POL 4170 Study Guide - Summer 2018, Comprehensive Midterm Notes - Ottawa, Development Assistance Committee, Canada
12 Oct 2018
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Department
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POL 4170
MIDTERM EXAM
STUDY GUIDE
Fall 2018
POL4170 Politics of Foreign Aid
University of Ottawa
Lecture I: Oerie of Aid & Deelopet
19 June 2017
ODA
• Conventional foreign aid
• OECD's DAC
o Committee of representatives that are representatives of DAC
o Set the definition of what can qualify as ODA
o Accounting exercise
• Look how generous we are
o Symbolic
• Concessional aid
• No strings attached, nor profiteering
• As friendly as possible to recipients who are poor
Other forms of aid:
• Military aid
• Humanitarian relief
o Conditional and unpredictable
o In theory is ethically equal to ODA
o Disconnected from ODA b/c of its irregularity, relative to ODA
• Import/export credits
o Preferential access to markets if you agree to export products to us
• Technical or knowledge sharing
o Can be classified as ODA depending on its purposes
What else can aid be?
$125 billion flows from Global North to the Global South
• Figure is even higher the other way around.
Global Integrity and Centre for Applied Research (School of Economics in Norway) recently totalled all
the financial resources transferred b/w poor and rich countries.
• Includes aid, investment, trade, debt cancelation, remittances, and unrecorded capital flight (off-
the-books, illegal).
• Determined that more resources were transferred out of the South into the North than the other
way around
• 2012 was the last year for recorded data
• 2012: South + $1.3 trillion but also - $3.3 trillion
• Since 1980: Net outflow from the South of $16.3 trillion (roughly equivalent to GDP of the US)
What are these outflows?
• Debt payments
o Larger than the principle amount that was leant
o $4.2 trillion of $16.3 trillion
• Repatriated income from foreign investments
o Mining and oil companies
find more resources at oneclass.com
find more resources at oneclass.com
POL4170 Politics of Foreign Aid
University of Ottawa
o Take the profit out of the company and brings it elsewhere
• Largest = unrecorded capital flight
o Since 1980: net $13 trillion
o Mostly illicit or illegal
o Mainly in the international trading system
• Trade misinvoicing
▪ Foreign corporations show false prices on their invoices for trade
▪ Why? Shift income out of the country for things like tax havens, evade taxes,
launder money, get around capital controls.
▪ Basic form of money laundering (i.e. Breaking Bad)
▪ 2012: $700 billion (5x larger than ODA)
• Same invoice faking
▪ Shift of profits illegally by subsidiaries of the same parent company
▪ Fake the trade invoices on both ends
▪ i.e. Nigerian firm can transfer funds to another subsidiary in the British Virgin
Islands (tax haven)
▪ Another $700 billion/year
1994: WTO decision
Over 60 tax havens in the world.
• Most are controlled by wealthy Western countries
ODA window dressing?
• Hardly doing anything
• Considering the money leaving the country
• Is it more about legitimizing the actions of wealthy countries?
o Compare to colonialism
What should aid really be?
• Focus on ODA
• Tackle the outflows
Official Development Assistance (ODA)
ODA: flows of official financing and resources "administered w/ the promotion of the economic
development and welfare of developing countries as the main objectives, and which are concessional in
character w/ a grant element of at least 25%" (OECD, 2003).
• Financing and resources = not just money
• Economic and human development
• Concessional = given on less difficult terms than what is found elsewhere
ODA comes from govts and must aim to improve social and/or economic well-being in recipient
countries.
• Also includes administrative costs (i.e. domestic and field offices)
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Oda: conventional foreign aid, oecd"s dac, committee of representatives that are representatives of dac, set the definition of what can qualify as oda, accounting exercise. Look how generous we are: symbolic, concessional aid, no strings attached, nor profiteering, as friendly as possible to recipients who are poor. Other forms of aid: military aid, humanitarian relief, conditional and unpredictable. In theory is ethically equal to oda: disconnected from oda b/c of its irregularity, relative to oda. Import/export credits: preferential access to markets if you agree to export products to us, technical or knowledge sharing, can be classified as oda depending on its purposes. billion flows from global north to the global south. Figure is even higher the other way around. Global integrity and centre for applied research (school of economics in norway) recently totalled all the financial resources transferred b/w poor and rich countries.
