(The latest version of this page is at Pattern Descriptions. An archived copy of this page is held at https://www.patternsofpower.org/edition02/3581.htm)
Aid to developing countries is channelled through governments, civil society, the World Bank and the UN. There is a widespread feeling that aid is often wasted and that it fosters a dependency culture, but a small amount of aid has been proven to work in helping a country, like India for example, to reach self-sufficiency in food.[1] And such countries can then start to trade their way out of poverty, as India is doing. The amount of aid required was identified in the Millennium goals,[2] and some progress is being made in achieving the targeted improvements,[3] but most wealthy countries are not meeting their targets on giving aid.[4]
Even if the targets were being met, there are problems in how to give aid in such a way that the benefits go to the recipients:
· One of the arguments against assisting poorer countries is that it would be a waste of money because of corruption and it might even be used to buy weapons.[5]
· Competition between charities is wasteful: increasing their marketing costs and causing confusion and duplication in aid delivery.[6]
· The intervention of external agencies distorts a countrys economy and undermines its ability to help itself.[7]
· It is cynical to regularly supply aid in the form of food, which benefits the farmers in the donor country whilst destroying the market for farmers in the recipient country.
These points, which are acknowledged by some of those involved, are not sufficient to argue that all assistance is a waste of money at a minimum it will always have a tactical humanitarian role.[8] It is a question of managing it well:
· It is possible to ensure that the money goes directly to the people rather than to their governments. Jeffrey Sachs gives the example of insecticide-treated bed nets, which have proven to be a very effective in preventing malaria and it would be difficult for officials to misuse them.[9] Another example is building houses, with running water and toilets, to replace slum dwellings.[10]
· Similarly, infrastructure projects, such as the provision of clean water or better roads, can be supported by ensuring that payment is given directly to the contractor who carries out the work.
· Aid can be provided in the form of seeds and technical help, directly to the farmers.
· The governance of aid can be improved: partly by rich countries refusing to take bribes but mainly by reform within the recipient countries, as suggested by Paul Collier for example.[11]
If these precautions are taken, aid can be used both to respond to crises and to help launch economic growth. Its funding is currently unreliable though it is subject to economic and political circumstances in donor countries. It has been suggested that aid could be funded by a Robin Hood Tax or Tobin tax (3.5.5) on bank transactions, but that would lead to governance problems in controlling both the collection of the tax and the spending of the proceeds.[12] By contrast, the present arrangements for aid, though chaotic, are either under political control or they are entirely voluntary.
© PatternsofPower.org, 2014
[1] Jeffrey Sachs, in the 4th Reith lecture of 2007, Economic Solidarity for a Crowded Planet, broadcast by the BBC, said:
Current agronomic technologies can triple food production. The key in that case is to get smallholder farms the vital inputs of high-yield seeds, fertilizers, and small-scale water management techniques that can dramatically boost farm yields. Africa can and must have a Green Revolution as India initiated nearly forty years ago. Malawi has started this year, with a program to guarantee vital inputs for the poorest farmers. Food yields have soared, in a neighborhood of acute food shortages. And we should certainly remember that India's Green Revolution also depended on international aid in its early years. Virtually every country has needed a helping hand at some point. It's a rule of life.
The text was available from http://www.bbc.co.uk/radio4/reith2007/lecture4.shtml in April 2014.
[2] The UN Millennium Development Goals (MDG) website was at http://www.un.org/millenniumgoals/ in April 2014.
[3] The Millennium Development Goals Report 2010 was available in April 2014 at http://www.un.org/millenniumgoals/pdf/MDG%20Report%202010%20En%20r15%20-low%20res%2020100615%20-.pdf
[4] In October 2010, The Guardian reported on progress against the Millennium Development Goals, and noted that:
Just a handful of countries Denmark, Luxembourg, the Netherlands, Norway and Sweden have met or exceeded the UN's modest target of 0.7% of GDP for foreign development assistance.
This report was downloadable in April 2014 from http://www.guardian.co.uk/commentisfree/2010/oct/07/millennium-development-goals-un-poverty.
Thomas Pogge has also pointed out, in an article entitled Unfair Share, that the targets have been progressively changed: from a commitment to halve the absolute number of undernourished people between 1996 and 2015 into a commitment to halve the proportion of extremely poor people among the population of developing countries and between 1990 and 2015. He points out that these changes make the targets easier to meet, because they now compensate for population growth and have been backdated to include China's spectacular progress in the 1990s. This article was published in the RSA Journal in Spring 2011 and was available in April 2014 at http://www.thersa.org/fellowship/journal/features/features/unfair-share.
[5] In an article entitled Following the aid money with Linda Polman on the Reuters Great Debate UK blog, Linda Polman wrote:
Warring factions use money and supplies intended for humanitarian purposes for their own gain.
This article was available in April 2014 at http://blogs.reuters.com/great-debate-uk/2010/05/19/following-the-aid-money-with-linda-polman/.
A BBC article on 4 March 2010, entitled On the trail of Ethiopia aid and guns, made a more specific allegation about aid money being used to buy weapons; it was available in April 2014 at http://news.bbc.co.uk/1/hi/programmes/from_our_own_correspondent/8548412.stm.
[6] In the same article, Linda Polman wrote:
An estimated 37,000 international non-governmental organisations follow the flow of aid money and compete with each other for billions of dollarsŠ
[7] Clare Lockhart, in an article entitled The Failed State We're In, in Prospect magazine in June 2008, wrote:
Šthere is growing evidence that aid projects can undermine reconstruction. The funding imbalance between government programmes and aid projects, together with distorting wage policies, are damaging the functioning of the state and market in Afghanistan.
This article also confirmed the point made in the previous endnote, about the confusion created by multiple agencies. It was available in April 2014 at http://www.prospectmagazine.co.uk/2008/06/thefailedstatewerein/.
[8] A UK think tank, The Overseas Development Institute (ODI), in an article Aid and war: a response to Linda Polmans critique of humanitarianism, agrees that the problems she highlighted are real but then goes on to say:
While agreeing that humanitarian aid has had perverse effects, the Opinion argues that the picture is no longer as bleak as suggested. Humanitarian agencies have learned the lessons of the past, and now work in a more professional, coordinated and monitored way than in previous decades.
This article was available in April 2014 at http://www.odi.org.uk/opinion/4835-aid-war-response-linda-polmans-critique-humanitarianism.
[9] Jeffrey Sachs, in the 4th Reith lecture cited above, said:
Powerful technologies, as simple as insecticide-treated bed nets and a new generation of anti-malaria medicines, can control malaria by 90 percent or more.
The text was available from http://www.bbc.co.uk/radio4/reith2007/lecture4.shtml in April 2014.
[10] The Niall Mellon Township Trust, whose web-site was at http://www.nmtownshiptrust.com/ in April 2014, has built tens of thousands of houses for poor people in Africa.
[11] Paul Collier made suggestions on increased transparency and other measures for improved governance of aid, in his book The Bottom Billion. A Financial Times review of this book, published on 13 May 2007 and entitled How the bottom billion are trapped, was still available for registered users in April 2014 at http://www.ft.com/cms/s/2/4858ed7e-0178-11dc-8b8c-000b5df10621.html#axzz18fCfzGPb. Collier was also interviewed on EconTalk on 28 January 2008; the podcast and a transcript of the highlights were available in April 2014 at http://www.econtalk.org/archives/2008/01/collier_on_the.html.
[12] The Robin Hood Tax has been proposed as a small tax (0.05% has been suggested) on inter-company bank transactions, as previously suggested by James Tobin. This became a popular concept after the bank bail-out that was necessary to resolve the 2008-9 economic crisis. In April 2014 there was a website at http://robinhoodtax.org/ to publicise the idea, but it was thought unlikely to be implemented by many commentators, including a February 2010 article in The Telegraph which was available in April 2014 at http://blogs.telegraph.co.uk/news/tobyyoung/100025643/a-robin-hood-tax-is-a-terrible-i-mean-brilliant-idea/.