One of the real issues neglected in much (if not all) of the debate on aid and Africa is the way in which aid relationships have developed over decades of dependence and their unintended political consequences. Another issue is how the international aid system has expanded and entrenched itself in many African countries. Let’s quickly recap how the aid relationship evolved, before going into the unintended consequences and the entrenched nature of the aid system.
Changes in the global economy in the 1970s and early 1980s led to debt and balance of payments crises in many African countries. These countries desperately needed foreign exchange and could only get it from one source: the Bretton Woods Institutions. This general economic crisis in Africa occurred during a paradigmatic shift in economic thinking (generally, and not just in development economics), and it presented an opportunity for the World Bank and IMF to influence recipients’ policies in line with this new paradigm. New policy prescriptions were attached to balance of payments support and sector loans from the Bank and Fund. In the 1990s, donors moved beyond macroeconomic policy, placing conditions on a wide range of policy areas and seeking to transform the administrative and political systems in these countries. By the early 2000s, debt relief through the Heavily Indebted Poor Country initiative and the Poverty Reduction Strategy Papers that came with it extended donor conditions to the process of policymaking itself.
Continuous engagement with the World Bank and IMF since the 1980s, as well as an expanding list of other official and private aid agencies, has also created three common characteristics in aid dependent countries today: (1) a state of permanent negotiation with donors; (2) the gradual entanglement of donor and government institutions alongside the limited (re)building of the recipient’s public administration; and (3) the political dimensions of aid dependence. These characteristics have become key factors shaping the incentives facing many African governments.
1. Permanent negotiation
The proliferation of donors and donor agendas has led to the diffusion of government control over its development programme. A continuous, permanent negotiation has developed over policies, programmes, and projects between donors and governments. Donors may ultimately give in on a condition or choose not to punish non-implementation of conditions, but donors nonetheless continue to assert their preferences either in the form of traditional conditionality or in the form of intimate participation in policy discussions and attempts at micromanaging project and programme implementation. Permanent negotiation places an immense burden on recipient administrative systems, making it hard for these governments to keep up.
Permanent negotiation also means that ministers and civil servants do not take it up with donors every time there is a disagreement. They pick only the important battles. These relationships have become such a routine that the governments know what different donors want to see in a development strategy or sector policy. Ministers and civil servants thus may pre-empt tough negotiations over policy choices by adopting donor preferences in advance in order to gain the maximum amount of aid or donor favor that may be leveraged in other negotiations. Tough negotiations are reserved for instances where there is strong disagreement over policy areas seen as vital to the economy, to the ruling party remaining in power, or to the personal interests of government officials.
As a result of permanent negotiation, these governments spend most of their time responding to donor initiatives and negotiating on that basis, trying to work their own priorities into the donor agenda or waiting until implementation to steer the project or program towards their preferences. This is predominantly a defensive strategy, which leaves these governments with little time to devise policies independently of donors and little intellectual space to develop coherent frameworks.
2. Institutional entanglement
Fragmented policymaking and budgeting processes that resulted from the influx of aid and donors and almost non-existent national planning systems meant that many African governments were in weak positions to coordinate aid according to a national development plan. As a result, donors started coordinating aid giving among themselves in the 1990s. Donors created arenas for ‘policy dialogue’ between the government and themselves. These arenas multiplied to cover all policy sectors as donor agendas proliferated. In Mozambique, there are twenty-nine sector and thematic working groups which meet regularly to accompany the formulation and implementation of government policies.
Thus, the fragmented aid system in the 1980s was transformed into a joint donor–government planning process by the 2000s. Notably, this transformation took place against the backdrop of a general failure of recipient governments to reform their public service, and the failure of donors to reform aid practices which got things done in the short term but which undermined, and even exacerbated, the problems in recipients’ public administration systems. What emerged in most countries is a joint policy process parallel to a country’s official policy processes. The implication of this joint policy process around the budget and at sector levels is to create a rigid framework that gives the government little room to reach policy decisions independently through formal institutions before negotiating with donors and which makes it harder for the government to change its programs and react quickly.
The incentives are very strong for the recipient government to adopt a strategy of going along with the consensus produced through the joint policy process, but to try to stick in its priorities where possible and when it really matters. This strategy has three side effects. First, it usually produces ‘compromise documents’ which are not wholly supported by the government or donors. Second, governments do not want to be confrontational with donors, because government officials have to continue to work together in this joint process, and confrontation only makes that job harder. Third, the absence of effective authority over policy with neither governments nor donors exercising complete control leads to fragmented policymaking and policy implementation processes.
3. Politics of aid dependence
Many African governments have relied on aid to retain their position in power since independence. But the contemporary phenomenon of political dependence is different, partly as a result of the continuous engagement with donors, and partly as a result of new imperatives facing governments after the return to multiparty rule in the mid-1990s. Aid dependent African governments have become accustomed to the increased budgets that aid provides. Aid is a vital resource with which these governments seek to deliver goods and services or other promises they have made. Thus, they are unwilling to take stronger policy positions or to chart a development strategy outside of the purview of donors, as they are afraid of risking reductions in aid that could undermine their political support and/or cost them the next election.
Fragile domestic political support combined with dependence on aid to shore up their political legitimacy provides strong incentives for African governments to remain in a subordinate position to donors. The conditions of permanent negotiation and institutional entanglement, at the same time, provide strong disincentives for recipients to challenge their subordination. Many African governments have accepted their subordinate position and the inevitability of intimate donor involvement in policymaking, and then pursued strategies to maximize their policy control within that context.
In analyzing East Asian success, Mustaq Khan argues that state capabilities are key to economic development, but that state capabilities are in turn determined by political configurations and the organization of power. In African countries, we not only need to understand how the distribution and disposition of organizational power has helped or hindered different economic transformation strategies in the past, we also need to understand how the onset of aid dependence and the intensity of donor engagement has further shaped these domestic political configurations and the organization of power.
Lindsay Whitfield is Project Senior Researcher at the Danish Institute for International Studies and editor of The Politics of Aid: African Strategies for Dealing with Donors (2009). This blog was published as a Danish Institute for International Studies working paper. For more on the (dead) aid debate, visit GEG’s resource page.
