Overhauling the Aid System and the Voter

Owen Barder makes some interesting points about reforming the international aid system. I am largely in agreement with him. The decision to give is ultimately a political one, and I think it is probably unfeasible to imagine it could ever be otherwise. (Although as a counterpoint, it is interesting to note British politicians’ recent preferences to take ‘the politics’ out of all sorts of difficult decisions.) But while Owen makes a good point about NGOs sometimes somewhat mis-selling what it is that they do (e.g. in conservation the likes of WWF do not publicise much to their members their support for sustainable big game hunting in Africa), I do not see that this point is necessarily at issue when it comes to some of the big failings of international aid, e.g. sustainability.

I think the sustainability problem comes from a desire for the illusion of political control. For instance, project durations of five years so that the next government in the donor country can review and re-allocate funding. But, I do not think that international aid is a particularly big political football in donor countries; even the most rabid right-wingers generally have more important drums to bang. Thus if ever aid modalities were to become a serious political issue domestically I think it is far more likely to be as and when the colossal mismanagement of aid by donors is subject to journalistic exposé. At present I get the impression that rich country taxpayers assume that aid often does not succeed primarily because of mismanagement by the recipient, and that this dismays them. If they learned that their own bureaucrats were as much, if not sometimes more, to blame then I think attitudes might harden rapidly. Joe Public may have varying views as to charitable giving, but little patience for incompetence by their own bureaucrats.

Donor governments have shown themselves perfectly capable of managing long term projects and investments (e.g. major civil engineering projects) which extend over multiple parliamentary terms. Budgets maybe revised, and terms and conditions re-negotiated, but work is – presumably – not entirely halted for a whole year whilst a regular review is conducted. Why should aid be managed any other way?

Of course non-performing projects should be halted, preferably sooner rather than later, but too many aid projects seem to be managed as if they will fail. (Which perhaps tells you something, itself.) Evaluations and reviews should be planned to complete before the end of the existing funding period, and with enough of a grace period to allow negotiation of the next phase to complete without any gap in funding. Funding should also not stop just because there is a change of staff in a critical position within the donor agency. In all cases there should be a presumption that the aid money will continue to flow, unless there is a significant shortfall in performance, not the other way around.

As many others have pointed out before me, that aid is delivered in such perverse ways, in relation to its stated aims, is often not the fault of aid agency officials, who, generally speaking, are fundamentally good people trying to make the best of the situation, but of the system in which they operate. In Owen’s words:

“[Aid agencies are] … trying to mediate between the preferences of the people who give them money and their view of the interests of people in developing countries.  Aid agency staff typically want to do as much as they can for people in developing countries… But they feel they can’t do many of the things they would like to do … because they have to take account of the preferences of the people whose money they are spending.”

It’s a nice turn of phrase, but whose preferences are we talking about here? I do not see voter preference expressed in the perverse incentives of most bilateral aid agencies.

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3 responses to this post.

  1. Posted by Linda on June 3, 2010 at 1:22 pm

    Did you notice that the Swedes did actually take some action on this matter? The SIDA boss, Anders Nordström, was fired, partly as a result of the embezzlement of health care (aid) funds in Zambia. Nordström didn’t embezzle anything but he was in charge while it happened. The sack came from Gunilla Carlsson, the minister in charge of international development. You can read about it here http://www.lusakatimes.com/?p=26456 or a more guarded article on the SIDA website.
    Of course plenty of murky internal politics may have been going on there between the Swedes, leading to the dismissal, but the upshot is that a top Swedish official is expected to have done something about Zambian corruption.
    Aid is becoming a medium-hot discussion topic among the Finnish public as well, with a populist veteran politician in charge of the development cooperation department.

    Reply

    • Fascinating! I also hear the Norwegians are demanding some money back from the Tanzanian government that was misspent out of a major environmental programme. (Sorry no link, but I believe my source to be accurate.) Although, as with anti-corruption drives in developing countries, one does wonder whether such action as firing people might not have counter-productive results. People who fear they maybe in the firing line tend to be over-cautious, especially when it comes to authorising release of funds.
      But if aid is becoming an object of popular political discussion in donor countries then that is very much to the good!

      Reply

  2. […] That I previously suggested that appealing to the voter in achieving the necessary reforms to bilateral donors is another one of the contradictions in which we live. Share this:Like this:LikeBe the first to […]

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