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Expert Opinion: Getting Better or Dead Aid? Making sense of the aid effectiveness debate

29 July, 2011

Dennis de Tray, R4D Principal, authors expert opinion on Charles Kenny's book, Getting Better: Why Global Development is Succeeding – and How We can Improve the World Even More.

Charles Kenny, a former World Bank and Center for Global Development colleague, and one of the most thoughtful people writing on development these days, has produced a fascinating and informative book, Getting Better: Why Global Development is Succeeding – and How We can Improve the World Even More. Getting Better is a counterweight to the growing cadre of development assistance naysayers (Bill Easterly’s White Man’s Burden and Dambisa Moya’s Dead Aid come immediately to mind but there are others) who claim that rich countries have wasted most of the money they’ve spent trying to help poor countries develop.

In Getting Better Charles argues that in spite of misspent aid, corruption, poor governance, weak institutions, almost without exception developing countries have seen the lives of their citizens improve over the past 100 and especially the past 50 years…not by a little, but by a lot. As Charles points out, these improvements occurred despite anemic and in some cases even negative per capita income growth. HIS Bottom line: since life has improved even though income has not, the aid community’s obsession with income as the measure of “success” for development assistance is misguided and misleading.

Charles makes his case through a detailed, painstaking and literate review of changes in a host of considerations that most of us would agree bear on people’s well-being, from life expectancy to infant mortality to morbidity to human rights to democracy, although his case is strongest for health and education.

So, who is right? Dambisa Moya who says that aid is dead or should be? Or Charles Kenny who says that what the world has delivered through its international aid programs more than justifies not just continuing those programs, but increasing them?

The answer is “both” and “neither” because, as is too often the case in grand public debates, the two sides are talking about very different things. Charles focuses on what we might think of as the case for international welfare assistance, the aid naysayers on either income growth or, closely related, the capacity of poor countries to stand on their own.

Most of the gains Charles cites were brought about by rich countries doing things for people living in poor countries with, admittedly, varying degrees of help from recipient governments. This is nowhere more true or dramatic than in the health arena. Not only did the rich West discover the cures, antibiotics, insecticides, vaccinations, anti-retrovirals that have saved and continue to save millions of lives in poor countries, it was also the principle provider of those treatments to the world’s poor.

Aid critics part ways with Charles because the improvements he documents are the product of developed not developing countries. Critics argue that because poor countries are not held accountable for serving their people, those countries are institutionally weaker—they are less “developed”—than they would be if their own governments had been accountable for serving their people’s needs. In the eyes of aid critics, generous international “welfare” programs have undermined poor countries’ incentives to build their own institutions.

On the face of it there would appear to be considerable truth in the critics’ view. After more than a half century of serious international development assistance, weak institutions continue to define developing countries. Charles says that this just reflects what we know about how institutions are created – over generations, not years. But even if institutions take a long time to create, it is still important to know if and how our aid financing affects that process. Does international development assistance that makes people in poor countries better off today come at the expense of the pace of institutional development in receiving countries, and if so by a little or a lot?

For poor countries in the midst of a humanitarian crisis, even if there is a trade-off between international aid and institutional development, it’s hard to see any reasonable person not taking it. The international community’s roles in Africa’s HIV/AIDS pandemic or Haiti’s earthquake are cases in point. Things become less obvious as we move beyond these extremes.

For institutionally weak poor countries, the idea that global assistance can smother incentives for local institutions to develop and even damage existing institutions is all too plausible. My time at the World Bank, much of it spent working on low income countries, planted the seeds of concern about how development assistance hinders local institution building but it was my recent work in Afghanistan, East Timor and Iraq that convinced me that the trade-off between improving people’s lives today and the rate at which local institutions develop is real and serious.

For the Afghanistans and East Timors of the world, donor good intentions…and donor domestic politics…can and often do lead to aid programs that are too complicated for local implementation, and to expatriate-driven technical assistance that first overwhelms then takes over for weak governments. Recipient governments are stripped of accountability and without accountability have little incentive to focus on institutional development or improving governance.

When I was working with Afghanistan’s international military and civilian development communities the single hardest idea to get across to either group was that when outsiders do everything, governments are left with no sense of commitment to themselves or their people. The aid experts were the worst. Maybe USAID did get more girls in school and bring infant mortality down but they did so at a huge cost to government confidence and credibility and, therefore, to local institution building. An overwhelmed, dispirited government stripped of accountability can hardly be blamed for not taking its own institutions seriously.

Charles Kenny has done the international aid community a great service by reminding us that there is more to development than “income” and that our report card in these other areas is good. But, if international good intentions stunt institutional development in poor countries the aid community needs to accept that even though it has the capacity to make poor people in developing countries better off today, using that capacity to its fullest may undercut broader development goals. We know that welfare programs for individuals must be appropriately incentivized to avoid making welfare the preferred state. We need to hold international aid to the same standard. Unless we do, our aid programs will continue to create more dependency than development.

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