Can aid be made accountable

"As the left continues to reinvent itself for the modern world, accountability and democracy must sit alongside compassion as the core principles through which we understand the world. The way our money is spent to help the most needy around the world is no exception."

The extent to which aid can and should be accountable to different stakeholder groups is an old question, but one which is a long way from being resolved. For many in the donor community, the first and, really, only question of importance is whether aid is effective. Accountability – defined as channels of real control over donor programmes – to the people who are the recipients and beneficiaries of aid is too often seen as something desirable but not essential. Accountability to affected stakeholder communities such as private companies, academics, and governments is generally considered in terms of ‘buy-in’, to ensure the effectiveness of donor-initiated programmes, rather than in terms of genuine accountability. This has helped contribute to the mistrust aid agencies frequently face in both their own and recipient countries, as well as from the private sector and NGOs. More importantly, it has resulted in a situation in which too many programmes continue to be ineffective or even counterproductive.

 Donor institutions, in particular development finance institutions (DFIs) such as the World Bank Group, make enormous efforts to be transparent, at least about certain issues. Detailed project documents are made available, media officers are generally responsive, and executives frequently attend major conferences to explain what they are doing and why.

 Substantial efforts have also been made to mitigate the potential negative impact of donor spending. To combat corruption, contracts must be awarded by competitive international tenders with strict, somewhat over-zealous rules. Reputable companies must be brought in to carry out environmental and social impact assessments (ESIAs), which include consultations with local communities. But while ESIAs are essential for impact mitigation, they are not a democratic instrument able to give voice to those who do not agree with the direction of travel. Consultation is not a substitute for accountability.

What if the recipients of aid do not want it, for example because they believe aid programmes prop up an unpopular or oppressive government? It is not difficult to see how donor money might have perverse political implications in major aid recipient countries such as Egypt, Ethiopia, and Tanzania. Or what if many in the host country do not agree with the policies being funded, such as privatisations or projects which play into complex political rivalries or systems of exploitation and corruption? Host governments frequently own aid-funded programmes only in public. What about those who lose out or are excluded? Should donors have to take their views into account, in the same way that a government in a developed democratic country does? Ad hoc studies are frequently conducted to model or investigate the effects of policies, but while important these could only be considered a tool for accountability in the most patronising sense.

 The role that aid plays in the political, social, and economic development of poorer countries is undoubtedly complex. The simplest way to be accountable to affected groups is to be accountable to a democratically elected government and efforts have been made to ensure that governments have some ownership of donor programmes, at least to a greater extent than they have in previous decades.

 But what to do when the host government is not representative of its people? The head of one World Bank Group institution once told me that they tried in the 1970s and 1980s to withhold aid from countries where the government had a bad governance or human rights record, especially in Africa. The expectation was that in the end, the lure of cheap money and socioeconomic development would bring the governments back to the table. Instead, they found that nothing happened. Governments, perhaps unsurprisingly, continued to go about the business of staying in power by whatever means they could and the lives of their unfortunate citizens remained difficult and, all too often, short.

 As a result, a view has developed in the donor community that encouraging development regardless of politics will, in the long term, alter the domestic political equation. Effective aid programmes help create an active and powerful constituency of citizens with a vested interest in good and accountable government who will ultimately be able to force change. There is certainly some merit to this argument. But what about those excluded from this group? If donor policies foster the growth of a middle class with a strong interest in the protection of private property, low tax and minimal but effective regulation, how will this change in relative economic position between the haves and have-nots affect the stability and politics of a country? We are in an age of backlash from those who do not share these values and without accountability there is a risk of heightening tensions in already volatile parts of the world.

 A recent study by Aid Data, ‘Beyond the Tyranny of Averages: Development Progress from the Bottom Up’, found that donors prioritise efficiency – the ease by which a programme can be effectively implemented – over equity, with the possible consequence of exacerbating inequality. Donors cannot be expected to anticipate these impacts in all cases, but then again if aid programmes were truly accountable to the entire community affected they would not have to. The voices of those feeling the pinch would already be heard.

 Private companies also have their disagreements with donors. One example from the energy sector is the International Finance Corporation’s Scaling Solar programme. Scaling Solar has often been unfairly criticised – it has resulted in important advances in developing standardised contracts, showcased again the benefits of competitive tendering for renewable power, and kickstarted the process of bringing solar power to the grid – but private sector concerns about the programme’s impact on the long-term sustainability of the power sector in Scaling Solar countries, with the potential for reduced investment in early stage project development and a lack of transparency about how low prices were achieved, are also valid.

 While significant private sector players at least benefit from some direct contact with DFIs, they remain as devoid of any real voice in donor programmes, aside from public and private criticism, as many host communities. This has sometimes led to bad policy and bad outcomes.

 Independent academics and NGOs can face a similar situation. In health, for example, there is growing criticism of the promotion of male circumcision as a means of reducing the spread of disease. While it is known that circumcision can reduce infection rates for HIV, academics at Harvard argue in a forthcoming paper that the policy has not been properly trialled against the best alternatives, such as antiretroviral drugs, and that the risk of complications during surgery may be much higher than generally believed. Furthermore, some doctors are making the case that circumcision policy in developing countries, particularly in Africa, reflect a continuing culturally invasive attitude. While circumcision is common in the United States, preventative circumcision is not a policy that was or is ever likely to be advocated for high-risk communities in other parts of the developed world. The idea of incentivising or compelling homosexual men in the United Kingdom to be circumcised because they are more likely become HIV carriers would be considered both sinister and outrageous.

 However, the practice continues to be advocated by institutions funded by developed countries. The UK’s Department for International Development told me in June that it indirectly funded male circumcision programmes through its funding for the World Health Organisation. Dissenting voices outside the donor community have no obvious avenue through which to change the policy.

 Even if there is a will to improve the accountability of aid programmes, development finance institutions (DFIs) are hamstrung by the desire of donor countries, the only entities to which the DFIs might be considered truly accountable, to maintain a high degree of control over how their funds are spent. More fundamentally, conceptualising a system in which affected communities have a voice in aid programmes – even defining affected communities – is hugely challenging. But this does not mean that it should be ignored. 

Much of the debate about aid is parochial nonsense. The commonly heard refrain in donor countries that “money should be spent here first” is a dead-end argument which, from people almost unimaginably more wealthy than those receiving aid, can only be based on meanness or an ugly form of nationalism. Simplistic arguments that aid always crowds out private spending or can never be effective are equally spurious and dogmatic. Aid still has a crucial role to play in development; many of the most important advances which led to the Africa rising narrative have been underpinned, catalysed, or sustained by institutions such as the World Bank and International Monetary Fund and the threat that they might withdraw their funding. But that does not mean that the transformation of developing countries couldn’t be more effective, deeper or more long lasting without considering the ways in which development policy is decided, managed and implemented, and how it might be made accountable to those who benefit and those who don’t. 

As the left continues to reinvent itself for the modern world, accountability and democracy must sit alongside compassion as the core principles through which we understand the world. The way our money is spent to help the most needy around the world is no exception.

 

Dan Marks is a Young Fabian. Follow him on twitter at @DanMarks14 

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