Tracking Down the Trail of Foreign Aid
Thursday, July 17, 2008
The current foreign aid fad is to channel most money through recipient governments rather than the NGOs that actually deliver most services in most poor countries.
This wins the donors (Canada among them) high praise from the heads of those lucky governments who get the cheques. They like this policy a lot.
But the people the money’s supposed to help? No so much.
In an ideal world, it would be hard to argue against providing aid money through governments. Fairness and democratic principles demand that nations be free to pursue their own priorities, not be bound by ours.
But in the real world, a key cause of mass poverty is bad governance – incompetent, corrupt, sometimes even vicious. In other words, far fewer places would be poor if their governments could be trusted. So who wants to prop up their leaders with money for them to siphon off from its intended uses?
Yet that’s what we often do.
Canada officially targets 25 poor countries for our aid, although we actually support many more than that. Only one country on our list, Ghana, makes it (barely) into the most trustworthy 50 per cent in Transparency International’s ranking of corruption. And seven of the 25 (Bangladesh, Cambodia, Cameroon, Ethiopia, Indonesia, Kenya and Pakistan) are in the bottom 25 per cent.
No question that people in these countries need help, although I’m not sure how their governments got on a list that’s supposedly based, in part, on probity. Nor do I understand why we don’t bypass corrupt governments and more strongly support the NGOs that do the real work.
Tom Kessinger, deputy chair of the Aga Khan Development Network, says his agency hasn’t yet been seriously affected by this trend. The AKDN, which is substantially funded by the personal wealth of the Aga Kahn as well as his Ismaili Muslim followers around the world, still also gets support from many donor governments, including Canada.
But Kessinger worries that the trend will inevitably take money away from agencies that have a solid track record for results.
When it comes to results, NGOs are often better positioned than governments, and not only because they don’t feel obligated to deal through recipient governments even when they’re incompetent or corrupt.
In my view, the AKDN, as just one example, deals far more effectively with the need to focus sharply and for the long term than does CIDA, the aid arm of the Canadian government.
The first thing AKDN has done is to commit to development aid rather than – except in the direst emergency – mere stopgap relief, Kessinger told me.
The second is to stay in for the long haul – a crucial strategy if improvements are ever to take root and grow strong enough to stand on their own.
Third, it focuses on a relative handful of countries in just a few parts of the world. Granted, this is a more obvious choice for AKDN than for a donor government. While the Ismaili agency doesn’t limit its aid to Muslims, it does confine itself to countries where Ismailis have cultural connections and sound knowledge of the social and political landscape.
CIDA pays lip service to similar principles. But its targets – worthy as they are – are too numerous, far-flung and diverse. It has a spotty record of sticking to projects, even those that are well-started. And its bureaucrats are too often out of touch with what’s happening, or needs to happen, on the ground.
Kessinger talked about two other intertwined principles that I think are also key.
The first is to stand firm for one inviolable principle: the inclusion of all races, religions, genders and social strata in community development and decision-making. The second is to pick and choose recipients on the basis of their readiness to accept these principles – to work with progressive villages in a region, but not those stuck in divisive practices of the past.
“That’s something governments don’t dare to do,” he said.
But perhaps it’s time for governments to be as bold.
Oxford economist Paul Collier makes much the same point in The Bottom Billion: Why the Poorest Countries are Failing, and What Can be done about It. He deplores the rich world’s habit of giving “too little too soon.”
He notes how, in post conflict situations, rich countries always lavish aid on governments that are ill-prepared or ill-suited to do anything worthwhile with it. And if such a government ever does get its act together to the point where real progress is possible, by then the aid has dried up.
Collier argues that donor governments should dare to intervene massively when the moment is right, and to pull back when it is not.
CIDA’s new minister, Bev Oda, talked about the need for more effective aid at a meeting of aid minister in Japan this spring. Her staff told me at the time that they expected a major announcement from her soon.
That hasn’t been forthcoming, perhaps because of turmoil in CIDA following the resignation last month of its three-year president, Robert Greenhill.
Greenhill’s replacement is Margaret Biggs, formerly a senior Privy Council official, who has a reputation for understanding policy and knowing how to navigate Ottawa’s bureaucratic maze.
I hope she and her minister are still working on those big changes. And I hope they ignore the fads or the politics, and focus on policies that improve results.