Aid Effectiveness? - Slide 5

Decades of western aid have done little to ease suffering in many developing countries, particularly in Africa.

Sub-Saharan Africa has long been the most aided major region of the developing world. Aid as a proportion of gross domestic product there has averaged over 5% for much of the past two decades, has reached nearly 10% at times and still equals nearly 6% of the region's GDP. These proportions are much higher in many smaller African countries.

But, despite this level of assistance, development performance in nearly all African countries has been deeply disappointing - indeed the overall picture is very grim.

Because of relatively low growth rates in most African countries over the past four decades, combined with high and rising population, average per capita incomes have fallen since 1970. Although average per capita income in the region increased modestly in 1995-7, it was still 15% lower in that period than it was in 1976-8. More than 300 million Africans live on less than a dollar day and two-thirds of the world's poorest countries are located in Africa. Every 12 hours the same number killed on 9/11 perish from AIDS in Africa, which has 2/3 of the world's cases. In a year 150,000 die giving birth, It is the only region of the world with regular savage wars, and the only continent that has grown steadily poorer over the last 30 years - between '70 and '00 Africa lost half its share of world markets to other developing nations. Over 50% of its population is under eighteen. Finally, making improvement even more difficult, at least 70,000 skilled graduates leave every year.

For many this begs serious questions about the delivery of aid and the prospects for poverty reduction.

Some observers, like Phyllis Pomerantz, argue that foreign aid as currently configured and presented is unnproductive, vain, and fruitless. Instrumental rationality has overtaken purposeful action and reform; reform that places people at the center of interaction and change. The failure of aid is not due to political economy or state sovereignty, selfishness, corruption, greed and/or arbitrary use of government power. It is culture that really matters. She makes a cultural case for why donors and governments need to begin to build greater levels of trust in order for aid to truly be effective. She calls for greater cultural sensitivity and dialogue between giving and receiving countries. If aid reform is to bring sustained development to Africa it can only be successful if aid agencies and other institutional entities change what they are currently doing.

Some observers take the view that aid is always a means of influence: political, commercial, military and security-related - however disguised or covert. Some influence is benign, but much of it is coercive, even imperialistic. They argue that, given the nature of aid, its effectiveness should be judged not only in developmental terms, but in terms of international relations. They assert that on both counts, the returns are meagre.

Others point to the protectionist practices of developed countries. E.g. to protect its farmers, the EU spends $350 billion/year with is 14 times the aid given to all of Africa and equal to its total annual income - thereby damaging its farmers and helping cause economic problems.

Kenyan economist James Shikwati takes the radical view that it is aid itself which has caused many of Africa's problems. The helpful intentions of donors have been damaging the continent for the past 40 years. If the industrial nations really want to help the Africans, he argues, they should terminate the aid. The countries that have collected the most development aid are the ones that are in the worst shape. Despite the billions that have poured in to Africa, the continent remains poor. Huge bureaucracies are financed with the aid money, corruption and complacency are promoted, Africans are taught to be beggars and not to be independent. In addition, development aid weakens the local markets everywhere and dampens the spirit of entrepreneurship that needed. If the West were to cancel these payments, normal Africans wouldn't even notice. Only the functionaries would be hard hit. Which is why they maintain that the world would stop turning without this development aid.

For their part donors are also beginning to ask themselves questions about aid effectiveness and to re-evaluate their programmes and approaches. But it would be asking too much of them to accept that aid isn't working at all.

Drivers of Change analysis came about in response to the debate about the overall effectiveness of aid and the "development model" (the set of assumptions about the way countries develop and the role of aid in that) which underpins donor agencies policies and strategies.

One key recognition is that politics is important - development will be much slower if the political environment is not conducive. Drivers of Change analysis is one of the tools DFID and other donors are using to become better aware of the political context of their programmes; to identify sectors in which there may be the political will for reform and those in which there is not.

Link to Aid Effectiveness? slide.

1. DRIVERS OF CHANGE - OR STAGNATION?
2. BACKGROUND TO 'DRIVERS OF CHANGE' ANALYSIS
3. POLITICAL ECONOMY
4. METHODOLOGY
5. AID EFFECTIVENESS?
6. KEY FINDINGS OF 'DRIVERS OF CHANGE' STUDIES
7. Poverty Reduction Strategies (PRS)
8. The Politics of Survival
9. Patrimonialism
10. Political Incentives for Poverty Reduction
11. The Role of 'Good Governance' in Development
12. Can Aid Be Made More Effective?
13. Summary of Findings