Is Aid Effective?

Picture a hospital, bringing in thousands of people every day who suffer from a host of different ailments, many of them contagious. If you go there for one reason, there is a risk you will end up suffering from something else by the time you leave: a complex medical procedure could go wrong, or – more likely – you could end up catching something from a fellow patient or a visitor. Working there puts you in an equally dangerous situation, as you spend your days alongside seriously ill people. A hospital, in short, has a “negative baseline” of secondary effects that must be overcome for it to be beneficial to the community it serves. Yet very few people would be bold enough to suggest we would be better off without hospitals.

This is development economist Paul Collier’s (2006, p. 1485) defence of development aid. I believe it strikes at the heart of a common misconception about aid. And it matters when it comes to the philosophical question of what we owe to others.

It would be wrong to “underestimate the relevance of empirical questions for normative enquiries, to the detriment of our discussions and of the impact of political philosophy outside philosophical circles” (Risse, p. 86). It’s not enough to say that a duty is owed in the abstract. There must be a feasible way of carrying out that duty and a reasonable expectation that the end goals can be attained, and it must be likely to produce replicable results under the right circumstances.

One common criticism is that it comes with sinister hidden motivations. In Richard Miller’s view, the world’s greatest powers are not motivated by a desire to help the poorest, but rather in “using aid to cajole, support and threaten [in a way] that guarantees volatility as challenges and opportunities change location over time” (Miller 2010, p. 227). Historically, this has undoubtedly been true in many cases, but philosophically it is a different question from the one I’m exploring here. To talk about what duties a country owes another, it must be assumed that they go about discharging that duty with good intentions.

Aid effectiveness depends on what kind of aid is given, what the development assistance is used for, what the aim is, how well it is being implemented, and whether it is appropriate for the specific scenario. The relevant empirical question therefore isn’t whether aid is effective, but whether we understand under what circumstances it is effective, and what kind of support will be necessary. It is intuitively logical that aid has the potential to be effective in some places while not in others. The question is to what extent development experts feel confident that they can prescribe the right medicine and be reasonably sure of success.

One of the more frequent criticisms of aid has been the way it has historically been linked closely with great power politics. Historically, as a tool of self-interested foreign governments, both the US and the Soviet Union used development aid not as a means of ensuring that democracy and rule of law were consolidated across Africa, but of ensuring the support of despotic rulers and access to valuable natural resources.

But there seems to have been a change in attitude since the end of the Cold War. Although aid still has an overall negative effect on governance, this effect declined significantly from the 1980s to the 1990s. Bräutigam and Knack (2004, p. 275) attribute this change to an increased focus on reducing those negative side effects, which again suggests a shift away from development assistance as primarily a political tool.

Aid is generally most effective when it is focused on strengthening and empowering government where it is and in the form it already exists in, even if it is not the form we might have chosen. This is because, as for instance the United States learned to their detriment in Iraq, building new institutions is extremely difficult. This does not mean that the international community should never promote democracy. Many autocracies are imperfect democracies, paying lip service to the ideals of democracies all-the-while rigging elections. But in these cases, whatever the rules these regimes pretend to play by (presidential, bicameral, etc.), civil society will almost certainly be pushing for the rules that exist to be followed, and that is where international efforts ought to lie.

However, even in achieving goals that are objectively positive, there risks being some negative consequences. Bräutigam and Knack (2004, pp. 255-85) suggest that by doing the very things that improve bureaucracy and rule of law, such as reducing corruption and improving public finances, donors risk creating collective action problems that impede the adoption of these practices by local authorities. These include free rider problems, where the local governments may simply not have any incentive to adopt good practices, and face no significant penalty for not doing so. But they also include more intractable problems. Aid projects require government oversight, which pries resources away from the day-to-day business of running a government. Moreover, government institutions may not be able to pay the salaries that donors can offer, creating a risk of brain drain from the public to the third sector.

As I argue in my PhD thesis, the literature is unequivocal in arguing that aid has some negative consequences. But this is neither surprising nor evidence of failure. Just as a well-run can hospital can overcome a negative baseline and provide a vital service, so can development aid. Where hospitals do fail, the solution is to fix them or, at worst, build a new one; similarly, where aid fails, the solution is not to rebuke the concept of aid itself, but rather to search for ways to make it more efficient (Collier 2006, p. 1485). And on the whole, Collier estimates that on average aid has added 1% to African growth rates in the past 30 years (2008, pp. 99-100). 1% a year is hardly an economic miracle, but it may have prevented some countries from falling apart under the strain of their many problems. Moreover, there is no obvious solution to global poverty that does not have potential drawbacks. This includes many of the solutions that aid critics suggest can substitute for aid money. Remittances, supposedly one of the more democratic means of supporting people in developing countries, are not immune from negative external effects on government. Nor is revenue from natural resources, even in democratic contexts. The fact that development aid has negative secondary effects in certain circumstances must therefore be understood in context.

References

• Bräutigam, Deborah A., and Stephen Knack. “Foreign Aid, Institutions,
  and Governance in Sub-Saharan Africa.” Economic Development
  and Cultural Change 52, no. 2 (2004): 255–85.
• Collier, Paul. “Is Aid Oil? An Analysis of Whether Africa Can Absorb More
  Aid.” World Development 34, no. 9 (2006): 1482–97.
• Collier, Paul. The Bottom Billion: Why the Poorest Countries Are Failing and What Can Be Done About It. Oxford: Oxford University Press, 2008.
• Miller, Richard. Globalizing Justice: The Ethics of Poverty and Power.
  Oxford: Oxford University Press, 2010.
• Risse, Mathias. “What We Owe to the Global Poor.” The Journal of Ethics 9, no. 1–2 (2005): 81–117.