Hook, Steven W. (1995), “Chapter 7: The Comparative Record,” in Hook, Steven W., National Interest and Foreign Aid, Boulder, pp. 143-165, Colo.: Lynne Rienner.
As the previous four chapters have demonstrated, the French, Japanese, Swedish and US governments have transferred large amounts of foreign aid to developing countries in pursuit of widely varying objectives throughout the post-World War II period. The historical and political settings of their development aid programs have been reviewed in detail, along with their relationships to the donor’s broader foreign policies. The direction and assigned functions of each donor’s aid flows were also examined along with their performance in relation to the ODA regime’s qualitative standards.
This chapter contrasts the performances of these donors from a variety of perspectives: in the contrast of the three potential foreign-policy interests outlined in previous chapters; in terms of the relationship between the quantity and quality of aid flows; from the standpoint of state behavior within an international regime; and from systemic and domestic levels of analysis. Each perspective provides distinct insights into the foreign-aid policies of these donors; collectively, they strengthen our understanding of the intimate relationship between national interest and foreign aid.
Donor Interests and ODA Patterns: A Summary
The basic needs of impoverished peoples ostensibly represent the basis of contemporary development assistance, as reflected in the proclamations of donor states and multilateral aid organizations. These aid providers most often emphasize the narrowing of economic disparities between the world’s rich and poor, the alleviation of short-term suffering within LDCs, and the benefits derived from long-term economic, social, and political development. Within the ODA regimes, aid flows have been commonly characterized as a moral obligation of the world’s wealthy toward the less fortunate.
As previously observed, in an attempt to codify these humanitarian objectives, the Development Assistance Committee of the OECD has established a series of qualitative standards for aid flows. These standards involve minimum proportions of ODA flows relative to donor GNP, the appropriate recipients of aid, the mode of aid delivery, and the terms upon which aid is extended. Although the OECD members have not always embraced these standards and have often acted upon their own conceptions of aid quality, the ODA norms continue to reflect widespread presumptions about the humanitarian basis of development aid.
Among the four donor states under study, the Swedish government most closely adhered to these qualitative standards during the 1980s. More so than the other three donors, Sweden distributed aid to the poorest recipients and on the terms most favorable to them (often exclusively in the terms of grants). The statistical analyses revealed a consistent emphasis on humanitarian interests in Swedish ODA disbursements. France’s ODA flows, which were concentrated among its former colonies and overseas territories, were also found to be related to the social welfare conditions of its recipients. In the case of Japan, no significant relationship between ODA flows and social-welfare conditions within recipient states was found. The United States’ aid program also lacked such a relationship when all recipients were considered; when the two primary recipients (Israel and Egypt) were eliminated from the analysis, U.S. ODA flows were found to be statistically related to humanitarian interests during five of the final six years of the decade.
In challenging the OECD’s qualitative standards, leaders of major donor states often advanced alternative conceptions of recipient humanitarian interests. The emphases of their ODA programs – including regional economic development related to bilateral trade and military support in support of geopolitical goals – were seen as compatible with the long-term human needs of LDCs. In the Japanese case, for example, leaders argued that their own robust economic growth served as a model and as a catalyst for development within neighboring LDCs, who thus improved their living standards more effectively and more enduringly than they would have through the receipt of economic aid based exclusively on their social welfare needs. And in the case of the United States, the protection of allies and many LDCs from communist infiltration was expressed in humanitarian terms; the preservation of political freedoms was viewed as a moral undertaking comparable to that of promoting socioeconomic welfare in the Third World. Neither of these conceptions of humanitarian interest maintained by most other donor states or by the ODA regime in general, which continued to emphasize more immediate responses to basic human needs as the essential imperative of development aid.
The preceding discussion relates directly to the linkages between ODA flows and donor economic interests. Significant empirical relationships between the two existed in the case of Japan and, to a lesser degree, in that of France; both countries’ ODA flows were disproportionately directed toward recipients with which they maintained close bilateral trade ties. As Japanese leaders acknowledged, not only did domestic economic growth stimulate that of neighboring countries, but the process of sustained regional growth served Japan’s own long-term economic interests as well. France similarly integrated its aid and trade relationships as part of an effort to enhance its own economic interests through the growth of the regional economy in francophone Africa and among its overseas territories. The trading networks were more important to LDC economies than to that of France, but collectively they provided crucial sources of raw materials and destinations for finished products and investment capital.
No such relationships were evident in the cases of Sweden or the United States. More so than other donors Swedish officials framed aid policy in the context of transnational economic redistribution and of reducing long-standing material inequalities between the affluent North and the impoverished South. This focus could be readily observed in the concentration of Swedish ODA among a small number of Third World recipients – most of them in sub-Saharan Africa and many of them among the poorest developing countries – with little economic connection to Stockholm.1 U.S. leaders, meanwhile, emphasized market-driven growth strategies as the best means for LDCs to achieve prosperity and close the gap between North and South. Many influential observers of U.S. ODA (e.g., Eberstadt, 1988), reflecting the conventional wisdom of government officials, believed U.S. technical assistance should primarily be directed not toward addressing basic needs in the poorest LDCs, but instead toward encouraging leaders of LDCs to stimulate private enterprise and attract foreign investment. As Baldwin (1985: 324) observed,
American policy makers have repeatedly gone to great lengths to emphasize that economic development is primarily a matter of domestic effort and that external assistance can merely supplement such efforts. Both explicitly and implicitly American policy has reflected the belief that development must come from within and cannot be imposed from outside.
The relationship between donor states’ economic interests and ODA may be illuminated further by considering aid flows in the context of the economic systems maintained by recipient countries.2 In Africa, the region with the largest number of recipients and the only one in which all four aid donors maintained extensive bilateral ODA ties, France, Japan, and the United States directed more than 70 percent of their ODA flows to states with capitalist economies, whereas 80 percent of Swedish aid was transferred to states with Marxist or socialist economies (see Table 7.1). Although U.S. aid flows were not statistically related to trade ties with recipients, the United States distributed the highest percentages of ODA (88 percent) among the four donors to capitalist states in Africa. This fact suggests that economic interests may be expressed in various ways by donor states. In addition, it demonstrates the tendency of donors to direct aid flows to recipient countries with economic systems similar to their own.3
The relationship between development aid and donor states’ security interests has been rendered increasingly ambiguous given the shifting bases of security in an era of “economic statecraft.” This study relied on the traditional conception of security interests, which were related to recipients’ levels of militarization on a relative and absolute level. Its underlying assumption has been that selective economic support to militarized LDCs serves indirectly to project the security interests of aid donors.
Most significant in this respect was the consistent correspondence between the flow of U.S. ODA and both absolute and relative indicators of recipient militarization. This relationship was principally a by-product of the concentration of U.S. assistance to Egypt and Israel. The security emphasis, consistent with the nation’s broader approach to foreign policy as one of the two Cold War superpowers, was magnified by the transfer of U.S. military assistance to many of the same LDCs that received annual infusions of U.S. ODA.
In none of the other cases were security interests significantly related to bilateral ODA transfers. France’s security agreements with most of its aid recipients in francophone Africa allowed for French assistance in times of crisis but otherwise discouraged militarization within the region. Japanese militarization was proscribed by the country’s U.S.-imposed constitution, and its military security was assured by its bilateral defense treaty with the United States, factors that were reflected in the absence of security considerations in its ODA policies. Finally, the Swedish government based its national security on neutrality and the pursuit of pacific resolution of international conflicts; military considerations were explicitly omitted from Swedish ODA calculations and were not evident in aid patterns during the 1980s.
Like Swedish leaders, those in France and Japan distanced traditional security objectives from their ODA calculations but acknowledged that their aid relationships enhanced their own security, more broadly defined. All three of these donors characterized themselves during the 1980s as “bridges” between the Cold War superpowers and portrayed the economic and social development of their selected aid recipients as a means to reduce the latters’ dependence on either superpower. Through the development of LDCs, these donors presumed, their own security would be enhanced. As one of the superpowers, however, the United States subsumed its aid flows within a broader security orientation. It conceptions of national security was most congruent with traditional standards of military preparedness, both at home and within its allies, and these norms were reflected in the flow of U.S. aid, both military and economic, to supportive LDCs throughout the world.
ODA Performance: Quantity Versus Quality
As noted above, ODA programs are generally evaluated on the basis two criteria: first, the quantitative or aggregate volume of aid outlays; and, second, their qualitative characteristics as defined by the Development Assistance Committee. To many analysts of foreign aid, per capita aid flows, their proportion to donor GNP, and the adherence of donors to other qualitative standards serve as better reflections of commitment of donors to Third World development than do the absolute sums of aid transferred overseas. It is for this reason that the U.S. aid program, although the largest in absolute terms throughout the Cold War, was regularly criticized for its qualitative shortcomings.
An inverse relationship between quantity of aid flows and their quality was evident in the allocations of France, Japan, Sweden and the United States during the 1980s and for all members of the OECD during the final year of the analysis (see Table 7.2). The major donors of ODA on an absolute level, particularly the United States and Japan, ranked among the sources of lowest-quality aid. Concurrently, those transferring lesser net amounts, such as the Netherlands, Norway and Sweden, were among the leaders in terms of quality. These negative relationships were strongest when the top ten ODA donors were considered; the correlations were negative and significant in all four cases, particularly vis-à-vis aid to eh poorest LDCs. When all eighteen members of the DAC were included the relationship between ODA flows and the top two categories of aid quality were positive but insignificant, whereas the relationship between aid and the final two categories was negative and of moderate significance. These patterns demonstrate that the tension between ODA quantity and quality extends beyond the four categories reviewed in this study and represents a general tendency among aid donors.
The discrepancy has propelled an ongoing debate within the ODA regime regarding appropriate standards of conduct in this issue area: Donors of relatively small volumes of aid routinely criticize major donors, namely the United States and Japan, for contributing less on a proportionate or per capita basis than they seemingly can afford and for violating the norms of aid quality as articulated by the DAC. Major donors, conversely, emphasize their large aggregate volumes, dismiss certain DAC qualitative standards as invalid, and point to their leadership in stimulating regional and global economic growth, providing for the military security of overseas allies, and so forth. The debate, often conducted in public forums, continued through the 1980s and into the 1990s as donor states large and small struggled with sluggish domestic growth rates, growing domestic demands for fiscal austerity, and ongoing pressure from LDCs for continued or growing amounts of development assistance.
In absolute terms, the United States consistently operated the largest DOA program during the post-World War II period; its preponderant role in global foreign aid is magnified when US military assistance is taken into account. This pattern continued throughout the two decades between 1970 and 1990, during which annual U.S. ODA flows averaged about $8.5 billion (see Figure 7.1). The volume of Japanese ODA increased threefold during the same twenty-year period, from about $3 billion to more than $9 billion. Japanese ODA, which was not accompanied by military assistance, ultimately reached and exceeded U.S. levels, although its higher levels were in part a reflection of a stronger yen during the 1980s. France and Sweden reported similar growth rates, but their aggregate flows were far smaller than those of the other two donors. For the DAC as a whole, inflation-adjust aid outlays grew from $25.5 billion in 1970-1971 to $47.6 billion two decades later, an overall increase of nearly 90 percent. This quantitative increase coincided with the expansion both of bilateral and multilateral sources of ODA and of aid recipients.4
Among qualitative indicators of ODA performance, the ODA/GNP ratio is most widely considered to be indicative of a donor state’s commitment to Third World social welfare and economic development. At the 1968 UNCTAD meeting, members of the DAC pledged to dispense at least 0.7 percent of their GNPs in the form of ODA. This became the accepted benchmark of aid quality. Sweden, the first country to reach and exceed this level, frequently transferred a full 1 percent of its GNP in economic assistance; it government was unable to maintain these levels in the early 1990s, however, amid continuing economic austerity and growing dissensions over the direction and terms of aid flows.
In the French case, ongoing disputes over whether its overseas territories should be considered ODA recipients were closely related to its performance in this category of aid quality. Excluding these recipients, French ODA averaged about 0.55 percent of French GNP; if they were included, the average approached 0.8 percent throughout the 1980s. In the same time span, the high absolute levels of ODA from the United States and Japan contrasted with their relatively low levels of proportionate aid flows. Although the share of national product allowed to ODA rose marginally in the Japanese case, it fell in that of the United States, reflecting a long-range pattern that continued into the mid-1990s (see Figure 7.2).
Similarly, Japan and the United States contributed less ODA on a per capita basis than France or Sweden (see Figure 7.3). Per capita outlays rose during the 1980s in every case except that of the United States during the decade. The greatest proportionate increases were reported by Sweden, whose per capita flows jumped from about $150 to $205, and by France, whose per capita flows grew from $98 to $135 in 1989 dollars. Japanese per capita ODA flows increased slightly from $50 to $74 during the decade, where as U.S. flows declined slightly from $40 to $37. As previously observed, per capita ODA was one of the few categories in which aid quality generally improved during the 1980s. Among the eighteen DAC members, per capita aid flows increased in twelve cases, with the greatest proportional increase reported by Finland, which tripled per capita flows, from $43 to $143. Decreases were reported by Australia, Belgium, New Zealand, and the United Kingdom, along with the United States.
Another closely watched indicator of ODA quality was the degree to which resources were offered in the form of grants rather than concessional loans. Members of the contemporary ODA regime collectively increased the relative grant element during the 1980s, responding to the emergent norm that LDC recipients should not take on reciprocal burdens in exchange for ODA. Sweden, for example, adhered to its standard of nearly 100 percent grants, and French and U.S. leaders gradually increased their grant proportions (to 85 and 99 percent, respectively). Japan, however, maintained relatively greater levels of concessional loans in the name of recipient “discipline.” But even in this case, the grant level grew considerably during the decade.
Figure 7.4 further illustrates the effort by the Swedish government to conduct a high-quality ODA program. The share of Swedish ODA directed to LLDCs, which measured 33 percent of outlays in 1990, respectively, was nearly twice in the 1989 French and Japanese levels (18 percent) and nearly three times the U.S. level (13 percent). Among the two major donors, the concentration of Japan’s flows to newly industrialized countries along the Pacific Rim limited its contribution to LLDCs, and the disproportionate share of U.S. ODA directed to Egypt and Israel had a similar effect. Overall, DAC members reduced their relative disbursements of ODA to the poorest subset of recipients from 25 to 22 percent during the 1980s.Their performance in this regard reflected the general decrease in aid quality over the decade.
These patterns have been reviewed collectively to illustrate the wide variations in aid behavior among these donors. Further, they have reinforced the inverse relationship between the quantity and quality of aid flows, the latter of which is monitored by the ODA regime in several categories.
Systemic Dimensions of ODA Behavior
The inverse relationship between ODA quantity and quality, which reflects the broader variation in the absolute scale of donor economies, suggests that systemic factors are closely related to their behavior in this area of foreign policy. More broadly, it calls attention to the general importance of systemic factors in influencing state actions.
In contrast to unit-level factors (incorporating both societal and governmental characteristics), systemic explanations “account for state behavior on the basis of attributes of the system as a whole” (Keohane, 1984a: 25). Such explanations are not intended to deny the importance of such unit-level factors, nor do they presume a narrowly deterministic relationship between systemic factors and state behavior. Instead, they suggest that analysis of foreign policy should begin with a look at the broader milieu of state action and its impact on the calculations of foreign policy. As opposed to deterministic models, environmental possibilism (Sprout and Sprout, 1969: 44) “postulates some set of limits that affect the outcomes of any attempted course of action.”
Analysts of international relations have long argued that the distribution of state resources is a salient determinant of military stability within the international system. They have disagreed as to whether a bipolar (Waltz, 1964) or a multipolar (Deutsch and Singer, 1964) distribution of power is more war-prone, but they have shared the underlying presumption that “outside-in” interpretations are instructive in the study of world politics. By contrast, the systemic sources of states’ foreign economic policies, in areas that include the transfer of foreign aid, have received less attention. As in the case of security issues, however, economic policies are not created in a vacuum; they reflect the relative capabilities and more general roles of each state in the international system. In this view, “the foreign economic policy of individual country is affected both by the international economic structure … and by the state’s position within it” (Lake, 1983: 523-524).5
The importance of systemic factors in influencing the volume and direction of donor aid flows begs the larger question of what systemic roles have been played by individual aid donors and how their roles have been reflected in foreign-policy behavior in general and aid policy in particular. Among early analysts of systemic roles and foreign policy, K. J. Holsti provided a typology of roles that may be usefully applied to this important dimension of world politics (see Table 7.3). Holsti (1970: 307) defined the role concept as an “analytical tool for explaining certain ranges or patterns of foreign policy decisions and actions.” These systemic roles, as apprehended by political leaders and translated into political action, shape the long-term objectives of nation-states and must be considered in any comprehensive effort to understand comparative foreign-policy behavior (see Walker, 1987; and Wish, 1987).
Appling Holsti’s typology to the four donor states during the 1980s, the behavior of France was most characteristic of a systemic “active independent,” which is prone to “emphasize at once independence, self-determination, possible mediation functions, and active programs to extend diplomatic and commercial relations to diverse areas of the world” (Holsti, 1970: 262). A consistent relationship was evident between this systemic role and France’s overall approach toward foreign affairs as well as its actions in transferring ODA. French leaders’ pursuit of autonomy in foreign affairs, their identification of French interests with those of their francophone neighbors, and their active involvement in international organizations reinforced this aspect of France’s systemic role. In the area of ODA, France extended concessional financing as part of an orchestrated effort to serve as a bridge between North and South and between East and West and to enhance its regional influence and prestige.
Meanwhile, Japan’s foreign-policy performance was most characteristic of a “regional-subsystem collaborator,” which deliberately eschews a global role and undertakes “commitments to cooperative efforts with other states to build wider communities” (Holsti, 1970: 265). As noted earlier, after World War II Japanese military rearmament was precluded under its constitution, which limited its defense spending to 1 percent of GNP, and its territorial security has been protected ever since through its bilateral treaty with the United States. Japan’s narrow focus on tightening economic relations with the Pacific Rim, extending beyond ODA policy to trade and private investment, was consistent with this systemic role. Regional integration was complicated by Japan’s previous imperial ambitions in East Asia, but it remained an explicit goal of Japan’s leadership into the 1990s and found expression in the interrelationships between Japanese ODA flows, trade ties, and patterns of overseas private investment.
Sweden’s disavowal of political and security alignments, its preference for pacific means of conflict resolution, and its promotion of like-minded LDCs exemplified the behavior of a systemic “mediator” (Holsti, 1970: 255). Such a state characteristically ventures to create and “interposition into bloc conflicts” and provides a forum for negotiated settlements and integration. Swedish leaders often emphasized both the constraints and opportunities posed by their country’s role as a small power in the midst of stronger states. In this respect, Prime Minister Palme often referred to the “small-state doctrine” that guided Swedish foreign policy. This effort entailed support for other small powers, particularly those sharing Sweden’s social and political values, along with the application of those instruments of foreign policy that most “equalized” the influence of states: international organizations, international law, and, if concentrated toward a few key recipients (“program countries”), development assistance. Its neutralist foreign policy entailed a defensive military capability and the avoidance of formal alliances. To Sundelius (1990: 122), these strategies exploited the natural advantages of a “committed neutral”:
By keeping a distance from both sides, the Swede indicates a commitment to impartiality in any political conflict between these sets of values. Through such reasoning, the neutral position can be justified in positive terms. It provides a foundation for a unique and valuable mediating role between two alien antagonists. This stand is identified with a vital systemic function and is thus transformed from a strategy of political necessity to a moral imperative. In such a perspective a neutral democracy is clearly not morally compromised. On the contrary, it represents reason and a concern for the overriding interests of the international community (emphasis added).
The United States, by contrast, assumed the role of “bloc leader” throughout this period, described by Holsti (1970: 255) as one based on ideology, systemic predominance, active resistance to perceived external threats, and the maintenance of “bloc cohesion.” The U.S. preoccupation with military security, which was evident in its patterns of military and economic assistance, was typical of a great power, which attempts to establish and retain global influence in the face of perceived threats from other great powers.
These role profiles call attention to the importance of each state’s broader role within the international system in shaping its foreign policies. In all four cases, the documented patterns of ODA behavior were consistent with the expectations of Holsti’s analysis. The consideration of systemic roles as a source of foreign-policy behavior focuses on the relative attributes of each state and their impact on shaping policy. The question may be probed a step further by examining the relationship between a state’s absolute resource base and its behavior in distributing ODA. As noted previously, states that provided the most ODA were less likely to adhere to DAC standards of aid quality; of additional interest is whether the wealthiest states, as measured by GNP, varied in their qualitative ODA behavior in a similar manner. The evidence from the year 1989-1990 suggests that they do. When the ten largest OECD economies are ranked for their performance in four areas of aid quality, the negative rank-order correlations range from -.32 to -.72. This pattern is also evident when all eighteen members of the DAC are considered, although the negative correlations are weaker in each case (see Table 7.4).
Collectively, these patterns demonstrate the relationship between the size of a donor state’s economy, a key aspect of its systemic role, and its behavior in providing assistance to LDCs. These findings are consistent with those advanced by Ruggie, who found that the amount of economic resources available to aid donors was inversely proportionate to the extent to which they provided aid through multilateral channels. Thus, “the condition of possessing a certain level of national resources seems to be related to a state’s propensity to organize the performance of a task internationally” (Ruggie, 1972: 883). This relationship has profound implications for the future volume, direction, and quality of aid flows under the rapidly shifting systemic conditions of the 1990s. Observers of aid policy may wish to consider the emerging roles of states, based on both relative and absolute standards, in attempting to understand current aid strategies or anticipate future plans.
Donor Behavior Within the ODA Regime
Though systemic factors have most often been related to the international system’s propensity for armed conflict and to the behavior of states in matters of war and peace, they have increasingly been applied to other aspects of state behavior in economic affairs. Kindleberger (1973) and Gilpin (1975), among others, have developed and refined the theory of hegemonic stability, which argues that the preservation of a liberal international economic order is facilitated by the presence of a preponderant economic power. In this view, the absence of a global hegemon during the period between the world wars contributed to widening economic warfare and the collapse of many industrialized economies. Conversely, post-World War II U.S. preponderance in both economic and security areas presumably sustained global economic stability. Current debates over hegemonic stability concern the prospects for a viable monetary and trading system in the absence of a hegemon. The relative decline of the United States (whose share of global GNP fell from about 50 percent in 1945 to about 22 percent in 1994) and the concurrent ascension of Japan, NICs, and members of the European Union since the 1970s have provided the impetus for these debates.
It is widely presumed that many of the economic regimes that emerged as part of the liberal international economic order (LIEO) immediately after World War II were manifestations of U.S. hegemony. Contrary to the expectations of hegemonic-stability theorists, the erosion of U.S. hegemony has not been accompanied by the breakdown of most transnational economic regimes. Many middle-income states continue to violate principles of the LIEO, “free-riding” under the economic and security protection of the United States, yet the postwar order has remained largely intact. Recent evidence for this cohesion was the conclusion in early 1994, of the Uruguay Round of GATT talks, at which the delegate agreed on many measures to further coordinate and liberalize their macroeconomic policies and to institutionalize global trade within the World Trade Organization.6 To Keohane (1984a: 215) and others, the persistence of many regimes is due to the endurance of the norms, principles, and procedures that were established under conditions of hegemonic influence: “International regimes perform functions demanded by states having shared interests; when the regimes already exist, they can be maintained even after the original conditions for their creation have disappeared.”
The foundations of the ODA regime were established during the peak of U.S. hegemony and reflected developmental principles of GATT, the World Bank, and the International Monetary Fund. Although the current institutional framework did not take shape until after the process of decolonization had largely concluded in the early 1960s (see Chapter 2), when the decline of the relative U.S. position was well under way, the developmental models conceived in the 1940s and 1950s were largely adopted by the OECD and its Development Assistance Committee. Like other transnational regimes, that which coordinated ODA reflected the prerogatives of its most powerful members, including those providing the greatest aggregate volumes of aid. DAC members agreed upon the collective interests and broad objectives to be served by the ODA regime – to ease the suffering of the world’s poor and to promote market-oriented economic growth – but their self-interests were accommodated and were evident in both their bilateral and multilateral, aid flows.
In addition to being reflected in the deliberations of state leaders and their proclamations of shared interests and collective actions, international regime behavior may further be demonstrated by the coordinated activity of states in areas not immediately apparent. In distributing development assistance, for example, donor states concentrated aid flows along geographical lines; they identified Third World recipients of particular salience to their own national interests and distributed a disproportionate share of aid flows to them. Recalling that the United States, Japan, and France represented the three top donors of ODA during the 1980s, their geographical concentrations effectively amounted to a division of labor in global ODA flows (see Appendix 2). France served annually as the primary source of aid to LDCs in francophone Africa; Japan played that role for its Pacific Rim neighbors (and increasingly to East Africa and South America); and the United States provided most concessional resources to Central American recipients and those in the eastern Mediterranean, particularly Egypt and Israel (and to a far lesser degree Oman and Cyprus).7 Shifts in geographical ODA concentration reflected broader changes in donors’ foreign policies during the decade, particularly in recent years as the Cold War ended and the international system experienced a fundamental transformation.8
Donor states coordinated the volume and direction of ODA flows in many other respects. During the height of the Cold War, for example, the U.S. government urged Japan to supplement its own economic support for many Pacific states that were considered strategically important in the face of perceived internal challenges. “Japan’s foreign aid has become inseparably incorporated into the world strategy of the United States,” argued Shinsuke (1982: 32). Prominent examples of Japanese aid initiatives that were at least partially driven by Cold War concerns included aid to Indonesia following the departure of Achem Sukarno (1966), to Thailand during the Vietnam War (1968), and to the Philippines at the peak of the Ferdinand Marcos dictatorship (1969). U.S. pressure on Japanese aid policies was widely acknowledged. As Akira (1985: 141) put is, “Japan is responding to American wishes in its allocation of ODA. And in this sense the Japanese motivation in giving foreign aid lacks the basic humanism that animates most international aid organizations.”
The empirical patterns outlined above are largely consistent with theoretical expectations of regime behavior under conditions of hegemony. Specifically, the security orientation of U.S. economic and military aid reflected the country’s preponderant role in providing for the security of its allies throughout the Cold War. The patterns of French and Japanese ODA flows, which were statistically related to their own economic interests, were consistent with the anticipated behavior of smaller states, which, in the area of trade policy, were given to “free-riding” within the LIEO. This patterned crossnational behavior was consistent with that expected of an international economic regime, in which persistent competition among states is regulated and coordinated policy behavior ensures each participant some benefit. The global ODA division of labor thus adds empirical evidence of regime behavior in foreign assistance, a fact that is of particular merit given the limited number of international economic regimes available for study. Further, the coordination of ODA flows with broader aspects of donor foreign policies reflected the cohesion of the ODA regime in its first three decades.9
Domestic Sources of ODA Behavior
Although the emphasis in this discussion has been on the influence of systemic factors in shaping donor ODA policies, these policies must not be considered in isolation. In each case, internal social values strongly influenced donor approaches to foreign aid and foreign policy in general, and the institutional mechanisms by which aid policies were implemented also exerted a powerful impact. Systemic context may be a useful starting point in cross-national analysis, but a comprehensive understanding of state behavior requires an additional assessment of the role of unit-level characteristics that bridge the gap between systemic context and observable behavior. A review of these domestic factors strengthens our understanding of donor states’ behavior (see Table 7.5).
In the United States, the broad scope of its foreign-aid program led to the creation of a complex bureaucracy, giving domestic politics a prevalent role in the shaping of U.S. aid policy. Within USAID, administrators often clashed over the objectives of specific bilateral aid programs and the general strategy of achieving U.S. national interests through bilateral and multilateral aid. These debates were exacerbated by the concurrent flows of U.S. military assistance, coordinated by the Department of Defense, to many of the same LDCs receiving ODA. The arena for domestic politics further involved Congress, whose “power of the purse” provided it with strong leverage in directing the flow of foreign assistance. Congress, of course, was far from a unitary actor in this regard; its members reflected the interests of their disparate district and state constituents and advanced the prerogatives of a wide array of committees and subcommittees. The continuity in many bilateral aid programs even spanned successive presidential administrations pursuing widely varying foreign policies, reflecting the strong roles of Congress and the aid bureaucracy, which collectively served to mitigate the fundamental shifts in aid strategy proposed by the White House.
The prevalence of domestic politics in the U.S. ODA program was in large part a by-product of the absence of public support for foreign assistance. Overseas aid was consistently among the least popular federal programs, and it was far less popular in the United States than in the other three countries under review in this study. This fact was reflected in the relatively small amounts of per capita U.S. ODA, the relatively small percentage of U.S. GNP devoted to ODA, and the low level of U.S. aid quality as defined by DAC. Yet U.S. aid transfers, both economic and military continued to grow through the period in absolute terms, and collectively they represented the largest flows of foreign aid by any single donor. The impetus for U.S. aid, therefore, must be found outside the realm of public opinion – and inside the institutional framework of the federal government.
As demonstrated in the statistical analysis, the aid programs were largely related to U.S. security interests throughout the Cold War, serving as extension of the overall effort by the United States to maintain its leadership role as “bloc leader.” When they did appeal to the general public for support, influential political leaders justified aid programs on the basis of their contribution to the broader effort of containing communism and preserving U.S. influence in overseas regions of “vital interest.” The large volume of U.S. ODA transferred to Egypt and Israel, which served many domestic constituencies as well as U.S. interest in Middle East stability, reflected this security orientation – one that was relatively distinct from Cold War concerns.
The large Japanese ODA program was also driven by domestic politics but under very different circumstances. In contrast to their U.S. counterparts, neither the chief executive nor the legislative branch of the Japanese government played a stronger role in formulating and executing aid policy. Instead, aid policy was largely driven by decentralized government ministries, many of which pursued parochial foreign-policy interests. As Orr noted, “There exists a greater degree of delegation of authority by the [Japanese] legislative branch to the administrative branch. Career government officials play a larger role in making foreign policy than do their counterparts in the United States” (1990: 11-12). This facet of Japanese politics helps to explain why successive prime ministers’ frequent pledges to diversify the direction of Japanese aid flows and increase its DAC-defined quality were largely unfulfilled.
Though the general public widely supported Japanese ODA, its influence over the volume and direction of aid flows was relatively modest. Instead, its general assent provided a mandate for the rapid growth of the aid program, whose specific applications were determined within government ministries. These bodies, particularly the Ministry of International Trade and Industry, comprised both political leaders and powerful economic actors. In this environment, the economic basis of Japanese postwar national interests found expression in bilateral aid packages to LDCs that maintained strong economic relations with Tokyo in other areas, including foreign investment and the expansion of multinational corporations. Japanese officials acknowledged the role of ODA flows in tightening their broader economic links to regional LDCs along the Pacific Rim and in furthering their own economy, which was viewed as an engine of regional growth. In this respect, they differed with OECD standards of aid quality and emphasized the successful application of Japanese ODA in promoting the ascension of many aid recipients from LDC status to that of NICs.
During the postwar period, French presidents and the general public held widely varying ideological orientations and advocated disparate national objectives, reflecting the country’s conflictive political culture. This discord existed to a lesser degree in the area of foreign policy, however; a general consensus existed on France’s role within the “front rank” of major powers and, more specifically, on the continuing concentration of French influence within the developing regions formerly under its colonial control. French presidents, who maintained broad authority over foreign policy under the political system designed by de Gaulle, shared these objectives and ensured the continuities in French foreign policy, including the distribution of development assistance. The French legislature, though formally empowered to approve the president’s specific policy initiatives, generally deferred to the chief executive as the “guarantor” of French national interests.
In this respect, France’s cultural tradition served as a strong and consistent impetus for its relations with developing countries, which in turn served as a primary vehicle of the country’s overseas ambitions. As Cerny put is, “French policy was always dominated by a cultural element which put cultural values … before a search for either economic wealth or pure military power” (1980: 75). In aid policy, French leaders declared their mission civilisatrice in maintain close relations with former African colonies that were connected to Paris through monetary integration, trade ties, and ongoing ODA transfers. The French government also maintained close security relationships with many of these states, but its influence was generally limited to providing material and logistical support in times of crisis.
The Swedish aid program was also sustained by high levels of public support, which, in contrast to the French case, extended to other aspects of Swedish public policy, both foreign and domestic. The country’s consensus political culture was based upon widespread and enduring social values. In domestic policy, these involved the promotion of socioeconomic equality and the observance of social democratic principles; in foreign policy, they entailed the pursuit of geopolitical neutrality and active support for peaceful conflict resolution among great powers.
As in the French case, the Swedish government endeavored to use foreign-aid relationships to project these societal values, identifying and rewarding LDCs that emulated the Swedish system of social democracy. In many cases, Sweden supported regimes that were emerging from wars of national liberation – such as Cuba, Vietnam, Angola, and Nicaragua – and that had established socialist or Marxist systems. Swedish leaders hoped their “third way” of economic and political development would provide an alternative to the dependence of these LDCs on either of the Cold War superpowers.
Given the strong societal consensus that endured in Sweden through two world wars and within the bipolar system of the late twentieth century, the executive and legislative branches played a relatively modest role in affecting Swedish foreign policy in general and aid policy in particular. The country’s aid strategy epitomized the “Nordic model,” founded upon explicitly humanitarian interests, support for LLDCs, the transfer of funds exclusively in the form of grants, and relatively high per capita aid and ODA/GNP ratios. The distinctive aspects of Swedish ODA policy were modified in the late 1980s, however, in response to domestic economic strains and growing preferences for greater “realism” in advancing Swedish economic interests through foreign-aid flows. These modifications were reflected in the presence of economic interests in Swedish ODA during the final three years of the decade. But the qualitative aspects of Swedish aid, and the overall thrust of Sweden’s foreign policy and approach to North-South relations, were largely retained.
The relation of domestic politics to the development and pursuit of national interest is complex and, in most cases, ambiguous. As the American Federalists (Madison, 1938 : 56) acknowledged, domestic politics are invariably divisive based on the presence of contending economic factions: “a landed interest, a manufacturing interest, a mercantile interest, a moneyed interest, with many lesser interests, grow up of necessity in civilized nations.” In other respects, domestic divisions are sustained along religious, linguistic, or ethnic lines. When these divisions become predominant and overwhelm the ability of central governments to reconcile them, states fall prey to civil war and disintegration. More often, and in the case of the four countries under study, a sense of holistic identity and purpose transcends parochial concerns, thus providing the basis of national interest that is expressed in foreign policy.
In all of these ways, the national interests and foreign-aid policies of these donor states were influenced by societal values and government practices. Despite their many internal differences and systemic roles, these states were influential in creating and maintaining the ODA regime for more than three decades. Their continuing involvement in transferring ODA in the 1990s – a period in which their relationships with many LDCs were shaped by the end of the Cold War and in which economic strains placed limits on their involvement in foreign affairs – presages the endurance of the regime well into the future.
Challenges to the ODA regime continue to be expressed by its members, and long-standing disputes over aid quality and other issues remain unresolved. These tensions will be explored in the final chapter, along with the future prospects of development aid. In addition, emerging conceptions of national interest will be examined as world politics moves further away from the Cold War and toward an uncertain new millennium.