The last ten years has been a remarkable experiment in using official development assistance (ODA) as a motor for development in Africa (and other developing countries too). It has been a bonanza for the aid industry and especially the favoured elements such as HIV/AIDS, which have often found themselves in the remarkable situation in which resource availability is not a binding constraint.
… But, aid seems to displace the other parts of the development debate. Of the other pillars, only debt relief has seen any significant progress in the last ten years. Trade reform and economic governance are much harder, and far less progress has been made.
Aid donors and recipients alike have good reason for preferring to focus on aid rather than trade or governance.
I see two things wrong with this argument.
First, it has not been a bonanza for aid. We have just about recovered aid volumes to the level they were before they collapsed at the end of the cold war. We are still talking about 20 cents per person in poverty per week in Africa. It is hardly a lot of money.
Second, I understand the argument that aid may have been a displacement activity for rich countries unable or unwilling to make progress on issues such as trade, reducing conflict, a fair deal on climate change, or extending migration opportunities. I agree that these issues are important – and that they are potentially more important than aid. But I am much less clear that there really is a trade-off between aid and making progress on these issues. How do we know?
Alex is making a bold claim that aid has delayed progress on these issues. Given the enormous good that aid does, the people who call for governments to pay less attention to aid had better be sure that this really will unblock progress on the other policy issues that will compensate for the loss of aid that will result. I am not so sure that they are right.