Feb 10 2012

In the aftermath of the Fourth High Level Forum in Busan – Reflections on the Effectiveness of Aid

By Simone Datzberger, Ph.D. Candidate, Department of International Relations, LSE

‘Where has the aid money gone?’ – was the title of a Guardian DataBlog article released on January 12th 2012 which analyzed the re-construction efforts, costs and funding of conflict and earthquake shattered Haiti. The matter of concern is worrisome indeed as – echoing the Guardian: ‘figures released by the UN special envoy for Haiti show that only 53% of the nearly $4.5bn pledged for reconstruction projects in 2010 and 2011 has been delivered.’[1] Looking at the current funding status of latest appeals by all humanitarian organizations, the situation in Haiti seems even more devastating. According to the data collected by the United Nations Office of Humanitarian Affairs (OCHA) Financial Tracking System (FTS)[2], only 2% of all funds required in the near future are hitherto covered.[3] As of February 10, 2012, within OCHA’s FTS, Haiti is ranked as the third most underfunded country worldwide in terms of funding appeals and requirements by organization and ‘real’ commitments (not pledges) made.  Liberia leads the way (0% of all new appeals thus far funded) and is followed by Côte d’Ivoire (only 1% covered).

Strikingly, once aid money has finally reached a country or in fact the aid organization in question; practitioners and experts within and outside the development community are frequently complaining about how inefficiently and inadequately this money is then eventually spent. In her book ‘Dead Aid’, Dambisa Moyo famously highlighted that over the past fifty years more than US$ 2 trillion of foreign aid has been transferred from rich countries to poor – Africa being the biggest recipient with no major improvements thus far. Reasons why this financial aid hasn’t lead to ‘desired outcomes’ and has failed to fulfill any ‘benchmarked’ criteria, vary from corruption at all levels to lack of capacities, political will or bad timing – to name but a few. For some authors such as Linda Polman the aid industry per se is part of the problem. In her controversial books ‘The Crisis Caravan: What’s wrong with Humanitarian Aid?’ and ‘War Games: The Story of Aid and War in Modern Times’, Polman criticized how the vast industry of aid agencies and operations can in fact do more harm than good. The case of Sudan serves as one of her prime examples where the military regime benefits almost more from the aid in Darfur than the targeted beneficiaries themselves.

Other experts shifted their focus to the question of how aid money could be actually better allocated. For many, the concept of microcredits or direct cash transfers has become more and more convincing in that it shows the potential to reduce poverty in a straightforward and sustainable manner.  Put simply and in Joseph Hanlon word’s (and also the title of his book): Just give money to the poor.

Effectiveness of aid hence depends largely on the where, how, why, when and how much. This tricky interplay of increasing funds in a financially unstable world while simultaneously tackling all the implementation problems, shaped the Fourth High Level Forum on Aid Effectiveness from 29 November – 1 December 2011 held in Busan, Korea (also known as HLF-4). About 3000 delegates met to discuss the progress on implementing the principles of the 2005 Paris Declaration on Aid Effectiveness. The list of thematic sessions was long, particularly focusing on:

–         Ownership and Accountability

–         Country Systems

–         Aid Fragmentation

–         Aid Predictability

–         Results

–         Capacity Development

–         Rights-based approaches

–         Fragility and Conflict

–         South-South and Triangular Cooperation

–         Private Sector

Notably, for the first time Africa (representatives from the AU and NEPAD) presented a consensus and position on its Development Effectiveness agenda – certainly an important and crucial step forward.[4] Yet, only time will show whether the Busan talks will have an impact in improving the quality and delivery of aid beyond numerous briefing papers, key documents, summary reports and speeches. In fact, none of these declarations or high-level reports are de-jure or de-facto binding. Talking about change is one thing, really walking down the road is another. Further, issues which weren’t on the official agenda at the HLF-4 include: how to effectively minimize corruption (at all levels, thus also within aid organizations), how to avoid aid-dependency and ensure exit strategies (to truly foster local and sustainable ownership of the process), and, how to culturally sensitize approaches towards development (not aid).

In short, the devil lies in the detail and in the particular case of the HLF-4 the detail is in the word ‘effectiveness’. The Oxford Dictionary defines the term as ‘the degree to which something is successful in producing a desired result’. The crunch question is now – what is a desired result and for whom? In 2000/01, the World Bank published a fascinating book trilogy called ‘Voices of the Poor’. In its study, the Bank interviewed in total 60,000 poor women and men in over 50 countries worldwide to gather their views on how to eradicate poverty and improve their lives.  What this study successfully accomplished was to compile an extensive account on how poverty and aid is perceived and experienced by the very people it affects. Unfortunately not many follow-up studies have been undertaken since then.

Thus, despite ongoing studies, debates and efforts on how to improve and tackle the major challenges of the aid industry – progress is slow. After all, there is

one aspect even the biggest chunk of aid money can’t buy: consistent and coherent political will combined with a more culturally and ethically sensitive approach towards development at global, regional and local levels. In the attempt to measure success and failure and consequently effectiveness, aid has become a depersonalized set of indicators. In other words, when debating and writing about aid effectiveness we all run the risks to sometimes forget for whom the aid so urgently is needed for.

 

 

References:

Hanlon, Joseph, et.al. (2010): Just give money to the poor: the development revolution from the global south, Kumarian Press, U.S.

Moyo, Dsambia (2009): Dead Aid, Why aid is not working and how there is a better way for Africa, Farrar, Straus and Giroux, New York

NEPAD’s (2.12.2011): ‘Busan keeps promise on Africa’s Development Effectiveness’, http://www.nepad.org/crosscuttingissues/news/2592/busan-keeps-promise-africa’s-development-effectiveness, last visit 6 February 2012

OCHA – FTS: Tracking Global Humanitarian Aid Flows, see: http://fts.unocha.org/, last visit 3 February 2012

Polman, Linda (2010): The Crisis Caravan: What’s wrong with humanitarian Aid?, Metropolitan Books, Henry Holt and Company, LLC, New York

Polman, Linda (2010): War Games: The Story of Aid and War in Modern Times, Penguin Group, London

The Guardian, DataBlog (12.01.2012): Haiti Earthquake: Where has the aid money gone? See: http://www.guardian.co.uk/global-development/datablog/2012/jan/12/haiti-earthquake-aid-money-data, last visit 3 February 2012

World Bank (2000/01): Voices to the Poor, Oxford University Press, see also: http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTPOVERTY/0,,contentMDK:20612393~menuPK:336998~pagePK:148956~piPK:216618~theSitePK:336992~isCURL:Y,00.html, last visit 4 February 2012

[2] The FTS is a global, real-time database which records all reported international humanitarian aid(including that for NGOs and the Red Cross / Red Crescent Movement, bilateral aid, in-kind aid, and private donations).

[3] Data as of 10 February 2012.

[4] For more details see NEPAD’s press release: ‘Busan keeps promise on Africa’s Development Effectiveness’, http://www.nepad.org/crosscuttingissues/news/2592/busan-keeps-promise-africa’s-development-effectiveness, last visit 6 February 2012

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5 Responses to In the aftermath of the Fourth High Level Forum in Busan – Reflections on the Effectiveness of Aid

  1. Safiya says:

    Great article Ms. Datzberger. It think that it is not only imperative but vitally important that the discussion on the ‘effectiveness of aid’ continues to occur outside the normal formal high-level meeting, literary or academic setting in which it tends to take place and often stays.

    Having opened your piece using Haiti as a brilliant example of how the fragmentation of aid from top down is in fact still occurring, I think I’d like to boldly state here that Haiti is an excellent benchmark to be used in discussion of just how inefficient the system of aid is especially within a country that desperately needs it and suffers not just from political instability and inconsistency but lack of an adequate institutional platform to see to it that such matters ( as aid ineffectiveness) are not cyclical. Haiti has had to depend on aid for a better part of its latter life and yet still, even with the 10,000 or so registered NGO’s based within the country and many more continued forms of assistance from universities, aid organizations the world over, the problem of how exactly should Haiti deal with turning the dollars into tangible and long term changes is still left unanswered. Perhaps the theoretical economists are right to assume that there may be some realistic link between political instability, economy and institutions. So much so that the World Bank’s 2010 economics and developmental report places emphasis on the need to institutionalize from within as well as mitigate poverty – a dual sword meant to set the foundation for a new and most effective economic and social way forward.

    Your sentence, “there is one aspect even the biggest chunk of aid money can’t buy: consistent and coherent political will combined with a more culturally and ethically sensitive approach towards development at global, regional and local levels,” brings up 2 important points that an approach to development should be consistent and politically coherent and must be sensitive to the culture and ethics of a place.

    Being from a Caribbean island, I can say that there are those that are very reluctant in being told how aid money should be used to help them move forward – coming out of the strict hold of colonialism where we were pushed to adopt a way of life and development whose antiquated nature is at present crippling our present and future developmental objectives, being dictated on how to use “aid” by those that are supplying it in many ways isn’t the answer.

    I’d like to suggest that this top down approach only is ineffective and that perhaps greater emphasis should be placed on mobilizing and supporting a bottom approach to assist in meeting developmental and ‘aid’ objectives or perhaps as some others have also suggesting a top down / bottom up approach to this thing. A country moves forward only with the combined support of its people and any decisions that must take place must include the masses and should not be independent of them or the people made by-standers in deciding the way forward. Here is where the theme of “ownership” now takes center stage and recommendations such as “just give the poor the money” begins to take form.

    I would like to see quick progress made on this debilitating issue and it is with great hope that I implore you to continue to encourage discussion in non -traditional ways and engage perhaps a different audience – for too the economists also support innovation and ideas as another crutch in achieving effective development.

    • Simone Datzberger says:

      Dear Safiya,

      I am delighted that this blog entry benefits from a Caribbean perspective as well! Thank you very much for your additional and very valuable points.

      Haiti was indeed not randomly chosen as my opening example, as it definitely became (especially before the earthquake) a ‘NGO’s or aid agencies paradise’. However, it seems central to stress that my point is NOT that these organizations are useless or not carrying out significant tasks. Rather, I need to further complement here, that in the specific case of Haiti, global, regional and local (‘national elites’) actors failed to alleviate the deep scars of colonialism and occupation – thereby not only rendering the country dependent on external actors but also constantly feeding into a large and ever-growing aid industry. Hence, and in response to your remark about top-down vs. bottom-up approaches: Aid (and development) has become a globally, regionally and locally intertwined process. The question is though: What is a healthy mix of top and bottom-up (thus hybrid) initiatives… ? In my view this is the litmus test of whether aid (and development) was and is truly contextualized and respects and reflects local and cultural realties.

      Further, your point with regards to expanding the debate to a broader audience and other disciplines is well taken!

      Sincerely,
      Simone

  2. Safiya says:

    Ms. Datzberger,

    I will also like to re-ierate too (and I apologize if it was conveyed poorly) that aid organizations in Haiti are neither useless or unable to bring about necessary changes. I only wanted to show that despite the magnitude of registered (the 10,000 figure does not include unregistered ones) NGO’s and aid organizations, Haiti has yet to reach a stage where it can be less dependent on aid – only in fact supporting your point that the effectiveness of aid is lacking in “effect” (as you rightly pointed out above) – and that perhaps the way in which aid is applied or implemented should be revisited.

    The application of aid to development is indeed a local, national, regional and global intertwined process – yet the reason I thought it pertinent to make such a bold statement on the top down versus bottom up approach is that being a Caribbean native presently living in the Caribbean and working with many grassroots efforts on social, economical and environmental issues one thing is clear – that the top down approach to ameliorating the fundamental problems that plague economy, livelihoods and society dictates development. There is a pseudo – engaging process of including the bottom – up approaches and in fact not much of a push or support to include such initiatives in the scheme of development. I worry that perhaps the requirements attached to older aid packages may be the main reason for this, that too there doesn’t seem to be enough incentive to include bottom up approaches or it could be as you’ve pointed out that there isn’t a proper benchmark that showcases a “healthy mix” of bottom up / top down approaches to development – that it is merely theoretical. Or simply, that the “intertwining process” is not very effective – that perhaps what works in one nation within a region does not work for another, that the global mandates attached to aid packages is not realistic at the local level that it doesn’t as you say “contextualize and reflect local and cultural realities”. Another reason – short term economic gains versus long term gains. This is what we need to explore. In which part of the cycle does it break down and what can be done? “Ineffectiveness” is what caused Jeff Sachs to famously state that “it’s not expensive to fix the problems of poverty, the issue isn’t the amount of aid but the application of aid”

    Recently, more aid and developmental packages to developing and under developed nations are including requirements that aim at engaging bottom up approaches and it seems in this case time can only tell – however for failed states like Haiti, time, and not aid, is what they don’t seen to have enough of.

    • Simone Datzberger says:

      Dear Safiya,
      Thank you for your supplementary and very insightful points – I really appreciate that. What struck me amongst others was your comment about the legacy of ‘old’ aid packages (an often overlooked aspect…) as well as your statement: ‘There is a pseudo – engaging process of including the bottom – up approaches and in fact not much of a push or support to include such initiatives in the scheme of development.’
      I guess to this day one of the major challenges is that in certain instances improving aid (and consequently development) has to go beyond rhetoric…

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