Tuesday, July 21, 2009

Comments on U.S. aid delivery

There has long been talk about changing the delivery of U. S. aid to foreign nations. Now that President Barack Obama wants to see changes the talk has become more serious. A majority of the U.S. aid money goes to U.S. organizations, corporations or farmers. Instead of the organizations or farmers of the under-developed world, even President Obama admits this.

From the magazine Foreign Policy, we found a couple of great comments on the subject. One from Paul O'Brien of Oxfam America and another from Andrew M. Mwenda editor of Ugandan newspaper The Independent. The comments come from a recent roundtable discussion the magazine held on U. S. aid, the previous link contains a few more.

Paul O'Brien, Oxfam America

What do we know [about foreign aid] that actually works? For Oxfam that is about [local] ownership. Why do we care about ownership? Because all the aid in the world is not going to get the bottom billion out of poverty. We all know it. If we want sustainable solutions, it's about [local states and citizens] working together in a political and economic compact where states actually care about having legitimacy from their citizens.

Right now if you're a USAID professional on the ground and you're trying to build local country capacity, essentially, you have to use U.S. contractors and even [U.S.] NGOs, because they're the only ones who understand the complexities of the Washington bureaucratic system. People aren't getting the contracts because they're the most capable at leaving sustainable capacity behind. We've got to fix that.

Andrew M. Mwenda, The Independent (Uganda)

In their search for revenues to sustain themselves in power, Africa's rulers do not find it in their own interest to build productive and profitable arrangements with their own citizens. Governments in Africa find it much more productive to enter negotiations with the international community for aid. If governments had to depend on their own citizens for revenues, they would be driven -- by self-interest -- to listen to their citizens about the policies and institutions necessary for economic growth.
Comments on U. S. Aid
The result of aid is actually to disarticulate the state from the citizen. The citizen in Africa does not look at the state as an institution that is supposed to serve the common good. Instead, they begin looking at the state as a patron who gives gifts that fall from heaven like manna. In this case they fall from the Western world in the form of aid.

Aid should be aimed at promoting innovation, not at rewarding failure. Currently, aid goes to countries that have failed, and therefore, aid tends to be a reward for failure. Even in dysfunctional states, you may find pockets of efficiency -- some public institutions that perform a very good function. I think those should be supported. Uganda has a very incompetent and corrupt state, so my view is that you should not give money to the state of Uganda. But the state of Uganda is not homogeneous. There are pockets of efficiency in that ocean of incompetence.

Of all Western governments, I find the U.S. government to have the most corrupt and patronage-ridden political system. If the U.S. president says, "I am putting up $15 billion for XYZ," that money must be appropriated by Congress. The moment Congress sits to discuss that money, lobbyists arrive. By the time Congress appropriates that money, for every dollar, 80 cents has been chopped off to U.S. companies. So American aid is not about the recipient; it is about American companies. How then do you change that? It is up to you Americans. American aid is the most inefficient type of aid I have looked at.

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