In an earlier contribution to this GEG blog series The (Dead) Aid Debate, I looked at macro-level relationships and effects of aid dependency in African countries. But the problems with aid also have to do with micro-level relationship and the everyday practices of aid agencies and how aid is given.
There has been little public attention given to and assessment of how aid is actually provided and how aid agencies actually work. There is some academic research on this subject, but it is not the stuff of popular books.
Concrete examples of ‘aid in action’ can tell volumes about why aid has such a limited impact on economic development and poverty reduction. Unfortunately, there is not room in a blog entry to do justice to even one of a myriad of cases I have researched in Ghana. To get the full impact, one has to give all the details, so I have settled with pulling out some generalizations from these cases.
Donor-funded projects are still largely designed by donors, and often in donor headquarters as opposed to recipient country offices. Although there is variation across donors, this is largely the case. In particular, World Bank projects are definitely still designed in Washington.
A good example of this in Ghana is a big agriculture sector loan document produced in 1999. The then Ghana government rejected it. A new government came to power in January 2001, which also did not like the loan because it did not invest directly in increasing production. The World Bank encouraged the government to sign it by saying that the content could be changed during implementation, otherwise it would take several years to redesign it. The government signed it, but it still took several years to redesign it. The new project design was approved in 2004, by which time there were only two years left. A few key things were done in those two years, but considering that the World Bank was the biggest donor in agriculture at that time, relatively little aid was going to agriculture.
The agricultural sector in Ghana has also witnessed several failed attempts at donor coordination through sector-wide approaches in the 1990s. Donors have proved unable to coordinate themselves, and the Ghana government has been unable to coordinate donors due to donors being uncooperative and due to their own weak public management. Thus, the agriculture sector was characterized by many uncoordinated donor projects with isolated, small and sometimes unsustainable impacts. Donor projects often address the easy tasks, and understandably so, since the major constraints (such as access to credit and land tenure reform) require high level political support and enforcement during implementation. But many small impacts do not add up to big impact. The main structural challenges to increasing agricultural productivity still remain: roads, irrigation, credit and technical knowledge.
Relying on donor projects to support the productive sectors has been problematic. First, donor projects have to be negotiated, so state elites driving support for particular sectors, such as horticulture export, cannot fully determine the content of projects or their implementation. How much they can determine varies with the donor agency, but beyond that, most if not all donor projects are characterized by certain features which make them not a good tool for supporting production. It takes too long to produce a project document in donor cycles (3-5 years!), and it is very difficult to change a project significantly once it is approved. This might not be an issue for aid in social sectors, but it is in the productive sectors where conditions change rapidly. The problem or constraint that the project was meant to address might have changed, but aid practices are so rigid that they cannot respond.
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.