Overseas Development Institute (ODI) Blog : Beware the aid sceptics?

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# re: Beware the aid sceptics? @ Thursday, August 10, 2006 11:02 AM

Paolo

I was reading your article that you posted yesterday on the ODI website. Aid is a very controversial topic in International Development and certainly in the circles of academia. I am not proponent of aid either and I would therefore support the points that Ruth Lea puts forward.

I am working at World Relief Mozambique and given your experience in this country you will agree that this has been the case. Aid has actually led to increased dependency which many folk in Western circles fail to see. If African countries can improve their comparative advantage not based on multilateral and bilateral relations that are patronizing, this would signify the dawn of a new era. While aid is 'effectively' administered to be a tool to curb poverty and set impoverished societies on a trajectory of transformational development, you can agree that aid finances the spending habits of the so-called 'Middle Class' in Africa. Although we have seen a decrease in aid being given to NGOs as multilateral and bilateral institutions are focusing on giving aid to various government departments in Africa, staff in NGOs ask for lucrative salaries that in the end are a detriment to developmental initiatives.

I am strongly convinced that ideas work well in their original context, and bilateral and multilateral institutions that give aid do not give an African voice that can implement ideas. This is absurd and makes aid ineffective as Africans continue to be at the receiving end of aid policies. The challenge facing the post-Washington Consensus state in Africa is how to increase its capacity to deliver, and develop necessary technical expertisee using the already existing resources (both human and natural) that Africa is endowed with. This, in the 21st century can never be achieved by increasing aid to Africa. However this should not be done in a paradigm shift that seeks to divorce both multilateral and bilateral institutions, rather enhance dialogue to complement developmental plans on the continent.

Kind regards

Madalitso Phiri

Madalitso Phiri

# re: Beware the aid sceptics? @ Friday, August 11, 2006 9:39 AM

We are very worried about this question in the West, does aid help, or does it hurt? Will aid fix the problems of poverty, or it will ensure that they are never fixed?

Most likely, the answer is that aid doesn't make very much difference at all. Average aid to Africa over the last fifty years has been about $10/person/year, so what were we expecting?

Certainly, aid projects have helped some poor people in some places, especially emergency aid, but it is more difficult to find aid projects that have actually brought poor people out of poverty. Likewise, a lot of aid money has enriched the elites of a lot of poor countries. But these were elites who were already rich and powerful, and would have enriched themselves at the cost of their country with or without the infusion of aid.

There is not a country that has escaped poverty because of aid. Those that have, have done so because they have invested in their people and implemented good policies. It is very ethnocentric for Westerners to think that the solution to global poverty lies in getting aid right - our interventions just aren't that important.

Paul

# Response to Madalitso Phiri @ Saturday, August 12, 2006 12:05 PM

I actually mostly agree with your comments, Madalitso. I would not call myself a 'proponent of aid', but a 'proponent of aid reform'. In the current international scenario, aid is not likely to disappear, so the real challenge is to make it work better, and shift its focus from financing 'the spending habits of the African middle class' (although I think that's exagerated. Aid also finances lots of schools, roads and hospitals) to 'setting impoverished societies on a trajectory of transformational development', as you correctly say. Scaling up aid in its present form, I agree with you, is not likely to be very successful, and may even do more harm than good (the missing link to my Briefing Paper on absorptive capacity is http://www.odi.org.uk/publications/briefing/bp_may05_absorptive_capacity.pdf). Lack of coordination, promotion of blueprint approaches, unclear focus on results, and a tendency to only talk to governments are problems of the current aid regime that need to be addressed. But the aid system will hardly be able to reform itself. It's people like you and me, working from outside the system both at the global level and at the country level, in Mozambique, who can make a real difference, but making sure that our governments (both aid donors and aid recipients) use aid resources in the best possible way.

Paolo de Renzio

# re: Beware the aid sceptics? @ Thursday, August 17, 2006 10:31 PM

What would You say if China wanted to give Public Aid to North Ireland but asked to be able (a) to give part of that aid directly to NGOs (b) to give the rest to the United Kingdom as far as UK buy Chinese products, technical and professional services (they even would send Chinese technicians for free) AND follow their "guidances".

The big problem with Public Aid is that We continue to deny their sovereignty to the receipient countries and we yet think it will work. Another problem is that we have created a hundred-headed Hydre. Some day a UN Agency publish a report, the other day another Agency publish something else that is saying almost the contrary. Not to talk about the labyrintic clan-oriented nomenclatura-dominated Development System. Even Bill Gates is in now.

And all together they have hundreds of receips. There are so many cooks, it is not a surprise that we have such a bad cake.

Welcome in the Marvelous World of the Aid Industry.

Is it not about time to fully respect the complete sovereignty of the countries we pretend to help?

The only conditionnality should be a true democracy. Stop helping, start being helpfull. As we say in French "L'Enfer est rempli de bonnes intentions".

Michel Monette

# re: Beware the aid sceptics? @ Tuesday, August 22, 2006 2:00 AM

The problem of foreign aid is as much with the recipients as with the dispensers. We need also a vigorous debate on whether the industry of aid agencies of the global north have become more aid dependant than its intended beneficiaries. We need a critical re-thinking of the entire supply chain of the aid business, and not just blame the end-users.

Any call of 'scaling back' foreign aid will undoubtedly hit the more vulnerable groups disproportionately hard.

New York

Tamo Chattopadhay

Beware the aid sceptics?

Tuesday, August 08, 2006 11:04 AM by Paolo de Renzio

In a Personal View in yesterday’s Daily Telegraph, Ruth Lea puts forward a series of arguments which will sound very familiar to people following the debates for and against foreign aid and its role in tackling global poverty and underdevelopment. What poor countries need, argues Lea, is less aid and a more business-friendly environment that will unleash their dormant entrepreneurship and economic potential. She claims that aid has failed to deliver, and in many cases does ‘more harm than good by propping up corrupt regimes, engendering aid dependency and, crucially, holding back the necessary internal reforms needed for businesses to thrive’.

Many of her remarks are, in my view, somewhat misplaced. While I would never claim that all aid is good, and I am often skeptical about the call for scaling it up substantially (see my Briefing Paper on scaling up and absorptive capacity), I think that the crucial point of the aid debate should not be about whether it has worked or not, but about how the way in which aid is given can be improved, along with our understanding of the ways in which it influences (or not) reform opportunities in poor countries.

First of all, we need to recognize that aid has changed dramatically since the end of the Cold War. While twenty years ago Mobutu and other African leaders could count on Western aid no matter how corrupt their regimes were, nowadays not only Zimbabwe, but also Chad, Uganda and Ethiopia see their aid cut as soon as the donor community has clear proof that the government is not serious about reducing poverty and respecting some basic rules of democracy.

Certainly the aid system can still improve a lot, as inefficiency and wastage abound, but blaming aid dependency for all of Africa’s woes is not correct. Are we sure that poor countries would be better off today had they received no aid flows in the past? In a paper reviewing 50 econometric studies, Mark McGillivray of WIDER shows that this is not the case, especially when recent aid flows are taken into account.

Moreover, the ‘business-friendly environment’ that Ruth Lea would like to see taking root is that same one that was being promoted by the World Bank and the IMF in the structural adjustment programmes that are partly blamed for Africa’s lagging economic growth. In this case, the failure of aid is not that of holding back the necessary internal reforms, but that of promoting the wrong kind of reforms, not adequate to the contexts in which they were being introduced (Bill Easterly, in his new book, has some interesting views on this). In my opinion, one of the reasons why aid has not been as effective as one would hope lies in the lack of sufficient appreciation, in the aid world, of the social and political dynamics that underpin developmental reforms in poor countries. Aid can, when soundly designed, support progressive reforms, but it cannot substitute for the lack of sufficient pressure from within society for the kinds of reforms that can allow for ‘people's entrepreneurial initiative to flourish and decent jobs to be created’.

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This is a background paper to give a broad overview of the literature and debates in the field of state building. The aim is to bring insights from a developmental states perspective to bear on the challenges of state-building in fragile and post-conflict states; and to explore some of the challenges for why externally supported state-building has not led to expected results in a number of cases. The paper informs the donor, DFID, in drawing together conclusions about the main lessons for the future in terms of how to approach state building.

David Booth, Alison Evans, Verena Fritz

Project Completion Reports for DFID Budget Support Programmes 04/05 and 05/06
May 2007 - May 2007

Details:

The aims of this project were to: Fulfil DFID’s corporate reporting requirements; Assess in broad terms the impact that DFID’s budget support programme has had in Sierra Leone; Make broad recommendations on improvements that could be made to DFID Sierra Leone’s budget support programme based on best international practice. This project involved a review of key documents and meetings with key Government officials and Donor Agencies, in particular the World Bank, EC and African Development Bank.

Assessment of Paris Baseline Survey Findings
May 2007 - June 2007

Details:

The overall objective of the assessments was to contribute to a prioritised and targeted approach for Danish and Norwegian development assistance to meet the 2010 targets of the Paris Declaration.

The specific objective was to obtain a more detailed mapping and analysis of Danish and Norwegian development assistance with regard to baseline data on the Paris Declaration indicators, pointing to areas where special attention is needed.

David Booth

Re-thinking aid policy in response to Zimbabwe's protracted crisis
May 2007 - June 2007

Details:

Roundtable discussion on 4th June 2007 at the ODI office, to focus on the deepening crisis in Zimbabwe, current aid modalities and programmatic design.

Kate Bird

UNCT Rwanda Liaison
May 2007 - June 2007

Details:

Establishment of Single UN Budgetary Arrangement at Country Level: Liaison with Rwanda UNCT

Scoping DFID's Policy on Human Rights
April 2007 - October 2007

Details:

This is a desk based study to scope DFID’s current policy on specific human rights in the UN Human Rights Conventions. The output is a report which describes and analyses DFID’s current policy on human rights as it relates to the UK’s external relations.

Tim Braunholtz, Marta Foresti, Tammie O'Neill, Bhavna Sharma

Strengthening Public Expediture Management in Bosnia and Herzegovina
April 2007 - June 2007

Details:

The aim of the project was to improve consistency between government policy objectives and expenditure allocations by strengthening budget planning and preparation processes at State, Entity and Canton levels of government.

Short Term Consultancy for Strategic Conflict Assessment
April 2007 - May 2007

Details:

This is a strategic conflict assessment study for The Asia Foundation (TAF) based in Pakistan. This entailed: 1) Designing the analytic framework for the study for the local consultants.
2) Mentoring the local consultants. 3) Writing the national overview based on the regional papers prepared by the local consultants subcontracted by TAF.

Diana Cammack

2007 Annual Report on the Results and Impact of IFAD Operations
April 2007 - September 2007

Details:

ODI provided a range of inputs into the fith Annual Report on the Results and Impact of IFAD Operations preparation process including leading on, reviewing and co-authoring various chapters and papers; facilitating workshops etc.

Ed Hedger

Application of the Performance Based Allocation (PBA) System to Fragile States
April 2007 - June 2007

Details:

The aims of this project were to: Provide input for discussion at the coordination meeting of IDA15 EU deputies in June 2007; Provide scientific background information for strengthening the German position on the IDA15 special theme of ‘fragile states’ and for the German evaluation of the Performance Based System (PBA) in general; Provide recommendations on Germany’s position on PBA with respect to fragile states.

This project involves an analysis of World Bank data and analysis of current literature, including existing studies on PBA and fragile states and current debate within the World Bank, NGOs and the academic community.

Nick Highton, Cecilie Wathne, Rowan Putman

EU Aid Effectiveness
April 2007 - June 2007

Details:

This study on EU Aid Effectiveness has been commissioned by the European Parliament’s Committee on Development. The study selects a number of countries to look at as case studies with a particular focus on aid effectiveness at the EU level.

ODI/AAPPG Meetings Series: Parliaments and Development
April 2007 - May 2007

Details:

A series of public meetings on parliaments and development, jointly-organised by ODI and the Africa All-Party Parliamentary Group in April-May 2007.

Alan Hudson

Strategic Governance and Corruption Assessments
April 2007 - March 2009

Details:

The Ministry of Foreign Affairs, Netherlands awarded ECORYS Nederland BV a contract for the implementation of ‘Strategic Governance and Corruption Assessments’ (SGACA). The overall objective of this project is to perform SGACA’s for up to 35 partner countries of Dutch development cooperation. The ultimate aim is to provide relevant and stimulating material that assists the local Royal Netherlands Embassy staff in preparing both specific governance strategies as well as multi-annual strategies for Dutch development assistance over the 2009-2012 period. ODI is a contract partner in this project.

Diana Cammack

Nepal Participatory Poverty Assessment
March 2007 - June 2007

Details:

Design and implementation of Nepal’s first post-peace process participatory governance assessment, commissioned by DFID Nepal.

This consultation for DfID resulted in the production of a participatory governance assessment which focuses on the grassroots experiences of citizens in post-conflict Nepal. The research process and ultimate presentation of findings in June 2007 aimed to explore the views of poor and excluded Nepalese citizens on the post-conflict state and the democratisation process, identifying their development priorities and illuminating the relations between poor and excluded communities and the government. The findings were then used to inform the development of the NPC’s 3-year Interim Development Plan and serve as the basis for a regional, district and community communications strategy.

Harry Jones, Sara Pantuliano

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Resources links

What do you think?

Beware the aid sceptics?

Related projects