Development aid is a type of
foreign/international/overseas aid given by governments and other agencies to support the economic, environmental, social, and political
development
Development or developing may refer to:
Arts
*Development hell, when a project is stuck in development
*Filmmaking, development phase, including finance and budgeting
*Development (music), the process thematic material is reshaped
*Photographi ...
of
developing countries
A developing country is a sovereign state with a lesser developed industrial base and a lower Human Development Index (HDI) relative to other countries. However, this definition is not universally agreed upon. There is also no clear agreem ...
.
Closely-related concepts include: developmental aid, development assistance,
official development assistance
Official development assistance (ODA) is a category used by the Development Assistance Committee (DAC) of the OECD, Organisation for Economic Co-operation and Development (OECD) to measure aid, foreign aid. The DAC first adopted the concept in ...
, development policy, development cooperation and technical assistance. It is distinguished from
humanitarian aid
Humanitarian aid is material and logistic assistance to people who need help. It is usually short-term help until the long-term help by the government and other institutions replaces it. Among the people in need are the homeless, refugees, and ...
by aiming at a sustained improvement in the conditions in a developing country, rather than short-term relief. Development aid is thus widely seen as a major way to meet
Sustainable Development Goal 1
Sustainable Development Goal 1 (SDG 1 or Global Goal 1), one of the 17 Sustainable Development Goals established by the United Nations in 2015, calls for the end of poverty in all forms. The official wording is: "No Poverty".United Nations (2 ...
(end poverty in all its forms everywhere) for the developing nations.
Aid may be bilateral: given from one country directly to another; or it may be multilateral: given by the donor country to an international organisation such as the
World Bank
The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects. The World Bank is the collective name for the Interna ...
or the United Nations Agencies (
UNDP
The United Nations Development Programme (UNDP)french: Programme des Nations unies pour le développement, PNUD is a United Nations agency tasked with helping countries eliminate poverty and achieve sustainable economic growth and human dev ...
,
UNICEF
UNICEF (), originally called the United Nations International Children's Emergency Fund in full, now officially United Nations Children's Fund, is an agency of the United Nations responsible for providing Humanitarianism, humanitarian and Devel ...
,
UNAIDS
The Joint United Nations Programme on HIV and AIDS (UNAIDS) (, ONUSIDA) is the main advocate for accelerated, comprehensive and coordinated global action on the HIV/AIDS pandemic.
The mission of UNAIDS is to lead, strengthen and support an e ...
, etc.) which then distributes it among the developing countries. The proportion is currently about 70% bilateral 30% multilateral.
About 80% of the aid measured by the
OECD
The Organisation for Economic Co-operation and Development (OECD; french: Organisation de coopération et de développement économiques, ''OCDE'') is an intergovernmental organisation with 38 member countries, founded in 1961 to stimulate e ...
comes from government sources as
official development assistance
Official development assistance (ODA) is a category used by the Development Assistance Committee (DAC) of the OECD, Organisation for Economic Co-operation and Development (OECD) to measure aid, foreign aid. The DAC first adopted the concept in ...
(ODA). The remaining 20% or so comes from individuals, businesses,
charitable foundations or
NGOs
A non-governmental organization (NGO) or non-governmental organisation (see spelling differences) is an organization that generally is formed independent from government. They are typically nonprofit entities, and many of them are active in h ...
(e.g.,
Oxfam
Oxfam is a British-founded confederation of 21 independent charitable organizations focusing on the alleviation of global poverty, founded in 1942 and led by Oxfam International.
History
Founded at 17 Broad Street, Oxford, as the Oxford Co ...
).
[OECD, DAC1 Official and Private Flows (''op. cit.''). The calculation is Net Private Grants / ODA.] Most development aid comes from the Western industrialised countries but some poorer countries also contribute aid.
Development aid is not usually understood as including
remittance
A remittance is a non-commercial transfer of money by a foreign worker, a member of a diaspora community, or a citizen with familial ties abroad, for household income in their home country or homeland. Money sent home by migrants competes wit ...
s received from migrants working or living in
diaspora
A diaspora ( ) is a population that is scattered across regions which are separate from its geographic place of origin. Historically, the word was used first in reference to the dispersion of Greeks in the Hellenic world, and later Jews after ...
—even though these form a significant amount of international transfer—as the recipients of remittances are usually individuals and families rather than formal projects and programmes. Some governments also include military assistance in the notion of "foreign aid", although the international community does not usually regard military aid as development aid.
Related terms
There are various terms that are interchangeable with "development aid" in some contexts but possess significantly different meanings in others.
"
Aid
In international relations, aid (also known as international aid, overseas aid, foreign aid, economic aid or foreign assistance) is – from the perspective of governments – a voluntary transfer of resources from one country to another.
Ai ...
" is a more general concept which can include
humanitarian aid
Humanitarian aid is material and logistic assistance to people who need help. It is usually short-term help until the long-term help by the government and other institutions replaces it. Among the people in need are the homeless, refugees, and ...
(emergency relief) and other voluntary transfers not specifically aimed at development. Other expressions that relate to aid in general include "foreign aid", "international aid", and "overseas aid".
"Developmental aid" is an expression sometimes used to indicate aid that is more genuinely or effectively oriented to development than what is commonly regarded as development aid.
[
"Development assistance" is a synonym of "development aid" often used in international forums such as the UN and the OECD. ]official development assistance
Official development assistance (ODA) is a category used by the Development Assistance Committee (DAC) of the OECD, Organisation for Economic Co-operation and Development (OECD) to measure aid, foreign aid. The DAC first adopted the concept in ...
(ODA) is aid given by OECD-member governments that specifically targets the economic development and welfare of countries with the lowest per capita incomes. It includes humanitarian aid as well as development aid in the strict sense.
"Development cooperation", despite apparently suggesting a potentially wide range of co-ordinated action, has often been used synonymously with "development aid".[ In the early 21st century, "development cooperation" has become a key term in a discourse associated with the Global Partnership for Effective Development Cooperation. In this context it encompasses activities that may not be directly related to aid, such as domestic and global policy changes, co-ordination with profit-making and civil society entities, and exchanges between less-developed countries.
]
Types of development aid by source, channel and recipient
Non-ODA development aid
Analyses of development aid often focus on ODA, as ODA is measured systematically and appears to cover most of what people regard as development aid. However, there are some significant categories of development aid that fall outside ODA, notably: private aid, remittances, aid to less-poor countries and aid from other donor states.
Private development aid
A distinction is often made between development aid that is governmental ("official") on the one hand, and private (originating from individuals, businesses and the investments of charitable foundations, and often channeled through religious organisations and other NGOs
A non-governmental organization (NGO) or non-governmental organisation (see spelling differences) is an organization that generally is formed independent from government. They are typically nonprofit entities, and many of them are active in h ...
) on the other. Official aid may be government-to-government, or it may be channeled through intermediary bodies such as UN agencies
The United Nations (UN) is an intergovernmental organization whose stated purposes are to maintain international peace and security, develop friendly relations among nations, achieve international cooperation, and be a centre for harmonizin ...
, international financial institutions
An international financial institution (IFI) is a financial institution that has been established (or chartered) by more than one country, and hence is subject to international law. Its owners or shareholders are generally national governments, al ...
, NGOs or other contractors. NGOs thus commonly handle both official and private aid. Of aid reported to the OECD, about 80% is official and 20% private.
Remittances
Remittances
A remittance is a non-commercial transfer of money by a foreign worker, a member of a diaspora community, or a citizen with familial ties abroad, for household income in their home country or homeland. Money sent home by migrants competes with ...
—money sent home by foreign workers—might be considered a form of development aid, although it is not usually regarded as such. World Bank
The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects. The World Bank is the collective name for the Interna ...
estimates for remittance flows to "developing countries" in 2016 totalled $422 billion, which was far greater than total ODA. The exact nature and effects of remittance money remain contested. The International Monetary Fund
The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution, headquartered in Washington, D.C., consisting of 190 countries. Its stated mission is "working to foster globa ...
has reported that private remittances may have a negative impact on economic growth, as they are often used for private consumption of individuals and families, not for economic development of the region or country.
Aid to less-poor countries
ODA only includes aid to countries which are on th
DAC List of ODA Recipients
which includes most countries classified by the World Bank as of low and middle income.
Weakly-concessional loans
Loans from one state to another may be counted as ODA only if their terms are substantially more favourable than market terms. The exact rules for this have varied from time to time. Less-concessional loans therefore would not be counted as ODA but might be considered as including an element of development aid.
Aid from other donor states
Some states provide development aid without reporting to the OECD using standard definitions, categories and systems. Notable examples are China and India. For 2018, the OECD estimated that, while total ODA was about $150 billion, an additional six to seven billion dollars of ODA-like development aid was given by ten other states. (These amounts include aid that is humanitarian in character as well as purely developmental aid.)
TOSSD
Recognizing that ODA does not capture all the expenditures that promote development, the OECD in 2014 started establishing a wider statistical framework called TOSSD (Total Official Support for Sustainable Development) that would count spending on "international public goods". In March 2022, TOSSD was adopted as a data source for indicator 17.3.1 of the SDGs global indicator framework to measure development support. The TOSSD data for 2020 shows more than USD 355 billion disbursed to support for sustainable development, from almost 100 provider countries and institutions. The Commitment to Development Index
The Commitment to Development Index (CDI), published annually by the Center for Global Development, ranks the world's richest countries on their dedication to policies that benefit the five billion people living in poorer nations. Rich and poor c ...
published annually by the Center for Global Development
The Center for Global Development (CGD) is a nonprofit think tank based in Washington, D.C., and London that focuses on international development.
History
It was founded in November 2001 by former senior U.S. official Edward W. Scott, directo ...
is another attempt to look at broader donor country policies toward the developing world. These types of activity could be formulated and understood as a kind of development aid although commonly they are not.
Bilateral v multilateral
Official aid may be bilateral: given from one country directly to another; or it may be multilateral: given by the donor country to pooled funds administered by an international organisation such as the World Bank
The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects. The World Bank is the collective name for the Interna ...
or a UN Agency (UNDP
The United Nations Development Programme (UNDP)french: Programme des Nations unies pour le développement, PNUD is a United Nations agency tasked with helping countries eliminate poverty and achieve sustainable economic growth and human dev ...
, UNICEF
UNICEF (), originally called the United Nations International Children's Emergency Fund in full, now officially United Nations Children's Fund, is an agency of the United Nations responsible for providing Humanitarianism, humanitarian and Devel ...
, UNAIDS
The Joint United Nations Programme on HIV and AIDS (UNAIDS) (, ONUSIDA) is the main advocate for accelerated, comprehensive and coordinated global action on the HIV/AIDS pandemic.
The mission of UNAIDS is to lead, strengthen and support an e ...
, etc.) which then uses its funds for work in developing countries. To qualify as multilateral, the funding must lose its identity as originating from a particular source. The proportion of multilateral aid in ODA was 28% in 2019.
History
Britain's development funding for its colonies
The concept of development aid goes back to the colonial era at the turn of the twentieth century, in particular to the British policy of colonial development that emerged during that period. The traditional government policy had tended to favor laissez-faire
''Laissez-faire'' ( ; from french: laissez faire , ) is an economic system in which transactions between private groups of people are free from any form of economic interventionism (such as subsidies) deriving from special interest groups. ...
style economics, with the free market for capital and goods dictating the economic role that colonies played in the British Empire
The British Empire was composed of the dominions, colonies, protectorates, mandates, and other territories ruled or administered by the United Kingdom and its predecessor states. It began with the overseas possessions and trading posts esta ...
.
Changes in attitudes towards the moral purpose of the Empire, and the role that government could play in the promotion of welfare slowly led to a more proactive policy of economic and developmental assistance towards poor colonies. The first challenge to Britain was the economic crisis
An economy is an area of the production, distribution and trade, as well as consumption of goods and services. In general, it is defined as a social domain that emphasize the practices, discourses, and material expressions associated with the p ...
that occurred after World War I
World War I (28 July 1914 11 November 1918), often abbreviated as WWI, was one of the deadliest global conflicts in history. Belligerents included much of Europe, the Russian Empire, the United States, and the Ottoman Empire, with fightin ...
. Prior to the passage of the 1929 Colonial Development Act, the doctrine that governed Britain (and other European colonizers) with their territories was that of financial self-sufficiency. What this simply meant was that the colonies were responsible for themselves.
Britain was not going to use the money that belongs to the metropole
A metropole (from the Greek ''metropolis'' for "mother city") is the homeland, central territory or the state exercising power over a colonial empire.
From the 19th century, the English term ''metropole'' was mainly used in the scope of ...
to pay for things in the colonies. The colonies did not only have to pay for infrastructural development but they also were responsible for the salaries of British officials that worked in the colonies. The colonies generated the revenues to pay for these through different forms of taxations. The standard taxation was the import and export taxes. Goods going out of the colonies were taxed and those coming in were also taxed. These generated significant revenues. Apart from these taxes, the colonizers introduced two other forms of taxes: hut tax and labor tax. The hut tax is akin to a property tax today. Every grown up adult male had their own hut. Each of these had to pay a tax. Labor tax was the work that the people had to do without any remunerations or with meager stipends. As the economic crisis
An economy is an area of the production, distribution and trade, as well as consumption of goods and services. In general, it is defined as a social domain that emphasize the practices, discourses, and material expressions associated with the p ...
widened and had significant impact on the colonies, revenues generated from taxes continued to decline, having a significant impact on the colonies. While this was going on, Britain experienced major unemployment rates. The parliament began to discuss ways in which they could deal with Britain's unemployment rates and at the same time respond to some of the urgent needs of the colonies. This process culminated in the passage of the Colonial Development Act in 1929, which established a Colonial Development Advisory Committee under the authority of the Secretary of State for the Colonies
The secretary of state for the colonies or colonial secretary was the Cabinet of the United Kingdom, British Cabinet government minister, minister in charge of managing the United Kingdom's various British Empire, colonial dependencies.
Histor ...
, then Lord Passfield. Its initial annual budget of £1 million was spent on schemes designed to develop the infrastructure
Infrastructure is the set of facilities and systems that serve a country, city, or other area, and encompasses the services and facilities necessary for its economy, households and firms to function. Infrastructure is composed of public and priv ...
of transport
Transport (in British English), or transportation (in American English), is the intentional movement of humans, animals, and goods from one location to another. Modes of transport include air, land (rail and road), water, cable, pipeline, an ...
, electrical power
Electric power is the rate at which electrical energy is transferred by an electric circuit. The SI unit of power is the watt, one joule per second. Standard prefixes apply to watts as with other SI units: thousands, millions and billions of ...
and water supply
Water supply is the provision of water by public utilities, commercial organisations, community endeavors or by individuals, usually via a system of pumps and pipes. Public water supply systems are crucial to properly functioning societies. Thes ...
in colonies and dominion
The term ''Dominion'' is used to refer to one of several self-governing nations of the British Empire.
"Dominion status" was first accorded to Canada, Australia, New Zealand, Newfoundland, South Africa, and the Irish Free State at the 1926 ...
s abroad for the furtherance of imperial trade. The 1929 Act, though meager in the resources it made available for development, was a significant Act because it opened the door for Britain to make future investments in the colonies. It was a major shift in colonial development. The doctrine of financial self-sufficiency was abandoned and Britain could now use metropolitan funds to develop the colonies.
By the late 1930s, especially after the British West Indian labour unrest of 1934–1939
A series of workplace disturbances, strikes, and riots broke out across the British West Indies in the period between 1934 and 1939. These began as the Great Depression wore on and ceased on the eve of World War II. The unrest served to highligh ...
, it was clear that this initial scheme was far too limited in scope. A Royal Commission under Lord Moyne
Walter Edward Guinness, 1st Baron Moyne, Distinguished Service Order, DSO Medal bar, & Bar, Her Majesty's Most Honourable Privy Council, PC (29 March 1880 – 6 November 1944), was an Anglo-Irish politician and businessman. He served as the Br ...
was sent to investigate the living conditions in the British West Indies
The British West Indies (BWI) were colonized British territories in the West Indies: Anguilla, the Cayman Islands, Turks and Caicos Islands, Montserrat, the British Virgin Islands, Antigua and Barbuda, The Bahamas, Barbados, Dominica, Grena ...
and it published its Report
A report is a document that presents information in an organized format for a specific audience and purpose. Although summaries of reports may be delivered orally, complete reports are almost always in the form of written documents. Usage
In ...
in 1940 which exposed the horrendous living conditions there.
Amidst increasing criticism of Britain's colonial policies from abroad and at home, the commission was a performance to showcase Britain's "benevolent" attitude towards its colonial subjects. The commission's recommendations urged health and education initiatives along with increased sugar subsidies to stave off a complete and total economic meltdown. The Colonial Office
The Colonial Office was a government department of the Kingdom of Great Britain and later of the United Kingdom, first created to deal with the colonial affairs of British North America but required also to oversee the increasing number of col ...
, eager to prevent instability while the country was at war
War is an intense armed conflict between states, governments, societies, or paramilitary groups such as mercenaries, insurgents, and militias. It is generally characterized by extreme violence, destruction, and mortality, using regular o ...
, began funneling large sums of cash into the region.
The Colonial Development and Welfare Act was passed in 1940 to organize and allocate a sum of £5 million per year to the British West Indies
The British West Indies (BWI) were colonized British territories in the West Indies: Anguilla, the Cayman Islands, Turks and Caicos Islands, Montserrat, the British Virgin Islands, Antigua and Barbuda, The Bahamas, Barbados, Dominica, Grena ...
for the purpose of long-term development. Some £10 million in loans was cancelled in the same Act. The Colonial Development and Welfare Act of 1945 increased the level of aid to £120m over a twenty-year period. Further Acts followed in 1948, 1959 and 1963, dramatically increasing the scope of monetary assistance, favourable interest-free loan
In finance, a loan is the lending of money by one or more individuals, organizations, or other entities to other individuals, organizations, etc. The recipient (i.e., the borrower) incurs a debt and is usually liable to pay interest on that d ...
s and development assistance programs.
Postwar expansion
The beginning of modern development aid is rooted in the context of Post-World War II
World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposin ...
and the Cold War
The Cold War is a term commonly used to refer to a period of geopolitical tension between the United States and the Soviet Union and their respective allies, the Western Bloc and the Eastern Bloc. The term '' cold war'' is used because the ...
. Launched as a large-scale aid program by the United States in 1948, the European Recovery Program, or Marshall Plan
The Marshall Plan (officially the European Recovery Program, ERP) was an American initiative enacted in 1948 to provide foreign aid to Western Europe. The United States transferred over $13 billion (equivalent of about $ in ) in economic re ...
, was concerned with strengthening the ties to the West Europe
Western Europe is the western region of Europe. The region's countries and territories vary depending on context.
The concept of "the West" appeared in Europe in juxtaposition to "the East" and originally applied to the ancient Mediterranean ...
an states to contain the influence of the USSR
The Soviet Union,. officially the Union of Soviet Socialist Republics. (USSR),. was a transcontinental country that spanned much of Eurasia from 1922 to 1991. A flagship communist state, it was nominally a federal union of fifteen nationa ...
. Implemented by the Economic Cooperation Administration
The Economic Cooperation Administration (ECA) was a U.S. government agency set up in 1948 to administer the Marshall Plan. It reported to both the State Department and the Department of Commerce. The agency's first head was Paul G. Hoffman, a fo ...
(ECA), the Marshall Plan also expanded its reconstruction finance to strategic parts of the Middle East and Asia.
Although Marshall aid was initially offered to Europe in general, the Soviet Union forbade its neighbouring states from accepting it. This has been described as "the moment of truth" in the post-World War II
World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposin ...
division of Europe.[Bideleux, Robert and Ian Jeffries, ''A History of Eastern Europe: Crisis and Change'', Routledge, 1998, ] The Soviet Union provided aid to countries in the communist bloc; for instance, on Poland's abstention from the Marshall Plan, Stalin
Joseph Vissarionovich Stalin (born Ioseb Besarionis dze Jughashvili; – 5 March 1953) was a Georgian revolutionary and Soviet political leader who led the Soviet Union from 1924 until his death in 1953. He held power as General Secretar ...
promised a $450 credit and 200,000 tons of grain.
In January 1949 the inaugural address of U.S. president Harry Truman
Harry S. Truman (May 8, 1884December 26, 1972) was the 33rd president of the United States, serving from 1945 to 1953. A leader of the Democratic Party, he previously served as the 34th vice president from January to April 1945 under Franklin ...
announced an extension of aid to "underdeveloped areas" in the form of technical assistance. While the main theme of the speech was strengthening the free world against communism, in his fourth point Truman also appealed to the motives of compassion and pride in civilization. "For the first time in history, humanity possesses the knowledge and skill to relieve the suffering of these people." The United Nations followed up the US initiative later that year by setting up an Extended Programme of Technical Assistance (EPTA) to help pool international donor funds for technical assistance and distribute them through UN agencies. EPTA was a precursor of UNDP
The United Nations Development Programme (UNDP)french: Programme des Nations unies pour le développement, PNUD is a United Nations agency tasked with helping countries eliminate poverty and achieve sustainable economic growth and human dev ...
.
U.S. aid for development in the 1950s came to include grants and concessional loans as well as technical assistance. This development aid was administered alongside military aid within the framework of the Mutual Security Act
The Mutual Security Act of 1951 launched a major American foreign aid program, 1951–61, of grants to numerous countries. It largely replaced the Marshall Plan. The main goal was to help poor countries develop and to contain the spread of commun ...
. But for most of the decade there was no major multilateral body to provide concessional loans. An initiative to create such a body under the UN met with resistance from the U.S. on the grounds that it was premature. Accordingly, when the UN's "Special Fund" was created at the end of 1958, its remit was only for technical assistance not loans. (The Special Fund was differentiated from EPTA by assisting public infrastructure rather than industrial projects.)
In 1959, a significant annual amendment to the Mutual Security Act declared that it was "a primary objective of the United States" to assist "the peoples of other lands who are striving to establish and develop politically independent and economically viable units". This shifted the emphasis of U.S. economic aid away from immediate Cold War security needs, towards supporting the process of dismantling the empires of the UK, France and other European colonial powers. The amendment also made clear that Congress expected those industrialized nations which had been helped by U.S. aid to rebuild after the war would now share more of the burden of helping less-developed countries.
Following on, the U.S. encouraged the Organisation for European Economic Cooperation (OEEC) to set up a Development Assistance Group (DAG) composed of the main donor states, in order to help coordinate their aid. This was done in January 1960. The following year the DAG adopted a "Resolution of the common aid effort", vowing to increase the volume of aid, and to share the task equitably. Shortly after this, the OEEC was succeeded by the OECD
The Organisation for Economic Co-operation and Development (OECD; french: Organisation de coopération et de développement économiques, ''OCDE'') is an intergovernmental organisation with 38 member countries, founded in 1961 to stimulate e ...
, expanding its scope from Europe to the world, and embracing a particular concern with less-developed countries. The DAG became the Development Assistance Committee
The Organisation for Economic Co-operation and Development's (OECD) Development Assistance Committee (DAC) is a forum to discuss issues surrounding aid, development and poverty reduction in developing countries. It describes itself as being the ...
(DAC).
1960 also saw the creation of a multilateral institution to provide soft loans for development finance. The International Development Association
The International Development Association (IDA) (french: link=no, Association internationale de développement) is an international financial institution which offers concessional loans and grants to the world's poorest developing countries. Th ...
(IDA) was created as part of the World Bank (over which the U.S. and other Western countries exerted more influence than they did over the UN).
In 1961 several Western states established government departments or agencies to administer aid, including USAID
The United States Agency for International Development (USAID) is an independent agency of the U.S. federal government that is primarily responsible for administering civilian foreign aid and development assistance. With a budget of over $27 bi ...
in the United States.
In 1960 the USA was providing half of all aid counted by the OECD. This proportion increased to 56% by 1965, but from 1965 to 1973 (the year of the oil price crisis), the volume of U.S. aid generally declined in real terms (though it increased in nominal terms, due to inflation). The other OECD-DAC members meanwhile generally increased their aid, so that the total volume of OECD aid was fairly constant up to 1973.
After the Cold War
The quantity of ODA dropped sharply in the seven or eight years after the fall of the Berlin wall (1999-2007).
The turn of the 21st century saw a significant proliferation and diversification in aid donors and non-governmental actors. The traditional donors in the DAC have been joined by emerging economies
An emerging market (or an emerging country or an emerging economy) is a market that has some characteristics of a developed market, but does not fully meet its standards. This includes markets that may become developed markets in the future or were ...
(China, India, Saudi Arabia, Turkey, Brazil, Venezuela, etc.), some of which are still receiving aid from Western countries. Many of these new donors do not feel compelled to conform to traditional donors' norms. Generally demanding conditionality
In political economy and international relations, conditionality is the use of conditions attached to the provision of benefits such as a loan, debt relief or bilateral aid. These conditions are typically imposed by international financial institu ...
in return for assistance, which means tying aid to the procurement of goods and services, they are challenging traditional development aid standards.
Multinational corporations, philanthropists, international NGOs and civil society have matured into major players as well. Even though the rise of new development partners had the positive effect of bringing an increased variety of financing, know-how and skills to the development community, at the same time it has shaken up the existing aid system.
Extent of development aid
Most development aid is counted as part of the official development assistance (ODA) reported by governments to the OECD. The total amount of ODA in 2018 was about $150 billion. For the same year, the OECD estimated that six to seven billion dollars of aid was given by ten other states, including China and India. However, these amounts include aid that is humanitarian in character as well as purely developmental aid. The proportion of development aid within ODA was about 80%.
Top recipient countries
Top donor countries
The OECD also lists countries by the amount of ODA they give ''as a percentage of their gross national income
The gross national income (GNI), previously known as gross national product (GNP), is the total domestic and foreign output claimed by residents of a country, consisting of gross domestic product (GDP), plus factor incomes earned by foreign ...
''. The top 10 DAC countries in 2020 were as follows. Six countries met the longstanding UN target for an ODA/GNI ratio of 0.7% in 2020:
# – 1.14%
# – 1.11%
# – 1.02%
# and – 0.73%
# – 0.7%
# – 0.59%
# – 0.53%
# – 0.48%
# and – 0.47%
# , and – 0.31%
European Union
The European Union (EU) is a supranational political and economic union of member states that are located primarily in Europe. The union has a total area of and an estimated total population of about 447million. The EU has often been des ...
countries that are members of the Development Assistance Committee
The Organisation for Economic Co-operation and Development's (OECD) Development Assistance Committee (DAC) is a forum to discuss issues surrounding aid, development and poverty reduction in developing countries. It describes itself as being the ...
gave 0.42% of GNI (excluding the US$19.4 billion given by EU Institutions).
By type of project
File:Total official flows for infrastructure, by recipient, OWID.svg, Total official development assistance (ODA) and other official flows from all donors in support of infrastructure in 2017
File:Total official flows commitments for Aid for Trade, by recipient, OWID.svg, Total official flows commitments for aid for trade in 2017
File:Total official financial flows for water supply and sanitation, by recipient, OWID.svg, Total water and sanitation-related Official Development Assistance (ODA) disbursements that are included in the government budget in 2015
File:Total official development assistance for biodiversity, by recipient, OWID.svg, Total official development assistance (ODA) transferred for use in biodiversity conservation and protection efforts 2017
File:Total official development assistance for biodiversity, by donor, OWID.svg, Total official development assistance for biodiversity, by donor in 2017
File:Total official flows commitments for Aid for Trade, by donor, OWID.svg, Total official flows commitments for Aid for Trade, by donor in 2015
Debated effectiveness and impacts
There are many debates about the effectiveness and possible unfavourable impacts of development aid.
Dissident economists such as Peter Bauer and Milton Friedman
Milton Friedman (; July 31, 1912 – November 16, 2006) was an American economist and statistician who received the 1976 Nobel Memorial Prize in Economic Sciences for his research on consumption analysis, monetary history and theory and the ...
argued in the 1960s that aid is ineffective:
In economics, there are two competing positions on aid. A view pro aid, supported by Jeffrey Sachs
Jeffrey David Sachs () (born 5 November 1954) is an American economist, academic, public policy analyst, and former director of The Earth Institute at Columbia University, where he holds the title of University Professor. He is known for his work ...
and the United Nations, which argues that foreign aid will give the big push to break the low-income poverty trap
In economics, a cycle of poverty or poverty trap is caused by self-reinforcing mechanisms that cause poverty, once it exists, to persist unless there is outside intervention. It can persist across generations, and when applied to developing count ...
poorer countries are trapped in. From this perspective, aid serves to finance "the core inputs to development – teachers, health centers, roads, wells, medicine, to name a few". (United Nations 2004). And a view that is skeptic about the impacts of aid, supported by William Easterly, that points out that aid has not proven to work after 40 years of large investments in Africa.
Reducing recipient government accountability and national democracy
Foreign aid may hinder the development of democracy in recipient states, by reducing governments' need to raise taxes from citizens, thus making those governments more autonomous and less sensitive to citizen demands, while citizens, on their part, have less necessity to make demands on the government. Although international aid has done far-reaching things with respect to increasing access to improved medical care, improving education, and decreasing poverty and hunger, only in 1997 did the World Bank
The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects. The World Bank is the collective name for the Interna ...
began to rethink its aid policy structure and begin using parts of it specifically for building up the state capability of the aid-receiving nations. In 2004, the USA set up the Millennium Challenge Corporation
The Millennium Challenge Corporation (MCC) is a bilateral United States foreign aid agency established by the U.S. Congress in 2004. It is an independent agency separate from the State Department and USAID. It provides grants to countries that h ...
, to provide development aid in a way that fostered recipient country ownership, and only to countries with good systems of governance.
Corruption
Foreign aid encourages rent-seeking
Rent-seeking is the act of growing one's existing wealth without creating new wealth by manipulating the social or political environment.
Rent-seeking activities have negative effects on the rest of society. They result in reduced economic effi ...
, which is when government officials and leaders use their position and authority to increase their personal wealth without creating additional wealth, at the expense of the citizens. Most African leaders and officials are able to amass huge sums of personal wealth for themselves from the foreign aid received—they enrich themselves and do not use the aid provided for its intended purpose.
It has been argued that much government-to-government aid was ineffective because it was merely a way to support strategically important leaders (Alesino and Dollar, 2000). A good example of this is the former dictator of Zaire
Zaire (, ), officially the Republic of Zaire (french: République du Zaïre, link=no, ), was a Congolese state from 1971 to 1997 in Central Africa that was previously and is now again known as the Democratic Republic of the Congo. Zaire was, ...
, Mobuto Sese Seko
Mobutu Sese Seko Kuku Ngbendu Wa Za Banga (; born Joseph-Désiré Mobutu; 14 October 1930 – 7 September 1997) was a Congolese politician and military officer who was the president of Zaire from 1965 to 1997 (known as the Democratic Republic o ...
, who lost support from the West after the Cold War had ended. Mobuto, at the time of his death, had a sufficient personal fortune (particularly in Swiss banks) to pay off the entire external debt of Zaire.
Promoting neopatrimonialism and poor governance
American political scientist and professor Nicolas van de Walle
Nicolas van de Walle is an American political scientist specializing in comparative politics. He has taught at Cornell University since 2004, and is currently the Maxwell M. Upson Professor of Government. Between January 2004 and June 2008 he di ...
has also argued that despite more than two decades of donor-supported reform in Africa, the continent continues to be plagued by economic crises due to the combination of state generated factors and to the counter productivity of international development aid to Africa. Van de Walle first attributes the failure to implement economic policy reform to factors within the African state:
# Neopatrimonial tendencies of state elites that serve to preserve and centralize power, maintain limited access orders, and create political obstacles to reform.
# Ideological obstacles that have been biased by two decades of failed economic policy reform and in turn, create a hostile environment for reform.
# Low state capacity
State capacity is the ability of a government to accomplish policy goals, either generally or in reference to specific aims. A state that lacks capacity is defined as a fragile state or, in a more extreme case, a failed state. Higher state capacity ...
that reinforces and that in turn, is reinforced by the neopatrimonial tendencies of the state.
Van de Walle later argues that these state generated factors that have obstructed the effective implementation of economic policy reform are further exacerbated by foreign aid. Aid, therefore, makes policy reform less likely, rather than more likely. Van de Walle posits that international aid has sustained economic stagnation in Africa by:
# Pacifying Africa's neopatrimonial tendencies, thereby lessening the incentives for state elites to undertake reform and preserving the status quo.
# Sustaining poorly managed bureaucratic structures and policies that would be otherwise rectified by market forces.
# Allowing state capacities to deteriorate through externalizing many state functions and responsibilities.
In order for aid to be productive and for economic policy reform to be successfully implemented in Africa, the relationship between donors and governments must change. Van de Walle argues that aid must be made more conditional and selective to incentivize states to take on reform and to generate the much needed accountability and capacity in African governments.
Additionally, information asymmetries often hinder the appropriate allocation of aid; Blum et al. (2016) note that both South Sudan and Liberia struggle tremendously with paying employees and controlling the flow of money - South Sudan had a significant number of ghosts on its payroll, while Liberia's Civil Service Agency could not adequately pay civil servants because there was minimal communication from the Ministries of Health and Education regarding their respective payrolls.
Besides some instances that only the president (and/or his close entourage) receives the money resulting from development aid, the money obtained is often badly spent as well. For example, in Chad, th
Chad Export Project
an oil production project supported by the World Bank, was set up. The earnings of this project (6.5 million dollars per year and rising) were used to obtain arms. The government defended this purchase by stating that "development was not possible without safety". However, the Military of Chad
french: Armée nationale tchadienne
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is notorious for severe misconduct against the population (abuse, rape, claiming of supplies and cars) and did not even defend the population in distress (e.g. in the Darfur conflict
The War in Darfur, also nicknamed the Land Cruiser War, is a major armed conflict in the Darfur region of Sudan that began in February 2003 when the Sudan Liberation Movement (SLM) and the Justice and Equality Movement (JEM) rebel groups be ...
). In 2008, the World Bank retreated from the project that thus increased environmental pollution and human suffering.[Tsjaad by Dorrit van Dalen]
Th
Center for Global Development
have published a review essay of the existing literature studying the relationship between Aid and public institutions. In this review, they concluded that a large and sustained Aid can have a negative effect in the development of good public institutions in low income countries. They also mention some of the arguments exhibited in this article as possible mechanism for this negative effect, for instance, they considered the Dutch Disease
In economics, the Dutch disease is the apparent causal relationship between the increase in the economic development of a specific sector (for example natural resources) and a decline in other sectors (like the manufacturing sector or agricultur ...
, the discourage of revenue collections and the effect on the state capacity among others.
Effects of development aid in Africa
Dambisa Moyo
Dambisa Felicia Moyo, Baroness Moyo (born 2 February 1969)Moyo showed a copy of an official document with her date and place of birth as part of a lecture she gave at TEDGlobal 2013, Edinburgh, Scotland. is a Zambian-born economist and author, ...
argues that aid does not lead to development, but rather creates problems including corruption, dependency, limitations on exports and Dutch disease
In economics, the Dutch disease is the apparent causal relationship between the increase in the economic development of a specific sector (for example natural resources) and a decline in other sectors (like the manufacturing sector or agricultur ...
, which negatively affect the economic growth and development of most African countries and other poor countries across the globe.[Moyo, D. (2009). ''Dead aid: Why aid is not working and how there is a better way for Africa''. Macmillan.] Moyo devotes a section of her book, ''Dead Aid'' to rethinking the aid dependency model. She cautions that although "weaning governments off aid won't be easy", it is necessary. Primary among her prescriptions is a "capital solution" where African countries must enter the bond market to raise their capital for development, the interconnectedness that globalization has provided, will turn other "pools of money toward African markets in form of mutual funds, hedge funds, pension schemes" etc.
Other research has shown that development aid has a strong and favorable effect on economic growth and development through promoting investments in infrastructure and human capital. According to a study conducted among 36 sub-saharan African countries in 2013, 27 out of these 36 countries have experienced strong and favorable effects of aid on GDP and investments. Another study showed that aid per capita supports economic growth for low income African countries such as Tanzania, Mozambique and Ethiopia, while aid per capita does not have a significant effect on the economic growth of middle income African countries such as Botswana and Morocco. Aid is most beneficial to low income countries because such countries use aid received for to provide education and healthcare for citizens, which eventually improves economic growth in the long run.
Effects depend on geography
Jeffery Sachs
Jeffrey David Sachs () (born 5 November 1954) is an American economist, academic, public policy analyst, and former director of The Earth Institute at Columbia University, where he holds the title of University Professor. He is known for his work ...
and his collaborators argue that in order for foreign aid to be successful, policy makers should "pay more attention to the developmental barriers associated with geography specifically, poor health, low agricultural productivity, and high transportation costs". The World Bank and the International Monetary Fund are two organizations that Sachs argues are currently instrumental in advising and directing foreign aid; however, he argues that these two organizations focus too much on "institutional reforms". Foreign aid is especially multifaceted in countries within Sub-Saharan Africa due to geographic barriers. Most macro foreign aid efforts fail to recognize these issues and, as Sachs argues, cause insufficient international aid and policy improvement. Sachs argues that unless foreign aid provides mechanisms that overcome geographic barriers, pandemics such as HIV and AIDS that cause traumatic casualties within regions such as Sub-Saharan Africa will continue to cause millions of fatalities.
Death of local industries
Foreign aid kills local industries in developing countries. Foreign aid in the form of food aid that is given to poor countries or underdeveloped countries is responsible for the death of local farm industries in poor countries. Local farmers end up going out of business because they cannot compete with the abundance of cheap imported aid food, that is brought into poor countries as a response to humanitarian crisis and natural disasters. Large inflows of money that come into developing countries, from the developed world, in a foreign aid, increases the price of locally produced goods and products. Due to their high prices, export of local goods reduces. As a result, local industries and producers are forced to go out of business.
Neocolonialism
Neocolonialism
Neocolonialism is the continuation or reimposition of imperialist rule by a state (usually, a former colonial power) over another nominally independent state (usually, a former colony). Neocolonialism takes the form of economic imperialism, gl ...
is where a state is "in theory, independent and has all the outward trappings of international sovereignty. In reality its economic system and thus its political policy is directed from outside".[Nkrumah, K. (1966). Neo-Colonialism: The Last Stage of Imperialism. 1965. Introduction. ''New York: International''. ]
The political and economic affairs of a state under neocolonialism, is directly controlled by external powers and nations from the Global North, who offer aid or assistance to countries in the Global South or developing countries. Neocolonialism is the new face of colonialism, which is made possible by foreign aid. Donor countries offer foreign aid to poor countries while bargaining for economic influence of the poor or receiving countries, and policy standards that allow donor countries to control economic systems of poor countries, for the benefit of the donor countries.
Foreign aid creates a system of dependency where developing or poor countries become heavily dependent on western or developed countries for economic growth and development. As less developed countries become dependent on developed countries, the poor countries are easily exploited by the developed countries such that the developed world are able to directly control the economic activities of poor countries.
Aid dependency
Aid dependence is defined as the "situation in which a country cannot perform many of the core functions of government, such as operations and maintenance, or the delivery of basic public services, without foreign aid funding and expertise". Aid has made many African countries and other poor regions incapable of achieving economic growth and development without foreign assistance. Most African economies have become dependent on aid and this is because foreign aid has become a significant norm of systems of international relations between high and low income countries across the globe.
Foreign aid makes African countries dependent on aid because it is regarded by policy makers as regular income, thus they do not have any incentive to make policies and decisions that will enable their countries to independently finance their economic growth and development. Additionally, aid does not incentivize the government to tax citizens, due to the constant inflow of foreign aid, and as a result, the citizens do not have any obligation to demand the provision of goods and services geared towards development.
Econometric studies
Many econometric
Econometrics is the application of statistical methods to economic data in order to give empirical content to economic relationships. M. Hashem Pesaran (1987). "Econometrics," '' The New Palgrave: A Dictionary of Economics'', v. 2, p. 8 p. 8 ...
studies in recent years have supported the view that development aid has no clear average effect on the speed with which countries develop. Negative side effects of aid can include an unbalanced appreciation of the recipient's currency (known as Dutch Disease
In economics, the Dutch disease is the apparent causal relationship between the increase in the economic development of a specific sector (for example natural resources) and a decline in other sectors (like the manufacturing sector or agricultur ...
), increasing corruption, and adverse political effects such as postponements of necessary economic and democratic reforms.[Aid Effectiveness and Governance: The Good, the Bad and the Ugly](_blank)
[Rahnama, M. & Fawaz, F. & Gittings, K. (2017). The effects of foreign aid on economic growth in developing countries. ''The Journal of Developing Areas'' 51(3), 153-171. Tennessee State University College of Business.]
Other econometric studies suggest that development aid effectively reduces poverty in developing countries.
Promoting or easing conflict
Furthermore, the effect of Aid on conflict intensity and onset have been proved to have different impacts in different countries and situations. For instance, for the case of Colombia Dube and Naidu (2015) showed that Aid from the US seems to have been diverted to paramilitary groups, increasing political violence. Moreover, Nunn and Qian (2014) have found that an increase in U.S. food aid increases conflict intensity; they claim that the main mechanism driving this result is predation of the aid by the rebel groups. In fact, they note that aid can have the unintentional consequence of actually improving rebel groups' ability to continue conflict, as vehicles and communications equipment usually accompany the aid that is stolen. These tools improve the ability of rebel groups to organize and give them assets to trade for arms, possibly increasing the length of the fighting. Finally, Crost, Felter and Johnston (2014) have showed that a development program in the Philippines have had the unintended effect of increasing conflict because of a strategic retaliation from the rebel group, on where they tried to prevent that the development program increases support to the government.
Imposition of inappropriate strategies and technologies
According to James Ferguson James Ferguson may refer to:
Entertainment
* Jim Ferguson (born 1948), American jazz and classical guitarist
* Jim Ferguson, American guitarist, past member of Lotion
* Jim Ferguson, American movie critic, Board of Directors member for the Broadca ...
, these issues might be caused by deficient diagnostics of the development agencies. In his book The Anti-Politics Machine
''The Anti-Politics Machine'' is book by James Ferguson, originally published in 1990 by Cambridge University Press. The 1994 edition is available from the University of Minnesota Press. This book is a critique of the concept of "development" in ...
, Ferguson uses the example of the Thaba-Tseka
Thaba-Tseka is the capital city or camptown of the Thaba-Tseka District in Lesotho. It has a population of 15,248 (2016 census).
Thaba-Tseka was also the subject of the case studies in James Ferguson's book ''The Anti-Politics Machine'', which i ...
project in Lesotho
Lesotho ( ), officially the Kingdom of Lesotho, is a country landlocked country, landlocked as an Enclave and exclave, enclave in South Africa. It is situated in the Maloti Mountains and contains the Thabana Ntlenyana, highest mountains in Sou ...
to illustrate how a bad diagnostic on the economic activity of the population and the desire to stay away from local politics, caused a livestock project to fail.
According to Martijn Nitzsche, another problem is the way on how development projects are sometimes constructed and how they are maintained by the local population. Often, projects are made with technology that is hard to understand and too difficult to repair, resulting in unavoidable failure over time. Also, in some cases the local population is not very interested in seeing the project to succeed and may revert to disassembling it to retain valuable source materials. Finally, villagers do not always maintain a project as they believe the original development workers or others in the surroundings will repair it when it fails (which is not always so).
A common criticism in recent years is that rich countries have put so many conditions on aid that it has reduced aid effectiveness. In the example of tied aid
Tied aid is foreign aid that must be spent on products & services provided by companies that are from the country providing the aid (the donor country) or in a group of selected countries. A developed country will provide a bilateral loan or gra ...
, donor countries often require the recipient to purchase goods and services from the donor, even if these are cheaper elsewhere. Other conditions include opening up the country to foreign investment, even if it might not be ready to do so.
Other criticisms of development aid
Besides questions of effects and effectiveness, other criticisms have been made of development aid.
Inappropriate behaviour by aid workers
Development aid is often provided by means of supporting local development aid projects. In these projects, it sometimes occurs that no strict code of conduct is in force. In some projects, the development aid workers do not respect the local code of conduct
A code of conduct is a set of rules outlining the norms, rules, and responsibilities or proper practices of an individual party or an organization.
Companies' codes of conduct
A company code of conduct is a set of rules which is commonly writt ...
. For example, the local dress code
A dress code is a set of rules, often written, with regard to what clothing groups of people must wear. Dress codes are created out of social perceptions and norms, and vary based on purpose, circumstances, and occasions. Different societies an ...
as well as social interaction
A social relation or also described as a social interaction or social experience is the fundamental unit of analysis within the social sciences, and describes any voluntary or involuntary interpersonal relationship between two or more individuals ...
. In developing countries, these matters are regarded highly important and not respecting it may cause severe offense, and thus significant problems and delay of the projects.
Tied aid
There is also much debate about evaluating the quality of development aid, rather than simply the quantity. For instance, tied aid
Tied aid is foreign aid that must be spent on products & services provided by companies that are from the country providing the aid (the donor country) or in a group of selected countries. A developed country will provide a bilateral loan or gra ...
is often criticized, as the aid given must be spent in the donor country or in a group of selected countries. According to a 1991 report for the OECD, tied aid can increase development aid project costs by up to 20 or 30 percent.
Contradictions between aid and other donor policies
There is also criticism because donors may give with one hand, through large amounts of development aid, yet take away with the other, through strict trade or migration policies, or by getting a foothold for foreign corporations. The Commitment to Development Index
The Commitment to Development Index (CDI), published annually by the Center for Global Development, ranks the world's richest countries on their dedication to policies that benefit the five billion people living in poorer nations. Rich and poor c ...
measures the overall policies of donors and evaluates the quality of their development aid, instead of just comparing the quantity of official development assistance
Official development assistance (ODA) is a category used by the Development Assistance Committee (DAC) of the OECD, Organisation for Economic Co-operation and Development (OECD) to measure aid, foreign aid. The DAC first adopted the concept in ...
given.
At the development level, anthropologist and researcher Jason Hickel
Jason Edward Hickel (born 1982) is an economic anthropologist whose research focuses on ecological economics, global inequality, imperialism and political economy. He is known for his books ''The Divide: A Brief Guide to Global Inequality and ...
has challenged the narrative that the rich countries of the OECD help the poor countries develop their economies and eradicate poverty. Hickel states that the rich countries "aren't developing poor countries; poor countries are developing rich ones."
Imposition of Western values and agendas
Another criticism has been that Western countries often project their own needs and solutions onto other societies and cultures. In response, western help in some cases has become more 'endogenous', which means that needs as well as solutions are being devised in accordance with local cultures. For example, sometimes projects are set up which wish to make several ethnic group
An ethnic group or an ethnicity is a grouping of people who identify with each other on the basis of shared attributes that distinguish them from other groups. Those attributes can include common sets of traditions, ancestry, language, history, ...
s cooperate. While this is a noble goal, most of these projects fail because of this intent. Additionally, although the goal in utility to provide a larger social benefit may be justified as worthy, a more ethically sourced incentive would be projects not looking for an opportunity to impose a social hierarchy through cooperation, but more-so for the sake of truly assisting recipients. The intent of cooperation is not necessarily a reason for failure, but the very nature of different aspirations towards defining virtues which exist in direct context with respective societies. In this way a disconnect may be perceived among those imposing their virtues onto ethnic groups interpreting them.
Political bias in aid allocation
The practice of extending aid to politically aligned parties in recipient nations continues today; Faye and Niehaus (2012) are able to establish a causal relationship between politics and aid in recipient nations. In their analysis of the competitive 2006 Palestinian elections, they note that USAID provided funding for development programs in Palestine to support the Palestinian Authority, the US backed entity running for reelection. Faye and Niehaus discovered that the greater the degree of alignment the recipient party has with the donor entity, the more aid it receives on average during an election year. In an analysis of the 3 biggest donor nations (Japan, France, and the US), Alesina and Dollar (2000) discovered that each has its own distortions to the aid it gives out. Japan appears to prioritize giving aid nations that exercise similar voting preferences in the United Nations, France mostly sends aid to its former colonies, and the U.S. disproportionately provides aid to Israel and Egypt. These allocations are often powerful tools for maintaining the strategic interests of the donor country in the recipient country.
Proposed good practices
The following proposals have been made about good practice in development aid.
For aid to work well, donors need to invest heavily in staff who maintain sustained relationships with counterparts in recipient countries, in order to deal intelligently and flexibly with the complex difficulties involved:['Putting Relationships First for Aid Effectiveness'](_blank)
Evidence Submission to the APPG Inquiry on Aid Effectiveness, Institute of Development Studies (IDS)
Public accountability of aid is important, both for the sake of democratic citizenship in recipient countries, and for realistic and sustainable attitudes to aid in donor countries.:
Types of development aid by activity and aim
The OECD classifies ODA development aid by sector, the main sectors being: education, health (including population policies, water supply and sanitation), government & civil society, economic infrastructure (including transport and energy), and production (including agriculture). Additionally, there are "cross-cutting" aims; for instance, environmental protection, gender equality, urban and rural development concerns.
Some governments include military assistance in the notion of "foreign aid", although the international community does not usually regard military aid as development aid.
Aid for gender equality
Starting at the beginning of the UN Decade for Women in 1975, the women in development Women in development is an approach of development projects that emerged in the 1960s, calling for treatment of women's issues in development projects. It is the integration of women into the global economies by improving their status and assisting ...
(WID) approach to international development began to inform the provision of development aid. Some academics criticized the WID approach for relying on integrating women into existing development aid paradigms instead of promulgating specific aid to encourage gender equality. The gender and development Gender and development is an interdisciplinary field of research and applied study that implements a Feminism, feminist approach to understanding and addressing the disparate impact that economic development and globalization have on people based up ...
approach was created in response, to discuss international development in terms of societal gender roles and to challenge these gender roles within development policy. Women in Development predominated as the approach to gender in development aid through the 1980s. Starting in the early 1990s Gender and Development's influence encouraged gender mainstreaming
Gender mainstreaming is the public policy concept of assessing the implications for people of different genders of a planned policy action, including legislation and programmes. Mainstreaming offers a pluralistic approach that values the diversi ...
within international development aid.
The World Conference on Women, 1995
The Fourth World Conference on Women: Action for Equality, Development and Peace was the name given for a conference convened by the United Nations during 4–15 September 1995 in Beijing, China.
At this conference, governments from around the ...
promulgated gender mainstreaming on all policy levels for the United Nations
The United Nations (UN) is an intergovernmental organization whose stated purposes are to maintain international peace and international security, security, develop friendly relations among nations, achieve international cooperation, and be ...
. Gender Mainstreaming has been adopted by nearly all units of the UN with the UN Economic and Social Council adopting a definition which indicated an "ultimate goal ... to achieve gender equality". The UN included promoting gender equality and empowering women as one of eight Millennium Development Goals
The Millennium Development Goals (MDGs) were eight international development goals for the year 2015 that had been established following the Millennium Summit of the United Nations in 2000, following the adoption of the United Nations Millenniu ...
for developing countries.
The EU integrated women in development thinking into its aid policy starting with the Lomé Convention in 1984. In 1992 the EU's Latin American and Asian development policy first clearly said that development programs should not have detrimental effects on the position and role of women. Since then the EU has continued the policy of including gender equality within development aid and programs. Within the EU gender equality is increasingly introduced in programmatic ways. The bulk of the EU's aid for gender equality seeks to increase women's access to education, employment and reproductive health services. However, some areas of gender inequality are targeted according to region, such as land reform and counteracting the effects of gangs on women in Latin America.
USAID
The United States Agency for International Development (USAID) is an independent agency of the U.S. federal government that is primarily responsible for administering civilian foreign aid and development assistance. With a budget of over $27 bi ...
first established a women in development office in 1974 and in 1996 promulgated its Gender Plan of Action to further integrate gender equality into aid programs. In 2012 USAID released a Gender Equality and Female Empowerment Policy to guide its aid programs in making gender equality a central goal. USAID saw increased solicitations from aid programs which integrated gender equality from 1995 to 2010. As part of their increased aid provision, USAID developed PROMOTE to target gender inequality in Afghanistan with $216 million in aid coming directly from USAID and $200 million coming from other donors.
Many NGOs have also incorporated gender equality into their programs. Within the Netherlands, NGOs including Oxfam Netherlands Organization for Development Assistance, the Humanist Institute for Cooperation with Developing Countries, Interchurch Organization for Development Cooperation, and Catholic Organization for Relief and Development Aid have included certain targets for their aid programs with regards to gender equality. NGOs which receive aid dollars through the Norwegian Ministry of Foreign Affairs
The Royal Norwegian Ministry of Foreign Affairs ( Norwegian (Bokmål): ''Det kongelige utenriksdepartement''; Norwegian (Nynorsk): ''Det kongelege utanriksdepartement'') is the foreign ministry of the Kingdom of Norway. It was established on June ...
or which partner with the Norwegian government on aid projects must "demonstrate that they take women and gender equality seriously". In response to this requirement organizations like the Norwegian Christian charity Digni have initiated projects which target gender equality.
Private foundation
A private foundation is a tax-exempt organization not relying on broad public support and generally claiming to serve humanitarian purposes. The Bill & Melinda Gates Foundation is the largest private foundation in the U.S. with over $38 billion ...
s provide the majority of their gender related aid to health programs and have relatively neglected other areas of gender inequality. Foundations, such as the Bill and Melinda Gates Foundation
The Bill & Melinda Gates Foundation (BMGF), a merging of the William H. Gates Foundation and the Gates Learning Foundation, is an American private foundation founded by Bill Gates and Melinda French Gates. Based in Seattle, Washington, it was ...
, have partnered with governmental aid organizations to provide funds for gender equality, but increasingly aid is provided through partnerships with local organizations and NGOS. Corporations also participate in providing gender equality aid through their Corporate Social Responsibility
Corporate social responsibility (CSR) is a form of international private business self-regulation which aims to contribute to societal goals of a philanthropic, activist, or charitable nature by engaging in or supporting volunteering or ethicall ...
programs. Nike
Nike often refers to:
* Nike (mythology), a Greek goddess who personifies victory
* Nike, Inc., a major American producer of athletic shoes, apparel, and sports equipment
Nike may also refer to:
People
* Nike (name), a surname and feminine given ...
helped to create the Girl Effect
Girl Effect is an independent non-profit organization, launched in September 2015 with the goal of ending poverty globally.
History
Girl Effect was created in 2004 by the Nike Foundation, in collaboration with the NoVo Foundation and United Natio ...
to provide aid programs targeted towards adolescent girls. Using publicly available data Una Osili an economist at the Indiana University-Purdue University Indianapolis
Indiana () is a U.S. state in the Midwestern United States. It is the 38th-largest by area and the 17th-most populous of the 50 States. Its capital and largest city is Indianapolis. Indiana was admitted to the United States as the 19th st ...
found that between 2000 and 2010 $1.15 billion in private aid grants over $1 million from the United States targeted gender equality.
The Organisation for Economic Co-operation and Development
The Organisation for Economic Co-operation and Development (OECD; french: Organisation de coopération et de développement économiques, ''OCDE'') is an intergovernmental organization, intergovernmental organisation with 38 member countries ...
provides detailed analysis of the extent of aid for gender equality. OECD member countries tag their aid programs with gender markers when a program is designed to advanced gender equality. In 2019-20 OECD DAC members committed almost $56.5 billion to aid for gender equality, with $6.3 billion of that committed to programs where gender equality is a principal programmatic goal.
Effectiveness of aid for gender equality
Three main measures of gender inequality are used in calculating gender equality and testing programs for the purposes of development aid. In the 1995 Human Development Report the United Nations Development Program
The United Nations Development Programme (UNDP)french: Programme des Nations unies pour le développement, PNUD is a United Nations agency tasked with helping countries eliminate poverty and achieve sustainable economic growth and human dev ...
introduced the Gender Development Index The Gender Development Index (GDI) is an index designed to measure gender equality.
GDI, together with the Gender Empowerment Measure (GEM), was introduced in 1995 in the Human Development Report written by the United Nations Development Program. ...
and Gender Empowerment Measure The Gender Empowerment Measure (GEM) is an index designed to measure gender equality. GEM is the United Nations Development Programme's attempt to measure the extent of gender inequality across the globe's countries, based on estimates of women's ...
. The Gender Empowerment Measure is calculated based on three measures, proportion of women in national parliaments, percentage of women in economic decision making positions and female share of income. The Gender Development Index uses the Human Development Index and corrects its results in life expectancy, income, and education for gender imbalances. Due to criticisms of these two indexes the United Nations Development Program in its 2010 Human Development Report introduced the Gender Inequality Index
The Gender Inequality Index (GII) is an index for measurement of gender disparity that was introduced in the 2010 Human Development Report 20th anniversary edition by the United Nations Development Programme (UNDP). According to the UNDP, this inde ...
. The Gender Inequality Index uses more metrics and attempts to show the losses from gender inequality.
Even with these indexes, Ranjula Swain of the Stockholm School of Economics
The Stockholm School of Economics (SSE; sv, Handelshögskolan i Stockholm, HHS) is a private business school located in city district Vasastaden in the central part of Stockholm, Sweden. SSE offers BSc, MSc and MBA programs, along with ...
and Supriya Garikipati of the University of Liverpool
, mottoeng = These days of peace foster learning
, established = 1881 – University College Liverpool1884 – affiliated to the federal Victoria Universityhttp://www.legislation.gov.uk/ukla/2004/4 University of Manchester Act 200 ...
found that, compared to the effectiveness of health, economic, and education targeted aid, foreign aid for gender equality remains understudied. Swain and Garikipati found in an analysis of Gender Equality Aid that on a country and region-wide level gender equality aid was not significant in its effect. Swain and Garikipati blame this on the relative lack of aid with gender equality as a primary motivation.
In 2005, the Interagency Gender Working Group of the World Health Organization
The World Health Organization (WHO) is a specialized agency of the United Nations responsible for international public health. The WHO Constitution states its main objective as "the attainment by all peoples of the highest possible level of h ...
released the "So What? Report" on the effectiveness of gender mainstreaming in NGO reproductive health programs. The report found these programs effective, but had trouble finding clear gender outcomes because most programs did not measure this data. When gender outcomes were measured, the report found positive programmatic effects, but the report did not look at whether these results were from increased access to services or increasing gender equality.
Even when gender equality is identified as a goal of aid, other factors will often be the primary focus of the aid. In some instances the nature of aid's gender equality component can fail to be implemented at the level of individual projects when it is a secondary aspect of a project. Gender equality is often put forward as a policy goal for the organization but program staff have differing commitment and training with regards to this goal.[Van Eerdewijk, Anouka. "The Micropolitics of Evaporation: Gender Mainstreaming Instruments in Practice". Journal of International Development. 26: 353.] When gender equality is a secondary aspect, development aid which has funds required to impact gender equality can be used to meet quotas of women receiving aid, without effecting the changes in gender roles that Gender Mainstreaming was meant to promote. Programs can also fail to provide lasting effects, with local organizations removing gender equality aspects of programs after international aid dollars are no longer funding them.
Robert C. Jones of McGill University
McGill University (french: link=no, Université McGill) is an English-language public research university located in Montreal, Quebec, Canada. Founded in 1821 by royal charter granted by King George IV,Frost, Stanley Brice. ''McGill Universit ...
and Liam Swiss of Memorial University
Memorial University of Newfoundland, also known as Memorial University or MUN (), is a public university in the province of Newfoundland and Labrador, based in St. John's, with satellite campuses in Corner Brook, elsewhere in Newfoundland and ...
argue that women leaders of governmental aid organizations and NGOs are more effective at Gender Mainstreaming than their male counterparts. They found in a literature review that NGOs headed by women were more likely to have Gender Mainstreaming programs and that women were often the heads of Gender Mainstreaming programs within organizations. By breaking down gender equality programs into two categories, gender mainstreamed programs and gender-focused programs which do not mainstream gender, Jones and Swiss found that female leaders of governmental aid organizations provided more financial support to gender mainstreamed programs and slightly more support to gender aware programs overall.
Criticism of aid for gender equality
Petra Debusscher of Ghent University
Ghent University ( nl, Universiteit Gent, abbreviated as UGent) is a public research university located in Ghent, Belgium.
Established before the state of Belgium itself, the university was founded by the Dutch King William I in 1817, when the ...
has criticized EU aid agencies for following an "integrationist approach" to gender mainstreaming, where gender mainstreaming is used to achieve existing policy goals, as opposed to a "transformative approach" which seeks to change policy priorities and programs fundamentally to achieve gender equality. She finds that this approach more closely follows a Women in Development model than a Gender and Development one. Debussher criticized the EU's development policy in Latin America for focusing too much attention on gender inequality as a problem to be solved for women.[Debusscher, Petra. "Gender Mainstreaming in European Union Development Policy Towards Latin America: Transforming Gender Relations or Confirming Hierarchies?". ''Latin American Perspectives''. 39: 190.] She found that the language used represented more of a Woman in Development approach than a Gender and Development Approach. She notes that men's role in domestic violence is insufficiently brought forward, with program and policy instead targeting removing women from victimhood. Rather than discussing the role of men and women relative to each other, women are discussed as needing to "catch up with an implicit male norm". Debussher also criticized EU's development aid to Southern Africa
Southern Africa is the southernmost subregion of the African continent, south of the Congo and Tanzania. The physical location is the large part of Africa to the south of the extensive Congo River basin. Southern Africa is home to a number of ...
as too narrow in its scope and too reliant on integrating women and gender into existing aid paradigms.[Debusscher, Petra; Hulse, Merran. "Including Women's Voices? Gender Mainstreaming in EU and SADC Development Strategies for Southern Africa". ''Journal of Southern African Studies''. 40 (3): 571-572.] Debusscher notes that women's organizations in the region are often concerned with different social constructions of gender, as opposed to the economic growth structure favored by the EU. For EU development aid to Europe and surrounding countries, Debsusscher argued that programs to encourage education of women were designed primarily to encourage overall economic growth, not to target familial and social inequalities.
Some criticism of gender equality development aid discusses a lack of voices of women's organizations in developing aid programs. Debusscher argued that feminist and women's organizations were not represented enough in EU aid. and that while feminist and women's organizations were represented in implementing policy programs they were not sufficiently involved in their development in EU aid to Southern Africa
Southern Africa is the southernmost subregion of the African continent, south of the Congo and Tanzania. The physical location is the large part of Africa to the south of the extensive Congo River basin. Southern Africa is home to a number of ...
. Similarly, Jones and Swiss argue that more women need to be in leadership positions of aid organizations and that these organizations need to be "demasculinized" in order to better gender mainstream. T.K.S. Ravindran and A. Kelkar-Khambete criticized the Millennium Development Goals for insufficiently integrating gender into all development goals, instead creating its own development goal, as limiting the level of aid provided to promote gender equality.[Ravindran, TKS; Kelkar-Khambete, A. "Gender Mainstreaming in Health: Looking Back, Looking Forward". ''Global Public Health''. 3: 139.]
National development aid programs
* Australian Agency for International Development
Australian Aid is the brand name used to identify projects in developing countries supported by the Australian Government. As of 2014 the Department of Foreign Affairs and Trade (DFAT) has been responsible for Australia's official development ...
* Aid for Trade
Aid for Trade is an initiative by the World Trade Organization (WTO), as well as a policy concept in international economic and trade development, concerned with helping developing countries and particularly the least developed countries build tr ...
* China foreign aid
Chinese foreign aid may be considered in this article as both governmental (official) and private development aid and humanitarian aid originating from the People’s Republic of China.
Chinese official aid - unlike most major nation-state sour ...
* Department for International Development
, type = Department
, logo = DfID.svg
, logo_width = 180px
, logo_caption =
, picture = File:Admiralty Screen (411824276).jpg
, picture_width = 180px
, picture_caption = Department for International Development (London office) (far right ...
(United Kingdom)
* International economic cooperation policy of Japan
Japan emerged as one of the largest foreign aid donors in the world during the 1980s.
In 1991 Japan was the second largest foreign aid donor worldwide, behind the United States. Japan's ratio of foreign aid to GNP in this year was 0.32%, behind ...
* Saudi foreign assistance Since the 1980s Saudi Arabia has provided foreign assistance to many countries and organizations.
Between 1976 and 1987, Saudi developmental aid amounted to US$49 billion. In 2006, it was reported that the country was the biggest per capita donor, ...
* Swedish International Development Cooperation Agency
The Swedish International Development Cooperation Agency ( sv, Styrelsen för internationellt utvecklingssamarbete, ) is a government agency of the Swedish Ministry for Foreign Affairs. Sida is responsible for organization of the bulk of Swede ...
* United States foreign aid
United States foreign aid, also known as US foreign assistance consists of a variety of tangible and intangible forms of assistance the United States gives to other countries. Foreign aid is used to support US national security and commercial int ...
* United Arab Emirates foreign aid
Foreign aid from the United Arab Emirates is provided in the form of assistance, grants and loans through both the government and nongovernmental organizations. These projects provided to other countries deal with healthcare, infrastructure, develo ...
*Deutsche Gesellschaft für internationale Zusammenarbeit
The Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH (English: ''German Agency for International Cooperation GmbH''), often simply shortened to GIZ, is the main German development agency. It is headquartered in Bonn and Eschb ...
See also
* International development
International development or global development is a broad concept denoting the idea that societies and countries have differing levels of economic or human development on an international scale. It is the basis for international classifications ...
* Development economics
Development economics is a branch of economics which deals with economic aspects of the development process in low- and middle- income countries. Its focus is not only on methods of promoting economic development, economic growth and structural ...
* ''Global South Development Magazine
''Global South Development Magazine'' (''GSDM'') is an online magazine dedicated to international development issues. The magazine is inspired by the idea of citizen journalism and primarily covers developmental issues of developing countries. Fr ...
''
Effectiveness and anti-corruption measures:
* Conditionality
In political economy and international relations, conditionality is the use of conditions attached to the provision of benefits such as a loan, debt relief or bilateral aid. These conditions are typically imposed by international financial institu ...
* Aid effectiveness
Aid effectiveness is the degree of success or failure of international aid (development aid or humanitarian aid). Concern with aid effectiveness might be at a high level of generality (whether aid on average fulfils the main functions that aid is ...
* Tied aid
Tied aid is foreign aid that must be spent on products & services provided by companies that are from the country providing the aid (the donor country) or in a group of selected countries. A developed country will provide a bilateral loan or gra ...
* International Health Partnership
UHC2030, formerly known as the International Health Partnership (IHP+), is a global platform which brings together multiple stakeholders to take action to advance progress towards universal health coverage (UHC) by mobilizing political commitment ...
General:
* Development economics
Development economics is a branch of economics which deals with economic aspects of the development process in low- and middle- income countries. Its focus is not only on methods of promoting economic development, economic growth and structural ...
Tools and stories:
*
'' Development Cooperation Handbook''
References
Further reading
* Georgeou, Nichole, ''Neoliberalism, Development, and Aid Volunteering'', New York: Routledge, 2012. .
* Gilbert Rist, ''The History of Development: From Western Origins to Global Faith'', Zed Books, New Exp. Edition, 2002,
* Perspectives on European Development Co-operation by O. Stokke
* European development cooperation and the poor by A. Cox, J. Healy and T. Voipio
* Rethinking Poverty: Comparative perspectives from below. by W. Pansters, G. Dijkstra, E. Snel
* European aid for poverty reduction in Tanzania by T. Voipio London, Overseas Development Institute
ODI (formerly the 'Overseas Development Institute') is a global affairs think tank, founded in 1960. Its mission is "to inspire people to act on injustice and inequality through collaborative research and ideas that matter for people and the p ...
,
* The Bottom Billion: Why the Poorest Countries are Failing and What Can Be Done About It by Paul Collier
''How Do We Help? The Free Market in Development Aid''
by Patrick Develtere, 2012, Leuven University Press,
External links
Open Aid Register
IATI search engine (Beta). Find any development aid activity around the world. Using the IATI registry as access point.
*
AidData: Tracking Development Finance
Open Aid Data
Provides detailed developing aid finance data from around the world.
Center for International Development
at Harvard University
The Centre for Aid and Public Expenditure, Overseas Development Institute
Millions Saved
A compilation of case studies of successful foreign assistance by th
Center for Global Development
German Development Institute
- the German think tank of development aid
Work on Development Aid by the Institute of Development Studies (IDS)
;Articles
* Abhijit Baerje
Boston Review, March/April 2007.
*
Failed Expectations, Or What Is Behind the Marshall Plan for Post-Socialist Reconstruction
', by Tanya Narozhna
* Håkan Malmqvist (February 2000),
, Ministry for Foreign Affairs, Monograph No 46, Sweden
* Andrew Rogerson with Adrian Hewitt and David Waldenberg (2004),
The International Aid System 2005–2010 Forces For and Against Change
", Overseas Development Institute
ODI (formerly the 'Overseas Development Institute') is a global affairs think tank, founded in 1960. Its mission is "to inspire people to act on injustice and inequality through collaborative research and ideas that matter for people and the p ...
Working Paper 235
*
Arab Aid
from ''Saudi Aramco World'' (1979)
;Videos
*
⇒
The Vrinda Project Channel
- videos on the work in progress for the achievement of the MDGs connected to the Wikibook
⇒ Development Cooperation Handbook
* Development Cooperation Stories
* Development Cooperation Testimonials
{{DEFAULTSORT:Development Aid
Aid
International development
International relations
Sustainable development