Wednesday, 1 December 1999

From "Debating foreign aid: right versus left"

By Jean-Philippe Thérien (Third World Quarterly, Vol 23, No 3, 2002, p. 460).

The Right acknowledges that development assistance is a foreign policy tool that can be useful as either a carrot or a stick [...] But it holds that the fight against poverty ultimately is a duty incumbent upon each state, not on the international community. Seen from this viewpoint, aid is often considered inefficient. In particular, the Right points to the fact that aid has no clear effect on growth or on the policies of developing countries. [...] The explanation given is that, like any state intervention in the economy, aid distorts markets and creates a climate of dependency that inhibits entrepreneurship. Furthermore, development assistance is said to be a source of waste inasmuch as it allows countries to obtain modem equipment they often do not need. Finally, the Right frequently links the failure of aid to poor management by non-democratic governments hostile to Western value [...] In recent years the Right has endeavoured to prove the inefficiency of development assistance by contending that it had not been used in the proper conditions. According to Fieldhouse, 'aid could do little if the recipient countries rejected the price mechanism and the case for free trade and export-led growth, and continued to believe that government controls on virtually all economic and social matters were essential to relieve poverty' [...] In support of this position, a major World Bank report concludes that developing countries with 'mediocre' policies receive more financial aid than those with 'good' policies. [...] For the Right, this situation is plainly unacceptable. It seems urgent that the allocation of aid be more selective and directed more towards those countries where political and institutional reform is well under way.

No comments: