Good Governance Conditionality Effective

Good Governance Conditionality Key to Reducing Poverty

Larry Diamond, Senior Fellow-Hoover Institute, 2008, Foreign Aid and Foreign Policy: lessons for the next half-century, eds. L. Picard, R. Groelsema & T. Buss, p. 61

There is growing evidence that governance patterns matter. And there is growing recognition in development assistance circles that poverty reduction and empowerment of the poor require broad improvements in governance. Yet policy and practice lag well behind understanding. International donors remain reluctant to violate international norms of sovereignty, and there is a powerful tendency for political conditionality to give way to compliance.

Yet if poverty is a political phenomenon, then a serious effort to reduce the structural conditions of mass poverty is also a political action. Overcoming severe underdevelopment requires an assault on rent seeking, clientelism, injustice, and bad governance – in other words, sweeping political reforms. Is the world ready for the scope of political intervention that will be needed? This chapter examines the way that international donors can support the democracy and governance process in ways that foster development and poverty alleviation.

Wil Hout, Associate Professor World Development in the Hague, 2007, The Politics of Aid Selectivity: good governance criteria in World Bank, US and Dutch development assistance, p. 19-20

Several World Bank working papers and the report Assessing Aid arrived at the conclusion that aid has a positive impact on growth in developing countries that have good policies and governance. The message according to the World Bank was as follows:

“The development strategy emerging from this view is two-pronged – put in place growth-enhancing, market-oriented policies (stable macro-economic environment, effective law and order, trade liberalization, and so on) and ensure the provision of important public services that cannot be well and equitably supplied by private markets (infrastructure services and education, for instance). Developing countries with sound policies and high quality public institutions have grown much faster than those without – 2.7 percent compared with -0.5 percent per capita. Put simply, failures in policymaking, institution building, and the provision of public services have been more severe constraints on development than capital markets… The key recommendation from these findings is not that finance should go only to well-managed countries. Rather, we recommend that aid be allocated on the basis of poverty and economic management. Among countries with similar poverty levels but different policy regimes, more finance should go to the countries with better management.” (World Bank 1998: 11, 15-16)

Steven Radelet, Center for Global Development, Aid Effectiveness and the Millennium Development Goals, February, [http://www.unmillenniumproject.org/documents/MDG-aid-paper-introduction-v2.pdf]

Can Increase Effectiveness of Political Conditionality

MANY FACTORS INVOLVED IN MAKING POLITICAL CONDITIONALITY EFFECTIVE

Peter Burnell, Senior Lecturer International Studies, University of Warwick, 1994, Democratization, Vol. 1. No. 3, Autumn, p. 485-7

In the 1990s the promotion of good government and democratization and their relationship to political conditionality have come on to the agenda of international aid agencies in a rush. The agencies are still learning how to cope with the new brief and adjust to its demands. In order to offer constructive advice on these matters, we must begin by making some simple assumptions about the context in which conditionality can be expected to operate.

First, in the countries considered suitable candidates for conditionality the indigenous political actors and government officials will display a range of views towards democratization and good government. There will be some friends among the politically most active members of the population, possibly in very high places. But at least a few significant elements of the political elite will be either suspicious (footdraggers) or hostile (unrepentant sinners). Not every good government reform that is sought by the donors will be welcome to even the most enthusiastic friend in the recipient country, and friends might wish to delay or discard what they find troublesome. Conversely, unrepentant sinners might not oppose those good government reforms which in their view do not touch on their interests. In any event, political conditionality would be superfluous if we could assume the existence of a completely open door and little likelihood of recidivism. Ordinary members of the public might also constitute a problem in so far as they neither possess nor aspire to the sort of civic culture that would furnish a level and style of political participation appropriate to the donors’ stated goals of democracy and good government.

Second, antipathy to political reform (and likewise support for reform) can owe to one or more of a variety of reasons. These include:

--some principled belief which favors a rival philosophy or system of ideas.

--a genuine belief that democratization and either some or all aspects of good government would not serve the country well in its present circumstances, for example because of fears about the consequences for social, economic, or political stability. Some apparent “footdraggers” may be satisfied with a slower pace of change than the donors are looking for, precisely because they prefer to do things the democratic way – consulting and, if necessary, making concessions to the doubters. Attempting to impose good government undemocratically by fiat and edict is a nonsense. There might also be disagreements with the donors over what can be achieved in spite of the best political will in the world, due to managerial and administrative shortcomings.

--a hard-nosed calculation of the personal political costs involved in making the changes, such as loss of occupancy or access to public office, reduced chances of acquiring office, and greater limits on the power and resources to be gained by enjoying association with office. The opposition is based on personal interests rather than grounded on values.

A third assumption is that political conditionality is not the same thing as specialized forms of assistance to good government, such as help for institution-building projects, although the two might be linked (conditional tied aid). This article is concerned more with conditionality than with specialized support. The prospects for switching conditioned aid into the funding of specific projects will be restricted by the desires of the donors to continue to furnish program loans or general balance of payments support and to retain some degree of conditionality.

Fourth, aid inducements to advance democracy and good government, of what Britain’s Foreign Secretary, Douglas Hurd has called ‘helpful pressure,’ should be so designed as to make it easier for the friends of reform in the aid-receiving countries to grow in numbers and influence. These groups are enabled to gain the ascendancy over the enemies, who are caused to become deflected, disarmed, neutralized or won over.

Fifth, notwithstanding Hurd’s protest “We are not imposing political conditions on aid. We are simply making a point…”, aid and the implementation of good government policies certainly do involve political conditionality at the present time, and this is the way the situation is seen in aid-receiving countries. This is not necessarily a claim that donors are imposing political conditions on those countries (as distinct from imposing conditions on aid). The actual terms and conditions of aid will emerge from negotiations in which the parties deploy whatever bargaining resources they can muster and as effectively as they can manage. At the end of the day, however, helpful pressure is more than mere persuasion (which is the presentation of reasoned argument), and as a relationship is belongs to the family of concepts denoted by power and influence.

Sixth, the linkage between political conditional and aid forms but one of a series of a graded measures that may be introduced into the relationship with states. As long ago as 1978 14 “possible actions” were listed by the Foreign and Commonwealth Office as diplomatic responses to human rights violations overseas; only two concerned aid programs. The exercise of political conditionality offers various steps, some of them taken in private: offers and payment of rewards, threats to withhold, to suspend or to cut off aid, and action implementing the same. Conditionality can mean more than just the enforcement of sanctions, an act of last resort which in the past has been associated with gross abuses of human rights. Conditionality can infuse the regular decision-making process over aid allocations, whereby a country’s inflow is maintained, increased or reduced from previous years, and its annual request is acceded to by donors, or met wholly or only in part. Instances of punitive conditionality have attracted most attention, but progress conditionality is probably a more widespread feature of the landscape.

The final assumption is that although political conditionality is still in its infancy, there has been time enough to begin trying to learn some experiment, speculation could soon start to rise concerning how much longer it has left to run.

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