The Roles of Aid in Politics Putting China in Perspective

The foreign assistance rhetoric and policy behavior of the Netherlands, Belgium, and the United Kingdom are different. On balance, the rhetoric of the Dutch and British decision makers shows greater evidence for the hypothesized role conceptions than that of the Belgians. The policy behavior measures distinguish the three states quite well and are mostly in the hypothesized directions. Table 10 summarizes the results for each of the three states. A comparison with Table 1 shows that the Netherlands and the United Kingdom fit the rhetoric and behavior measures for, respectively, the activist and power broker role conceptions quite well. The Belgian case combines policy behavior associated with the merchant role conception with rhetoric that emphasizes activist and merchant themes about equally.

This incongruence between rhetoric and behavior is perhaps explained by the structure of Belgian debate: foreign assistance, foreign trade, and foreign affairs are debated jointly during many parliamentary years. For purposes of comparison, only those portions of these joint debates were coded in which the Belgian decision makers themselves indicated they were addressing foreign assistance. This was done to preserve cross-national equivalence in the debates used for coding. This strategy may have skewed the results in favor of the activist role conception. However, including the combined debates in their entirety would most likely have skewed the results in favor of a greater volume of merchant themes. This implies that foreign assistance may not be perceived as a wholly separate and distinct issue area by the Belgian decision makers. It is possible that securing Belgium's economic interests is so important that it permeates all of its foreign relations, including foreign assistance.

The assumption that decision makers perceive foreign assistance as a distinct issue area is based in the widespread usage of the issue area concept (see Zimmerman, 1973; Potter, 1980; Evangelista, 1989). It is an almost self-evident device to investigate some aspect of foreign policy rather than all of it. While for both the Dutch and British cases the concept poses no problem, the Belgian case indicates that decision makers may not necessarily slice up the whole of foreign policy in the same manner as the analyst. If so, then the Belgian case violates an assumption of the framework and thereby points out a limiting condition for the framework's applicability.

Belgium's distinct language communities provide another potential explanation for the inconclusive findings: to the extent that the two groups perceive themselves as separate communities, another assumption of the role conception framework is violated, namely, that a common societal-cultural background results in common cognitive biases. There are indeed slight differences in the relative emphasis Flemish and Walloon members of Parliament place on the various role conceptions (Breuning, 1994b). The significance of these differences is unclear. They intersect with differences in party affiliation. The minister's party affiliation does not have a significant impact on the variability of relative emphasis on the various role conceptions. Likewise, the slight difference between Flemish and Walloon members of Parliament may not be significant.

On the basis of the results presented here, it is indeed legitimate to speak of national role conceptions. The observed shifts in the relative emphasis in the rhetoric cannot be attributed to ministerial agenda-setting. Yet, the members of Parliament react differently to ministers with different party affiliations. It appears, then, that there is a consensus about the state's role in the foreign assistance issue area. Parliament appears to act to preserve the consensus. Whether this is unique to the foreign assistance issue area or might be found in other policy domains is an empirical question that only further research can answer.

As indicated, most policy behavior measures are in the hypothesized direction for all three cases. The exception is the greater than expected emphasis on bilateral aid of both the Netherlands and Belgium, which is more in line with the behavior hypothesized for the power broker role. This runs counter to East’s (1973) finding that small states rely more on multilateral foreign policy because of their lesser capacity to administer and implement programs on their own. Of course, East's research concerned the foreign policies of small states more generally, and it is possible that foreign assistance provides a payoff that makes it worth the effort for small states. Bilateral assistance gives the donor state greater control over the destination of such aid, which may enhance the potential usefulness of foreign assistance in the service of trade relations. This explanation fits well with the merchant, but less well with the activist role conception.

The focus of multilateral aid was hypothesized to be on the World Bank and associated institutions for both the power broker and merchant role conceptions, and on UN agencies for the activist. Although the relative emphasis on UN agencies does not stand out if compared to other Dutch multilateral allocations, it is consistently higher than the comparable emphasis of Belgium and the United Kingdom. Both of the latter favor the World Bank over UN agencies.

The tying status of bilateral aid clearly distinguishes the Netherlands from both Belgium and the United Kingdom. The latter two make extensive use of tied aid. The Netherlands consistently provide a substantial proportion of its aid untied. Most of the remainder is partially rather than wholly tied.

In sum, the empirical evidence shows a congruence between the rhetoric and policy behavior of the foreign assistance decision makers of the Netherlands and the United Kingdom that conforms to the hypothesized role conceptions. The rhetoric and policy behavior of the Belgian decision makers does not exhibit a similar congruence. The lack of distinction between foreign assistance and foreign economic relations partially explains the failure of the Belgian case to fit the framework. Rhetoric and policy behavior co-vary in two of the three cases. This suggests that there is some relation between the two.

The congruence between rhetoric and behavior found in this study shows that this approach promises to enhance the understanding of cross-national differences in policy behavior. Parliamentary debates, like other rhetorical data, are not a “clean” measure of motivation. However, the themes emphasized in parliamentary debates are not randomly distributed across time and states. Assessments of foreign assistance policy motivation are therefore strengthened when separate measures of rhetoric and behavior point in the same direction. Words and deeds will enlighten us more about foreign assistance policy motivation than deeds alone.

Brown, Keith and Tirnauer, Jill (2009), Trends in US Foreign Assistance Over the Past Decade: Report Produced for Review by USAID, Washington, DC: Management Systems International.

Major events and changes during the past decade have had dramatic impact on the means by which the U.S. Government and its citizens engage the world. Terrorism, substantial and sustained war efforts, the spread of HIV/AIDS, the financial crisis—though far from a complete list—are some of the more significant happenings that have shaped the international context for the United States. With these changes have come associated shifts in the organization and delivery of U.S. foreign assistance. The United States Agency for International Development (USAID) has commissioned Management Systems International to write a series of papers to help the Agency better understand the trends in U.S. foreign assistance and international evaluation theory and practice, and its implications for evaluation of development programs. This paper focuses on the trends in foreign assistance programming and the changes in how foreign aid has been delivered over the past decade. It does not attempt to provide recommendations for how foreign assistance should be structured under the new Administration.

Global official development assistance (ODA) doubled over the past decade, increasing from $52.1 billion in 1999 to $119.8 billion in 2008, with the United States accounting for 22 percent of all ODA. U.S. ODA grew at a faster rate, almost tripling from $9.1 billion to $26 billion. Even with this growth, USAID’s share of bilateral and multilateral ODA fell from 64.3 percent in 1998 to 38.8 percent in 2005 according to the Development Assistance Committee (DAC). According to the Department of State, it rebounded to 47 percent in 2007 as USAID took on greater responsibility for stabilization activities in Iraq and Afghanistan and for implementing programs under the President’s Emergency Plan for AIDS Relief (PEPFAR).

Although it seemed as though decision-making was becoming more centralized with foreign assistance reforms, foreign aid continued to fragment with the creation of new entities such as the Millennium Challenge Corporation (MCC) and the Office of the U.S. Global AIDS Coordinator (OGAC) in the State Department. Furthermore, both the Department of Defense (DOD) and Treasury expanded their authority and their total share of foreign assistance. Between its inception in FY 2003 and the end of FY 2008, the MCC has entered into compact agreements worth $6.3 billion. During the same period, threshold programs administered by USAID reached $440 million. OGAC is responsible for administering the PEPFAR, the single largest foreign assistance program. Funding for PEPFAR through the Global HIV/AIDS Initiative (GHAI) account is expected to reach almost $4.8 billion in FY 2009. Other new programs and entities at the State Department include the Democracy and Human Rights Fund, the Middle East Partnership Initiative (MEPI), and the Office of the Coordinator for Reconstruction and Stabilization (S/CRS).

Whereas foreign assistance has always been aimed at reconstruction efforts in the aftermath of conflict, U.S. aid gained greater prominence during the decade with the elevation of development to an equal footing with defense and diplomacy. The National Security Strategy in 2002 and again in 2006 extolled its importance. With the advent of the conflicts in Afghanistan and Iraq, foreign assistance is becoming increasingly militarized as the Department of Defense plays a bigger role in stabilization efforts. DOD increased its share of total foreign assistance from 5.2 percent in 2001 to 15 percent in 2007 (USAID 2008e). Under a number of expanded and new accounts and authorities, DOD is providing development-type assistance (e.g., infrastructure, democracy promotion, and economic development), which, along with the creation of the Office of the Coordinator for Reconstruction and Stabilization further blurs the line between the different agencies.

Health became the predominate sector for foreign assistance during the past decade, with explosive growth due to the HIV/AIDS epidemic. Funding for health programs rose from $250.7 million in Child Survival and Health (CSH) funds in 1999 to $3.9 billion in CSH and GHAI funds in 2009. PEPFAR began in 2004 with a legislative commitment of $15 billion over five years. The majority of this funding went to fifteen focus countries, almost all of which are located in Africa. In 2008, the reauthorization act increased funding for PEPFAR for $48 billion over the next five years, including $5 billion for malaria and $4 billion for tuberculosis.

Another trend in development assistance was the shift of funding toward Africa. Global ODA for Africa increased from $10.3 billion in 1999 to $24.5 billion in 2009. Moreover U.S. foreign assistance to the continent grew at a faster rate, quadrupling to $5 billion for FY 2009. In addition to PEPFAR funding, the reasons for this growth included the signing of eight MCC compacts, new presidential initiatives in areas including trade, education and food security, and counter-terrorism initiatives. Development Assistance to Africa increased 51.5 percent and Economic Support Funds increased 90.3 percent over the same time period.

The theme of “aid effectiveness” has emerged over the past decade. To address criticism regarding the effectiveness and utility of donor assistance, the Development Assistance Committee (DAC) is working to promote, support and monitor progress on harmonization and alignment of aid. The Paris Declaration, signed in 2005, set forth concrete actions for donors and recipient countries around five principles: local ownership, donor alignment, harmonization of aid, managing for results, and mutual accountability. The United States has lagged behind other donors in the implementation of the Paris Declaration; however, actions have been taken to continue and expand managing for results and improved coordination with partner countries and other donors pool funding, move towards general budgetary support and shift away from projects.

There are also more private actors in foreign assistance. Private sources now account for over 80 percent of total U.S. based financial flows to developing countries. Remittances from the United States, the largest contributor, reached $45.6 billion in 2007, up from $27.4 billion in 1999. Low-income countries received some $305.3 billion dollars. Foundation giving increased from $3.2 billion in 2000 to $5.4 billion in 2007, mostly due to the establishment of the Bill and Melinda Gates Foundation. Corporate giving was estimated at $5.5 billion in 2006.

Structurally, the delivery of foreign assistance also changed. In 1998 USAID became a statutory agency, reporting directly to the Secretary of State. To coordinate foreign assistance more effectively, the Secretary created the Office of the Director of Foreign Assistance (State/F). The Foreign Assistance Framework, created in 2006, became the organizing framework for the delivery of aid, and is supposed to tie programming to budgeting and performance. Lastly, operational planning, which moved USAID from long-term strategies to short-term planning, became the basis for coordinating programming.

In 2000, in response to growing private flows to the developing world and the desire to leverage this growth, USAID created the Office of Global Development Alliance (GDA), a fourth pillar in the Agency at that time. Although it has been moved to the Office of Development Partners, it and the public-private alliances it promotes remain an important mechanism for implementing development programs. By mid-2008, GDA claimed that 680 alliances had been formed, and more than $9 billion dollars of private funding had been leveraged.

The expansion of presidential initiatives also occurred during the decade. Some 22 initiatives were announced. Some of these were funded with new monies, and others were programs cobbled together to meet these executive directives. These initiatives were important, but typically created without a strategy on how to integrate it with existing programs on the ground. Initiatives also added to the heavy reporting burden placed on USAID staff.

USAID capacity for implementing foreign assistance had been diminishing since the mid 1980s. Hiring freezes have placed a heavier burden on staff as funding and program requirements increased over the past decade. The increased need for coordination among programs and initiatives has also added to this burden. Compounding the problem of overburdened staff is the growing number of employees becoming eligible for retirement in the near future. The agency expects that 31 percent of all civil servants and 44 percent of all Foreign Service Officers will be eligible to retire in 2012. To increase staff capacity, both in numbers and skill levels, USAID instituted the Development Leadership Initiative in FY 2008, which is aimed at hiring up to 900 new staff and increasing training in technical and “soft-skill” topics.

The global financial crisis will have a profound impact on developing countries through reduced growth. The World Bank estimates that global GDP will contract by 1.7 percent in 2009. In the developing regions, the Bank estimates that GDP will fall by 2 percent in Europe and Central Asia, by 1.9 percent in South Asia, 2.5 percent in Sub-Saharan Africa (World Bank 2009d). The Bank estimates that when there is a 1 percent decline in development countries’ growth rates, an additional 20 million people fall into poverty. Hard hit will be countries with large numbers of people whose incomes hover around the poverty rate. The view on ODA is mixed. The UN predicts a cut in 20 percent, whereas the World Bank is expecting to triple lending to $35 billion in 2009, and the United States Administration has promised a doubling of aid for FY 2010. Private capital flows will decrease but some of the largest foundations, including the Bill and Melinda Gates Foundation, vow to maintain or increase funding despite shrinking endowments. Predictions for growth in 2010 remain positive, although a continued contraction will have major repercussions for U.S. foreign assistance and developing countries.

The foregoing discussion now allows at least a preliminary answer to the two questions I posed. Taking them in reverse order we can see that any donor policy based on an expectation of African political and institutional conformity to a simplistic liberal ideal is likely to face considerable obstacles. The framework presented above would also suggest that those donors or analysts who describe us a world consisting of unproblematic uniform processes, whether they be the spread of liberal governance, the dominance of neoliberalism or the spread of capitalist social relations, are somewhat wide of the mark. Instead we have a much more complex agenda for future research, not least of which is the issue of unevenness of change within Africa. Harrison, for one, has pointed to the variability with which different African states have adhered to the World Bank’s governance agenda (2004; see also Whitfield, 2009). He is also surely right to point out that the long histories of interaction between African societies and the wider world have produced differing configurations of liberal and illiberal social forces within Africa (Harrison, 2004, pp. 44–49).¹⁰ Yet, by specifying political variation and combined development as general, rather than specifically African, features of the world, it also allows us to bring into question the self-image of donors themselves. Policy rhetoric might well portray an easy adherence to liberal ideals of law bound states existing in a world of liberalised markets but the inability of donors to carry out their side of the liberal bargain itself demonstrates the absence of any simple homogeneity among even the developed states.

While the liberal consensus continues to have political force within and outside of Africa there is also clearly a significant gap between rhetoric and reality. As a consequence we can expect continuing tension in the aid relationship as a mechanism by which donors and recipients struggle over the content of this particular international relationship. Such tension turns ultimately on the differences between the character of state-society relationships in Africa on the one hand and the kind of liberal capitalist social development donors—and some African leaders—say they want to see created on the other. Even if high-level politics presents us with a new consensus on aid, deep issues of social development need to be addressed for us to produce a rounded account of this aspect of international relations.

The disciplinary and theoretical context outlined at the start of this article was a twin challenge to analysts of Africa’s international relations: to situate understandings of the geopolitics of Africa’s international relations in a broader conception of processes of social development; and to incorporate within theoretical frameworks the variation in social and state forms and, indeed, historical experience. Although in many ways only a preliminary investigation, the analysis presented above suggests that these challenges can be met, and moreover, that serious attention to these aspects of international relations opens up useful ways to reframe research into other aspects of Africa’s international relations.

Bueno de Mesquita, Bruce and Smith, Alastair (2007), “Foreign Aid and Policy Concessions,” in Journal of Conflict Resolution, Vol. 51, No. 2, pp. 251-284.

We propose a theory of aid-for-policy deals. While we believe this is a major determinant of aid giving, we do not deny that aid might be given for other purposes. Aid is just one weapon in the foreign policy arsenal of leaders (Baldwin 1985). In this article, our approach has been to embed our explanation of aid giving within the context of the selectorate theory of political survival. As Bueno de Mesquita et al. (2003) show, the selectorate model explains many other features of domestic and international politics. On the international side, for instance, it explains immigration and emigration, the democratic peace, and patterns in nation building. That a single theoretical framework can explain results in many disparate political arenas provides reassurance relative to a tailor-made application to account for one aspect of the larger political puzzle.

Our model offers important policy advice for those who wish to help the needy around the world. Receiving aid is most likely to improve the welfare of citizens in large coalition systems. In such systems, the majority of the additional resources are allocated to public goods, and the leader can retain only limited resources for her own discretionary projects. Aid given to such systems is likely to promote economic growth and enhance social welfare. U.S. reconstruction aid to Western Europe under the Marshall Plan is an example of such a success story. In small coalition systems, aid resources disproportionately end up in the hands of the leader and her cronies in the form of private goods. Aid does little to promote growth and development (Burnside and Dollar 2000).

In terms of promoting development, the theory’s implications are clear: political reform needs to precede economic development. The democratic institutions of Western Europe ensured that the U.S. Marshall Plan’s dollars promoted vigorous growth and produced a counterbalance to Soviet incursions into Europe. Aid to poor democracies around the world would likewise generate effective development. An emphasis on enlarging winning coalition size around the world is the most effective way to alleviate poverty.

Unfortunately, such goals are generally inconsistent with the survival incentives of leaders in large coalition donor countries. The survival of leaders in large W systems depends on providing for the welfare of their supporters and not on the welfare of people abroad. It is far easier for leaders to buy the public goods their citizens value from a small coalition state than from a large coalition democratic system. Unless it is the case that the policy goals in the donor state are furthered by enhancing growth in the recipient states (as we might argue was the case under the Marshall Plan) or the citizens in the donor state really care about promoting growth abroad (as, for example, Lumsdaine [1993] and Noel and Therien [1995] have argued is the case for Scandinavian nations), then leaders in donor states promote their political survival better by buying policy from autocrats than they do by pushing for the institutional reforms necessary for effective development. As van de Walle (2001) observes, aid often undermines the attempts at democratic reforms. The selectorate theory paints a depressing picture about the likely effectiveness of foreign aid for alleviating poverty around the world.