*Topicality/Definitions Democracy Promotion Includes Military Intervention
Democracy Promotion Undermines Poverty Reduction Agenda
Download 2.51 Mb.
|
- Navigate this page:
- US Assistance Generally Undermines Economic Growth/Reforms
Democracy Promotion Undermines Poverty Reduction AgendaAID FOR POVERTY REDUCTION COMPETES WITH AID FOR GOOD GOVERNANCE Jo Beall, Director Development Studies Institute-London School of Economics, 2005, Funding Local Governance: small grants for democracy and development, p. 15-6 Another classic problem with demand-driven approaches is that while they may be beneficial to some sections of the client population, they can tend to keep the poorest or most marginalized groups out of the frame. It is often people who are disadvantaged or relatively deprived but not totally destitute who are best able to participate in partnerships and rise to the challenge of deliberative democracy. The poorest often have a more limited capacity to articulate their demands, to come up with match funding, and to sustain projects that meet all the criteria and requirements laid down by donors and local fund agencies. As a result of this and the inevitable power differentials within a locality, it has been argued that local funds often advance the interests of those who are already better off (Fumo et al., 2000; Tendler and Serrano, 1999). This points to one of the dilemmas that arise when local funds are designed both to alleviate poverty and to enhance governance or state society relations. When pro-poor local funds are accompanied by objectives such as participation and poverty reduction these objectives are not necessarily compatible.
John Degnbol-Martinussen & Poul Engberg-Pedersen, Danish Association for International Cooperation, 2003, Aid: understanding international development cooperation, p. 240-1 Right-wing opponents of aid emphasize the first two groups of criticism: aid has not promoted economic growth, which is primarily due to the fact that it allows and leads to a laissez-faire policy in developing countries, so that the necessary reforms are not made and the correct policies are not carried out. The argument is that there is no direct connection between the size of aid (large or small) given to the individual developing country, and economic growth (high or low) and the size of savings and investments in the same country. This, together with the fact that evaluations of individual projects for most donors have given positive results in up to 60-70 per cent of cases, led Mosley (1986) to point to a micro–macro paradox. Economists generally see a strong correlation between high savings and economic growth. The main problem for economists is therefore to find explanations for why the sum of aid, in the form of resources of considerable size, did not lead to economic growth in developing countries. Economists gave three explanations. First, aid is not exclusively distributed according to need and effectiveness criteria, which would give most aid to the poorest countries that implement growth-generating economic policies and have the capacity to make use of aid. Historic, strategic, political, commercial and other motives influence donors' aid distribution (as described in Chapter 2). Figures 12.1 and 12.2 show that to a large extent aid has gone to middle-income countries rather than to the low-income countries with the largest number of poor people. Below, we consider the attempts of some World Bank economists to calculate the effects of the ineffective distribution of aid. The economists' second explanation for the micro–macro paradox was that aid (like commercial loans) is used here and now for consumption or poor investments. Therefore, aid is not well enough integrated into the necessary use of domestic and foreign savings for long-term investments to improve production and capacity and thereby create a basis for future economic growth. Furthermore, aid makes it possible for recipient governments to postpone necessary solutions to the country's problems, especially in relation to imbalances in the economy (foreign trade and debt, inflation and state deficits). The third explanation is the so-called 'Dutch disease'. All resource transfers from one country to another cause the exchange rate in the recipient country to be revalued, which reduces its export opportunities and ability to compete. This is a problem that the oil-exporting countries have run into, and which has resulted in a high living standard but low growth. In order to avoid this situation, which is seldom sustainable in the long run, recipient countries must use resource transfers for investments rather than consumption. This can be difficult in a developing country that is often in the midst of several crisis situations that demand transfers of income for consumption. The main argument of these economists was that (a) there are always policies that are out of balance and must be adjusted; (b) adjustments often cost political popularity; (c) foreign aid allows countries not to adjust; (d) thus, small imbalances can grow large; and (e) aid thereby causes macro damage in addition to whatever else it does. On the basis of this logic, the structural adjustment programmes (SAPs), which the World Bank and IMF have supported and insisted upon since the beginning of the 1980s, were ideal for removing the micro–macro paradox and increasing the impact of aid on economic growth. Through SAPs, donors made conditions requiring strong adjustments of economic and other macro policies. The results, however, have been quite ambiguous. AID FAILS TO PROMOTE MACRO-ECONOMIC DEVELOPMENT AND POVERTY REDUCTION GOALS: MANY REASONS John Degnbol-Martinussen & Poul Engberg-Pedersen, Danish Association for International Cooperation, 2003, Aid: understanding international development cooperation, p. 239-40 To these aid potentials must be added aid's political effects in the form of society-building and democratization. At the same time, the country analyses in Lele and Nabi (1991) point to three negative consequences that aid has had/can have on the society and macro level. 1. Aid increases consumption and reduces savings and investments in the recipient country. 2. Aid promotes growth in the public sector beyond what the national economy can carry. 3. Aid promotes ineffective use of resources, for example, in the form of increased use of capital at the expense of labour. On the basis of Serageldin (x995), we can go a bit further in summarizing the negative consequences of aid pointed out by the critics. 1. Aid has not worked. It has not promoted economic growth and development in recipient countries. Aid has replaced or reduced domestic savings and investments instead of supplementing and promoting them. 2. Aid causes dependence and inhibits or postpones the necessary economic changes and political reforms in recipient countries. It gives the elite the opportunity to continue polices that are detrimental to development. Aid has also promoted unnecessary state intervention in societal development. 3. Aid is misused. It falls into the hands of the relatively rich and powerful, not the poor and needy. Aid increases the resources of those in power and thereby their grip on society. This criticism comes from both the left and right sides of the political spectrum. 4. Aid is not nearly as good as trade and direct private investments in getting a development process started. There is therefore no alternative to liberalization, which can integrate developing countries in the world economy far better than aid.
Mary B. Anderson, president of the Collaborative for Development Action, 1999 Do No Harm: How Aid Can Support Peace- or War p. 42-43 Aid can reinforce market distortions by feeding the war economy and undermining peacetime production and productivity. For example, when aid agencies hire guards from local militias to protect their goods and their staff, those payments directly reinforce economic systems of conflict. When aid agencies import goods that can be produced from the local communities and sat them prominently in the front of the truck, car jackings were less likely to occur because any action against a vehicle in which a respected elder was riding wOl)ld be considered a hostile act by his clan, and reprisals would follow. The theft of aid goods would be associated with the disruption of interclan relations, which were closely guarded and controlled by elder councils. The costs of theft thus became too high to make it worthwhile. locally and distribute them at no cost, they can undermine peacetime economic incentives. Aid often creates its own "industries" in recipient countries in which profits can be made and wages can be paid. Because of the wealth aid represents and the systems it relies on, profits can be made by local people who control the assets aid needs; War disrupts distribution systems and routes, which aid agencies need to reach at-risk populations. Individuals and groups that control delivery and access can gain both financially and politically. Demand for other assets also rises when aid agencies arrive. The costs of hotel rooms, office space, housing, food, furniture, and equipment are bid up by the influx of expatriates. People who own or control these facilities and goods can become wealthy in the midst of the otherwise deteriorating economic conditions associated with war. Directory: assets assets -> Northern territory of australia assets -> Number: caveat in the [Will/Will and Codicil/Estate of] assets -> Invitation for Bid Calact/mbta for Standard Floor and Low Floor Rural Duty Vehicles ifb no. 12-03 November 14, 2012 assets -> 12 Step Retreats For Everyone in Twelve Step Recovery Ratner Fellowship assets -> 12 Step Retreats For Everyone in Twelve Step Recovery Ratner Fellowship assets -> Sigaccess annual Report assets -> Central Government is expected to ask the seventh pay commission to consider merging 50% dearness allowance assets -> List of accessible executive records assets -> Emergency telephone numbers Call toll-free from anywhere in France Download 2.51 Mb. Share with your friends:
|