More on aid debates

YJIA features interviews with George Ayittey, Paul Collier, Nancy Birdsall, and Bill Easterly.

This aid debate is starting to sound rehearsed. People really need to move on to different questions, and stop running the same conferences and forums. The YJIA interviews had a few nice bits, however, and bring out the ideas of four important thinkers in a quick, crisp way.

From Ayittey, not a new point but an important one:

…reforming aid is a frustrating experience because of vested interests and institutional resistance. Aid has become an “industry,” with its own powerful lobbyists who seek a continuation of current programs at increased funding.

Since Congressional requirements and regulations channel over 70 percent of all U.S. aid projects to American contractors and sub-contractors, there is every incentive on the contractors part to clamor for continued funding.

According to a Clinton administration review report, the United States spent $27.7 billion on foreign assistance in the 1980s. However, “about 75 percent of that money was spent in the United States to purchase such items as food and equipment sent abroad or the salaries of aid workers”. As George Soros once said, “Foreign aid generally serves the interests of donors rather than recipients”.

From Collier, an interesting take on the evaluation craze:

Much of the academic critique of aid is misdirected. Matters such as the evaluation of projects should not be the concern of aid agencies but of governments. For example, to the extent that randomized evaluation is useful in project evaluation, academics should be engaging with governments to help them internalize these methods.

The key issue for aid agencies is how best to work with governments of widely varying competences, legitimacy, and intentions. Everybody is happy to propose the aid architecture appropriate for the best-case scenario, but there has been political reluctance to think through the architecture appropriate at the other end of the spectrum.

Because the academic debate has been inappropriately focused on evaluation and accountability it has driven donors into largely misplaced effort to show value for money.

The freshest idea I’ve heard in the aid debate this year is still the Pritchett talk I posted last week.