Aid and Influence

Patronage, Power and Politics

Stephen Browne

• Editorial: Routledge
• Año: 2022
• ISBN:
  9781000574951
• Edición: 2
• Categoría: Economía
• Categoría: Economía del desarrollo

This book turns the argument about aid effectiveness on its head. Since development assistance is inherently self-interested, a source of soft power, political manipulation and commercial opportunity, its real effectiveness could arguably be judged by the strength of donor influence and not by development impact. Its subjective nature means that its impact on development is often weak, mainly short-term and confined to limited and specific contexts.

Aid as influence was prevalent during the Cold War era. The connection is equally strong in this century's newly bipolar world in which the contest is between western donors led by the United States, and China which is spending hundreds of billions of dollars on infrastructure as a means of influence in the global South. Influence permeates both bilateral and multilateral aid and in parallel with official aid, the rise of global philanthropy has seen it taken up by some of today's billionaires.

The response by donors to the growing havoc caused by the three Cs – conflict, climate change and COVID-19 – confirms the main findings of the book, which concludes by outlining what aid without influence would look like. This book draws on the author's 40 years of experience of the aid industry and will be essential reading for development students, practitioners and policy makers alike.

1IntroductionDefining aid and its purposes

DOI: 10.4324/9781003134473-1

This introductory chapter describes the origins and definitions of development assistance. It describes why and how it comes to be out of sync with development needs, as conventionally defined. It sets out the central argument of the book which highlights the self-serving nature of aid and discusses how the motivations for aid can be seen through theories of international relations.

The historical perspective

Aid is a form of patronage that grew up alongside the independence movement that began in the 1940s. But the notion of resources freely given was then a radical idea. History tells us that in the pre-aid era the development of independent countries proceeded by way of familiar commercial principles. For example, back in the early 18th century, when Peter the Great started the modernisation of Russia, he turned to the outside for assistance, inviting the best engineers, shipbuilders, architects and craftsmen in from Europe. Hundreds of Russians were also sent to Europe for an education and to learn new skills. Japan opened to the outside world in the mid-19th century, and sought to catch up with the West, also calling for external assistance. More than 3,000 foreign experts were brought in with a range of skills. Japanese were sent abroad to study in growing numbers (Morgan 2002).

In the last century, the Iran of Reza Shah built infrastructure – including the Trans-Iranian railway – with foreign help since it lacked its own skilled manpower. He made a point of hiring these experts on an individual basis and under Iranian control, since he did not want to be subjected to foreign influence. There is also an important historical example from the Republic of China. Soon after its establishment at the end of World War I, the League of Nations received a request for help with its modernisation through the provision of capital and skills. In the ambiance of contemporary international relations, the deal required careful negotiation. The League was at pains to adhere to its neutrality and to demonstrate that the missions were purely technical in character. But by the early 1930s the first foreign experts (in health and hygiene) were in the field. In 1933, a ‘technical representative’, acting as a resident development ambassador of the League, was appointed in 1933 and by 1941 the League had provided China with 30 experts (Rist 1997). This was probably the first example of multilateral assistance to the South.

In all these historical instances of countries seeking to modernise, they decided on their best courses of action and purchased overseas the skills which they lacked. Where additional capital was also needed, they borrowed on commercial terms, abroad if necessary. The client country paid and the jobs got done the way the client wanted. These were examples of how technical and capital assistance from abroad helped drive progress. It was development cooperation in which market rules applied: supply responding to demand.

That was then. When official aid began to be offered, it was in the form of top-down patronage – a well-meaning attempt to push development along in poorer countries by means of resources from the rich. It was mostly pre-financed, meaning that it was offered and fully financed in advance by the donor, either as a grant or a subsidised loan, consisting of transfers from public sectors in the North to the public sectors of the South. From these conditions has flowed the whole complexion of aid which, as this book will set out to demonstrate, has been a creature mainly of rich country governments. The notion of aid as pre-financed patronage is so ingrained that it is rarely questioned. Over the years, the misleading term ‘cooperation’ has crept into the development lexicon, but aid, or development assistance, has generally connoted a richer party helping a poorer party as part of a from-to relationship.

If the notion was based on the assumption that the newly independent developing countries could not afford to do what Russia, Japan, Iran, China, Argentina and others had done prior to the aid era – buy or borrow commercially what they needed from outside – then the assumption was false. Most developing countries were adequately solvent at the time of their independence to have afforded to procure assistance. Part of the proof is the fact that, as dependent states, they had not been kept afloat on the patronage of the colonial powers but were – for the most part – economically viable. Given the precipitous nature of its birth, Bangladesh was one of the exceptions, especially following the devastating consequences of a tropical cyclone in 1970. As dependencies, their external markets were closely meshed with those of the metropolitan powers. Those powers were keen to see the newly independent countries become thriving markets and what they needed most at independence was the continuation of favoured market access, and a fair trading and financial system to compensate for falling commodity prices. (It was a logic inspired by the experience of the Marshall Plan in Europe in which US assistance helped to kick-start economies expected to become growing consumers of American goods.) In other words, then as now, developing countries needed trade and fairer global rules in preference to aid. But this was not to be. One of the greatest development misapprehensions was that channelling resources to poorer countries would automatically put them on the road to prosperity.

‘Pre-financed’ aid was difficult to refuse when it was offered – although some developing countries, like Sri Lanka (which first benefited handsomely from rising export prices), still needed some persuading (De Silva 1984). In this book, we seek to discover the extent to which even technical assistance and other development services, although pre-financed, have in reality been un-free, because of the connections and agendas which have trailed it. The most eloquent manifestation of the problems of pre-paid assistance is the constant exhortation heard in aid circles about the need for ‘country ownership’. Messrs. Nehru, Sukarno, Tito and other leaders at the first Bandung conference of newly independent countries (1955) would be dismayed to look down today and find that ownership is even an issue. Pre-financing substantially undermined it.

And of course, much of the aid came as concessional loans – for infrastructure, but also for technical assistance, critical commodities and even food aid. With lending have come added perils. In addition to buying many unsuitable things and tying up additional domestic resources, donor-driven loan projects often fall short of those much-vaunted rates of return, adding to general indebtedness. Right up to today most recipients have never been able to repay their aid debts in full. On the contrary, overall indebtedness has steadily worsened and most of the poorest developing countries are financially in a much more precarious state than when they started out at independence.

Bureaucracy has played its part in the aid story. Unlike in those earlier historical instances, aid was founded on transfers between governments. But as a child of bureaucracy, it took on other attributes. Bureaucracy breeds procedure and formality. As Morgan puts it, aid ‘was now to be managed as a public sector activity in accordance with the government regulations and procedures of each supplying country. Technical assistance activities were to be bureaucratically structured and controlled as part of a process of change’.

This author knows at first hand that bureaucrats are not adept at devising simple procedures. And multilateral bankers are scarcely any better. From the beginnings of aid, recipient countries have faced the costly administrative need to accommodate the innumerable and separate requirements for aid design, approval and reporting of individual donor sources. Donors are today belatedly striving to ‘simplify and harmonize’ their procedures for the benefit of recipients. Juggling multiple procedures was and is the reverse of logic: donors should have been responding to the respective requirements of the recipients. Harmonisation has become another mantra like country ownership. There are also rigidities in bureaucratic working practices that are ill-suited to supporting development processes. The new development specialists co-opted the project – a device from the engineering field – as their primary instrument for administering aid. The project conveniently divides aid into time- and money-bound fragments and is geared to short-term ‘results’. For capital funding of infrastructure and other tangible assets, projects have obvious relevance. But technical assistance also wholeheartedly bought into projectisation, because of the many advantages which it seemed to offer to aid administrators. Projects are an appropriate channel for public funds approved in annual tranches and intended to deliver visible short-term returns. The performance of aid agency staff is also measured by their effectiveness in moving the pre-approved money since low ‘delivery’ threatens future aid flows. In reality, however, the complexities of the development process do not lend themselves to quick-time inputs and outputs, which are more suited to limited technocratic challenges. Development is about lengthy, localised and idiosyncratic change. It is engendered within a subtle context alien to project rhythms and often resistant to outside interventions; however, well-meant. From the beginning, the project fixation within bureaucracies distracted agencies from all-important political and institutional issues, the critical importance of which only surfaced more recently in aid considerations.

From publicly administered aid arose numerous well-financed development agencies in donor countries, which took on lives of their own – in fact, if any has ever closed down, it has usually been resurrected under a new acronym. There are now more than 80 of them administering tens of thousands of separate projects. In addition to their complex procedures and working practices, aid agencies develop their own agendas, which serve the interests of their paymasters in ministries of finance and...

Índice

• Cover
• Endorsements Page
• Half-Title Page
• Title Page
• Copyright Page
• Contents
• List of figures
• List of tables
• Preface: the birth of Bangladesh
• Acknowledgements
• 1 Introduction: Defining aid and its purposes
• 2 The rationale for aid
• 3 US aid: Weaponised development assistance
• 4 China’s aid as influence
• 5 UK aid and influence: From ‘superpower’ to perfidious Albion
• 6 Influence and multilateral aid
• 7 Influence through conditionality
• 8 Private aid and influence
• 9 Aiding fragile states
• 10 The future of aid
• Index