Aid: The Debate
By Fonju Ndemesah
The growing importance of aid in development has fostered a wide debate among intellectuals, observers, and development practitioners. While some argue that there is no correlation between aid and development; others are pointing at the positive link existing between aid and development. In this article, we are going to look at some key figures in this debate. However, it should be clear to all that this is just a minor section of a very broad and complex debate. The analysis below, nonetheless, endeavors to point at some key position and their critiques.
The various perspectives on aid are many and diverse. Scholars like Peter Singer contend that “aid has added around one percentage point to the annual growth rate of the bottom billion”; and that this has helped to improve, however, the situation of some of the “bottom billions”. In the other hand, thinkers like James Shikwati posit that, because the aid goes into the hand of corrupt governments, foreign aid is more a liability than an asset to the recipient nations. Asante sustains that, on balance, foreign assistance, especially foreign capitalism, has been somewhat deleterious to African development, and that all the forms of aid have been counterproductive.
Easterly posits that, just like resource rich countries, aid to a country can also produce a ‘resource curse’ situation. Aid, according to Easterly, can often deform incentives in poor countries in various negative ways. In Dead Aid: Why Aid Is Not Working and How There is Another Way for Africa, Damisa Moyo argues that foreign aid has harmed Africa and that it should be phased out.
Aid criticism stemming from the above statistical studies has pushed some International Nongovernmental Organizations (INGO), Think Tanks and Citizen Movement to call for a new Foreign Assistance Act.
Reform or revolution?
Beyond the above empiric studies, some theoretical studies have been put forward to foster the aid debate; these studies can be divided into two camps: scholar who say changes can be done on the present system to make it better (we will call these group of scholars reformists); and on the other side, scholars who argue that the only possible solution is a systemic change (we will called this group of scholars revolutionists).
It should be clear to everyone that this division is just to ease the explanation of a complex issue. In addition, the above division does not imply that these theorists identify their studies as reformists or revolutionary. Furthermore, it does not mean that aid theorists or theories fall in these two extremes. Aid theory can be seen as a continuum with diverse and oftentimes opposite perspectives.
Reformists Theorists who belief that there is fire in the house, but the fire have not yet totally consumed the house, can be read in works of scholars such as McGillivray, Paul Mosely , David Dollar, and William Easterly. William Easterly’s approach termed the “Searchers Approach”, posits that to foster the livelihood of the poor, we need to use a bottom-up model. Rather than working with planned strategies working with governments, he sustains that aid donors starts by surveying the poor in the countries in question, and then try to directly aid individuals, rather than governments. This position is in clear contrast to the hegemonic standard western model supported by scholars such as Jeffrey Sachs. Sachs in his book, The End of Poverty: Economic Possibilities for Our Time (2005) sustains that extreme poverty can be eradicated through planned aid. This, according to him, can be reached simply by having a broad analytical “checklist” of things a country must attain before it can reach the next step on the ladder to development. To achieve this goal, he proposes a top down approach, utilizing plans developed by multilateral organizations such as UN and World Bank. This approach has been termed "Ladder Approach".
To adjust the above extreme positions, David Dollar for example posits that focus has to be placed instead on efficiency. He sustains that aid be channeled more towards countries with “good” policy. Paul Mosely, on his part, argues that the most important factors in efficiency of aid are income distributions in the recipient country and corruption. McGillivray contends that the problem lies in the fact that fragile states, with high volatility, and risk of failure scares away donors. For him, this needs to be adjusted.
Revolutionists These scholars strongly believe that aid or no aid in the present international system will yield no tangible result. Francis Nyamnjoh. (2005) talking about the modernization vision of development sustains that it is a “giant compressor determined to crush every other civilization in order to reduce them to the model of the industrialized west. That is the reason why modernization theory can also be termed the theory of the convergence of civilizations”.Dependent theorists such as André-Gunder Frank (1966) see development as a process of “development of underdevelopment”. That is, rather than seeing the cause of underdevelopment in the psychological, political, and sometimes genetic irregularities of the Third World countries and people, the dependency theorist saw the mechanical vision of development of the traditional development paradigm as a great cause of underdevelopment. Followers of this theory question the vision of development as a universal process. They favor a particularized vision of development that will look at the socio-economic, ideological, and political reality of a country or region. They also brought the idea of structural inequality, where development in one part of the globe inevitably produces underdevelopment in the peripheries due to the presence of “global dualism” in the economic system. For these thinkers development and underdevelopment are inter-connected. Hence, any aid in the present global system will yield little or no concrete outcome.
Sources
Moyo, Dambisa (2012). Winner Take All: China's Race for Resources and What It Means for the World. New York: Basic Books.
Easterly, William (2006). The White Man's Burden: Why the West's Effort to Aid the Rest Have Done So Much Ill and So Little Good. Penguin.
Sachs, Jeffrey D. (2005). The End of Poverty: Economic Possibilities for Our Time. New York: Penguin Books.
Paul Mosley, John Hudson, Arjan Verschoor (2004). Aid, Poverty Reduction and the ‘New Conditionality.The Economic Journal, Volume 114, Issue 496
The growing importance of aid in development has fostered a wide debate among intellectuals, observers, and development practitioners. While some argue that there is no correlation between aid and development; others are pointing at the positive link existing between aid and development. In this article, we are going to look at some key figures in this debate. However, it should be clear to all that this is just a minor section of a very broad and complex debate. The analysis below, nonetheless, endeavors to point at some key position and their critiques.
The various perspectives on aid are many and diverse. Scholars like Peter Singer contend that “aid has added around one percentage point to the annual growth rate of the bottom billion”; and that this has helped to improve, however, the situation of some of the “bottom billions”. In the other hand, thinkers like James Shikwati posit that, because the aid goes into the hand of corrupt governments, foreign aid is more a liability than an asset to the recipient nations. Asante sustains that, on balance, foreign assistance, especially foreign capitalism, has been somewhat deleterious to African development, and that all the forms of aid have been counterproductive.
Easterly posits that, just like resource rich countries, aid to a country can also produce a ‘resource curse’ situation. Aid, according to Easterly, can often deform incentives in poor countries in various negative ways. In Dead Aid: Why Aid Is Not Working and How There is Another Way for Africa, Damisa Moyo argues that foreign aid has harmed Africa and that it should be phased out.
Aid criticism stemming from the above statistical studies has pushed some International Nongovernmental Organizations (INGO), Think Tanks and Citizen Movement to call for a new Foreign Assistance Act.
Reform or revolution?
Beyond the above empiric studies, some theoretical studies have been put forward to foster the aid debate; these studies can be divided into two camps: scholar who say changes can be done on the present system to make it better (we will call these group of scholars reformists); and on the other side, scholars who argue that the only possible solution is a systemic change (we will called this group of scholars revolutionists).
It should be clear to everyone that this division is just to ease the explanation of a complex issue. In addition, the above division does not imply that these theorists identify their studies as reformists or revolutionary. Furthermore, it does not mean that aid theorists or theories fall in these two extremes. Aid theory can be seen as a continuum with diverse and oftentimes opposite perspectives.
Reformists Theorists who belief that there is fire in the house, but the fire have not yet totally consumed the house, can be read in works of scholars such as McGillivray, Paul Mosely , David Dollar, and William Easterly. William Easterly’s approach termed the “Searchers Approach”, posits that to foster the livelihood of the poor, we need to use a bottom-up model. Rather than working with planned strategies working with governments, he sustains that aid donors starts by surveying the poor in the countries in question, and then try to directly aid individuals, rather than governments. This position is in clear contrast to the hegemonic standard western model supported by scholars such as Jeffrey Sachs. Sachs in his book, The End of Poverty: Economic Possibilities for Our Time (2005) sustains that extreme poverty can be eradicated through planned aid. This, according to him, can be reached simply by having a broad analytical “checklist” of things a country must attain before it can reach the next step on the ladder to development. To achieve this goal, he proposes a top down approach, utilizing plans developed by multilateral organizations such as UN and World Bank. This approach has been termed "Ladder Approach".
To adjust the above extreme positions, David Dollar for example posits that focus has to be placed instead on efficiency. He sustains that aid be channeled more towards countries with “good” policy. Paul Mosely, on his part, argues that the most important factors in efficiency of aid are income distributions in the recipient country and corruption. McGillivray contends that the problem lies in the fact that fragile states, with high volatility, and risk of failure scares away donors. For him, this needs to be adjusted.
Revolutionists These scholars strongly believe that aid or no aid in the present international system will yield no tangible result. Francis Nyamnjoh. (2005) talking about the modernization vision of development sustains that it is a “giant compressor determined to crush every other civilization in order to reduce them to the model of the industrialized west. That is the reason why modernization theory can also be termed the theory of the convergence of civilizations”.Dependent theorists such as André-Gunder Frank (1966) see development as a process of “development of underdevelopment”. That is, rather than seeing the cause of underdevelopment in the psychological, political, and sometimes genetic irregularities of the Third World countries and people, the dependency theorist saw the mechanical vision of development of the traditional development paradigm as a great cause of underdevelopment. Followers of this theory question the vision of development as a universal process. They favor a particularized vision of development that will look at the socio-economic, ideological, and political reality of a country or region. They also brought the idea of structural inequality, where development in one part of the globe inevitably produces underdevelopment in the peripheries due to the presence of “global dualism” in the economic system. For these thinkers development and underdevelopment are inter-connected. Hence, any aid in the present global system will yield little or no concrete outcome.
Sources
Moyo, Dambisa (2012). Winner Take All: China's Race for Resources and What It Means for the World. New York: Basic Books.
Easterly, William (2006). The White Man's Burden: Why the West's Effort to Aid the Rest Have Done So Much Ill and So Little Good. Penguin.
Sachs, Jeffrey D. (2005). The End of Poverty: Economic Possibilities for Our Time. New York: Penguin Books.
Paul Mosley, John Hudson, Arjan Verschoor (2004). Aid, Poverty Reduction and the ‘New Conditionality.The Economic Journal, Volume 114, Issue 496
