Whilst on the subject of disagreeing with Angus Deaton*, I re-read Chris Blattman’s commentary recently. Blattman made an interesting point about aid supporting the emergence of democracy in post-conflict situations such as Uganda and Liberia where Blattman has worked. The basic sense of his argument, that aid money helped those countries get back on their feet having chosen a proto-democratic path, seems clear enough. Clearly the link is not automatic: recent events in South Sudan show that just having lots of aid money around does not ensure a steady upward path, but I am more than happy to buy the basic idea, that, other things being equal, aid would help and potentially help quite a lot with the transition.
This line of reasoning can easily be extended. Just as the presence, even if largely wasted, of a big aid programme can provide cover for small local NGOs to do good things (I’ve seen cases of this), so maybe the promise of aid money can provide some cover to would be democratizers. I.e. at the margin, the presence of Western donors with deep pockets might plausibly increase the attractiveness of democracy to poor country elites (obviously the same cannot be said of the Chinese). Probably impossible to prove, but it is one of those enticing thoughts that you can see politicians grabbing on to.**
On the negative side of the ledger, the incentive value of lots of aid money would be paradoxically lower when accompanied by strong anti-corruption measures. But on the positive side such an incentive could be seen as the first step on a whole ladder of rising levels of cash support for good behaviour such as I’ve mused about before. It’s never going to happen, of course, and even in the case of democracy, I am sure all parties would deny the cash offer was anything as grubby as a bribe. But if Deaton is concerned with the theoretical undermining of the social contract caused by aid, then this is a nice theoretical riposte.
Next week, back to the messy real world in which bribes are paid all the time, even if they’re not called bribes …
* On the subject of international development aid. He can keep his intellectual authority status on other bits of development economics.
** I guess the Neo-Cons under Bush did exactly that!