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    Foreign Aid and Dev

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    Ayneh Maqpoon
    Foreign aid consists of resources like goods, skills and finances transferred from donors to recipients to promote development and welfare. It has evolved from emergency relief after World War II to become a major source of funding for developing countries. However, measuring the impact of aid is challenging due to gaps in data and uncertainties in methods. While aid has helped some countries like Botswana, it has also created dependency in many African nations and failed to significantly reduce poverty. Donors need to better align aid with recipient development strategies and promote transparency and accountability.

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    Foreign Aid and Dev

    Uploaded by

    Ayneh Maqpoon
    66 views16 pages
    Foreign aid consists of resources like goods, skills and finances transferred from donors to recipients to promote development and welfare. It has evolved from emergency relief after World War II to become a major source of funding for developing countries. However, measuring the impact of aid is challenging due to gaps in data and uncertainties in methods. While aid has helped some countries like Botswana, it has also created dependency in many African nations and failed to significantly reduce poverty. Donors need to better align aid with recipient development strategies and promote transparency and accountability.

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    foreign aid and dev

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    Foreign aid consists of resources like goods, skills and finances transferred from donors to recipients to promote development and welfare. It has evolved from emergency relief after World War II to become a major source of funding for developing countries. However, measuring the impact of aid is challenging due to gaps in data and uncertainties in methods. While aid has helped some countries like Botswana, it has also created dependency in many African nations and failed to significantly reduce poverty. Donors need to better align aid with recipient development strategies and promote transparency and accountability.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    66 views16 pages

    Foreign Aid and Dev

    Uploaded by

    Ayneh Maqpoon
    Foreign aid consists of resources like goods, skills and finances transferred from donors to recipients to promote development and welfare. It has evolved from emergency relief after World War II to become a major source of funding for developing countries. However, measuring the impact of aid is challenging due to gaps in data and uncertainties in methods. While aid has helped some countries like Botswana, it has also created dependency in many African nations and failed to significantly reduce poverty. Donors need to better align aid with recipient development strategies and promote transparency and accountability.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 16

    FOREIGN AID AND

    DEVELOPMENT
    Lecture 5
    2 Oct 2019
    2K19
    Foreign Aid

     It consists of all resources – physical goods, skills and technical


    know-how, financial grants or loans transferred by donors to
    recipients.
     Development Aid: Aid directed to poverty reduction, human
    welfare and development.
     Development Assistance Committee: formed in 1960, 29
    members. Coined ODA.
     Official Development Assistance: Government aid designed to
    promote economic development and welfare of developing
    countries. Pakistan, Nepal, Mongolia, Tanzania, Haiti, Brazil,
    Botswana.
    History of Foreign Aid

     The role of aid was a source of capital to trigger economic


    growth through higher investment during 50s;
     Backward agri sector and modern industrial sector, not
    sufficient for economic development;
     In the wake of the Second World War comprise the major
    basis for the development of today’s aid machinery;
     1948: George Marshall, planned to aid the reconstruction of
    war-torn Europe at end of WW II. Industrial centers were
    ruined, agricultural production disrupted, infrastructure
    destroyed. Aid given $13b for infrastructure development,
    food supply, fuel and machinery.
     UN Charter: agreed in 1945, committed all countries to work for
    promotion of higher living standards, full employment, economic
    and social progress.
     Universal Declaration of Human Rights: 1948, everyone has a right
    to food, clothing and shelter.
     Church initiated the delivery of social services.
     1950s: emergency relief aid was dominated by FAO; launched its
    first ‘freedom from hunger’ campaign to sensitize the world.
     1960s: Multilateral and bilateral aid gained prominence. UN
    proclaimed it as first Development Decade, formulating a strategy
    for flow of capital to developing countries – 1% of national income.
     Success of Marshall Plan turned the focus to problems of
    developing world.
     Assistance was given in 1970s during first oil crisis by IMF,
     In 1980s World Bank started structural adjustment loans;
     Unicef-financed study Adjustment with a Human Face argued
    that adjustment policies neglected the poor and should be
    redesigned;
     1990 W.B designed New Poverty Agenda of donor agencies
    but initially resisted;
     Loans and grants,
     Aid is treated as a foreign policy instrument applied to help
    achieve a range of political, strategic, economic, as well as
    humanitarian objectives.
     Donors require conducive environment in recipient countries
    as well as absorptive capacity;
     Evidence: U.S aid guided by strategic considerations, Japanese
    aid by commercial objectives and Dutch and Nordic aid by
    recipient needs.
     Pakistan has received $22.85 Billion from all donors in last five
    yrs. G7 countries contributed $339 Million to higher education,
    Does Foreign Aid Really Work?

     Mousetrap: Efficacy of aid remains a contested issue;


     Assessing impact of aid difficult, different factors are
    at play in eco. and social development;
     Impact of development intervention will not
    produce result in a short span;
     Positive impact of aid is heavily dependent on
    ownership and commitment to the development
    projects by the recipient.
    Measuring Impact of Aid

     Since its inception, the impact has been disputed. Critics of aid
    assert that it does not work but its supporters contend that it
    does.
     Discrepancies: gaps in data, uncertainties in methods to assess
    the relationship b/w aid and its outcomes, difference in
    recording the amount of aid by donors and recipients, weak
    governance of recipient countries, overall impact of aid is
    difficult to calculate as it does not include private donations
    and ignore humanitarian and emergency aid.
     For instance aid given for rescue and relief will be instant and
    will give hardly any result if analyzed after a long period.
    Africa

     Decades of foreign aid have done little in changing


    the destinies of African countries. West has spent
    $600 b on foreign aid to Africa, yet
    underdevelopment is widespread.
     Aid creates dependency on external donation for
    poverty alleviation and undermines ppl’s faith.
     Donors fail to tell African leaders where they are
    wrong, no mutual accountability, no alignment of aid
    with national development strategies, elite capture.
     ‘Aid is a double-edged sword’ where economic
    and political environment is right it can be utilized
    properly. E.g Botswana: Population of 1.9m it has
    maintained the highest economic growth, moving
    from poor country to middle-income country.
    Although country is rich in minerals but viable and
    self-reliant population moved the country towards
    development.
    Donors & Service Delivery

     In good country environments where there are genuine


    reformers, donors should integrate their support in the
    recipient’s development strategy.
     Donors should strengthen the critical relationships among
    policymakers, providers, and clients.
     Donors should support recipient institutions by realigning
    their financial assistance and knowledge transfers with the
    recipient’s service delivery focusing more on outcomes and
    results.
     Donors should adopt client feedback system.
     In Kenya a World Bank agricultural project paid
    eight local staff between $3,000 and $6,000 a month,
    many times the $250 available to a senior economist
    in the civil service.
     Creates market distortions
     Donors tend to be generous with training. In
    Malawi, training accounts for a staggering $4.5
    million, or 10 percent of donor spending on health
    care a year.
    Promoting Voice

     Importance of voice in service reform attempts include


    imposing conditions and setting performance criteria on
    aid flows where voice is weak, providing direct support to
    democratic governance and actively promoting
    transparency and participatory processes.
     What works better is choosing recipients more carefully,
    based on performance and setting conditions that reward
    reforms completed.
     Poverty-reduction strategies seek to promote stronger
    citizen voice, with an e¤ective link to public spending.
    Impact Evaluation

     Large public sector organizations in both donor


    and recipient countries focus on inputs rather than
    outputs and outcomes.
     Broken feedback loop between taxpayers in the
    donor country and beneficiaries in the recipient
    country.
     Outcome-oriented international targets.
    Reforming Aid

     Aid agencies want to be able to identify their own contributions, often


    through distinct projects, to facilitate feedback to taxpayers and sustain
    political support for aid flows. A new hospital is easier to showcase
    than the outcome of policy reform or budget support.
     Politicians and policymakers in donor countries cannot dismiss the
    interest groups that support them.
     Donors often are most comfortable with service delivery systems of the
    type operating in their own country.
     If donors do not pay attention to what the other donors are doing, they
    may concentrate too much on higher-priority sectors, leaving sectors
    with a lower priority, such as rural roads in Zambia, short of funds.
    There may be duplication.
     https://
    www.youtube.com/watch?v=H-Q3zWv0Evw

     https://vimeo.com/34074760

     https://vimeo.com/16326490

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