The Third High Level Forum on Aid Effectiveness will be held this September in Accra. But is aid effectiveness a mirage? Yash Tandon dissects the Paris Declaration in relation to aid effectiveness and reaches the conclusion that "under the pretext of making aid more effective, the aid effectiveness project is a form of collective colonialism by Northern donors of those Southern countries that, through weakness, vulnerability or psychological dependency, allow themselves to be subjected to it at the Accra conference in September." But all is not lost and he also offers a way out.
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A HISTORICAL AND CONTEXUAL NOTE

The Paris Declaration and the debate on aid effectiveness must first be placed in its proper conceptual and historical context. The origins of the debate lie in the concept of ‘failed states’ that in the 1990s became a common explanation for ‘crisis’ in large parts of the South. Theorists, largely in the US and Europe, argued that failed states were at the root of global instability and terrorism. They had lost their legitimacy and credibility, giving the North the right to intervene in order to reshape them as democratic states that would no longer pose a threat to the rest of the civilised world.




To summarise, then, we need to recognise that we are on very controversial and politically sensitive terrain when we talk about aid. Perhaps Bono and Sachs are honest advocates of aid, believing that the rich have a responsibility to help the poor. They do not ask if the rich had anything to do with creating poverty in the first place, but their good faith is best not questioned; they are artists and academics, not politicians, spreading the good word about humanity and humanitarianism. Bush and Blair, however, are in another camp altogether. They are in the category of people that Roger Riddell argues distort the purpose of aid because they have a political agenda, whether hidden or explicit. Their political track record suggests that they share Robert Cooper and Martin Wolf’s belief in defensive imperialism. Like their 19th century ancestors Bush and Blair are driven by a kind of missionary zeal to civilise the South and reorder it, to make it safe for democracy and ‘more like us’. Both soft and hard power are needed. Aid, from this perspective, becomes another weapon in their arsenal to discipline chaotic parts of the world. It follows that it would be irresponsible to give aid without conditions.



2. Donors prepare performance conditionalities in conjunction with the World Bank. In the case of Tanzania, for example, there is a 12-page matrix and 49 pages on accounting. The matrix is prepared with no participation by the recipient country. There is no real mutual accountability, contrary to the Paris Declaration`s stated objective. If recipient countries do not perform, they are subject to penalties, but if donor countries do not perform they are not penalised. In normal business transactions, banks that lend money take risks as well as borrowers; if borrowers fail to repay, the banks pay a price. But in the aid architecture proposed by the OECD, the risks are taken by recipient countries alone.

3. The compliance tests administered by the Word Bank do not use the economic and social policies of recipient countries. With regard to procurement, for example, the tests are externally imposed based on a World Bank-devised procurement assessment methodology. There is no recipient country ownership of these tests. The rating system uses a methodology provided by the OECD-DAC and the World Bank to test the effectiveness of aid in relation to systems of both public finance management and procurement. There are twelve criteria or indicators by which to measure the performance and progress of recipient countries, graded on a scale from A to E. If recipient country systems meet agreed donor criteria they will be used to make the evaluation; if not, tests provided by the OECD-DAC and the World Bank will be used. For example, if the national procurement system is not good enough, an open tender system will be used to undertake international procurement, something that developing countries have already rejected in the context of WTO negotiations. In other words, the Paris Declaration brings through the back door what developing countries have already turned down.

4. On governance, it is once again donor procedures that determine the method of harmonisation. Although the Paris Declaration talks about ownership, the opposite is in reality the case. Harmonisation processes are externally set. Donors decide whether a particular procurement item is to be tendered internationally or nationally (or locally in a local government context), and whether it is open to the private sector or the state sector or both. Donors may disagree (for example, the US favours the private sector and the Scandinavians prefer state procurement). These disagreements are first sorted out between donors, and then become inflexible instruments of enforcement on recipient countries in the name of aid efficiency.

5. There is a shift from project lending to programme-based lending, which involves the pooling of donor resources and the injection of these funds into the national budget through direct budget support. Donor countries develop a single Joint Assistance Strategy for each country. Recipient countries must discuss their strategies with donors and the World Bank. The provision of assistance and funding is based on a collective donor assessment of recipient countries’ policies and the extent to which these policies are acceptable to donors. There is a danger that if the performance of recipients falls short of the indicators, direct budget support may become the instrument for stopping the flow of aid. Recent World Bank documents show that in Poverty Reduction Strategy assessments undertaken by the World Bank, ‘few of them provide the level of operational detail that specifies how objectives are to be achieved through policy actions’. [12] Growth is apparently much lower than expected by the donor community. If this is still the case in 2010, the implication is that donors will demand better performance from recipient countries or they might stop aid.

CONCLUSION

The conclusion is unavoidable. Under the pretext of making aid more effective, the aid effectiveness project is a form of collective colonialism by Northern donors of those Southern countries that, through weakness, vulnerability or psychological dependency, allow themselves to be subjected to it at the Accra conference in September.

Is there a way out? Can the Paris Declaration be salvaged? Yes, it can. In order to give it legitimacy and credibility, the following steps are necessary.

1. The Paris Declaration must be properly embedded in the UN system. The UN (ECOSOC, for example) must thoroughly analyse it and bring into it the UN`s evaluative criteria on aid effectiveness, such as those related to internationally agreed development goals, the MDGs, and the ILO`s concept of ‘decent work’.

2. Meanwhile, there must be a moratorium on the Accra process and the proposed Accra Action Agenda.

3. The Paris Declaration must distance itself from the Bretton Woods institutions or it will suffer the same credibility and legitimacy gap.

4. The principle of mutual accountability must be properly structured and monitored by a UN body. The Development Cooperation Forum of the UN can play this role. Although it is a new institution created as a forum, without power of implementation or enforcement, it could undertake or commission a proper study of the Paris Declaration and recommend how a two-way process of accountability could be put in place.

5. Finally, aid is not the route to development. It creates dependency and erodes self-reliance. The UN should encourage a study on how developing countries can exit from aid dependency over the next 10 or 15 years. The South Centre is already engaged on such an exercise.


* Yash Tandon is the Executive Director of South Centre (South Centre - Home) based in Geneva.

*Please send comments to editor@pambazuka.org or comment online at Pambazuka News

*For further notes, please follow this link:
[1] The Post-Modern State and the World Order, Demos, 2000

[2] Financial Times, 9 October 2001. See also ‘We cannot ignore failing states’, 8 June 2004

[3] I, with others, have drawn attention to this on several occasions, for example at the Africa Leadership Forum conference ‘Africa on the eve of the 21st Century’, Maputo, 9-11 September 1997

[4] White Man’s Burden: Why the West’s Efforts to Aid the Rest have Done So Much Ill and So Little Good, Penguin, 2006

[5] Aid & Influence: Do Donors Help or Hinder? Earthscan, 2006

[6] Does Aid Really Work? Oxford University Press, 2007

[7] In 2005, for example, Tanzania hosted 541 donor missions and had to
account to donors for 700 projects managed by 56 parallel implementation units

[8] Human Rights Council, eighth session, Working Group on the Right to Development, High Level Task Force on the implementation of the right to development, Fourth session Geneva, 7-15 January 2008, A/HRC/8/WG.2/TF/CRP.7

[9] Among others, Nancy Alexander ‘The New Aid Model: Implications for the Aid System’, mimeo, 20 September 2007

[10] Resolution A/Res/60/1

[11] Resolution A/Res/61/16

[12] World Bank Comprehensive Development Strategies and Aid Effectiveness Reviews (AERs)


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