How can we improve the quality of aid delivery in Afghanistan? Many people would point to specific concerns vis a vis Afghanistan's economy, security situation, etc, but it's also worth taking a step back and asking: What are the criteria for successful aid in any country?
There are nearly as many theories on this as there are development economists. But one of the best concise summaries can be found in an important article in Foreign Affairs by Nancy Birdsall, Dani Rodrik, and Arvind Subramanian.
In it Birdsall, Rodrik and Subramian, three top scholars on the impact of foreign assistance, highlight areas in which aid has been successful:
eradicating smallpox, lowering infant
mortality, increasing school enrollment, etc. Then comes the rub: in each case, they note that “What these
successes share is that they were narrowly
targeted at specific objectives. Assistance does work well, but only when the
recipient countries do the right things to help themselves and have the
capacity and the leadership to spend the money wisely.”:
But aid has not been associated with the sustained increases in productivity
and wages that ultimately matter. . .There are many reasons for the mixed
performance of foreign assistance. Donors themselves cause many of the
problems. Recipient countries can be overwhelmed by the multiplicity of donors
pursuing many, even inconsistent, objectives, disbursing aid to innumerable
projects and imposing a plethora of conditions on its use. These factors
contribute to rather than offset a poor country's lack of institutional capacity. On top of that, there is the natural
volatility and uncertainty of foreign aid, which make it difficult for
recipient governments to plan their budgets. For more than a decade, the
bureaucracies of donor states and organizations have been unable,
despite good intentions and constant resolve, to change the political
incentives and constraints that impede the reform of their aid-delivery
apparatuses.
Probably more important, however, are institutional
deficiencies on the recipients' side. Aid is only as good as the ability of a
recipient's economy and government to use it prudently and productively. Thus,
the fundamental dilemma: countries most in need of aid are often those least
able to use it well. That sets limits on the extent
to which large infusions of foreign funds can make a difference.The greatest example of the success of aid
-- the Marshall Plan -- illustrates the importance of homegrown institutional
competence. Because the institutions and capabilities of the United
Kingdom, France,
and Germany survived the war to a large extent, even their
war-ravaged economies were able to exploit
fully the potential of financial assistance.
Read the complete article for more...
