The Roles of Aid in Politics
Putting China in Perspective
An Annotated Bibliography
Ward Warmerdam with Arjan de Haan
International development cooperation is, one again, under pressure. Many authors have argued ‘aid’ has failed, and global politics are rapidly changing the contours of international development. This publication draws together observations and conclusions from the realms of development studies, political science, international relations and economics written over the last sixty years, concerning the roles of foreign aid in politics. The bibliography charts recurring and emerging trends, enhancing the understanding of how current global circumstances, and domestic political forces, can and will shape the future political roles of foreign aid. Additionally, this should provide a comprehensive understanding of the patterns of foreign aid policies emerging donors – particularly China – could take, and it highlights possible methods and theoretical lenses through which emerging economies’ foreign relations with other developing countries could be analyzed.
The perceived failure of aid promulgated in the popular media, the expected failure of many aid recipient nations to attain their Millennium Development Goals, the apparent failure of the military and development missions in Afghanistan and Iraq to quell terrorism and bring about socio-economic development, and the deepening global recession tightening national budgets have caused many governments to re-evaluate their development assistance programs and priorities. Political parties leaning more to the political right are, in many countries, demanding a reduction in foreign aid expenditures in light of their own nation’s struggling economies and welfare systems, with some, in contradiction to OECD best practices, advocating for development assistance programs that also benefit the donor nation’s economies. The fiscal questioning of foreign aid has further led to the questioning of aid’s political roles and its value within and benefits to national governmental frameworks, calling for it to justify its continued existence and its budgetary demands.
Furthermore, the increasingly prominent role of emerging donors such as China and India has provided an altered international political situation in the context of which traditional donor governments must re-evaluate their foreign policy and foreign aid strategies (Broadman 2007). The (re-)emergence of such donors could provide new opportunities for cooperation with traditional donors and improved insights into processes and methods through which to stimulate socio-economic development, in light of South-South cooperation (e.g. Bräutigam 2009; de Haan 2009, 2010; Dollar 2008; Gill et al 2007; IOSCPRC 2005; Ravallion 2008; Tjønneland et 2006). Cooperation could also reduce the burden of traditional donors in the development assistance programs, and might provide the appropriate levels of aid flows to the developing world in order for it achieve much aspired development goals (Eisenman and Kurlantzick 2006). The (re-)emergence of China as donor and the increasingly global reach of its economic relations have often been met with a certain degree of suspicion (noted by e.g. Bräutigam & Tang 2009; Bräutigam 2009). During the Cold War, much of China’s relations with other developing countries were viewed in the context of the global ideological battle and the Communist geo-strategy for world domination (Black 1968; Li 2007; Mushkat 1972). However, post-Cold War post-Economic Reform and Opening Up, China’s foreign policy and foreign aid strategies have markedly changed (Li 2007), and should be studied as such in light of the altered global and domestic contexts.
It is in response to these new circumstances that the politics of aid needs to be reevaluated. This bibliography was compiled with the intention of providing an exploratory first step in this process. It draws together observations and conclusions from the realms of development studies, political science, international relations and economics, written over the last sixty years, concerning the roles of foreign aid in politics. This time period was chosen as it saw: the birth of the modern incarnation of foreign aid; post-war reconstruction in the centers of pre-war wealth and power; former colonies gaining their independence; the geo-strategic ideological battle of the Cold War; the collapse not only of the second largest superpower of the time but also of the socio-political and economic framework that sustained it and its allies; political and economic transitions in these former Communist states; civil wars based on opposing ideologies; civil wars in countries where, with the departure of imperial powers, there were no viable political systems within which power struggles could be mediated; the establishment of multilateral intergovernmental organizations such as the UN, the World Bank and IMF, and regional organizations like the EU; the emergence of global terrorism; the growing popular awareness in developed nations of the plight of the suffering in developing nations; the emergence of new donors, some of whom are themselves still foreign aid recipients, who, some have argued, have different political and economic agendas than the traditional donors; in addition to countless humanitarian disasters and a number of regional and global recessions. The broad time period in which and concerning which publications contained in this compilation were written should allow recurring and emerging trends to become apparent, leading to an increased understanding of how current global circumstances, and domestic political forces, can and will shape the future political roles of foreign aid. Additionally, this should provide a comprehensive understanding of the patterns of foreign aid policies that emerging donors could take and highlight possible methods and theoretical lenses through which a more thorough investigation in China’s foreign relations with other developing countries could be analyzed.
Domestic Origins of Foreign Aid
A natural starting point for an investigation into the politics of aid is to consider the domestic determinants of foreign aid. Foreign aid policies are, like domestic and foreign policies, formulated in consideration of domestic political realities and the context international circumstances. This means that as domestic political situations change and the international context changes, foreign aid policies are reformulated to adapt to the new set of conditions. There are a number of factors within domestic political contexts that can influence the ways in which foreign aid policies are formulated and reformulated. Lancaster (2007a: 18) calls these the domestic political forces which she defines as falling into four categories:
Ideas: Lancaster argues that the most fundamental “ideas” shaping aid are “worldviews”, the values shared by a given society based on their culture, religion and/or ideology. These worldviews are the origins of the norms and principled beliefs of a society.
Political institutions: According to Lancaster these form the “rules of the political games” (2007a: 18). She analyzes the electoral rules, role of legislatures, role of local governments and semi-public entities, the political system (parliamentary and presidential) and the effects these have on shaping the purposes of foreign aid.
Interests: These, she argues, broadly fall into three different groups, namely: 1) commercial interest groups, 2) NGOs and public interest groups, 3) as well as groups that have religious, ethnic or otherwise associations with specific foreign countries.
Organization of aid refers to the way that aid is managed within the government structure, particularly whether there is a dedicated development ministry, or whether it is a department within another ministry or ministries. She argues that the organization of aid has a strong influence on the purposes of aid.
Lancaster argues that as the international situation changes, and the domestic political forces react, purposes of aid change as well (ibid.). She (2007a) states that the traditional purposes of foreign aid include: diplomatic, developmental, commercial, cultural, and aid for humanitarian relief. She adds that more recent purposes of foreign aid include: promoting economic and social transitions, promoting democracy, addressing global issues (such as the environment and HIV/AIDS), and mitigating and managing post-conflict transitions (ibid.).
The current authors believe that the interaction of these domestic political forces can be represented as depicted in figure 1 below:
Figure 1. Interaction of Domestic Political Forces, based on Lancaster (2007a).
In her compilation of cases studies Lancaster analyzes the US, Japanese, French, German, and Danish models of foreign aid policy determination using the above described framework. Her findings suggest that foreign aid can only be understood through the lenses of both constructivism and realism (ibid.). She argues that although foreign aid was initially a realist response to the Cold War, by the end of the century the notion that more affluent states have an obligation to provide aid to less-well-off states has become a widely unchallenged norm (ibid.). Lancaster attributes this in part to the establishment of a political constituency for developmentaid in most donor countries, both inside and outside of the government (ibid.). She states that outside the government NGOs grew in number, size and influence, while inside many governments aid agencies were created with increasing budgets and staff sizes along with a progressive strengthening of professional capacities, and programs to inform the general public about development issues (ibid.). Lancaster cites the Japanese and French cases as proof of the influence of the domestic constituencies in guiding foreign aid towards its increased use for development purposes, as in both these countries, such constituencies are weak or lacked access, and therefore the development purpose of their aid allocation is weakest (ibid.). The author finds that domestic constituencies also increasingly took the role of monitoring government aid for development purposes, complementing international pressures from multilateral organizations such as the OECD-DAC, the World Bank, and UN agencies, promoting the use of aid for development purposes (ibid.). Interestingly, Lancaster notes that acceptance of the aid-for-development norm is dependent on whether the aid-giving nation’s socio-economic condition is sufficiently healthy that foreign aid allocations are not seen to be sacrificing the needs of the poor at home (ibid.). Furthermore, she adds that its acceptance is also dependent on the perceived effectiveness of government aid allocated for development purposes (ibid.). In her compilation of cases studies she observes a number of differences in the domestic political forces affecting aid, most notably varying influences of the different ideas and institutions which shape the purposes of aid. Lancaster’s broad analytical framework captures many of the aspects concerning the roles of aid in politics as discussed below.
These authors believe that the figure below, based on Lancaster’s framework, provides a simplified yet adequate representation of the interaction of domestic political forces and their further interaction with other members of the international system:
Figure 2. Simplified representation of the interaction between domestic and other members of the international system, based on Lancaster (2007a).
Goldstein and Keohane (ed.) (1993) investigate the influence of ideas on policy through a compilation of essays on different aspects and forms of ideas and their influence on policy formation and practice. They categorize ideas as being: world views, principled beliefs, and causal beliefs (ibid.). The authors define principled beliefs as consisting of the normative ideas used to determine right from wrong (Goldstein & Keohane 1993: 9). They further define causalbeliefs as beliefs concerning cause-effect relationship, based on the shared consensus of recognized elites (Goldstein & Keohane 1993: 10). Goldstein and Keohane argue that principled or causal beliefs affect policy formulation when these have become ingrained in political institutions and provide ‘road-maps’ to assist actors in policy formulation in strategic situations where there is no unique equilibrium (ibid.). They conclude that it is the combination of interests and ideas that has causal weight in the explanation of actions.
In a similar vein Cingranelli (1993) analyzes the effects of different moral positions on the relations of the US with the Third World through an historical analysis. He states that foreign policy formulation in the US is guided by a political culture composed of the values of: individualism, capitalism, civilian control of the government, rule of law, political equality and democracy (ibid.). The author further identifies four moral positions prevalent in American politics based on who the political leaders are willing to be held responsible by and whose interests these leaders should promote (ibid.). He categorizes these positions as: nationalist, exceptionalist, progressive, and radically progressive, although the latter position has less of a voice due to its similarity to the Marxist moral position. He also analyzes Marxism as a moral position taken in relations with the Third World. The author states that different presidential administrations cannot be classified as falling solely within these four categories, rather their positions will, on average, tend to fall in one category, though their positions will vary in relation to different issues (ibid.). Cingranelli defines these positions as shown in the table below, and analyzes how these positions have affected US relations with the Third World and other weaker nations throughout US history until the Reagan and Bush senior administrations. He concludes that there has been a general trend towards the Progressive moral position, although this has been gradual with regular fluctuations towards the nationalist position (ibid.).
Leaders Should Promote:
Leaders Should Be Held Responsible to:
Their Own Citizens
The Community beyond International Borders
Table 1. Moral positions regarding foreign policy as defined by Cingranelli (1993: 6)
Cingranelli finds that US policymakers, especially after the Second World War, have increasingly recognized the importance of universal values and their duties towards people outside their borders (ibid.). He identifies these universal values, with relevance to foreign policy, as:
(1) [S]elf-determination or autonomy, (2) nonintervention into the affairs of other states except under extraordinary circumstances, (3) the rejection of certain means no matter how worthy the ends, (4) social, political, and economic justice, (5) the existence of (and obligation to protect) universal human rights (as those rights are defined in international agreements, and (6) a commitment to multilateral as opposed to unilateral action … (Cingranelli 1993: 7-8).
Cingranelli argues that this trend towards a more Progressive moral position is driven by institutional changes in foreign policy making structures and processes initiated by Progressive administrations, the Cold War rivalry, the altered role of the US in the international structure and the shifts in American values (ibid.).
Stokke (1989) also describes how aid policies are formulated through the interaction of the external environment with a country’s domestic environment, norms, interests and traditions. His compilation of analyses regarding the foreign aid policies of five Western middle powers1 seeks to identify the extent to which different outcomes of foreign aid policy formulation can be explained with reference to the basic values and ideologies predominant in the nations under analysis, which, for the nations in question, he defined as being generally varieties of humane internationalism (ibid.). In the context of foreign aid policy Stokke argues humane internationalism implies: the recognition of the responsibility of developed nations to assist the Third World, a belief that a more just world is in the long-term interests of developed countries, and an understanding that this is not in the disinterest of their own national economic and social welfare policies. Stokke analyzes the foreign aid policies of these five Western middle powers in relation to variations of this ideology, and concludes that there has been a general move towards liberal internationalism in these five nations within the period of study (ibid.). Liberal internationalism, according to Stokke’s definition shares the core concepts of humane internationalism, and adds to it a commitment to an open and multilateral trading system as well the realist internationalism notion that nations ought to pursue economic and political self-interest in the short- and long-term (ibid.). Liberal internationalism, he states, recognizes a responsibility towards the South and aims for economic growth there, through seeking to promote common interests between rich and poor countries (ibid.). Stokke argues that this is motivated by the humanitarian aspects of humane internationalism while recognizing the opportunities for both the North and South in integrating the Third World into the Western market economy (ibid.). Liberal internationalism, he notes, is further characterized by a general objection to state and interstate intervention, as well as procurement tying, rather it favors the mobilization of the private sector in development efforts and the use of ODA to support this, in addition to favoring multilateral agencies which practice open bidding (ibid.). Stokke’s descriptions of different forms of internationalism provide useful measures with which to evaluate foreign aid policies, including the foreign aid policies of China and other emerging donors.2
Pratt (1989) similarly conducted an analysis of humane internationalism in four Western middle powers, through a compilation of country cases studies.3 He identifies three reasons for the sensitivity of these middle powers to the development needs and aspirations of the LDCs, although none, bar the Netherlands,4 had any direct ties to them. These reasons are: 1) the internationalist orientation of their policies; 2) their responsiveness to cosmopolitan values, which he argues stems from an extension of the dominant political cultures of their domestic social welfare systems, based in Christian and social democratic ideologies; and the influence, to greater or lesser degrees, of reform internationalists in the political arenas; 3) the political considerations that caused them to attach greater importance to their relations with the global South, such as the domestic political gains and the favorable consideration of recipients concerning other international political issues (ibid.). Pratt concludes, however, that the efforts of these middle powers to create a more equitable world have ebbed slightly, since 1981, in the face of an unfavorable political and economic climate internationally, the stronger influence of national loyalties compared to global responsibilities, and the lack of cohesiveness, coordination and consistency in their efforts. Pratt’s conclusions provide part of the explanation as to why the current international order can still not be described as an equitable world order. Nevertheless, his descriptions of why certain countries are more sensitive to the needs of the developing world allow the comparison of these characteristics to those prevalent in the engagement of China and other emerging donors with the developing world.
A number of authors have looked more specifically at certain aspects of domestic politics which influence foreign aid policy. Thérien and Noël (2000), for example, look at the influence of political parties on foreign aid. Their findings suggest that the impact of political ideologies on foreign aid goes beyond the mere support for or opposition to foreign aid policies, but that a political party which remains in power for a longer period of time is able to make its own particular concepts of social justice central to the political debates of their nation (Thérien & Noël 2000). The centrality of these conceptions of social justice in political debates, the authors argue, shapes the formulation of foreign aid policies and priorities (ibid.). Additionally, Thérien and Noël show that social-democratic parties have an influence on levels of development assistance, though the effects of this are only apparent in the long-term (ibid.). Moreover, alongside the influence of political parties on foreign aid expenditures, the authors also identify the significant roles played by welfare institutions and social spending in determining foreign aid spending (ibid.). These findings reflect those from their earlier study (Noël & Thérien 1995), which proposes that the institutionalization of socialist welfare principles at the domestic level shape the nature and practices of a nation’s foreign aid policy, arguing that states with more institutionalized welfare principles at the domestic level are more likely to provide foreign aid and development assistance and to base the provision of aid on similar principles. The influence of a governing party’s prolonged rule on a nation’s concepts of social justice, and therewith the impact on its foreign aid policies is a vital consideration in the analysis of the foreign aid policies of China and other emerging donors, and will provide useful information on which predictions regarding the future directions of these policies can be made. Additionally, and investigation into the extent to which socialist welfare principles are institutionalized in the domestic polities of China and other emerging donors will give an indication of the moral principles on which their aid provision is based.
Thérien (2002) has further argued that evolution of foreign aid is the result of an ongoing conflict between the political Right and Left regarding aid policies. This conflict, he argues, is based on the relative importance each attaches to the issues of cost-benefit analysis and moral principles. According to Thérien the Right is seen to be more concerned with the results of the former while the Left is more concerned with the latter (ibid.). He states that these differences have often led the Right to decry foreign aid as wasteful, ineffective, and inefficient, and to argue that poverty alleviation is ultimately not the obligation of the international community but each individual state (ibid.). The author argues that these concerns have been reflected in the introduction of new administrative practices in donor countries that increase accountability and monitor quality in the form of new ‘results-based’ management systems (ibid.). In contrast, Thérien adds, the Left believes that aid to poor countries is a moral obligation, it argues that the benefits are larger than the costs, and it is concerned about inadequate levels of aid (ibid.). As Thérien and Noël noted above, the Left’s convictions on foreign aid are based on the similarities it perceives between the domestic and international order, believing that international aid is an extension of the responsibilities of the domestic welfare state (ibid.). Thérien states that the Left argues that market mechanisms are incapable of achieving the optimal allocation of resources, thus state intervention is necessary to protect the poorest and most vulnerable (ibid.). Thérien states that the Left holds the belief that foreign aid and development cooperation have been responsible, to a large extent, for the socio-economic developments in the Third World, such as increased health indexes, reduced poverty, improved infrastructure, and the fall in birth rates (ibid.). Thérien further argues that it is these divergent concepts, concerns and arguments that have developed the international and domestic aid regimes current today (ibid.). Thérien’s findings describe the evolution of foreign aid both domestically in the countries included in his study, and to some extent within the international system. Understanding the political debates leading to the evolution of foreign aid in China and other emerging donors would be useful for predicting future trends of foreign aid as shaped by these new donors.
Fleck and Kilby (2001) have studied the relationship between the allocation of USAID contracts across different congressional districts and voting on foreign aid policies in US Congress. Although USAID activities do provide direct economic benefits to most states in the US, Fleck and Kilby find that the level of contract spending is not significantly related to the support for foreign aid by a representative, or other political factors (ibid.). The authors find no evidence that USAID manipulates contract allocation in order to gain political support (ibid.). Their findings also suggest that the level of aid contract spending only had a marginal impact on representatives’ support for foreign aid (ibid.). Fleck and Kilby state that their results concerning the influence of economic benefits on the support for aid are only considered from one dimension of the issue and they find little evidence that the two are positively correlated in the US (ibid.). They conclude that this appeal to commercial interests in the post-Cold War period, though a natural substitute for the ideological motivation, is unlikely to garner the desired levels of political support and increased funding (ibid.).
Milner and Tingley (2010) analyze whether there are any systematic political economy factors which shape foreign aid policies. They find that domestic politics and the distributional consequences of aid have an influence on foreign aid (ibid.). Notable factors influencing the support for aid, according to their findings, are the economic characteristics and the right-left ideological disposition of voting districts (ibid.). The authors find that for economic aid votes which have domestic distributional consequences, districts which are better endowed with capital are more supportive of economic aid, while those better endowed with labor are less supportive (ibid.). Additionally, Milner and Tingley (2010) find that districts and legislators of a more egalitarian ideological disposition and who believed in a larger role for government in the economy, are more likely to vote in favor of economic aid. Moreover, the authors also identify the sensitivity of legislators towards the pressures of organized interest groups (ibid.). They find that campaign contributions by organized groups may account for legislator voting behavior that deviates from their dominant party ideology (ibid.). Milner and Tingley further argue that although the foreign policy concerns of the executive also play a role in foreign aid policy, the positions and preferences of the president are not seen to significantly affect legislators’ votes on economic aid, meaning that support for foreign aid policies must also be gained in Congress, where legislators vote in accordance with the concerns of their constituents and organized pressure groups within their constituency (ibid.).
In a separate article dealing with the effects of the economic ideology of US governments on foreign aid Tingley (2010) finds that economic ideology plays in important role in determining aid allocations. He suggests that progressively more conservative governments commit progressively less of their GDP to foreign aid efforts than more liberal governments (ibid.). This, Tingley states, is especially the case with aid allocations to poorer countries and multilateral organizations, which he purports indicates that conservative governments attach higher importance to trade and geopolitics than development assistance (ibid.). These findings reflect those of a number of studies mentioned above, such as that of Thérien (2000).
An even deeper look into the workings of foreign aid appropriations procedures was taken by Irwin (2000). His findings provide a deeper understanding of the importance of person-to-person negotiations and personal favors, consensus building, issues coalitions, key legislative actors, and public-private issue management. Irwin states that foreign aid proponents have grown adept at using a variety of means and steps in order to achieve legislative success, and finds that respondents generally believed that people rather than procedure was the most important determinant of legislative success for aid policy decisions (ibid.). Chong and Gradstein (2008) analyze the factors which influence popular support for foreign aid based on World Values Surveys. Importantly, they find that satisfaction with own government performance and individual incomes has a positive influence on the support for foreign aid (ibid.). Additionally, Chong and Gradstein find that richer more egalitarian governments provide higher levels of aid, while inefficient governments provide lower levels (ibid.). Finally, the authors argue that whereas recipients’ economic conditions do not affect aid levels, their levels of corruption, inequality, political leaning and tax systems do (ibid.). Chong and Gradstein’s (2008) findings regarding the determinant of domestic political support for aid, provide useful standards against which to evaluate popular support for aid in China and emerging donors. Their findings concerning the effect of a number of characteristics of recipient countries on aid levels, also provide useful aspects to investigate in comparison to the aid level determinants for China and emerging donors.
Nelson (1968) gives a comprehensive insight into the aid allocation and program planning procedures in the US during the Cold War period. Although his study was performed around 40 years ago, these procedures and considerations seem to have changed little, as evidenced by more recent studies, although their general emphasis might have changed with the end of the Cold War. Nelson identifies the steps as: identifying US objectives in the recipient country, assessing the situation and trends in the recipient country, evaluating the role of other donors in the recipient country, selecting specific goals, and devising the most important and appropriate measures to achieve these goals (ibid.). A similar in-depth study into the workings of the domestic politics in the US in the formulation of foreign policy and foreign aid policies, was conducted by O’Leary (1967). He analyzes the effects of the American political culture and political opinion, the influence of Congress, and the situation of the executive on foreign aid policies. He concludes that official government commitment is not sufficient for the successful conduct of policy (ibid). O’Leary emphasizes that public support is vital for the success of aid programs, although, he argues, this often seems to be lacking in the US, and many government foreign policymakers frequently believe that US public opinion works against them (ibid.). The extent to which public support is essential to the success of aid programs implemented by China and other emerging donors, is something that needs to be investigated in more detail. Understanding the levels of influence publics in China and other emerging donors have on foreign aid policies can give an indication as to the motivation for aid provision. In conjunction with a deeper understanding of the evolving values and beliefs of these publics resulting from their own socio-economic development, knowledge on the extent to which these publics influence their foreign aid policies will provide a sound basis on which to evaluate the future trends of their aid policies.
Putnam (1988) applies a “two-level games” approach which recognizes the efforts of central decision makers to simultaneously reconcile both domestic and international imperatives in order to analyze the linkages between domestic politics and diplomacy. His findings highlight a number of significant features of these linkages, among which are the effects on international pressures on the domestic political arena, the finding that domestic political cleavages actually cultivate international cooperation, and the divergence of interests between a national leader and the people for whom he is negotiating (ibid.). Putnam’s “two-level games” approach and his findings provide useful tools, in addition to those of Chong and Gradstein, and O’Leary, with which to analyze in more detail the domestic politics of foreign aid policies in China and other emerging donors.
Murshed (2003) analyzes the strategic interaction in aid donor processes through principal-agent models and through endogenous policy determination. In his analysis legislators are considered as the principals and the aid agencies executing the wishes of the principals are considered the agents. His findings suggest that agents’ motivation is improved when their efforts are seen to be taken into account by the principals (ibid.). Furthermore, Murshed finds that when principals with divergent interests, e.g. commercial, strategic, and developmental interests, interact with the same agent, their interests are best served if their efforts are combined and their interests harmonized (ibid.). The author also notes the influence of powerful lobbies on aid policy (ibid.). Murshed’s analysis provides insights not just into the public politics and lobbing in aid policy formulation, but also into the internal politics of principal-agent interaction, an essential component in the analysis of China and emerging donors.
Domestic socio-economic and political conditions are clearly taken into consideration when foreign aid policies and priorities are devised. These and other publications contained in this bibliography should give insights into the nature of the domestic political forces that shape foreign aid, and how these interact with international circumstances to formulate aid policies. Similar studies on the nature of the domestic political forces, as most comprehensively formulated by Lancaster (2007a), in China and other (re-)emerging donors will also provide understandings into the possible changes in international foreign policy and foreign aid system.
Motivations for Foreign Aid
Related to the analysis of the influence of domestic political forces on foreign aid is the analysis of the motivations for providing foreign aid. The analysis of the motivations for (bilateral) foreign aid also includes analysis of government executive objectives and geo-strategic concerns. As is evidenced in, for example, Stokke (1989), Lancaster (2007a), Pratt (1989), and Hook (1995, 1996), foreign aid is deployed for a number of reasons and in pursuit of a number of goals. Whether it be to present an image in the international community of generous nation or to appease commercial interest groups domestically, whether it be for humanitarian and moral reasons or in the interests of national security and regional dominance, whether it be to encourage the recipient nation to adopt more democratic forms of government and respect human rights or stimulate regime change, foreign aid is always deployed for a reason or a mixture of reasons. This bibliography contains a number of publications which present and analyze the different motivations, and combinations of motivations, for aid and various aid allocation priorities.
An early analysis of the donor interest5 and recipient needs models of donor aid provision motivation was conducted by Maizels and Nissanke (1984). They find that while aid from multilateral institutions is provided on a recipients’ needs basis, bilateral aid from different donors is provided to greater or lesser degrees in support of their own political, economic and security interests (ibid.). In the periods they studied the authors find that there were shifts in the relative emphasis on donor interest in aid allocation, with trends towards more consideration for recipient needs during the early and mid-1970s, with a reversal of these trends in the latter half of the decade (ibid.). The authors attribute this trend to shifts in bilateral aid budgets during the 1970s away from donor interest, and an increased emphasis on multilateral sources (ibid.). Maizels and Nissanke state that the reversal of this trend is explained by two factors. Firstly, donor contributions to multilateral organizations were cut during the 1970s (ibid.). Secondly, a number of donors, most notably the US, have been more overtly using bilateral aid as a foreign policy instrument, or tying their aid allocations to their export orders (ibid.).
A later study by Berthélemy (2005) also concerning the donor interest and recipient needs models of donor aid provision motivation confirms Maizels and Nissanke’s findings that donor interests take precedence in the aid allocations of certain nations. He finds that while most donors provide at least target some of their aid to their most significant trading partners, they do so to varying degrees, and most provide at least at part of their aid to the neediest recipients (ibid.). Furthermore, Berthélemy (2005) indicates that on average aid is provided to recipients with better governance indicators, for example, the absence of violent conflict or more democratic political and economic systems (ibid.). He identifies Austria, Denmark, Ireland, Norway, and Switzerland as being more altruistic than other donors, while Australia, France, Italy, Japan and the US are more egotistic (ibid.). The Chinese government emphasizes recipient ownership and aligns its foreign aid with the national priorities of recipient governments (Davies 2007). This differs from traditional donor concepts of ownership and alignment which emphasize broad based participation (ibid.). Regardless of which concept of ownership and alignment is taken, the above mentioned approaches and findings of Maizels and Nissanke (1984) and Berthélemy (005) concerning the recipient needs and donor interest models provide useful measures against which to evaluate the foreign aid practices of China and other emerging donors.
Through a comparative analysis of the foreign aid policies of the US, France, Japan and Sweden Hook (1995) finds that there is a strong relationship between national interest and foreign aid. Additionally, he compares performances of these countries to the humanitarian objectives institutionalized in the OECD-DAC, of which all are members. He concludes that US foreign aid policy is dominated by national security concerns, while France is concerned more with maintaining colonial relationships and influence, Sweden provides most of its aid (80%) to recipients with Marxist or socialist economies similar to its own domestic world views, and Japan’s foreign aid policy is driven more by commercial interests (ibid.). Hook argues that Japan’s security interests are protected by America, Sweden is neutral, and France has security agreements with la Francophonie therefore these three countries had little need for security considerations in their foreign aid policies (ibid.). Hook draws on Holsti’s typology to categorize the roles these donors thus play in the international system, identifying France as an “active independent,” Japan as a “regional-subsystem collaborator,” Sweden as a “mediator,” and the US as a “bloc leader” (Hook 1995: 156). Hook further analyses the differing influences of the domestic politics in the nations under study, on their foreign aid policies. He finds that in the US domestic politics are very important because of the lack of public support for foreign aid, while Sweden enjoyed high levels of public support as their aid policies project their own social values and their political system is one based on the principle of consensus (ibid.). Furthermore, although there were also relatively high levels of support for foreign aid in France and Japan, the domestic political forces had little influence over policy formulation due to the political distance between the executive and the general public (ibid.). Lancaster (2007a) provides similar conclusions concerning the influence of domestic political forces in France, Japan and the US.
Sogge (2002) dedicates a large part of his book to analyzing the nature of the act of foreign aid provisio. He identifies in the foreign aid relationship inseparable acts of giving and taking (ibid.). While also noting the commercial, strategic and humanitarian motives of aid, Sogge states that donor nations also benefit from the brain drain and capital flight from the South to the North, Northern trade barriers and dumping in the South (ibid.). He concludes that foreign aid is not deployed in proportion to the levels of poverty of the recipient, and these insignificant levels of aid flows should be seen in the context of huge flows from poor to rich (Sogge 2002: 36). Sogge’s study raises our awareness of the less immediate effects of foreign aid provision. In later chapters he takes a closer look at the structures and institutions of the aid system to understand how they enable the perpetuation of the give and take relationship of foreign aid and what effect this has on aid policies. Sogge’s analysis of the North-South relationship, provides a useful framework within which to conduct an analysis of the South-South cooperation relationship of China and emerging donors. Whether the aid flows to and from recipients in the (poorer) South – (more) developed South relationship, when taken beyond the narrow definition of financial aid flows, are similarly disproportionate needs to be investigated.
In the same vein of the recognition of the interdependent relationship between the global North and the South, Cassen et al (1982) analyze the terms in which it is in the interests of the North and South promote and develop their interdependence. They state that there is no clear or simple set of conclusions which emerges from their study (ibid.). The authors argue that the interests and concerns vary both within and across developed nations, creating a complexity which they find difficult to summarize (ibid.). One general characteristic that they are able to identify is the absence of any effort in the North to construct a new form of interdependence or North-South interdependence on different terms (ibid.). Cassen et al argue that economic interactions among states of the North are considered to be real economic issues, while those between the North and the South are regarded as political diplomacy (ibid.). They propose that the findings from their case studies show that in actual fact the Third World is of economic importance, there are areas of mutual interest that can be pursued to stimulate global economic activity, and structural adjustments facing the North with regard to energy, trade and finance, and food production have given it greater incentives to engage in new forms of economic relations with the South (ibid.). However, Cassen et al also state that they see little evidence of economic gain from relations with the poorest developing nations, arguing that continued relations with these states should be based on notions of common humanity, poverty eradication and other humanitarian grounds and not on arguments of economic self-interest used to garner domestic political support (ibid.). Additionally, the authors find evidence of class stratification and class consciousness among nations, preventing the rich nations of the North entering alliances with groups of Third World countries (ibid.). Cassen et al conclude by questioning the ability of world order at the time of study to provide a truly equitable interdependent relationship in which Third World needs are truly taken into consideration (ibid.). The observations and conclusions of Cassen et al’s study provide an impetus for analyzing the strengthening South-South relationship, especially with consideration as to how this will affect the international political and economic order and whether or not this has the potential of initiating the process of establishing a more equitable world order, or whether it will perpetuate a world order of dominators and dominated where a number the players have merely changed roles.
Johansson (2011) investigates the determinants of bilateral donor grant aid. She notes that the grant component of bilateral aid has been increasing over the past decades, reaching as high as 97% of bilateral aid in 2005. However, she finds that the grant-concessional loan ratio for bilateral aid varies across different recipients (Johansson 2011). Johansson argues that this variation is partly explained by recipient needs as the grant component for poorer countries is higher between 1975 and 2005, however, she finds no evidence that more indebted countries receive a higher grant component (ibid.). In a related analysis, Chauvin and Kraay (2007) examine the determinants of debt relief allocation across 62 low-income countries. Their findings are similar to those of Johansson as more indebted countries are not much more likely to receive debt relief, however, larger countries are more likely to receive debt relief, especially from multilateral creditors (ibid.). These findings indicate that the relief of debt is not necessarily the main motivation for provision of debt relief (ibid.).
In his analysis of the determinants of debt forgiveness Neumayer (2002) finds that one powerful determinant is the recipient’s need for debt forgiveness, while political interests, excluding US military interests, are not significantly influential in the allocation debt forgiveness. However, he also indicates that good governance in general is not a clear determinant for debt forgiveness, rather a number of aspects of good governance are seen to have a greater influence than others, though the influence is still modest (ibid.). These aspects include: respect for democratic rights; accountability of the recipient government; and the extent to which the recipient government does not impose burdens of businesses through burdensome economic policies. He concludes that debt forgiveness has not often been used to reward good governance (ibid.).
The above discussions on the determinants of debt relief, and grant-concessional loan ratios are particularly relevant to emerging donors. There are fears that the emergence of new creditors such as China and India, will endanger the debt sustainability efforts of traditional donors (see for example AFRODAD 2008; Dahle Huse & Muyakwa 2007). China has granted debt relief and debt reductions to a number of developing countries (AFRODAD 2007; Davies 2007; McCormick 2008; MoFAPRC 2006), as has India (McCormick 2008). Investigations into the determinants of these debt relief and debt reduction policies, as well as the grant-concessional loan ratio determinants, of China and other emerging donors should provide fruitful comparisons to the determinants of similar traditional donor policies.
Arguably one of the more seminal papers on the effects of donor motivations for aid on aid effectiveness is that of Alesina and Dollar (2000). They analyzed the different motivations for aid of a number of countries, finding that while US and Nordic countries targeted poverty, democracy, and openness, with the US placing an emphasis on the Middle East, France was more concerned with former colonies and not with democracy or poverty, and Japan was more concerned with investment and trade relationships (ibid.). The authors conclude that the patterns of aid flows from donor nations are one the reasons for the only partial success of foreign aid in promoting growth and reducing poverty (Alesina & Dollar 2000). The influence of donor motivation for providing foreign aid on aid effectiveness is a theme that permeates much of the literature on the politics of foreign aid provision (see for example Bearce & Tirone 2009, Burnside & Dollar 2000 and 2004, Kilby & Dreher 2009 and McGillivray 2003, 2004). In light of the above finding that the patterns of aid flows from traditional donors are responsible for the only partial success of foreign aid in promoting economic growth and reducing poverty, it is pertinent that the patterns of aid flows from emerging donors such as China and India need to be evaluated and considered in comparison to those of traditional donors. This should provide indications of similarities and differences that will help to highlight areas that need particular attention in order to discovers mechanisms that will truly help to promote economic growth and reduce poverty in recipient countries.