Development Aid For Development’s Sake

ALMOST daily, the United States and Europe brandish threats to impose economic sanctions or cut off development assistance unless some vulnerable government accepts their political strictures.

The most recent threats are towards the new Hamas-led government in Palestine. Other recent examples include threats vis-à-vis Chad, Ethiopia, Haiti, Kenya, Bolivia, Uganda, and long-standing sanctions against Myanmar.Such tactics are misguided.The use of development aid as a political stick merely deepens the suffering of impoverished and unstable countries, without producing the political objectives sought by donors.To understand why requires taking a long-term view of geopolitics, particularly the gradual decline of US and European global domination.Technology and economic development are proliferating across Asia and the developing world, while the spread of literacy and political awareness during the past century made national self-determination by far the dominant ideology of our age, leading to the end of colonialism.Nationalism continues to produce powerful political “antibodies” to American and European meddling in other countries’ internal affairs.The failure to understand this lies behind repeated US foreign policy debacles in the Middle East, at least since the toppling of the Shah of Iran in 1979.The US naively continues to view the Middle East as an object of manipulation, whether for oil or for other purposes.In the Middle East, the Iraq war is widely interpreted as a war for US control of Persian Gulf oil – a rather plausible view given what we know about the war’s true origins.Only incredible hubris and naiveté could bring US (and UK) leaders to believe that Western troops would be greeted as liberators rather than as occupiers.The politicisation of foreign aid reflects the same hubris.Even as the US rhetorically champions democracy in the Middle East, its first response to Hamas’s victory was to demand that the newly elected government return $50 million in US aid.Hamas’s doctrines are indeed unacceptable for long-term peace, as even some Arab states, such as Egypt, have made clear.But cutting aid is likely to increase turmoil rather than leading to an acceptable long-term compromise between Israel and Palestine.A newly elected Palestinian government should be treated, at least initially, with legitimacy.Later, if it behaves badly by sponsoring terror, policies can change.An aid cut-off should be a policy of last resort, not a first strike.Aid cut-offs regularly fail to produce desired political results for at least two reasons.First, neither the US nor European countries have much standing as legitimate arbiters of “good governance.”Rich countries have long meddled, often with their own corruption and incompetence, in the internal affairs of the countries that they now lecture.The US preaches “good governance” in the shadow of an unprovoked war, congressional bribery scandals, and windfalls for politically connected companies like Halliburton.Second, US and European threats to cut off aid or impose sanctions are in any case far too weak to accomplish much besides undermining already unstable and impoverished countries.Consider the recent threats to cut Ethiopia’s aid, which is on the order of $15 per Ethiopian per year – much of it actually paid to US and European consultants.It is sheer fantasy to believe that the threat of an aid cut-off would enable the US and Europe to influence the course of Ethiopia’s complex internal politics.An aid cut-off to Ethiopia would nonetheless lead to a lot of death among impoverished people, who will lack medicines, improved seeds, and fertiliser.Indeed, the track record of on-again-off-again aid is miserable.Stop-and-go aid has left Haiti in an unmitigated downward spiral.The decade-long sanctions against Myanmar have not restored Aung San Suu Kyi to power, but have deepened the disease burden and extreme poverty in that country.Threatened aid cut-offs in Kenya, Chad, and elsewhere would make desperately bad situations worse.None of this is to suggest that the US and Europe should abide every move by every corrupt dictator.But realism in international economic affairs requires accepting that official development assistance can help achieve the broad political objectives of stability and democracy only in the long run.The most reliable path to stable democracy is robust and equitable economic progress over an ample period of time.The overwhelming standard for supplying official development assistance should therefore be whether official assistance actually promotes economic development.As such, it must be reliable, predictable, and directed towards development needs in ways that can be monitored, measured, and evaluated.Can the aid be monitored and measured? Is it being stolen? Is it supporting real development needs, such as growing more food, fighting disease, or building transport, energy, and communications infrastructure? If development aid can be directed to real needs, then it should be given to poor and unstable countries, knowing that it will save lives, improve economic performance, and thus also improve the long-term prospects for democracy and good governance.- Project Syndicate * Jeffrey Sachs is Professor of Economics and Director of the Earth Institute at Columbia University.Other recent examples include threats vis-à-vis Chad, Ethiopia, Haiti, Kenya, Bolivia, Uganda, and long-standing sanctions against Myanmar.Such tactics are misguided.The use of development aid as a political stick merely deepens the suffering of impoverished and unstable countries, without producing the political objectives sought by donors.To understand why requires taking a long-term view of geopolitics, particularly the gradual decline of US and European global domination.Technology and economic development are proliferating across Asia and the developing world, while the spread of literacy and political awareness during the past century made national self-determination by far the dominant ideology of our age, leading to the end of colonialism.Nationalism continues to produce powerful political “antibodies” to American and European meddling in other countries’ internal affairs.The failure to understand this lies behind repeated US foreign policy debacles in the Middle East, at least since the toppling of the Shah of Iran in 1979.The US naively continues to view the Middle East as an object of manipulation, whether for oil or for other purposes.In the Middle East, the Iraq war is widely interpreted as a war for US control of Persian Gulf oil – a rather plausible view given what we know about the war’s true origins.Only incredible hubris and naiveté could bring US (and UK) leaders to believe that Western troops would be greeted as liberators rather than as occupiers.The politicisation of foreign aid reflects the same hubris.Even as the US rhetorically champions democracy in the Middle East, its first response to Hamas’s victory was to demand that the newly elected government return $50 million in US aid.Hamas’s doctrines are indeed unacceptable for long-term peace, as even some Arab states, such as Egypt, have made clear.But cutting aid is likely to increase turmoil rather than leading to an acceptable long-term compromise between Israel and Palestine.A newly elected Palestinian government should be treated, at least initially, with legitimacy.Later, if it behaves badly by sponsoring terror, policies can change.An aid cut-off should be a policy of last resort, not a first strike.Aid cut-offs regularly fail to produce desired political results for at least two reasons.First, neither the US nor European countries have much standing as legitimate arbiters of “good governance.”Rich countries have long meddled, often with their own corruption and incompetence, in the internal affairs of the countries that they now lecture.The US preaches “good governance” in the shadow of an unprovoked war, congressional bribery scandals, and windfalls for politically connected companies like Halliburton.Second, US and European threats to cut off aid or impose sanctions are in any case far too weak to accomplish much besides undermining already unstable and impoverished countries.Consider the recent threats to cut Ethiopia’s aid, which is on the order of $15 per Ethiopian per year – much of it actually paid to US and European consultants.It is sheer fantasy to believe that the threat of an aid cut-off would enable the US and Europe to influence the course of Ethiopia’s complex internal politics.An aid cut-off to Ethiopia would nonetheless lead to a lot of death among impoverished people, who will lack medicines, improved seeds, and fertiliser.Indeed, the track record of on-again-off-again aid is miserable.Stop-and-go aid has left Haiti in an unmitigated downward spiral.The decade-long sanctions against Myanmar have not restored Aung San Suu Kyi to power, but have deepened the disease burden and extreme poverty in that country.Threatened aid cut-offs in Kenya, Chad, and elsewhere would make desperately bad situations worse.None of this is to suggest that the US and Europe should abide every move by every corrupt dictator.But realism in international economic affairs requires accepting that official development assistance can help achieve the broad political objectives of stability and democracy only in the long run.The most reliable path to stable democracy is robust and equitable economic progress over an ample period of time.The overwhelming standard for supplying official development assistance should therefore be whether official assistance actually promotes economic development.As such, it must be reliable, predictable, and directed towards development needs in ways that can be monitored, measured, and evaluated.Can the aid be monitored and measured? Is it being stolen? Is it supporting real development needs, such as growing more food, fighting disease, or building transport, energy, and communications infrastructure? If development aid can be directed to real needs, then it should be given to poor and unstable countries, knowing that it will save lives, improve economic performance, and thus also improve the long-term prospects for democracy and good governance.- Project Syndicate * Jeffrey Sachs is Professor of Economics and Director of the Earth Institute at Columbia University.