The Roles of Aid in Politics Putting China in Perspective

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Essex, Jamey (2008b), “Deservedness, Development, and the State: Geographic Categorization in the US Agency for International Development’s Foreign Assistance Framework,” in Geoforum, Vol. 39, pp. 1625-1636.

The continued refinement and implementation of the Foreign Assistance Framework promises deep and significant changes in the nature of official development assistance, and in dominant understandings of the relationship between development and security. Crucially, it reinforces and extends state and hegemonic projects of neoliberal globalization, which hinge on instituting neoliberal state forms built on strategic openness to capitalist internationalization, and the increasing prevalence of authoritarian governance in controlling resultant or already existing social resistance and insecurity. The cartography of development institutionalized in and by the framework exhibits a particularly diabolical moral calculus of deservedness, dependent on allocating aid to those that have already helped themselves, and leaving others out of the necessarily unequal and limited moral community delimited by capitalist internationalization. At the least, the framework advances a restricting influence on recipients’ strategic selectivity, narrowing the potential uses of aid, and reproducing the asymmetrical power relationships and ethical ambivalences that come with aid (Korf, 2007). For USAID, it deepens the structural displacement of contradictions in the US state’s neoliberal project onto the agency, re-integrating it more fully into foreign policy structures while demanding more in terms of accountability and aid effectiveness. The potential outcomes of continued agency restructuring based on the framework will likely focus on further integration with the State Department and whittling of USAID’s role to that of development program subcontractor.

Finally, an understudied but necessary component in extending this research is consideration of how developing states encourage and internalize the categorizations found in the framework. This follows Rankin’s (2004, p. 69) argument that “globalization studies should explicitly consider the role and position of the periphery in globalizing processes” to better explain and resist neoliberalization. In accordance with the strategic-relational approach employed in this paper, further investigation would necessitate a focus on the class-relevant basis of aid allocation and use, particularly where related to the identification and exercise of the “political will” that forms a pivotal criterion for aid deservedness. This would, once USAID fully implements the framework and longer-term research on its effects becomes possible, also answer the appeal Roberts et al. (2003, pp. 887, 892) make to engage with both neoliberalism’s “interarticulation with certain dangerous supplements, including, not least of all, the violence of American military force”, and the definition of developing states and societies by reference to their representation as “a lack, a hole, a stain, and a site of rejection”. Critically analyzing how such interarticulations are forged necessitates taking seriously the complex spatialities of neoliberalization as it proceeds (and is perhaps checked) through geographic categories like those found in the Foreign Assistance Framework.

Everts, Jacob (1982), “Rich Country Interests and Third World Development: The Netherlands,” in Cassen, Robert, Jolly, Richard, Sewell, John, and Wood, Robert (eds.) Rich Country Interests and Third World Development, pp. 248-278, London: Croom Helm.

Fariss, Christopher J. (2010), “The Strategic Substitution of United States Foreign Aid,” in Foreign Policy Analysis, Vol. 6, pp. 107-131.

The results demonstrate over a robust set of models that as human rights on the ground worsen, the probability for a state to be selected into the food aid recipient pool increases and, once selected, so too does the allotment of food aid. The needy people provision in the US foreign aid legislation seems to allow foreign policymakers a degree of leeway probably not found with other economic aid programs when crafting food aid packages. The results from the multinomial logit models suggest that the conditional relationship between human rights and strategic interests is an important part of the determination of the type of foreign aid that a country receives. The results from the Heckman model, however, suggest that the conditional relationship between human rights and strategic interests does not affect the allocated amount of food aid; however, the linear-additive effect of human rights is substantively important during this stage.

The four-category distinction of foreign aid (no aid, food aid only, economic aid only, or food aid and economic aid) has provided a rich view of the conditional relationship of human rights on the selection of different types of aid recipients when compared with the two-category distinction. To reiterate, the main hypothesized relationships are substantively and statistically important in determining the probability of a state receiving one of the four combinations of aid in the multinomial logit model; however, these relationships are not statistically important in determining the probability of food aid or no food aid in the first stage of the Heckman model. This difference suggests that a simple increase in the complexity of how foreign aid is conceptualized will allow for the discovery of previously unobserved relationships.

Overall, the results from both models have shed some light on policy outcomes that emerge from a complicated, interdependent decision-making process. Nonetheless, the policymaking picture is, at best, still incomplete. For example I have not accounted for the varying interests and strategic interaction of the USAID, Department of Agriculture, Department of State, Department of the Treasury, Congress and the President in my theory or models. How does the strategic interaction of these competing groups change depending on the foreign policy output in question? How does this competition influence the crafting of aid packages? Finally, the puzzle of which aid options are more or less restricted than others and what types of mechanisms cause such restrictions are still open research questions. Again, the evidence obtained in this study is suggestive of a substitution effect; however, to answer these questions and to integrate the findings from this study and other foreign policy research21 future studies would be enhanced by the use of more sophisticated research designs such as nonparametric matching as recommended by Ho, Imai, King, and Stuart (2007) or strategic interaction models as recommended by Braumoeller (2003). Untangling the varied purposes of these programs, while difficult, will provide a much more nuanced understanding of the US aid giving process and enhance efforts to integrate the findings of existing foreign policy research.22 Furthermore, such information would allow for better coordination between governments and NGOs to food-related crises such as those that occurred around the world in early 2008. At the very least, such information may allow NGOs to anticipate donor behaviors towards specific countries under specific conditions.

Fielden, Matthew B. (1998), “The Geopolitics of Aid: The Provision and Termination of Aid to Afghan Refugees in North West Frontier Province, Pakistan,” in Political Geography, Vol. 17, No. 4, pp. 459-487, Elsevier Science, Ltd.

Aid and refugees are emerging areas of academic discourse. This paper seeks to explore the geopolitics of aid in the context of the provision and termination of international humanitarian and development assistance to Afghan refugees in the North West Frontier Province of Pakistan. Discussion locates the origins of the ‘refugee crisis’ in the Soviet invasion of Afghanistan in December 1979. The exodus of Afghans following this foreign intervention is examined in its socio-cultural context. Discussion then progresses to consider the geopolitical motivations behind the provision of assistance and the way the aid supplied became heavily politicized.

Levels of aid are shown to have fallen dramatically in the post-Soviet era, and this downturn is linked to the geopolitical repercussions of the dissolution of the Soviet Union. The policy reasonings behind the ending of assistance reflect these changed geopolitical priorities, and are considered from the perspectives of both NGO and donor institutions. The geopolitics of the ongoing proxy war is carefully considered and the ending of assistance to Afghan refugees is shown to be highly problematic in humanitarian terms. Finally, discussion considers the broader implications of the conclusions drawn from the Afghan context. […]

The Afghan context

International humanitarian assistance to Afghans forcibly displaced by the Soviet invasion of Afghanistan in December 1979 was targeted at ‘refugees’. Research has suggested that this label of social identity is highly problematic and contains a number of legal and theoretical omissions. It misses the socio-culturally nuanced Afghan and Pakistani contexts into which aid was delivered. Discussion has also demonstrated that the decision to provide assistance to Afghans in Pakistan was an inherently political act reflecting Cold War priorities.

The presence of Afghan refugees in North West Frontier Province is argued to have served a number of geopolitical agendas. For Pakistan, these forced migrants were used to defuse demands for an independent Pushtunistun and as a bargaining tool for leverage on the West. For the United States the Afghan refugees were a vital strategic buffer against Soviet expansionism, and part of a broad anti-Communist strategy. In many ways US aid was an extension of the war effort against the Soviet Union, and Afghanistan a bleeding wound leading to the ultimate demise of the USSR. The politicization of Afghan refugees was achieved by only granting refugee status to individuals who were members of Afghan resistance parties. This paper has argued that aid itself was a political instrument, utilized to further military campaigns. It was, however, important for aid to be seen to be humanitarian so that the underlying geopolitical agendas could remain obscured.

In the post-Soviet era the levels of assistance to Afghan refugees have fallen dramatically. This paper has demonstrated that there are clear relationships between declining political interest in Afghanistan and declining amounts of aid to Afghan refugees. These trends are argued to be directly linked to the enormous repercussions of the collapse of the Soviet Union on the geopolitical priorities of the international (aid) community. The decision to terminate aid is argued to be a thoroughly geopolitical act, and donor influence was of paramount importance. Now that the refugees no longer fulfill a strategic role, there appears to be little concern about them in the West, even with the current interest in the rise of the Taliban militia. This paper has demonstrated that UNHCR has altered its priorities in the post-Cold War era. Even though it claims to be apolitical, it is still bound by the geopolitical agendas of the donors upon which it is dependent.

While the world community at large may have forgotten Afghanistan, this paper argues that a proxy war continues to fight out the competing geopolitical agendas of Afghanistan’s neighbours. Afghanistan retains its strategic significance as it is at the centre of an emerging economic, cultural and social bloc of non-Arab Islamic nations. The regional powers have been shown to be competing for influence in a future Afghan government. Hopeful conclusions about the prospects for peace bedevil many accounts of Afghanistan’s proxy war. This paper eschews such optimistic geopolitical assessments. It is better to hold a sceptical vision of Afghanistan’s future and be proved wrong, than for over-optimistic expectations of the chances for peace to be confounded. Afghanistan is likely to remain politically unstable and a source area of refugees well into the foreseeable future. Ending the proxy war is difficult because attempts to secure peace involve increased foreign intervention which make the conflict all the more intractable.

The ending of assistance to Afghan refugees has been shown to be tied to attempts to rebuild Afghanistan as a geopolitical entity. The use of the nation-state as a structure upon which to rebuild Afghanistan is highly problematic, and clashes with localized power structures. The ending of aid was also based on the erroneous assumption that peace would settle in Afghanistan. This paper argues that in humanitarian terms aid has been ended prematurely, given the continued arrival of hundreds of thousands of Afghans displaced by the ongoing proxy war, and the needs of vulnerable refugees that remain in Pakistan’s North West Frontier Province. The research for this paper suggests repatriation has adverse humanitarian consequences but is very important geopolitically.

Broader implications

Aid is a geopolitical instrument and part of the foreign policies of donor states. The importance of overseas development assistance is argued to lie in the realm of geopolitics rather than officially proclaimed humanitarian intentions. As the world community enters a post-Soviet era, changes in foreign aid provision are part of a wider redefinition of donor states’ overall foreign policy priorities or ‘geopolitical codes’ (Grant and Nijman, 1995: 215). This paper has suggested that prospects for achieving the humanitarian intentions of foreign aid are limited as long as world affairs are orchestrated by nation states, and the process of providing aid is linked to national geopolitical agendas. It is important for the academy to look beyond, and theorise alternatives to, the nation-state as the fundamental unit of geopolitics.

This paper argues that it is important to question whose interests are being served by international assistance in the context of refugee situations: the host countries, the donors, the assisting agencies or the recipients. It appears that the NGOs serving refugees are more accountable to their donors than to their beneficiaries. UNHCR is also donor-dependent and charged with the geopolitical role of ‘defending’ the borders of the world’s growing community of nation states, by ensuring that population movements across international boundaries are redressed by ‘the preferred solution’ (Ogata, cited in Mitchell, 1995: 3) of repatriation. The imperatives of this geopolitical mandate may ignore the problematic humanitarian realities of the ‘refugee’ situations UNHCR is attempting to resolve.

The origins of the Afghan ‘refugee crisis’ and the continued conflict in Afghanistan are products of conflicting geopolitical agendas. It is important to conclude with the understanding that the decisions to provide and end assistance to Afghan refugees make perfect geopolitical sense but are highly problematic in humanitarian terms. This paper strongly contests Gorman’s conclusion (Gorman, 1993: 291) that political and humanitarian objectives ‘must be forged into an ongoing partnership’. As long as the world community allows the provision of foreign aid to be linked to geopolitics, international humanitarian and development assistance in refugee contexts will be inconsistent, counterproductive and highly contradictory.

The number of refugees in the world today is the largest it has ever been. There are estimated to be about 23 million refugees world-wide and another 26 million internally displaced (Ogata, cited in Mitchell, 1995: 4). While the number of ‘refugee’ situations requiring international assistance has risen, the amount of Western overseas development assistance available has fallen to $53 billion, its lowest figure in the last 23 years (Brown, 1996: 158). As the 1990s come to an end, growing numbers of ‘refugee crises’ are likely to emerge as the nation-state comes under increasing pressure as a viable geopolitical entity. This will bring the geopolitical decision making behind the provision and termination of aid into increasing focus, as growing numbers of ‘refugee crises’ stretch increasingly limited aid resources.

Figaj, Monika (2010), “Who Gets Environmental Aid? The Characteristics of Global Environmental Aid Distribution,” in Environmental Economics and Policy Studies, Vol. 12, pp. 97-114.

Just as it is important which variables proved significant in the regression, it is also important which variables amongst the group analyzed did not prove significant. Democracy index, colonial past, government efficiency index, natural capital index, and Muslim countries are amongst those variables that do not have a significant explanatory value for the sum of environmental aid allocated. Therefore, donors were not guided by these variables when distributing aid. However, the results presented in this article explain 72%–89% of the donor’s environmental aid allocation explaining the amount of funds given; thus, there is still room for further analysis and possibilities of including new variables. No clear differences appeared between bilateral and multilateral donors, which may suggest similarities in their approaches.

From both the regressions, two different patterns emerged. In deciding which country will receive aid, the poverty–wealth related and environmental variables proved to be significant. This fits into the donors’ (except GEF [Global Environment Facility]) main mission of poverty alleviation. Environmental aid is determined within this primary activity. Yet, in determining exact aid amounts, it is the economic and environmental issues that appeared as significant.

Despite the strong correlation between environmental and economic variables in the linear regression (FDI, import amounts, CO2 emissions, GEF biodiversity index, number of threatened species, and environmental vulnerability), it is the economic variables that dominated and had the largest statistical significance in determining the increase of aid. Hence, donors allocating environmental aid amounts look not only at environmental issues, but also at economic ones. This is related to the fact that most environmental aid distributed is in the form of loans, and the funds received need to be paid back by the recipient government. For that reason the recipient country must be financially viable, hence the importance of economic indicators in aid distribution.

Environmental aid distribution is not a political issue, because political variables played no role in either regression output. Therefore, one can assume that environmental issues are separated from wider political concerns. This study does not confirm previous research results on this topic. However, the newly added Egypt variable, which is linked to political and national security concerns, did prove to be an important determinant for one donor (the USA), because being Egypt was shown to be a very significant variable. This variable has gained strength since the attacks of September 2001.

For environmental variables, the number of threatened mammals, environmental vulnerability, number of environmental treaties, environmental sustainability, CO2 emissions, and biodiversity were areas of special donor concern. These variables are mostly a measurement of the extent of environmental degradation. Allocating aid based on these indicators is the most fruitful path to fighting environmental degradation. For all the analyzed donors, at least one environmental variable proved to be significant for distributing environmental aid and deciding on its amount.

Regional variables were present in all the donor linear regression outputs, but were absent in the logit outputs. Thus, regions are not the main guide to allocating aid, although they do play a role when determining the aid amount. Out of the four donors, two (Japan and World Bank) specifi cally focused on Asia. Non-Asian countries for GEF and Egypt for USA were also statistically significant. Therefore, environmental aid amounts are regionalized for donors, because each one of them has a geographical preference.

Fleck, Robert K. and Kilby, Christopher (2001), “Foreign Aid and Domestic Politics: Voting in Congress and the Allocation of USAID Contracts Across Congressional Districts,” in Southern Economic Journal, Vol. 67, No. 3, pp. 598-617.

A variety of factors – USAID's promotional literature, anecdotes about political influence, and the simple correlation between contract spending and congressional votes – suggest links between the geographic distribution of USAID contract spending within the United States and support for foreign aid in Congress. Yet econometric analysis, based on data for all USAID contracts active during the 104th Congress, reveals only weak links. Once we control for differences in contractor qualifications across districts, the level of contract spending does not depend substantially on the representative's support for foreign aid or other political variables. Although USAID activities do provide “direct economic benefits” to “almost every state in the Union,” there is little indication that USAID systematically manipulates the allocation of contracts in an attempt to garner political support. Furthermore, the level of contract spending in a representative’s home district has at most a small effect on his or her support for aid (except in the case of Beltway Republicans).

The larger question raised by this research is whether domestic economic benefits significantly increase support for foreign aid programs. Although we explored only one dimension of the issue, we find little evidence that the economic benefits of aid translate into support for foreign aid in Congress. Traditional pork-barrel politics, which link votes to the distribution of benefits across districts, are not apparent in the data. If the commercial benefits of foreign aid programs have little effect on support for aid, a coalition that substitutes commercial interests for waning national security concerns is unlikely to win increased funding. Yet the costs of such a coalition may be high. Catering to commercial interests is likely to reduce development effectiveness and, especially in the long run, undermine public support (Jay and Michalopoulos 1989; Zimmerman and Hook 1996). In sum, trading away quality is unlikely to obtain a substantially higher quantity of foreign aid.

Fleck, Robert K. and Kilby, Christopher (2006a), “How Do Political Changes Influence U.S. Bilateral Aid Allocations? Evidence from Panel Data,” in Review of Development Economics, Vol. 10, No. 2, pp. 210–223.

Our analysis of panel data from 1960 to 1997 indicates that several aid allocation criteria—development concerns, commercial importance, strategic importance, and democratization—play a role in the allocation of US bilateral aid. Moreover, aid allocation criteria differ systematically and substantially between liberal and conservative regimes. Under liberal regimes, the distribution of US bilateral aid more closely mirrors that of small donors known for their development-oriented and humanitarian approach to aid. Commercial concerns have greater weight under conservative regimes than under liberal regimes. Specifically, under conservative Congresses (relative to liberal Congresses), the US allocates aid in a manner that appears more mercantilist-oriented. Conservatives appear to place greater weight on whether the US exports much to, and does not import much from, aid-receiving countries.

These findings contribute directly to the understanding of the domestic politics of US aid and, by doing so, provide new insight into the prospects for reforming aid policy. Over the last decade, a vigorous debate over how to improve aid effectiveness has led to calls by aid agencies and scholars for a policy of ex post selectivity—less funding for traditional projects and structural adjustment programs, more general budgetary support for developing country governments that have already demonstrated improved governance (World Bank, 1998). Proponents of this position attribute the failure of traditional aid programs at least in part to lax donor enforcement: even when recipients flout aid conditions, donors often continue making disbursements and even new commitments (Mosley et al., 1995). Ex post selectivity may be able to solve this enforcement problem (because aid flows will not occur until after reform takes place), but only if donors consistently reward desired changes in developing countries. In other words, selectivity can work only if donors can credibly commit to the policy. Yet if donor policy changes with the political cycle—and in the US it apparently does—the ability for the donor to make a credible commitment is questionable.

Understanding the aid allocation process is also central to the debate over the effect of aid on growth. The fact that development aid is targeted toward countries with poor records of growth has long clouded measurement of the link between aid and growth. Recent attempts to solve this potential endogeneity problem make use of factors that influence aid allocations yet do not depend on recipient need; the most notable of these factors stem from the political motive for aid (Boone, 1996; Burnside and Dollar, 2000). This debate remains contentious (Easterly et al., 2004; Hansen and Tarp, 2001; Roodman, 2004), and a more fully developed model of the political economy of aid allocation would allow more precise estimation of the effects of aid. Our findings are a step toward such a model. Furthermore, our results point to an important caveat for those attempting to instrument for aid with political variables: the political circumstances in donor countries are likely to affect not only the amounts of aid to developing countries, but the motivation for providing that aid—including the extent to which aid is focused on reaching development objectives. Thus, political variables may instrument, in part, for the purpose of aid. And the purpose of aid will likely influence the effects of aid on development.

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