The Roles of Aid in Politics Putting China in Perspective

Kolbe, Jim (2003), “Lessons and New Directions for Foreign Assistance,” in Washington Quarterly. Vol. 26, No.2, pp. 189-198

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Kolbe, Jim (2003), “Lessons and New Directions for Foreign Assistance,” in Washington Quarterly. Vol. 26, No.2, pp. 189-198.

Foreign Assistance: One Leg of a Three-Legged Stool

With those four lessons [learned in development assistance] in mind [namely: 1. It is not the quantity of foreign assistance that is integral to successful development. 2. It’s all about economic growth. 3. Good governance matters. 4. We need to remain focused.], we should evaluate carefully what we think the role of our development assistance should be. But before addressing that question, it is important to articulate how U.S. foreign assistance is an integral component of our overall foreign and national security policy. I often relate our total foreign assistance—the entire foreign operations bill—as one leg of a three-legged stool providing a sturdy U.S. foreign policy. Each leg is essential for the stool to carry the weight of the policies projected and coming together at the top. One leg is that of our diplomatic corps and intelligence services; another relates to national defense and security strategy; and the third has, as its core, our foreign assistance.

Our foreign assistance in a macro sense plays multiple roles within our foreign policy process. At its first level, the foreign assistance leg can be used as a vital tool to ease the suffering of people around the world. At a more nuanced level, it can enhance health, education, and national infrastructure. In light of security challenges to the United States, we can also link the foreign assistance leg of the stool to the national security leg by using it in the form of Foreign Military Financing. Of even more importance, it can and should nurture the structures of capitalism and the rule of law, making it possible for the poor to participate in market economies and for poor countries to participate in the global economy.

I believe this is the role we should want development assistance to play. If experience shows that successful development is driven by a country’s ability to access and use all its available resources for economic growth—particularly those that relate to integration in the global economy—then we must strategically align development assistance to that end. Our development assistance should serve as a catalyst to help countries prepare for greater participation in the global economy.

Where Do We Go from Here?

It is time to move beyond the debate on the quantity of foreign assistance to a focus on economic growth and helping countries maximize the benefits of participating in the global economy.

We must be sure that our expectations and definition of success are aligned with our development experience. All too often, advocates for development assistance argue that success is only a matter of additional resources. Experience tells us otherwise. Decades of development experience have demonstrated that resource transfers—without the environment of an effective political economy—will generate poor results. Our policy development and our advocacy must place an emphasis on those policies that will generate success—not simply the addition of more resources.

The United States must generate a development policy that is more holistic in outlook. Two pillars must be elevated in importance. First, U.S. policy must recognize trade and foreign direct investment as development tools. Second, economic growth must become its own objective and be strongly integrated into the fabric of our development programs. This is particularly true for many African countries where HIV/AIDS is actually projected to reduce GDP growth rates, making the situation of responding to the pandemic even more challenging.

Historically, we have focused exclusively on increases in foreign assistance and debt relief as the chief drivers of development. I would argue that giving developing countries access to the markets of the United States, Europe, and Japan creates a self-reliant path while aid is a donor-development path. For instance, if sub-Saharan Africa had an additional 1 percent of international markets in the form of exports, the region would have $60 billion more in resources derived from revenue earned through international trade.12

Our domestic discussion on development must consider the potential cost of failure in the new round of trade talks that were launched in Doha, Qatar, in November 2001 or of failure in negotiations for U.S. free-trade agreements (FTAs) with Central America or the countries of southern Africa. The World Bank has calculated that a successful round of global trade negotiations, coupled with related market reforms, could add a whopping $2.8 trillion to global income by 2015—much of it in developing countries.13

Knowing that we have a tendency to ask developing countries to accomplish all of our bilateral objectives at the same time, it is imperative that we remain focused. That should result from a reflection on our need to break out of the trap of “do-everything development.”

These messages of trade and focus are not ones that we—and many in the development or advocacy communities—are accustomed to hearing. In fact, some do not wish to hear it. We have become so devoted to the assistance programs or causes we each represent. Moreover, if we are serious about development, we have to be serious about trade. As a representative of Oxfam International has said, however, the “playing field is not level.”14 It slopes downhill from developed countries.

As the Bush administration continues to work on the Millennium Challenge Account (MCA), I would offer these suggestions. It should consider offering MCA recipient countries special consideration for expedited bilateral trade preferences (such as those offered in conjunction with the African Growth and Opportunity Act or the Andean Trade Preferences Act) or the option of negotiating an FTA with the United States. The administration should offer developing countries the prospect of ownership of their development strategies with U.S. assistance. In exchange for ownership, developing countries should be willing to accept the fact that MCA resources may be withdrawn if criteria for eligibility are not maintained or results not achieved. The MCA should aim to build and reinforce the governmental capacity of recipient countries to manage their own development. In establishing the MCA, we must minimize the administrative bureaucracy and bureaucratic requirements in assistance delivery. Once countries qualify, the MCA should complement current assistance efforts but, most importantly, generate a focus on economic growth and self-sufficiency.

Finally, the administration should aim to make sure development and economic opportunity is extended to those currently outside the formal economy. By this, I mean that the rule of law, property rights, and the ideas of Hernando DeSoto should be incorporated into our programs as a development goal.15 The promise of capitalism as a tool for economic development and poverty reduction can never fully be achieved as long as large populations have no stake in the capitalist mode of development.

In conclusion, I firmly believe that we are going to have to think outside the box in our development-assistance programs. The reality is that what we have tried in the past has not worked. We must learn from our prior experiences, and in light of the challenges we face, we must be open to new ideas and tools that will help us prioritize our efforts when helping countries achieve broad-based economic growth and integration into the global economy.

Korany, Bahgat (1986), “Coming of Age Against Global Odds: The Third World and Its Collective Decision-Making,” in Korany, Bahgat (ed), How Foreign Policy Decisions are Made in the Third World, pp. 1-38, Boulder: Westview Press Inc.

Integrative tendencies among Third World member nations form the basis of both the Third World’s emergence and its collective decision-making. Concerning the latter issue, three characteristics should be emphasized:

  1. The Third World’s self-assertion and the manifestation of its collective identity have come of age as a function, above all, of the common position of its countries in the global hierarchy. No longer formally integrated into colonial empires, these countries are vulnerable, suffer from an acute sense of threat, face serious economic problems, and feel that the “system” is somehow rigged against them.

  2. Notwithstanding the presence of common characteristics and interests with the Third World, the analyst should avoid any overhomogenization (i.e., glossing over of differences) among its different countries and clusters. Although Third Worldism is equated with NAM, the groping toward expression of collective identity at the global level has had a multigroup involvement from the very beginning. These groups can be general (Bandung) or specific (G-77), ideological (radical versus moderates) or geographical (African, Latin American).

  3. To keep these groups together, the Third World – while becoming increasingly institutionalized – has emphasized consensus building in its collective decision-making processes.

Korany, Bahgat (1986), “Foreign Policy Decision-Making Theory and the Third World,” in Korany, Bahgat (ed), How Foreign Policy Decisions are Made in the Third World, pp. 39-60, Boulder: Westview Press Inc.

To counter the serious deficiencies plaguing the established model, analysts of Third World foreign policy decision-making must turn to other schools of social analysis for inspiration. They must also be frankly innovative and attempt to adapt available frameworks to maximize potential payoffs. Thus, if the analyst is not to be dazzled by the psychological filter, the approach emphasized in this book can be used. It calls attention to the significance of the operational environment (i.e., the “real life” or objective factors as distinct from subjective ones), especially those factors characteristic of developing counties. It seems that the best way out of the present conceptual cul-de-sac is to turn to the field of decision-making activity itself and see what the data say. Through a dialectical process of interaction between existing theory and rigorous empirical research we can advance both. With the passage of time, it is hoped, data-based generalizations will be numerous and cumulative enough to achieve a more credible theory of foreign policy decisions in the Third World.

Korbe, Lawrence (2008), “Foreign Aid and Security: A Renewed Debate?”, in Picard, Louis A., Groelsema, Robert and Buss, Terry F. (eds.), Foreign Aid and Foreign Policy: Lessons for the Next Half Century, pp. 27-38, New York: M. E. Sharpe, Inc.

To prevail in the war on terrorism, the United States must remember that aid is a national security issue. As former Secretary of State Colin Powell noted, “the United States cannot win the war on terrorism unless it confronts the social and political roots of poverty,” and to win this war it needs poor countries as well as rich ones to support the values it champions and to believe that they too can climb out of poverty and achieve economic and political freedom (Radelet 2005, 6). But they need help to do it, and the assistance the United States currently provides is not enough.

Kuziemko, Ilyana and Werker, Eric (2006), “How Much is a Seat on the Security Council Worth? Foreign Aid and Bribery at the United Nations,” in Journal of Political Economy, Vol. 114, No. 5, pp. 905-930.

Thus far, we have argued that nonpermanent members of the U.N. Security Council receive extra foreign aid from the United States and the United Nations, especially during years in which the attention focused on the council is greatest. Our results suggest that council membership itself, and not simply some omitted variable, drives the aid increases. On average, the typical developing country serving on the council can anticipate an additional $16 million from the United States and $1 million from the United Nations. During important years, these numbers rise to $45 million from the United States and $8 million from the United Nations. Finally, the U.N. finding may actually be further evidence of U.S. influence: UNICEF, an organization over which the United States has historically had great control, seems to be driving the increase in U.N. aid.

Ideally, a study of vote buying in the United Nations would test for the ability of Security Council aid to influence actual voting. Unfortunately, this is difficult for two reasons. First, we cannot observe the counterfactual: how the country would have voted in the absence of vote-buying activity. Second, votes themselves are strategic. Agenda setters typically know, before putting a resolution up for a vote, the preferences of each member. Perhaps this is why most Security Council resolutions are passed unanimously and why failed resolutions are rare; recall that the 2003 resolution to authorize the invasion of Iraq never actually came to a vote. As a result of these identification problems, we believe that actual outlays of aid are the most trustworthy way to measure the presence of vote buying in the Security Council. By providing extra aid to nonpermanent members of the council, especially during years in which council votes are especially important, agenda setters have implicitly revealed their faith in the Security Council’s relevance in world affairs.

Lai, Brian (2003), “Examining the Goals of U.S. Foreign Assistance in the Post-Cold War Period, 1991-1996,” in Journal of Peace Research, Vol. 40, No. 1, pp. 103-128.

This study has resulted in two broad conclusions. First, the method used to measure economic variables and to address the associated problem of autocorrelation inherent in these types of data has a large effect on the results that are likely to be produced. Previous studies suffer from both of these problems. First, these studies do not deal with the large variance in economic indicators that can skew the results of statistical analysis. This study improves upon this design by using the logged values of these variables.

Second, many studies use inappropriate methods to control for time, such as the inclusion of yearly dummy variables. This article addresses this problem by using a more appropriate and original research design, as well as more sophisticated methods to deal with autocorrelation. Second, this article has developed some interesting findings in regard to the goals of US foreign aid policy. First, security considerations play just as important a role, if not more so, in who gets aid in the post-Cold War period as in the Cold War period. In all the empirical tests, security factors were significant in determining who got aid in the post-Cold War period, while they generally were not significant in the Cold War period. This demonstrates that when threats to US security change, the USA similarly changes its foreign policy to match the new threats. Also, the conundrum found in other articles that the USA aids democracies and abusers of human rights appears to be driven by the methodological problems discussed above. This study found that for new aid recipients in the post-Cold War period, the USA provides more aid to states that respect the human rights of its citizens. However, the USA in the post-Cold War period also provides more initial aid to non-democracies. This result is likely to be due to the analysis of first-time aid receivers in the post-Cold War period.

Lancaster, Carol (2000), “Redesigning Foreign Aid,” in Foreign Affairs, Vol. 79, No. 5, pp. 74-88.

In sum, foreign aid will continue to be an essential foreign policy tool to promote U.S. interests and values abroad. Its major purposes will include peacemaking, addressing transnational issues and other challenges arising from globalization, providing humanitarian relief, and promoting “humane concerns” abroad. The first two purposes relate primarily to U.S. interests; the second two reflect U.S. values. Support for development and democracy abroad will not disappear, but they will not be among the major priorities for foreign aid spending in the decades to come.

Lancaster, Carol (2007a), “Chapter 8: Conclusions and Conjectures,” in Lancaster, Carol, Foreign Aid: Diplomacy, Development, Domestic Politics, pp. 212-226, Chicago: The University of Chicago Press.

This book has addressed the question “Why aid?” It has attacked the question at two levels – one describes the multiple and evolving purposes of aid giving over the past half-century or so; the other digs into the political forces within five aid-giving countries that have shaped those purposes. It is the task of this final chapter to pull together the answers provided by the history of aid and five case studies. It will do two additional things in this chapter: draw out the policy implications of my conclusions and, finally, peer into the future of foreign aid.

Aid’s Origins and Evolution

Foreign aid began as one thing and became another. It began as a realist response to the deepening Cold War between East and West. While continuing to be deployed in the service of national interests, aid eventually created the basis for a new norm in relations between states – that better-off states had an obligation to provide aid to less-well-off states to better the human conditions of the latter. That norm did not exist in the middle of the twentieth century. It was widely accepted and unchallenged by the end of the century. For those of a theoretical bent, foreign aid must be understood through the lenses of both realism and constructivism. No one theory can adequately explain this twentieth century innovation in relations between states.

Looking back, there is a political logic to the evolution of aid’s purposes. Aid (apart from aid for relief) began in the United States in 1947 as a response to an external threat – it was a temporary expedient to bolster the economies of Greece and Turkey in the face of communist pressures. Without those pressures and the broader threat to security in Southwest Asia and the Middle East and later in Western Europe, the United States would an aid program then and, given the fiscal conservatism and isolationist tendencies in Washington, might not have begun one at all. Later, as the Cold War spread to the developing world, the US government put pressure on governments of Western Europe, Canada, and Japan to create their own aid programs. These pressures played an important role – though not the only role – in persuading governments in Western Europe and Japan to establish or expand their own aid programs and to create government aid agencies to manage them in the 1960s. Most of these governments also had nation interest reasons and, in some cases (like Denmark), domestic pressures for creating aid programs – managing decolonization, gaining access to strategic raw materials and export markets, reintegrating with the world community of states. The United States was pushing on an open door.

By the 1970s, aid had become a common element in relations between rich and poor countries. And during that decade and the one that followed, aid for development became increasingly prominent among aid’s multiple purposes. For example, the portion of aid given to the least developed countries more than doubled between 1970 and the mid-1980s, the terms of aid giving softened significantly, and the uses of aid shifted from funding economic infrastructure to social services and the more challenging problems of institutional and policy change. Further, during the 1990s and early years of the new century, aid-giving governments signed agreements to limit the commercial uses of aid, reducing the prominence of that purpose in aid-giving.

What led to the increase in priority for aid’s development purpose? A key factor was the establishment within most donor countries of a political constituency for development aid. This constituency existed both inside and outside governments. Outside government, NGOs supporting aid grew in numbers and influence in most major aid-giving countries, at times acting in an informal alliance with government aid agencies. Inside government, aid agencies were set up, expanded their budgets and their staffs, strengthened their professional capacities, and increased their “development education” programs with their own publics. The importance of constituencies for development aid inside and outside government in influencing aid’s purposes is underlined by the experience of those countries – Japan and France – where such constituencies were weak or lacked access and where, as a result, the development purpose of aid was the weakest.

Aid giving governments also had pressures on them from outside their countries to elevate the amount of their aid and its development orientation. Some of these pressures came from other governments. Many emanated from a group of international development aid agencies, including the Development Assistance Committee of the OECD, the World Bank, the regional development banks, and the many UN agencies and organizations involved with aid issues (the UN Development Program, the Food and Agriculture Organization, other UN specialized agencies, the Economic and Social council, and even the UN General Assembly), which, through a variety of means pressed rich governments to increase the amount and quality of their development assistance. External pressures appear to have been most effective where they resonated with internal constituencies for development aid (e.g., in the Nordic countries)) or, over the longer run, when they stimulated changes in those constituencies (e.g., urging the creation and strengthening of NGOs, as in Japan). But at a minimum, they succeeded in keeping development aid on the international agenda of all aid-giving governments and before the public and elites in those countries. External events, such as the two major famines in Africa in the 1970s and 1980s, raised the visibility in aid-giving countries of human suffering abroad – including problems of hunger as well as starvation and the role of aid in addressing those problems. They led both to an expansion of the constituency for development aid (that is, by stimulating the establishment of NGOs, which advocates for development aid) and to strengthening the norm among publics and elites that governments had a responsibility to respond to human suffering abroad. (Humanitarian relief was highly motivating for the public in aid-giving countries, but humanitarian crises also often led into increased support for development aid – at least for several years in the aftermath of such crises – to deal with the underlying problems of human suffering.) The HIV/AIDS pandemic appears to have had a similar effect by the beginning of the new century. Thus, over a period of a half century, publics and elites in rich countries came to accept the appropriateness and even the obligation of governments of rich countries to provide aid to governments and peoples in less-well-off ones.

Development-oriented NGOs and international organizations helped not only to promote an aid-for-development norm but sought to hold governments to account in fulfilling it. This does not mean that aid was not used for other purposes – such as Cold War containment, fighting terrorism, fortifying spheres of influence, or expanding markets for exports. These other purposes, tied to national security or economic interests, remained important and even essential to sustain high volumes of aid during the period of this study. But the development purpose of aid was no longer challenged as inappropriate, and, indeed, governments were increasingly forced to justify nondevelopment uses of their aid.

In the wake of the end of the Cold War in the 1990s, foreign aid fell in many donor countries, and the proportion of aid provided the poorest countries also fell, while the purposes for which aid was provided expanded to include promoting democracy, supporting economic and social transitions, addressing global issues, and mitigating conflict. The termination of the Cold War made foreign aid vulnerable to cuts in some counties, but two other factors played even more prominent roles in the drop in aid levels: economic and budgetary problems in donor countries and deepening doubts about the effectiveness of aid in spurring development, especially in sub-Saharan Africa.

The decrease in aid in the 1990s energized the constituency for development aid in many aid-giving countries to campaign for an increase in aid levels and a greater focus on development. Undoubtedly in part because of these efforts, public support in Europe and the United States for helping people in poor countries began to increase at the end of the twentieth and the beginning of the twenty-first centuries, as polls in the United States and European countries show.1

In the late 1990s and early years of the twenty-first century, governments in a number of aid-giving counties sough to reorganize their assistance to align it more closely with DAC development aid standards. These changes may have been hastened by the tragic events of September 11, 2001, and other terrorist attacks in Europe and elsewhere, which called the world’s attention to problems of poverty, despair, and conflict in poor countries, but plans for aid increases and aid reforms preceded the terrorist attacks. Something more fundamental was at work – an embedded aid-for-development norm, supported by a growing domestic constituency. However, experience also suggests that an aid-for-development norm is not unconditional – it assumes that such aid is relatively effective and that economic conditions in aid-giving countries are sufficiently buoyant so that aid abroad is not seen as taking badly needed assistance away from people in distress at home. Within this broad historical pattern, each of this book’s country case studies shows significant differences in the domestic political forces affecting the purposes of their aid – above all in the ideas and institutions shaping those purposes.

Findings from Country Case Studies

It is often thought that the main purpose of US aid is diplomatic – for most of the period of this study, fighting the Cold War. That impression is mistaken on two counts. Important among the diplomatic purposes of US aid has been peace-making, primarily in the Middle East. But more basically, roughly half of total US aid has been used for development and associated purposes. What has, in fact, marked US aid is its continuing dualism – the mix of diplomatic and development purposes. One reason for the dualism is found in the ideas shaping that aid, specifically the debate in the United States between libertarians, or classical liberals, on the political right, who argue that the role of the state in the economy should be limited and that foreign aid is an inappropriate or ineffective use of public resources, and the “humanitarians” on the political left, who argue that the United States should, as one of the richest countries, use its public resources generously to help the poor abroad. These arguments on the rightness of aid – not nearly so evident in other aid-giving countries – have been amplified by the adversarial nature of the US political system. They go a long way in explaining why aid has been so controversial in the United States, why support for foreign aid among the US public has been consistently lower than in any other major aid-giving country, and why, to garner enough support for annual aid appropriations, both diplomatic purposes (to gain the support or acquiescence of the conservative right or influential foreign affinity lobbies, especially that supporting the state of Israel) and development purposes (to obtain the support of the humanitarian left) have been essential. What will be interesting to watch in the future of US aid is whether the growing support of aid for humanitarian and development purposes from the Christian right will bring about a fundamental shift in the domestic politics and, ultimately, strengthen the development purpose of US foreign aid.

Japanese aid is often regarded as motivated primarily by commercial purposes – as a vehicle for expanding Japan’s exports. Commercial interests were important in the first two decades of Japanese aid-giving, but even then they were nested in broader diplomatic purposes of the Japanese government. What was missing in Japan’s aid was a major development focus, even after commercial purposes declined. Why was this so? Because Japanese traditions, in contrast to much of the West, put a low priority on public charity (families were supposed to take care of their needy), and the emphasis on a strong state and family left little room for civil society and, by implication, the nongovernmental organizations that populate the political landscape of aid-giving in the United States and Europe. As a result, the values and political constituencies sustaining public resources for development in other countries were weak in Japan (though over time and with international pressures, this began to change). The thing to watch in the future of Japanese aid is whether an emerging constituency for development outside government will eventually prove influential enough to strengthen the development focus of Japan’s aid, overcoming, or forcing reform in, the fragmented organization of Japanese aid within government.

France presents yet another combination of domestic political factors affecting its aid. French aid is often interpreted as primarily driven by colonial policies of maintaining a sphere of predominant influence, primarily in sub-Saharan Africa. This is true as far as it goes. But why did France choose to use its aid for so long in this way, even in the face of rising domestic criticisms that its aid was being wasted or helping corrupt dictators stay in power? Much of the answer has to do with widely shared ideas about France’s rightful role in world politics, together with a highly centralized and not very transparent government (the National Assembly had little involvement in or even knowledge of the details of French aid, and development-oriented NGOs had little access to government decision-making) with an internal organization, reinforced by informal private networks, that privileged the use of French aid for diplomatic purposes. This system is beginning to break down with the passing of the Gaullist generation of politicians in Paris and the criticisms of younger political elites not tied to Françafrique. Whether reforms in the organization of French aid – highly fragmented like that of Japan – will lead to a more coherent, accountable, development-oriented program of aid is still in question and is the key thing to watch for in the future.

German aid shows a trend of diminishing diplomatic and commercial influences and an increasing concentration of responsibilities for aid policies in its Ministry of Development. Set up as a result of coalition politics 1961, the ministry was initially a shell with few responsibilities for aid. But over time, its existence provided a political logic for successive ministers to argue successfully for greater control over German aid. That aid decreased dramatically during the economic stresses of the 1990s – especially the costs of absorbing East Germany – but it rebounded at the beginning of the new century, supported by a sizable and active NGO constituency for development aid and an activist minister of development who was also vice chairman of the Social Democratic Party – the leading party in the government coalition. Germany is committed to a substantial increase in its aid in coming years. The thing to watch is whether aid is of sufficient priority to the government for it to fulfill this commitment.

Denmark offers yet another contrast in the domestic politics of aid. Its embrace of social democratic ideas that the rich should assist the poor and that government was an appropriate vehicle for that assistance at home translated relatively easily to acceptance of development aid abroad. Its parliamentary system based on proportional representation reinforced the prominence of development aid as successive governments had to bargain with small political parties – some of which put development aid at the top of their political priorities – to create governing coalitions that raised the amount and development orientation of Denmark’s aid. The government’s need to create an adequate “resource base” (i.e., domestic constituency) for aid led it to allocate a significant portion of its aid initially to promote Danish commercial interests abroad, but this use was gradually limited over time as development criteria increasingly governed the allocation and use of this aid.

Denmark illustrates yet other interesting aspect of the domestic politics of aid. That country’s growing backlash against immigration and heavy government taxes led to the election in 2001 of a center-right coalition that reframed foreign aid – portraying it not as an extension of social democratic values abroad but as an expenditure abroad that traded off against needed health expenditures at home. The new government cut Danish aid by 10 percent, dropping that country to second place in relative generosity. But the government did not attempt to cut Danish aid further, possibly because such a move would have collided with considerable domestic resistance. Public support for aid, although declining after the election in 2001 (reflecting the reframing of aid in terms of domestic norms and preferences), was still strong. The thing to watch in Denmark is the extent to which the reelected center-right government will try to reorient Danish aid toward reducing the number of immigrants in the country and keeping others at home. Two elements in Danish identity appear in conflict when it comes to Denmark’s aid: its long tradition of caring for the poor at home and abroad versus guarding an ethnically and culturally homogenous country that seems to many Danes to be threatened by a sizable number of immigrants and refugees from very different cultures and countries. Given the sensitivities in many European countries to sizable immigrant populations within their borders, Denmark may show us one of the future faces of aid in that part of the world.

Further Insights from the Conceptual Framework

The conceptual framework of this study – including ideas, institutions, interests, and organization – was intended to provide a basis for analyzing the politics of aid in five countries. But the framework itself invites us to consider more general insights regarding the domestic politics of aid-giving.

First, norms are important in shaping and sustaining aid-giving. But how aid is framed in terms of those norms is also important. The impact of norms and framing is evident in a number of my cases – especially in the United States, where prominent members of the Christian right, previously skeptical about foreign aid, have begun to reframe certain kinds of aid as “Christian duty.” (This view of aid has long been held by Christian Democratic parties in Europe but not so prominently in the United States, perhaps because of the prevalence there of classical liberal views on the political right, which in general strongly favor a minimal role of government in society and oppose public welfare programs.) What has led to this reframing of aid in the United States? It seems likely that the emergence of a more educated, activist, and internationalist Christian right, led by elements of the evangelical community (which has increasing numbers of missionaries in developing countries), together with the rapid growth of local evangelical movement in Latin America and sub-Saharan African [sic], have fed this trend, both through learning and the experience of poverty and deprivation abroad. The support for increased aid from the evangelicals and the Christian right facilitated passage through the US Congress of significant increases in US aid proposed by the Bush administration (though this was not the only factor supporting the increase in US aid).

The case of Denmark provides another illustration of the power of the way aid is framed – in this case, by center-right parties linking it directly to the contentious issues of immigration, high taxes, and inadequate expenditures on domestic health services. Support for aid in Denmark fell when the center-right parties made these links in their electoral campaign, preparing the ground for a cut in Danish aid when the center-right took power in 2001. Both of these cases illustrate that aid can be framed and reframed in terms of number of domestic norms, and effective framing can have significant and immediate consequences for the amount and orientation of foreign aid and, over time, for the purposes of aid. The case of Denmark also suggests, however, that there may be limits, based on widely shared societal values extended over a considerable period, on how much change in aid levels and possibly aid’s purposes can be implemented through reframing. The center-right coalition refrained from cutting aid below the initial 10 percent, anticipating significant resistance to further cuts from the public and the Danish aid lobby.

The case studies confirm the argument, suggested at the beginning of the book, that the structure of governments, combined with electoral rules, can influence the purpose of aid. The need to create governing coalitions led to enhanced aid for development as a price of coalition building and maintenance, affecting the organization of aid in Germany and the amount of aid and aid’s purposes in Denmark up to 2001.2 This dynamic does not work in the winner-take-all presidential system of the United States, which discourages the formation of small political parties favoring niche issues (even though there might well be an adequate constituency base for such parties in the United States if electoral rules were based on proportional representation and the system were a parliamentary vote).

The case of Denmark illustrates the proposition that informed and engaged legislatures can affect aid’s purposes. The Folketing often debated aid issues and was long a vehicle for education and consensus-building among political elites and the public on Danish development aid. The opposite case is found in France and Japan, where the legislatures played no role in aid – they were mostly uninformed and seldom debated aid issues, leaving aid policies and decisions opaque and not subject to public scrutiny or influence. Where legislatures do not hold the executive branch to account, the public may strongly support aid, but it may be little informed about the actual uses of aid and have little impact on them. The public and political elites can also turn sharply against aid when scandals erupt involving the use of aid for commercial or political purposes, as they have in the less transparent aid systems of Japan and France.

The importance of a constituency for development aid and its degree of access to government is well confirmed by my cases. Where the constituency is weak or lacking in access – as in Japan and France, respectively – the development purposes of aid were weak. Where that constituency was strong and well connected to government decision-makers, as in the case of Denmark, aid’s development purposes were much more prominent. However, the cases of the United States and Denmark suggest an amendment to this proposition. A constituency with access to government may ensure that aid’s development purpose is prominent, but it is not usually adequate to ensure that development is aid’s only purpose. In both countries, other interests influence the purposes of aid – in Denmark, commercial interests, and in the United States, diplomatic ones. And these other interests proved essential to carrying sizable budgets forward year after year in these political systems.

Fifth, the case studies also demonstrate a relationship between the way a government organizes its aid and the priority of development in aid’s purposes. Development has gradually become a more prominent purpose in German aid as the Ministry of Development has increasingly gained responsibilities over Germany’s aid programs. The fragmented aid organizations in France and Japan have contributed to the weak development purpose in those government’s aid programs, and the stickiness of these systems has impeded efforts to elevate that purpose through government reorganization.

The bureaucratic location of aid also matters, though the relationship between location and aid’s development purposes is not as simple or straightforward as aid practitioners have often assumed. One would expect that a ministerial level development aid agency would carry more influence in government than a subcabinet-level aid agency. The case of Germany, compared to that of the United States, would seem to validate this prediction. But the case of Denmark – where aid has been fully merged into the Ministry of Foreign Affairs – suggests a caveat. The development purpose of Danish aid has not been overwhelmed by Denmark’s diplomatic policies, because those policies regarding developing countries are consistent with furthering development. In contrast, for the United States, in a position of world leadership, diplomatic goals (e.g., peace-making in the Middle East, containing communism, fighting terrorism) have a high priority in the mission of the Department of State and can collide with development purposes when aid is needed to reward regimes, even corrupt and incompetent ones, which support US policies. The potential inconsistency between development and diplomatic goals was at the heart of the conflict on the issue of merging USAID into the Department of State in the 1990s and remains alive at the time of this writing.

One further lesson on aid organization is suggested from the case studies. Even though aid systems are difficult to reform where such reforms involve major changes in government bureaucracies, change can occur through the creation of entirely new agencies – as in the case of the Millennium Challenge Corporation in the United States. This approach avoids costly confrontations with existing agencies and the interests they represent but has the downside of further fragmenting the overall organization of aid.

A final comment needs to be made about the interaction of domestic and international factors in shaping aid’s purposes. If domestic political forces are so important in influencing foreign aid, why has there been an obvious convergence in the purposes of aid over the past decade and a half among different aid-giving governments? Part of the answer is that external pressures, sustained over time, can change the fundamental determinants of aid’s purposes. Prolonged external pressures on governments of rich countries to provide more and better aid for development have affected the way publics, and particularly political elites within aid-giving governments, think about what purposes of aid should be and how their government measures up. They have, as in the case of Japan, encouraged governments to support the establishment and strengthening of development-oriented NGOs that, in turn, become lobbies for aid for development. External pressures have put development issues on the political agendas in many aid-giving countries over a period of time, helping to inform their publics on aid-giving and development needs abroad. In some cases, where governments have claimed a major world role in development aid – as in Japan, France, and Denmark – criticisms from abroad have provoked criticisms at home and have eventually motivated governments to bring their policies more into alignment with international norms for development aid.

Many of the factors leading to a convergence in aid’s purposes in the 1990s and early years of the twenty-first century relates to events within aid-giving countries rather than external pressure or events: the passing of a generation in France that cleared the way for new approaches to aid-giving; the beginning of greater accountability in Japanese political institutions; the resistance to immigration in Denmark; the rise of the evangelicals in US political life. International events, trends, and pressures are important sources of change, but they often work through domestic political forces, and those forces also produce change, independent of what is going on beyond their borders.

Implications for Policy

It was not the purpose of this book to generate policy recommendations. But there are two implications of this study that stand out as obvious, compelling, and little addressed by policy-makers. “Aid effectiveness” has almost always been defined as “developmental effectiveness,” and assessments of aid’s impact on growth have often found aid to be ineffective. Yet one of the lessons from this study is that aid’s purposes have always been mixed, related in significant part to the domestic political forces influencing the amount, allocation, and use of aid. And it seems likely that, despite an aid-for-development norm, aid’s purposes will continue to be mixed in the future. It is, therefore, irrational and potentially highly misleading to evaluate all aid according to only one of its purposes. What has long been missing is an effort to identify in detail and evaluate those other purposes of aid and to apply development criteria only to that aid that is primarily directed at development purposes.3 Roughly half of US bilateral aid might fall into the category of “aid primarily for nondevelopment purposes” – much of it tied to diplomatic purposes of various kinds – which should be evaluated as to whether it achieved those purposes. For example, was US aid for peace-making in the Middle East effective in helping to further peace between Israel and its neighbors? To what extent was aid successful in resisting the expansion of communism in Europe in the 1940s and 1950s and Central America in the 1980s? How effective has French aid been in fortifying a sphere of influence in Africa? To my knowledge, there has been no effort on the part of any aid donor at any time to provide a rigorous evaluation of its aid programs for purposes other than development.

This lack of a comprehensive effort to evaluate aid effectiveness in terms of its various purposes is not just a problem of bureaucratic untidiness. It is highly relevant to the future of development aid. The increases in aid during the early years of the twenty-first century have been justified in part on the promise that aid will be more effective in the future than it has been in the past, based on greater selectivity of recipients, better “ownership” on the part of recipients, and improved aid management through an emphasis on results. Yet aid is still provided for mixed purposes. If evaluations of aid’s impact in the future continue to apply development criteria indiscriminately to all aid rather than distinguish among aid’s different purposes and if future evaluations find that aid’s impact on development is still disappointing, there could well be an unjustified backlash against aid in general among the public and political elites in aid-giving countries. It is important to take the full range of aid’s purposes into account in making our evaluations, and we are not there yet.

A second policy implication involves aid effectiveness. All the donor governments in this study have committed themselves to increase their aid for development substantially throughout the remainder of the first decade of the twenty-first century. If they should seek to fulfill that commitment (which is not guaranteed), most of them lack the organizational capacity to manage dramatic increases in aid. The fragmented systems of the United States, Japan, France, and even Germany will make policy coordination within aid-giving governments, the design and implementation of greatly expanded development-aid programs and projects, and their monitoring and evaluation very challenging. Yet major increases in aid will have to be allocated and disbursed quickly; large and growing pipelines will lead legislatures to go slowly on approving increases in aid, as the US Congress has done with the Millennium Challenge Account. But moving large amounts of aid quickly, especially in fragmented donor aid systems, risks using it poorly, compelling donor governments to transfer the bulk of it to the governments of poor countries (rather than using NGOs and other intermediaries, for example, for small, community-based activities), which themselves lack the capacity to use aid well and the systems to ensure it is used for the purposes intended. If rapidly rising amounts of aid are wasted or fuel corruption in recipient countries, public support for aid in donor countries could erode and lead to a drop in aid in the future. Organization – and capacity – matters more than ever, both among donor and recipient governments.

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