Is Aid Really a Bust? (D Balke)

31 Dec

A friend, who served as a Peace Corps volunteer in Swaziland, recently told me that “aid”, as we commonly perceive it in the West, is a bust. She said that steady flows of aid actually sustain corrupt, ineffectual governments in poor countries. Rather than engendering the progressive reforms necessary to catalyze growth, job-creation, and improved social, health, and economic indicators, aid actually prolongs the suffering of the poor, in her view.

My friend goes further. She claims that aid flows keep life just tenable enough to prevent the masses in countries like Swaziland from rising-up against powerful elites. If such flows were stanched, she contends, people’s lives would dip below the level of acceptability, thereby catalyzing a rebellion aimed at upending prevailing power structures. She believes such rebellion constitutes the only – or, at least, the best – way to engender progressive, dynamic-changing political, economic, and social reform in low-income countries.

I don’t buy it. My friend spent more than two years living in one of the poorest, most inequitable economies in the world, and, so, has more credibility to talk about development than I do. Still, I think she has given aid an unfairly negative, even fatalistic, assessment.

Even a cursory review reveals that, despite its many shortcomings, bilateral and multilateral aid has achieved a great deal. This becomes particularly apparent when one considers health. The aid-financed spread of affordable anti-retroviral treatment throughout Africa in the 2000s has undoubtedly saved hundreds of thousands, and probably millions, of lives. (Incidentally, one of the greatest beneficiaries of such aid has been my friend’s host country of Swaziland.)

But aid’s success is not confined to the area of health. From education to microfinance, renewable energy to business development, aid has, quietly but steadily, improved development prospects across the world. Its numerous small victories are often overshadowed by large, at times spectacular failures; but that doesn’t undue the tangible gains aid brings about, nor the increased opportunity it engenders.

Plus, technology has vastly improved the ability of development organizations to monitor the effectiveness of their work. Recently installed World Bank President Jim Yong Kim’s data-fueled approach to development holds great promise in terms of allowing aid recipients to provide instant feedback on, and suggestions for, development projects in their communities. Improved feedback will allow aid providers to hold recipient governments more accountable for the usage of aid flows, which will improve outcomes of development lending and transfers.

Of course, aid can’t do everything. Development agency efforts to catalyze the establishment of strong, transparent, and efficient political, economic, and judicial institutions have proven largely unfruitful. But that doesn’t mean that aid is hopefully ineffectual. It just means that money can’t buy well-functioning institutions. Instead, institutional reform must be country-owned.

Meanwhile, anti-aid arguments can prove highly suspect. The contention that aid should be withdrawn to worsen life enough to trigger revolt seems a touch dangerous. Countries in which the majority of citizens struggle to survive do not deserve an intentional depreciation of their already meek living standards. Further, it strikes me as unconvincing to argue that dragging people into a state of desperation is the only way to get them to act in their own interest. And the notion that open rebellion is the right way to push reform is highly debatable.

So, let’s cool off the aid bashing. Yes, it is highly imperfect. Yes, flows often serve to line the pockets of self-interested dictators. And, yes, we can and should do much more to help ensure that development resources actually reach their intended beneficiaries. But, let us not dismiss a practice that has achieved notable gains and can achieve much more via steady improvement.

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3 Responses to “Is Aid Really a Bust? (D Balke)”

  1. Page 28 December 31, 2012 at 10:55 pm #

    What you say is fine and dandy as long as you don’t start start raising too much questions on efficiency. There’s a reason we don’t (or can’t)– after all, how do you compare the value of your development $ to human improvement? It’s hard to say how much is worth it and who should get it with any objectivity. In that sense, even if indeed there’s a lot of case to be had with things, a human life is worth a darn lot (I say), and that (or even smaller changes) can’t be belittled.

    What you’re friend is saying though in that ““aid”, as we commonly perceive it in the West, is a bust” though I think is sadly pretty dern true. Granted I wouldn’t take bust to mean a failure or without any merit, but just it doesn’t work like we’d hope it would. I’m not doing the PeaceCorp (something similar) and haven’t seen things exactly how she did, but I have seem just how much money and time it takes to get a darn silly small thing done in an underdeveloped area. Could that aid money go somewhere and get more done? I wouldn’t be surprised. Does that mean it shouldn’t at all be given though? Well I think that depends on your ethics system, but I’d say no.

    But most of what we see in pretty pictures of hope in the civilized world can take some big spending and doesn’t quite translate into real change. It’s sticky, tricky, and needs some darn careful though to work.

    So perhaps all sides are right here hah.

    • balkebros January 1, 2013 at 5:47 pm #

      I would say, I happen to agree with Daniel’s assessment, that aid as it currently is given out, does distort development, in that much of it is given as military aid or, in the not-too-distant past, has been given to regimes unfriendly to its populace but friendly to us. What can be done is a return to the way aid should be given, in a way that starts from the bottom up and supports the kind of development that created the developed countries we have today. Much “aid” from donor countries is often linked with IMF loans, as seen recently with Egypt, which entails conditionality, or severe cutbacks on the social safety net. Not that Egypt did not need to reform its economy, but in many cases the reforms that the West extracts do not serve development, but serve to weaken the state. No developed country rose to its position on laissez-faire alone, a strong developmental state boosted all economic growth with investment and experimentation, and aid needs to reflect that by allowing for state intervention in many recipient nations.
      So you’re right, there might be some waste, but it is worth it if it protects human life. But there has to be a way to craft aid so that it not only protect human life, but promotes political and economic development to actually make a difference for the betterment of the recipient nation. Maybe I’m an optimist, but I believe it’s possible.

      • Page 28 January 1, 2013 at 6:13 pm #

        “So you’re right, there might be some waste, but it is worth it if it protects human life.” That statement I think was more the crux of what I was getting at. That, all in all, an ethical response is that it’s definitely worth it if this is the assumed ethic. But if you tack on where the aid money is being spent (perhaps considered by the efficiency and other factors of its buying power), it gets damn sticky, and that’s when I think someone could make the argument that aid is a bust. Not that I’m saying this to really disagree with you at all; I’m likely just droning on of things that have swashed in my own mind of late.

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