NN42, June 2009
A Safari Towards Aid Effectiveness?
Development Aid: Advancing Effectively or Withdrawing Strategically?
By Emefa Takyi-Amoako, St Anne?s College, Oxford University
Email: emefa.amoako@st-annes.ox.ac.ukKeywords
Aid Effectiveness; Donors; Recipients; Development aid; Exit Strategy
Summary
This article argues that aid effectiveness might only be achieved if recipient countries devise an exit strategy out of development aid dependency. There is evidence that with such an exit plan the power balance between donors and recipients, seen as a crucial catalyst for aid effectiveness, could be realised.
There are those who applaud development aid, lay claim to the incontrovertible proof of its successes and advocate its continuance and even its increase (e.g. Sachs 2006). Most official donors and non-governmental organisations (NGOs) among others believe in aid effectiveness and emphasise that it works better now than it has done in the past (Riddell 2007, 2008). There are also documented experiences of development aid practitioners and their insights into how inclusive aid could be realized. However, while a number of these perspectives extol the virtues of aid, they are critical of its demerits (Easterly 2006). This article maintains that these demerits (lack of growth, dependency, domination, selfish interests etc.) hold sway because they undermine and outweigh the benefits. It argues that this unfortunate legacy of aid is resilient and cannot be eliminated by mere rhetoric. It further contends that the development aid process is intrinsically unequal and the manner in which it is currently structured can never ensure equity and a level playing field between donors and recipients, which are crucial for the principles of aid effectiveness to be feasible. It thus concludes that aid effectiveness, especially in sub-Saharan Africa, could only be achieved if recipient countries devise an exit strategy out of development aid dependency, for it seems that it is only through this exit plan that the balance of power between donors and recipients, seen as a crucial catalyst for aid effectiveness, could be realised. What this implies is that recipient governments have to start phasing out development aid while simultaneously searching creatively for viable alternative sources of funding to generate and boost financial reserves. This would probably make them more self-reliant, responsible and accountable to their own citizenry, which presently they are not.
Aid effectiveness, defined mainly as aid that efficiently leads to the economic growth of a developing country and alleviates poverty, has had its tenets recently re-emphasised by aid architects and recipients as: donor harmonisation, alignment with recipient governments? development strategies, recipient ownership, managing results and mutual accountability, all of which, among other things, are aimed at redressing donor-recipient power imbalance. Its real test lies in its developmental impact in terms of genuine transformation in the lives and rights of those affected by deprivation and inequality (Tujan & Tomlinson 2008).
Yet, aid effectiveness probably seems like a mirage since efforts towards it and its stated principles have not transcended their rhetorical claims. Power inequalities between foreign aid donors and recipients abound and have often been seen as a threat. The fundamental problems of power differential between donors and recipients continue to be manifest in their interactions. As a result, several attempts have been initiated over the years, mostly by the donors themselves, in order to address this issue. One effort was the Comprehensive Development Framework (CDF) launched by the World Bank in 1999 within which several countries including Bolivia, Eritrea, Ethiopia, Ghana and Uganda were designated pilot countries. The CDF, regarded as a country-led development and partnership, was a new context in which the World Bank and other donors/lenders would operate with borrowing countries. The CDF was guided by four ideals, which were to remedy past errors and failures, address power inequalities and enhance international aid delivery. They included the long-term holistic view of the needs of a country, interest in results rather than inputs, country ownership of donor support and finally, country-led partnership (World Bank 2002). This sparked a renewed interest in global partnership and networking processes to the extent that it was made the eighth goal of the Millennium Development Goals (MDGs).
To strengthen these efforts a more recent initiative was launched, namely the High Level Forums (HLFs) of aid effectiveness. Three of these forums have already occurred in Rome, Paris and Accra in 2003, 2005 and 2008 respectively; the fourth is scheduled for 2011. At these forums aid donors and recipients declared their commitment to what they referred to as the principles of aid effectiveness delineated above. However, concerns and scepticism have already been expressed about the Paris Declaration and its aid effectiveness paradigm (Tandon 2008). An example is the dominant role of the World Bank compared to the lesser function of the United Nations (UN) brought in at the eleventh hour in order to give the process credibility, over which the Development Assistance Committee of the Organisation for Economic Co-operation and Development (OECD-DAC) presided. Another concern is the insistence on compliance tests derived from the OECD-DAC and World Bank?s procurement strategies but none from recipient countries? social and economic policies to assess aid effectiveness in recipient countries (ibid.). Furthermore, the sole use of donor procedures for harmonisation among others is another problem. A large number of the participants at the HLF Roundtable 2 on Alignment in Accra in September 2008 expressed frustration about how, even when countries with the assistance of donors have reinforced their systems, donors still ignore them (Third High Level Forum 2008). Amar Bhattacharya & Stefano Manservisi, co-chairs of the Roundtable 2 reiterate that inadequate progress has been made in the area of alignment especially in terms of the use of country systems (ibid.). Civil society organisations on the ground query the extent of the transformation in aid culture by identifying ?weak commitments to untie aid, continued high numbers of policy conditions attached to aid, and limited use of developing country systems? (Tujan & Tomlinson 2008). While there is the call to align aid with recipient countries? strategies, anxieties over corruption and the misuse of aid resources, particularly in heavily aid-dependent African countries, have also prompted discussions in terms of the extent to which donors should supervise and manage their aid programmes (Kpodo 2008). All of this disquiet has raised fundamental questions about the feasibility of the aid effectiveness goals (Tandon 2008).
Undoubtedly, the perceived persistent lack of these principles in the reality of aid delivery has not only triggered global forums but also underpinned a number of studies that argued against aid effectiveness. Many remain suspicious of aid, perceive it as a hindrance to the progress of aid recipients and even see it as imperialistic. In their view, aid structured within the hegemonic framework of neo-liberalism with its associate globalisation undermines the social responsibility of a recipient country?s government to its citizens (Hayter 1971). Therefore, aid neither improves welfare nor promotes growth and at best has only very little developmental impact on its recipients, hence a call for its reduction and even its cessation (e.g. Moyo 2009). The lack of progress, according to Easterly (2007), has led to what is called ?Developmentalism?, which he classifies as a failed donor-initiated ideology. An example of this is probably what many CSOs, notwithstanding their support of the Paris Declaration, have identified and criticised in the declaration as a parochial and mechanical notion of development (Tujan & Tomlinson 2008). Despite the current reservations about free market economies, the most recent powerful statement of aid ineffectiveness has been made by the Zambian born economist, Dambisa Moyo, in her book Dead Aid (2009). She maintains that more than US$1 Trillion of development aid transferred to Africa over five decades has led to neither economic growth nor poverty reduction and therefore proposes neo-liberal market solutions as an alternative to development aid for African national governments. Whether an unbridled neo-liberal market approach is the substitute for aid must be a moot point. Nevertheless, it is impossible to ignore a cogent case for the termination of development aid, particularly in Africa. While efforts to tackle Africa?s developmental challenges cannot simplistically adopt an ?either-or? strategy, still, Moyo?s book has activated a lively debate perhaps, for the evolution of a more nuanced approach.
Regardless of the efforts and goodwill of donors, recipients and other development aid actors, and their determination to render aid effective, this article argues that this goal will probably not be attained if donors and recipient countries do not plan exit strategies as far as development aid is concerned, so as to redress the continuing donor-recipient power inequalities. When recipient countries do not rely solely on development aid but ingeniously seek other sources of funding that strengthen their financial capacity sustainably and put them in control of their own development, as in the cases of China, India, Botswana, South Africa and other emerging economies, then the possibility of them relating with donors in equal partnership (symbolised by the aid effectiveness principles) may perhaps be realised. Corruption may also probably be held in check as national governments may have to be more accountable to their own people.
References
Easterly, W. (2006) The white man?s burden(Ne w York, The Penguin Press).
Hayter, T. (1971) Aid as imperialism (Middlesex, Penguins Books Ltd).
Kpodo, K. (2008) News report on the 3RD High Level Forum, Reuters, Tuesday 2nd September 2008 Tue Sep 2, 2008.
Moreton B. (2008) The Accra HLF: good news for aid effectiveness, or a victory for mediocrity? http://northsouthinstitute.wordpress.com/2008/09/10/the-accra-hlf-good-news-for-aid-effectiveness-or-a-victory-for-mediocrity/ (ACCESSED 19/11/08)
Moyo, D. (2009) Dead Aid (London: Penguin Books Ltd).
Riddell, R. (2007, 2008) Does foreign aid really work? (Oxford, Oxford University Press).
Sachs, J. (2005) The end of poverty (New York, Penguin Press).
Tandon, Y. (2008) ?The Paris Declaration and aid effectiveness?. Online. Available
http://pambazuka.org/en/category/features/48634 (ACCESSED 11/09/08).
Third High Level Forum (2008) Roundtable 2: Alignment: Concurrent Roundtables,
Thursday, 4 September, 2008 Proceedings, 3rd High Level Forum on Aid Effectiveness.
Tujan, T. & Tomlinson, B. (2008) What should CSOs expect from the Accra High Level Forum? Real aid reform, measures for aid effectiveness: global citizens reclaiming democratic mandate for sustainable development.
World Bank (2002) Toward country-led development: a multi-partner evaluation of the Comprehensive Development Framework. Evaluation of the CDF: Ghana case study (World Bank, OED).