David A. Phillips is a writer and economic consultant. He was educated in Britain and has a PhD in economic development. 

Development without Aid

The Decline of Development Aid and the Rise of the Diaspora

By David A. Phillips

Wimbledon Publishing Company

Copyright © 2013 David A. Phillips
All rights reserved.
ISBN: 978-0-85728-303-0

Contents

List of Acronyms,
Acknowledgments,
1. Introduction: Motivation and Perspective,
2. What Is Foreign Aid, Who Does It, Why and How Much Is There?,
3. How Far Has Development Aid Been Effective?,
4. Why Has Development Aid Done So Little?,
5. Changing the Dynamics of Development,
6. “New Aid”: New Ways to Promote and Finance Development?,
7. Another Pathway Out of Poverty?,
8. Exit Strategy – Replacing Foreign Assistance,
9. Postscript,
Notes,

CHAPTER 1

INTRODUCTION: MOTIVATION AND PERSPECTIVE

International development cooperation has achieved many positive results. When we met in Monterrey a decade ago, we recognised that increases in volumes of financing for development must be coupled with more effective action to generate sustainable and transparent results for all citizens. Our dialogue in Busan builds on the foundations laid by previous High Level Fora, which have been proven to remain relevant, and which have helped to improve the quality of development cooperation.

“Partnership for Effective Development Cooperation,”
Fourth High Level Forum on Aid Effectiveness,
Busan, South Korea, 1 December 2011, par. 6

Development aid, far from being necessary to rescue poor societies from a vicious circle of poverty, is far more likely to keep them in that state.

Peter T. Bauer (1993)

A Starting Point

This book is ultimately a personal reflection rather than an academic treatise, and so, while as far as possible remaining objective and supported by evidence, it is in the end as much advocacy as argument, at times taking the risk of verging on the polemical. It aims to open up perspectives as much as analyze facts. It is about the development of poor countries, not the principles of how societies and economies develop but the narrower canvas of development assistance to poor countries, its effectiveness and whether there is a different way to achieve its objectives. It aims, in fact, to help move the perception of the path to development in poor countries squarely beyond development assistance and beyond the discussion of its architecture, design and practice. It also asks for a partial suspension of belief that only rigorously evidence-based statements are admissible while judgments based on experience are not. Evidence is a wonderful thing; but conclusive evidence on how to succeed in development aid is almost unobtainable, and it is wholly predictable that much of the current effort to obtain it will in the end provide no better basis for action than experience.

Nearly US$4.0 trillion (in today’s currency) has been disbursed in net official development assistance (ODA) to developing countries (after repayments) since 1960, or an average of about US$70 billion a year at today’s prices, according to the Organisation for Economic Co-operation and Development (OECD). During all this time foreign aid, or foreign assistance, has been the subject of extensive attention – books, papers, films, concerts, pamphlets, investigative reports and advertising campaigns, produced overwhelmingly by outside governments, organizations and individuals. The British Library lists over 250 new books on “economic development assistance” published during 2010 to 2011. There are 300 or so internationally recognized journals focusing on development, including development aid, and many others that deal intermittently with the subject. One might well question the value of another work on how to strategize, design, appraise, negotiate, implement, procure, manage, monitor, evaluate, scale up, reform, reinvent or move beyond foreign aid, written by another outsider, when what is now clearly called for is an upsurge, an outcry, from indigenous thinkers themselves, especially those from the poorest and most affected countries, about how to handle foreign aid. Those indigenous thinkers are emerging but seemingly there are still too few of them. In the meantime I offer two reasons why I should be entitled to speak up both for myself and for them.

The first reason is that I am not entirely an outsider. I was brought up from infancy in the “colonies” – that is to say, in the countries known then as Nyasaland and Southern Rhodesia in Central Africa that were once part of the British Empire. So what, one might ask. That life has gone with the wind and we have all said good riddance to a historical era that featured the nineteenth-century “Scramble for Africa” by the rival imperial powers. The gone-with-the-wind allusion is however important. From my viewpoint I did not much like the idea that the world of my childhood had vanished without trace, nor did I enjoy leaving behind forever the country of my earliest memories and experiences.

The fact of being from a transitory component of African society living a relatively privileged life did not mean that my childish sense that Nyasaland was my country and my home was more unreasonable than those of another child, whether of a farmer, a trader or a government official, indigenous or alien. I was the son of a colonial government official, and colonial officials tended to have a lesser sense of ownership than farmers and traders, even foreign ones, who invested in the country. Nevertheless as children our feelings about being part of the place were quite natural even if our parents tended to see themselves more on a temporary mission for his or her Britannic Majesty. Many of us after all were actually born there, or in my case nearly so, arriving at less than 1 year old. We were not on any mission. We belonged to the place. And in a sense we remain a part of the Nyasaland, now Malawi, diaspora, because those of us who left still retain some residual, if distant, allegiance to the country, while a few of us stayed on.

Many of us also grew up to think of Nyasaland as different from other colonies. The country surely had the usual ethnic and class anomalies of a colony. Some of us would experience a vague sense of guilt at being waited on by a retinue of servants; it didn’t seem to make sense that people who were deputed to look after me, my sister and brother, some of whom were themselves parents, should treat our own parents with exaggerated respect and be treated in turn with exaggerated, albeit institutionalized, disrespect. But I lived with it and so did they, apparently without too much trouble. The big difference was that the country did not have the gold, diamonds and other high value minerals that caused overt social trauma among neighbors like the Congo or South Africa, and it did not have the same toxic race relations. The country’s exportable offerings were largely tobacco and tea rather than minerals. It had a few towns, scattered villages and the beautiful Lake Nyasa (now known within the country as Lake Malawi) “discovered” for Europe by David Livingstone.

It was generally a quiet place, termed quaintly a protectorate according to the nomenclature of that era, a status that distinguished it somewhat from the settler colonies around it. In 1960, its population was only 3 million. The British colonial authorities invented a beautiful national crest consisting of a leopard standing on a rock before a rising sun. The leopard disappeared after independence and only the less beautiful, but more relevant, rising sun remained. Pity about that leopard. At the base of the crest was the Latin motto “lux in tenebris.” I was rather fond of the motto as well, but later understood that it was not a reference to the delights of Nyasaland but rather to a subtext about the illumination of a dark continent. In that apparently quiet country, the emergence of African nationalism in the late 1950s came as a surprise to both colonial parents and colonial children, though perhaps less in the case of the latter.

My home for most of my childhood was a place called Zomba. In 1964, just prior to independence, the town of Zomba was hardly more than a village. Its population was about 3,000 made up almost entirely of Africans, Indians and Europeans. The British colonial population numbered a few hundred administrators, military and police officers, a few settlers and businessmen, and their children. The town had a long main street with a narrow strip of asphalt on top of gravel, lined in places by blue jacaranda trees. There was a cluster of small stores owned mainly by Indian migrants, various legislative, administrative and judicial buildings scattered across the town, a couple of churches, a temple and mosque, the occasional inn and bar, schools and small hospitals (ethnically selective), a Freemason’s hall (my first school), a couple of sports and social clubs (also ethnically selective) and an airfield boasting two flights a week by a single-engine “Beaver” airplane. The town was located on the lower slopes of a mountain that looked out over a broad plain to another higher mountain (called Mlanje) and to a lake (called Shire) on the horizon. This was the country’s capital under the British colonial administration.

Elevated as it was and reasonably cool, Zomba was a beautiful place in the rugged manner of Africa. Our house was a little way up the mountain, according to a pecking order among the colonial cadre based on altitude. I grew up imbued with the sights, colors, smells and sounds, the plains, rivers, woods and mountains, plants and animals, tropical rain and heat, big skies and quiet solitude of small town Africa just as did the son of an African farmer or trader, even though they eked out a much more precarious existence than mine.

And that leads to another thought. Not only did I see this as my country but I sometimes thought that had I had the opportunity I could probably have worked more determinedly for my country to try to help it to prosper than the first of a stream of technical advisers that started to arrive as Nyasaland became independent of the British Crown in 1964, when my family and I had to leave. These newcomers really seemed to think that they knew more about what to do about my country than we colonial types, but I in my simple way felt they knew rather less. Certainly they knew less than us in terms of the history, geography, people, languages, cultures, realities and opportunities of my country, and some would agree that that was an important consideration, even though our knowledge had been gained within a social system that was incompatible with national aspirations. And, by the way, they also seemed to live in more comfortable circumstances than my family had ever done even as part of the colonial ruling class, protected by the assistance agency that sent them to this remote and risky place far away from civilization, a place with which we colonial teenagers in contrast were very familiar and saw as neither remote nor risky.

This idea of “my country” and questions about the meaning of national identity have remained with me ever since. I have no doubt that it remains today one of the keys to understanding the intractable problems that have beset foreign assistance to the poorest countries, especially in Africa, and have been extensively debated with little conclusion for 50 years, pretty much ever since the first technical advisers set foot in the former colonies of Britain, France, Portugal, Spain, Holland, Belgium and others. These are problems which, one suspects, have something to do with the present-day equivalent of the “quaint protectorate” system under which foreign aid is currently dispensed to the poorest countries, especially in Africa.

But there is a second reason why I think I am entitled to write a book on how to deal with foreign aid even though I don’t belong anymore to a country that is being aided. This is because I think that the era of foreign aid, as it is currently understood and practiced in the poorest countries, should be brought to a close, and this is an issue which concerns the donors as much as the recipients. I am in a very good position to talk about this because it has to do with the rich country which is now mine and its own policies. In other words, I am not presuming to tell anyone else in another country what to do.

In the meantime I have been employed in various parts of the world, in Africa, the Former Soviet Union and Asia in the foreign-aid business, for national and international organizations, for academia and as an independent “expert,” since the time that my family left Africa for what then seemed to us a rather remote and risky country known as Britain. My formative years in Africa led me to want to explore and work in and for other countries. But during these times, and since seeing the first foreign advisers arrive in Malawi, this experience has led me to a simple, perhaps simplistic, conviction. If after 50 years of extensive practical and theoretical effort, and several trillion dollars spent, we are still heatedly debating the main issue – how and whether foreign aid can be effective – it is extremely probable that in its present form it is, for the most part, not effective. Perhaps therefore we should be focusing not on trying to reinvent it but on alternative ways than foreign aid for poor countries to achieve the beautiful goal of ending poverty. Such alternative ways of thinking, of course, has to be led by the leaders and people of those countries themselves, not by outsiders.

This assertion is not intended to imply that none of the assistance that has been provided to poor countries has ever done any good, so immediately I have to temper such a sweeping proposition. And the “aid problem” largely applies to a group of countries with about a billion inhabitants (15 percent of the world’s population) that have, despite particularly large amounts of aid, remained in especially severe poverty up to now. It cannot be so easily applied, almost by definition, to those who have started to emerge from poverty even though emerging countries like China and India still contain large numbers of very poor people. And even in the poorest countries there are numerous examples where aid has in fact helped. Plenty of perfectly well-conceived and executed assistance projects have been delivered. After all, how can we say that roads and bridges, immunization programs, medicated mosquito nets, clinics, training of nurses, technicians and software engineers, or the provision of advice to finance ministers, hospitals, schools, farmers, businesses and banks by genuine experts have not added genuine value? Equally, numerous individuals and institutions involve themselves in foreign-aid work with the best of intentions, and sincerely strive to be effective.

In principle, properly conceived and in the right conditions, all outside advisory assistance can be valuable wherever it is given, both to rich and poor countries. Indeed, major international consulting firms worldwide who provide development advice to poorer countries do the large majority of their business in their home countries where markets are highly competitive and quality is essential.

Following the Paris donor conference of 2005 a renewed and extensive effort was launched by the international donor community to determine how to achieve effectiveness in development assistance through upgraded evaluation methods, in order to support the continuation of these programs. The declaration of the Busan conference 6 years later, from which I quote above, bears witness to these efforts.

Nevertheless, and despite the renewed efforts to understand how to improve assistance, as we shall see during the course of this story the results in the particular conditions of the poorest countries have been questionable. This is because the intrinsic quality of the assistance is not necessarily related to its ultimate effects. Thus, when it comes to assistance from the richest countries to the poorest countries quality is not necessarily the same thing as impact. This makes it difficult for even sophisticated evaluation methods to identify the reasons why assistance succeeds or fails. What is as, if not more, important is the environment in which that assistance takes place, whether advice, training, management or something else. It is not the quality of advice or training that has necessarily been defective but rather it is the broad social, economic and institutional context that has been inimical to its success, at least in the poorest countries, of which my first country remains one. It lies as much within the political and social dynamics of these countries and the relationship between the donor and the recipient societies. It is this aid relationship, the “aid model,” that has not worked. It is the old “quaint protectorate” syndrome but now perhaps worse. Yet the time and opportunity may have now arrived in which this aid relationship could start to be abandoned and replaced by something else. This is what much of this book is about.

(Continues…)Excerpted from Development without Aid by David A. Phillips. Copyright © 2013 David A. Phillips. Excerpted by permission of Wimbledon Publishing Company.
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