Foreign Aid

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Foreign Aid

• Democracy, Governance and the Moral Ambiguities
  of Foreign Aid

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The International Donor Regime

• Private Foundations vs. Government Donors
• Official Development Assistance (ODA)
• Bilateral Donors vs. Multilateral Assistance

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Multilateral Organizations

• United Nations Development Programmme
• UN Specialized Agencies
• UNICEF
• ILO
• FAO
• UNESCO

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FAO
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UN System Two Types

• Funds and Programs- Report to Economic and Social
  Development Council
• Specialized Agencies- Autonomous Boards

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Basic Characteristics UN System

• Made up of components of all National Systems
• Representative Voting Reflects LDC majority
• Critics Anarchy
• Significant Patronage and Corruption

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The World Bank System

• International Monetary Fund Bridging Loan
  Facility
• International Bank for Reconstruction and
  Development- Infrastructure
• International Development Association-
  Consessional
• International Finance Corporation Commercial
  Rates

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Bank Headquarters- Washington D.C.
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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

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Regional Banks

• Asian Development Bank
• African Development Bank
• Inter-American Development Bank
• European Bank for Reconstruction and Development

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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)

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Pentagon
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Commonwealth Legacy

• Colonial Development Corporation 1929
• Colombo Plan 1955-1964
• Commonwealth Fund for Technical Cooperation
• Department for International Development (DFID)

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U.K. Foreign Aid
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Commonwealth Donors

• Canadian International Development Corporation
  (CIDA)- Bridges French and English Speaking
  Countries
• Australia- Ausaid (Focus on Asia)
• New Zealand Aid

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Countries that are both Donors and Recipients

• India
• China
• South Africa
• Brazil
• Portugal

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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

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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

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Danish International Development Agency
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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

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The Donor System

• Soft Vs. Hard Systems
• Trade vs. Aid
• Debt Reduction/Debt Forgiveness
• Governance Reform vs. Interference
• Information Technology
• Multilateralism vs. Unilateralism

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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

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Changes in Focus

• The Change- 1
• Reduction of Poverty

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Reduction of Poverty

• Recognized empirically by academic studies
• Argued against ideologically by Anti-Keynesian
  Economists
• Reflected in State Department Changes
• Poverty Alleviation Downgraded by 2001

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Change -2 The Merging of USAID and State
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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

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2006

• Debate Should USAID Disappear? Three influences
• Impact of September 11
• HIV/AIDS
• Millenium Challenge Account

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The Change- 3

• Changing Motives

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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?

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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?

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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

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Change-4

• Increasing Gap between Academics and
  Practitioners
• Fewer Academics are practitioners, fewer
  practitioners write
• Focus For Profits Non-Profits

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Change Five Dominant Motive (After 2001)

• Carrot and Stick Approach- Based on Exchange
  Theory
• Back to Balance of Power
• Primary focus U.S. Security

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Cartoon In UAE News Paper On "America And Its
Carrot And Stick Policy Towards Israel"
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Change-Six

• Contemporary Foreign Aid

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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?

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Foreign Aid and Technical Assistance-2006

• Current bias to international trade
• Governance and Nation Building
• Merging of international assistance and security

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Dr. Ed Connerley, USAID, Meeting Civil Society
Representatives in Afghanistan
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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 beliefs- Economic and Religious
• Projects and Standard Operating Procedures

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Historical Quote

• With Gods 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.

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Discussion of Books

• Hancock, Lords of Poverty
• Perkins, Confessions of an Economic Hit Man
• Major Arguments
• Normative Positions
• Criticism

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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 2006