Last month I briefly returned to Washington, DC during the annual Spring Meetings. Of course this year’s meetings took place at a critical juncture that will define the future of international development. To paraphrase a famous Italian, we live in a time when the old model of foreign aid that largely cultivated aid dependency in most recipient countries is on its last legs, but the new model is yet to be born: now is the time of great uncertainty and attendant risks.
The goal of this post is to try and synthesize the emerging ideas of potential pathways forward in a world where (1) the resources available for aid are drastically reduced; and (2) the intellectual scaffolding that propped up the old aid model has lost legitimacy.
In Washington, it was clear that the defenders of the status quo in the aid industry are most likely going to double down on the familiar, which will render their actions ever more at variance with objective facts on the ground. I was surprised by the extent to which people in important positions just aren’t ready for change.
On their part, the emerging pro-change crowd are a mixed bag. There are those that recognize some positive aspects of aid (especially in public health and humanitarian assistance), but would want to see a root-and-branch reconfiguring of aid systems to ensure that they do not cultivate aid dependency (and instead catalyze or reinforce structural economic change). Others want to limit foreign assistance to donor countries’ transactional foreign policy goals. Yet others want radical cuts that will undoubtedly cause more harm than good.
So far these four camps have largely been talking past each other. Yet as I’ve repeatedly argued here, these conversations must converge if there’s ever going to be a reasonable consensus on the way forward.
Or perhaps there shouldn’t be a consensus, in which case alternative approaches to aid would duke it out in the real world. Note that this wouldn’t necessarily be a bad outcome (although it might prove to be rather expensive). As things stand there’s too much consensus-fueled collusion, conservatism, and lack of accountability in the aid industry (with lots of box checking rituals draped in intellectual garb). A model that provides a permission structure for unorthodox “aid start-ups” that are willing to try new and different things — like investing in growth and structural economic change(!) — wouldn’t be such a bad thing.
I should reiterate that in my estimation most pro-aid constituencies in donor countries, elites in aid-dependent countries, practitioners/experts, and scholars of international development remain wedded to the old model.
This is absolutely understandable. To many, the coming changes are deeply personal. Jobs and livelihoods, as well as a sense of personal accomplishment and moral/intellectual worth are on the line. Plus it is much easier to train anger on the heartlessness of erratic aid cuts by political/ideological opponents than to honestly look at the mirror and interrogate how aid dependency exposed millions of people to these kinds of developments in the first place. For better or worse, it’s these individuals — who, again, are more likely than not to have their eyes glued to the rear view mirror — that remain in key decision making roles about the future of aid.
With this in mind, the best thing that could happen is for the pro status quo camp to step outside their comfort zone and observe the world for what it is. Going about business as usual is no longer tenable. Attempts to browbeat folks into submission with doomsday figures and narratives of catastrophe outlining how many people will die due to aid cuts and/or reforms to the current aid regime won’t work. Reasonable people understand that it’s a false choice to pit ending aid dependency against not abandoning the most vulnerable people in the world. We can and must strive to do both. It’s as straightforward as that.
To this end, policymakers in donor countries and officials in multilateral institutions should pause for a moment and listen to the many voices around the developing world echoing Mavis Owusu-Gyamfi’s words:
Now is the time for transformation that is owned and driven by Africa. Amidst declining ODA, high debt burdens, and an erosion of multilateralism, we cannot depend on the rest of the world to step in and forge our futures –and frankly, no country has developed on the back of aid alone.
Multiple ideas are emerging regarding how to responsively reform the aid industry. In this section I’ll quickly summarize three such ideas (admittedly, this isn’t meant be an exhaustive exercise). I should note that what I have here is my reading of what the authors put forth, which may not exactly match what they intended (fortunately, I know three of the authors and will certainly get feedback if I misrepresent their ideas). Which is to say that I encourage readers to go read the relevant material for themselves.
The first idea is best summarized by Rachel Glennerster and Siddhartha Haria:
Aid agencies already try to cover too many countries and sectors, incurring high costs to set up small programs. Aid projects are far too complicated, resembling a Christmas tree weighed down with everyone’s pet cause. With less money (and in the US, very few staff), now is the time to radically simplify. By choosing a few highly cost-effective interventions and doing them at large scale in multiple countries, we would ensure
- aid funds are spent on highly effective projects;
- we benefit from the substantial economies of scale seen in development;
- a much higher proportion of aid money goes to recipient countries, with less spent on consultants; and
- politicians and the public can more easily understand what aid is being spent on, helping build support for aid.
This development would definitely be an improvement on the status quo. While I don’t share Glennester’s and Haria’s optimism about proven evidence being the arbiter of what gets prioritized (as opposed to good old politics of collective choice in recipient countries), it’s true that abandoning the illusion of “Christmas tree” aid goals (like, say, the SDGs) would lead to more focused thinking and spending by donors and recipients alike. A terribly underrated consequence of the “Christmas tree” approach to development assistance is that rather meager aid flows often end up causing lots of policy distortions via utterly meaningless box-checking rituals that no one cares about (not to mention wastage of scarce resources).
It would be ideal if everyone outgrew the notion that their pet issue is the silver bullet that will save the world and therefore must be included in every aid program.
Furthermore, a radical streamlining of aid programming would inoculate donors against thinking that they can solve all the problems in the world with just the right amount of rigorous evidence, consultants, conferences, and conditionalities (few will miss the solipsistic God complex behind this belief). It would also create the intellectual and moral permission structure for donors to not feel the need to be spread thin. For instance, a reasonable person could make the case that instead of running 48 atrociously-designed and poorly-resourced agriculture programs across the Continent, it would be better to focus on 5 intensive interventions that, among other things, helped everyone learn how to run a successful agricultural sector in a low-income country. If successful, this approach would generate strong demonstration effects. Other countries would then learn from the 5 “model countries.”
I cannot stress this enough. With the exception of health interventions, I often get blank states when I ask donors, aid organizations, or implementors to describe their gold standard program(s). Which is to say that an unconscionable share of aid work involves going through the motions without posting real points on the board that anyone can honestly be proud of. Sadly, most of this can’t be attributable to people trying to do big and difficult things. It’s mostly failures at lots of small things, but which are nonetheless highly distortionary at the macro level. This must stop.
The second idea is broadly represented by Stefan Dercon’s work. The basics of this are that development assistance should evolve into a partnership; that those who peddle policy advise must understand the domestic political economies of recipient countries; that the point of aid is for donors to eventually become dispensable; and that the lion’s share of aid flows should favor governments that have demonstrated a willingness to invest in transformational growth (those willing to gamble on development as it were).
This is then a plea for investment and effort in research that tries to […] find the best development or economic measures that recognise the objectives and therefore incentives of those with political and bureaucratic power in countries simply not committed to maximising growth, bringing down poverty and spreading development. Those designing programmes, in government ministries, donor agencies or international organisations would do well to take these problems seriously. I find it surprising that this is rarely done, not least by economists…
It makes advisors more than distant technocrats and forces them to recognise and understand politics, operate within it as politically-informed advisors, and possibly to be subversive by promoting those measures that shift the economic and development outcomes. It also suggests that it is wise to stay away from the mercenary actions that embed those in power further or from hiding behind politically-uninformed technocracy.
This approach promises to at once force aid recipients to be more agentic in the design and implementation of aid programs, while also ensuring that development assistance programs…
