awful aid programs run by the hapless eurocrats and UN staffs. What a way for Danes to prove their real commitment to development! It would make the Norwegians jealous enough to close down NORAD.
A plea for multilateral cooperation
My point of departure in this debate is similar to Richard Manning’s. Given the levels of widespread hunger, mortality, illiteracy, insecurity and marginalisation in poor countries in this rich and interconnected world, it is not an option to leave these countries to their own fate. While it is correct that we have seen much progress the last 25 years not only in East Asia, but also in Africa, the living conditions of poor people in the poorest countries are still unacceptable. It is therefore not a tenable proposition to abolish aid altogether.
On the other hand, I don’t share Nicolas van de Walle’s point that it should be an odd time to talk about the need to rethink development strategy and reform development cooperation. I think it is increasingly relevant despite the overall progress in poverty reduction globally. First, it appears that the attempts to address the lack of harmonisation, alignment and ownership which undermines the effectiveness of development cooperation do not produce the intended results. In a context where the number and variety of donors continue to increase, there is all the more need for a framework that can reduce contradictions, duplications and waste of resources.
Secondly, the increasing importance of global processes producing poverty creates a challenge that aid is little capable of addressing. The dramatic increase of food and energy prices, the financial and economic crisis, and the climate changes are examples of such processes that cause significant impoverishment. While their effects are found in villages and among slum dwellers, their causes are not easily confronted by an aid system focussing at countries and communities. If aid should not end as a mitigating instrument, but maintain the ambition of producing sustainable improvement for the poor, there is much need to rethink it.
Thirdly, despite efforts to adapt aid to the diverse conditions of the so-called fragile states, there are few examples of successful interventions in these most needy countries. The aid system has not been able to develop a framework for support to countries without a strong, cooperative government, and its current focus on various forms of programme support and sweeping reforms to create ‘good governance’ is likely to be counterproductive here. Contrary to Lindsay, I believe these situations call for extremely informed donor support based on long-term presence in the countries and the willingness to engage flexibly and modestly in political processes. Donors have so far not proved capable of delivering this kind of support.
I think that David Booth accurately identifies one problem that prevents a more effective, well-coordinated development cooperation. The lack of trust between donor and recipient organisations is a major impediment which is based partly on donors’ political agendas, partly on their lack of understanding of political processes in the recipient countries, and partly on recipient governments’ unwillingness to engage in an open dialogue with donor agencies. Despite weaknesses in terms of capacity and resources, I concur with David that recipient governments have a policy space and often manage to keep donors at a distance when central decisions are made. On the other hand, governments are constrained by domestic politics like in all other countries, and they may certainly not always be able to concede to donor concerns even when they share them.
To my mind, the different interests of donor and recipient countries are largely legitimate. Donors want to be sure that their funds contribute to poverty reduction, and recipient governments want to preserve as much political space as possible. This produces a vicious circle: The more donors seek to influence recipient countries, the more these do to keep donors out of central political processes and the more donors intensify their pressure.
Another significant problem, which may be felt more intensely in Denmark than elsewhere, is donor governments’ urge to use aid in domestic politics. Aid is not just part of foreign, commercial and security policies, but is certainly also subject to specific values and political struggles in the donor country. While this may seem legitimate in the current system of tax-payer financed development assistance, it has a very negative impact on aid. Priorities change rapidly, the focus on poverty reduction is often diluted, and the concern for recipient country ownership is limited.
In this context, my suggestion is to create a broad political framework for development cooperation. The Paris/Accra agenda addresses the processes of cooperation while the Millennium Development Goals is focused on the results. Poor and rich countries need to agree on a set of broad political priorities within which recipient governments can carry out the policies they prefer. The oversight of the use of funds in individual countries should be left with a multilateral institution which all parties trust. If it is not possible to find such an institution, it should be invented or developed. Like Nicolas, I don’t think that the profusion of donor agencies, each with their particular concerns and priorities, does any good. An arbitrator is needed to break the vicious circle of mistrust between rich and poor countries and to limit the political concerns unrelated to development on both donor and recipient sides. Such an arbitrator can only be found at the multilateral level.
In countries where the government does not want to adhere to the broad framework or where there is no government, it would be useful to identify the bilateral or multilateral actors historically best suited for engaging with a specific country and leave it to this or these actors to do the work on behalf of the international community. In these countries, presence, historical knowledge and close relationships with key actors cannot be overestimated. Furthermore, support to pro-poor actors under such circumstances has to be protected thoroughly from the whimsies of domestic politics in donor countries as the conditions for support are so difficult and the needs so significant that major results are impossible even in the medium term.
Are these embryonic suggestions just the wild product of an overly naïve soul? Ideally, I would love to combine them with Roger Riddell’s point that it is high time to match funds with needs. But how is it possible to move development cooperation from a voluntary affair of nation-states to a committed multilateral or global undertaking? Where is the coalition or movement that can bring about such a change? It is definitely difficult to see it among aid agencies themselves as Roger notes. Even NGOs are rarely interested in rocking the boat too much living, as they are, from private charity and bilateral agency funding.
Though the conference in Copenhagen was not a promising indicator of the game changing potential of climate change in terms of creating international agreement and regulation, I think there is little doubt that a change will occur if the scientists’ predictions hold true. New forms of international cooperation on climate change may inspire the aid system particularly if the public in rich countries gets frustrated with the limited results of the Paris/Accra agenda and the Millennium Development Goals.
Thank you for engaging this debate. It is an issue that has concerned me ever since I started working at the Inter-American Development Bank in the early 1990s and I found that Lindsay Whitfield’s paper really puts the issues in relief in a constructive way. My own recent work with Nancy Birdsall on aid effectiveness (http://www.cgdev.org/section/initiatives/_active/codaid) confirms much of Whitfield’s analysis, particularly with regard to the ways donors with legitimate interests and altruistic motives can end up making the lives of recipient countries difficult and distort the normal channels of accountability from government to citizens. In this regard, I liked the way Lars pointed out that donors and recipients have different and largely legitimate interests: “Donors want to be sure that their funds contribute to poverty reduction, and recipient governments want to preserve as much political space as possible.”
That sentence summarizes really well why we developed the Cash on Delivery Aid (COD Aid) proposal because it disentangles the problematic aspects of the donor/recipient relationship and channels attention to focusing on results and predictability of funding. In our book (“Cash on Delivery: a New Approach to Foreign Aid” being launched on March 23), we show how a simple contract between donors and recipients that truly pays for outcomes/outputs (e.g. $200 for each additional child who takes a completion test in the final year of primary school), is “hands off” (to preserve the recipient’s political space), is independently verified, and publicly transparent can address most of the problems that Whitfield identifies in her paper. While the proposal is not without its risks, seeing analyses like Whitfield’s and comments like these confirm in my mind that this approach is definitely worth trying.