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Foreign Aid
Democracy, Governance
and the Moral Ambiguities
of Foreign Aid
The International Donor
Regime
Private Foundations vs.
Government Donors
Official Development Assistance
(ODA)
Bilateral Donors vs. Multilateral
Assistance
Multilateral Organizations
United Nations Development
Programmme
UN Specialized Agencies:
UNICEF
ILO
FAO
UNESCO
FAO
UN System: Two Types
Funds and Programs- Report to
Economic and Social Development
Council
Specialized AgenciesAutonomous Boards
Basic Characteristics: UN System
Made up of components of all National
Systems
Representative: Voting Reflects LDC
majority
Critics: Anarchy
Significant Patronage and Corruption
The World Bank System
International Monetary Fund: Bridging
Loan Facility
International Bank for Reconstruction
and Development- Infrastructure
International Development AssociationConsessional
International Finance Corporation:
Commercial Rates
Bank HeadquartersWashington D.C.
Characteristics of World Bank
System
Block Voting
Dominated by Organization for Economic
Construction and Development (OECD)
Debt Forgiveness Issue
Structural Adjustment Vehicle
Heavily Indebted Poor Countries (HIPC)
Programs
Regional Banks
Asian Development Bank
African Development Bank
Inter-American Development Bank
European Bank for Reconstruction and
Development
U.S. Agencies
U.S. Agency for International Development
Millennium Challenge Corporation
Office of the U.S. Global AIDS Coordinator
State Department of Public Affairs
U.S. Agencies: Agriculture, Commerce, Labor
Defense Department (20% in 2008)
Pentagon
Commonwealth Legacy
Colonial Development Corporation:
1929
Colombo Plan: 1955-1964
Commonwealth Fund for Technical
Cooperation
Department for International
Development (DFID)
U.K. Foreign Aid
Commonwealth Donors
Canadian International
Development Corporation (CIDA)Bridges French and English
Speaking Countries
Australia- Ausaid (Focus on Asia)
New Zealand Aid
Countries that are both Donors
and Recipients
India
China
South Africa
Brazil
Portugal
European Colonial Legacy
Ministry for Cooperation,
Development and Francophony
GTZ- German Technical Assistance
and German Department of
Cooperation and Development
Dutch, Italian and Belgium Technical
Assistance
Scandinavia: “Soft Donors”
SIDA- Swedish International Development
Association
DANIDA- Danish International Development
Association
NORAD- Norwegian Agency for Development
Coorporation
FINNAID-Finnish foreign aid and cooperation
Danish International
Development Agency
Role of Soviet Block
Soviet Union- 1950s. About 8% of
World Foreign Aid
1970s and 1980s- Support for
Liberation Movements and Clients
1990s to Present- Became
Recipients of Foreign Aid
The Donor System
Soft Vs. Hard Systems
Trade vs. Aid
Debt Reduction/Debt Forgiveness
Governance Reform vs. Interference
Information Technology
Multilateralism vs. Unilateralism
Goals: 2006
Ostensibly, the goals of foreign
aid in 2006 remain what they
were more than half a century
ago.
However, Issues and
Perceptions have changed and
are Changing
Changes in Focus
The Change- 1
Reduction of Poverty
Reduction of Poverty
Recognized empirically by academic
studies
Argued against ideologically by AntiKeynesian Economists
Reflected in State Department Changes
Poverty Alleviation Downgraded by
2001
Change -2:
The Merging of USAID and
State
The Merging of USAID and State
1. Rice Announcement- Gradual
process: Integrating USAID into State
Department
2. Merge defense and foreign aid
(Security Imperative)
3. Focus on regime change,
governance and security issues
4. Decline in focus on economic and
social development
2006
Debate: Should USAID Disappear?
Three influences
Impact of September 11
HIV/AIDS
Millenium Challenge Account
PEPFAR- HIV/AIDs: Happy Talk
The Change- 3
Changing Motives
Three Views of Foreign Aid
1. Part of Balance of Power- Carrot and Stick
Approach (based on exchange Theory)
2. Commercial Promotion: Focus on
International Trade
3. Humanitarian Theory: Moral Imperative
(Missionary Factor)
Mini-Discussion: Where are we
now?
Change Four:
The Relationship between
Academics and Practitioners
Increasing Gap between Academics
and Practitioners
Fewer Academics are practitioners,
fewer practitioners write
Issue: Should academics also be
practitioners?
Patterns
1950s- Very close
1960s-70s- Split because of Vietnam
1980s- Close Again- Structural
Adjustment
University of Pittsburgh.
Graduate School of Public and Internationa Affairs.
International Management Development Institute
1990s and esp. since 2001 Split again
After 2001- Deep Cleavage
Change-4
Increasing Gap between
Academics and Practitioners
Fewer Academics are practitioners,
fewer practitioners write
Focus: For Profits & Non-Profits
Change Five: Dominant
Motive (After 2001)
Carrot and Stick Approach- Based
on Exchange Theory
Back to Balance of Power
Primary focus: U.S. Security
Break
TEN Minutes
Cartoon In UAE News Paper On "America
And Its Carrot And Stick Policy Towards
Israel"
Change-Six
Contemporary Foreign Aid
Foreign Aid and Technical
Assistance-2006
Back to the future
Get the LDC economy back to the
1950s
Integration: Dependent
development
Is it dependent and is it
development?
Foreign Aid and Technical
Assistance-2006
Current bias to international trade
Governance and Nation Building
Merging of international assistance
and security
Dr. Ed Connerley, USAID, Meeting Civil
Society Representatives in Afghanistan
Foreign Aid and Technical
Assistance- 2006 Issues
Impact of culture vs. Universal
Values
Corruption, clan and ethnicity
Clans in Somalia and taxi drivers in
Washington
Impact of Intellectual systems and
ideologies influences and beliefsEconomic and Religious
Projects and Standard Operating
Procedures
Historical Quote
With God’s help, we will lift
Shanghai up and up, ever up, until
it is just like Kansas City.[i]
[i] American Missionary quoted
byJohn Franklin Campbell, The
Foreign Affairs Fudge Factory
(New York: Basic Books, 1971), p.
178.
Discussion of Books
Hancock, Lords of Poverty
Perkins, Confessions of an
Economic Hit Man
– Major Arguments
– Normative Positions
– Criticism
Where are We now?
Should we focus on the “Good”
How Fair are our authors?
Are we missing something in our reading
and discussion?
What is the reality of Foreign Aid in 2009