Alternatives to International Aid

Alternatives to International Aid Partnerships: How to Double the Success of Development Assistance - What is the impact of networks? - “Do policy networks affect policy outcomes?” (Marsh. 1998) - “What Works, What Doesn’t, And Why” (Dollar and Pritchett, 1998) - “Does the use of a network approach (NWA) improve project performance? (Locher, 2002) - Defining policy networks - Structures of interdependent actors implementing projects by negotiating use of resources - Operationalization: wherever project responsibility involves at least 3 partners, 1 of them being a unit other than the central gov, NWA is coded as being present - Key differences b/w network approach + conventional management in development projects Domain Network Approach (NWA) Conventional Project Management Decision making Consensual Hierarchical Relationship state- Interdependence State autonomy civil society Organizational capacity Correspondence b/w state + society Imbalance favouring state - Similarities of NWA and participatory approaches - Emph on involving all stakeholders - Continuity of involvement - Exercising influ + power - Empowerment - Distaste for top-down management - Potentially meaningless lip service - Differences of NWA and Participatory approaches NWA Participation - Analytical - Programmatic - Changing projects + environments - Static situations - Global, holistic, complex, promising - More limited integration of stakeholders - Advantages of NWA - Stimulates negot settlement of partic interests - Self-interest of actors used as positive force - Works w/available info + existing knowl - Constantly adapted to what is locally possible - Examples of network use in municipal level projects Country Example of Network Use Brazil Road construction, component contains preventative maintenance, changed trajectory + timetables, all negot among at least 3 partners Ecuador Strategic negot of renovation of urban infrastruc. Interdependent public-private investments. Successful partnership of private sector + 3 levels of gov Honduras Privatization of water services. Negot adjustments to emergency caused by hurric Mitch Nicaragua Decentralization + municipal strengthening inclu negot legalization of squatter barrios, est of inter-instit mediating body + other elements of interdependencies - The great hope: NWA increases project success - Use of NWA in project design + implementation  project success (output + impact) - Hypothesis 1: NWA increases probability of project success b/c it facilitates effic alloc of resources - Hypothesis 2: effect of NWA upon project success = increased under condits of mismngd nat econs - A theory of network approach - NWA leads to project success b/c effic resource allocation (there are extraneous factors) - Project success by network use - Project implementation success 70%-100%  No network use (NWA = 0) = 30% / Network use (NWA = 1) = 96% - Mean success ratings for projects, by NWA (double if use NWA) - No support for Dollar and Pritcheet - Dollar + Pritchett: well managed nats make better use of aid resulting in stronger econ growth - Finding here: project success unrelated to macro management  Why? Smaller number of projects + nats  Management of econ = diff to def (weak variable b/c weak focus) - Confirmation of results fr/previous studies - Poor nats receive dispropro amounts of aid per cap - Large nats are discrim against in terms of aid per cap - Large nats are less well managed - Mean project success by NWA and macro management Mean project success Number of projects Mismanaged economies Conventional projects 45.9 50 NWA 91.1 23 Well managed economies Conventional projects 50.1 50 NWA 96.4 23 - Verif hypothesis 1: NWA increases probability project success b/c it facil effic alloc of resources st - Strong confirmation of ndpart nd - Qualitative supp for 2 part, other supp for 2 part (ex: Kottack) - Verifhypothesis2:effectofNWAuponprojectsuccess=increasedunderconditsofmismngdnatecons - No support  NWA impact impressive under all condits - Reasons given for project failure (blame recipients) - Lack of instit capacity of implementing agency - Big implementation delays due to lack of poli will - Cost overruns - Counterpart funding shortfall - Poli opposition/community resistance - National economic uncertainty - Lessons learned from project failure - Projects must be designed for specific environs - Projects need a broad + varied base of supp - Networks of negot + partnership achieve a better fit w/established priorities + opps - Conclusion: why networks work - Weight + direction in stakeholder participation = imp - Any network = preferable to no network - Mobilization of locally relevant knowl - Motivating structure: space, recog, reward for all partners Should Development Assistance Continue? - Should increase simply b/c increase in inequality in world - Lack of tech convergence that would impose more generosity on side of rich nats - Others: have been doing this for past 50 years, has not been convergence, poor are still poor - Has not worked, let’s stop it What is the purpose of aid? - Economic development = main purpose - Politically hard sell, H: when circumstances + leadership right, can be done - Econ devel in other parts of world seen mainly in its relationship in econ devel in rich nats - Poverty relief - Long time to arrive at, only in 1990s that World Bank has really made this central focus  Became integrated in all World Bank considerations - As an argument no longer carries this connotation of “for everyone” - Social justice = more radical - No more do-gooder mentality, it is a question of rights, justice which belong to e1 - Whatever may have happened in 3 world nats, when Cold War still on, doesn’t seem to apply to extremely miserable nats (mainly sub-Saharan Afr)  trap - Whatever has happened w/aid has been stolen, misused - Exit fr/4 traps: - Conflict trap: civil wars, extremely expensive  Doesn’t end when conflict ends  Nats which are in sequence of mili coups + civil wars have high chance that misery will restart w/in 5 years b/c of structural changes that have taken place in these nats - Natural resource trap  If discover bonanza of wealth, why not use it to make nat not poor?  Yes, under s/circumstances, natural resources = fantastic  Does this mean if discover lucrative nat resources lead to devel?  Only way assured nat resources do s/thing good is if have strong instit framework  Most poor nats, precisely what’s missing (corruption, laziness, misallocation)  Almost impossible to fight corruption if you have diamonds, gold, petrol, etc. - Landlocked w/bad neighbors  If want ot get into exports, have to carry very high export costs  These costs don’t necess occur to themselves  Ex: even if nat can export s/thing that is on world market, instead of taking advantage of cheap transport b/c of glz, nat will have to negot w/neighbor  Goods will be transported by truck in most cases (destroy roads)  Imposes high transportation costs + diff poli choices  Conflicts = spillover effects in other nats (displacement refugees, environ, export weapons)  If landlocked + bunch of bad neighbors, will suffer = trap - Bad governance in small nat  Greatly increases transaction costs in economy  Producers get less for their products b/c of intermediaries - Aid eems to work in vast parts of world  H: parts of nat which are trapped in one of these 4 traps Arguments Against Aid: Underdevelopment is Perpetuated by Foreign Aid - Vicious cycle of aid - Corruption fosters more corruption - Foreign aid props up corrupt govs - Corrupt govs interfere w/rule of law (property rights no longer guaranteed) - Such interference makes investment unattractive - Less investment means more poverty - More poverty means more foreign aid Aid at its Worst - “an excellent method for transferring money fr/poor ppl in rich nats to rich ppl in poor nats” - True or false? Under which condits? - Ex: Cda, is aid going w/CIDA to s/place in sub-Saharan Afr taken fr/Cda’s