The Roles of Aid in Politics

Putting China in Perspective

An Annotated Bibliography
Ward Warmerdam with Arjan de Haan ebruary !"##

Abstract $nternational development cooperation is% one again% under pressure& 'any 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 si*ty 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 ta,e% and it highlights possible methods and theoretical lenses through which emerging economies) foreign relations with other developing countries could be analy-ed&

Introduction The perceived failure of aid promulgated in the popular media% the e*pected failure of many aid recipient nations to attain their 'illennium .evelopment /oals% the apparent failure of the military and development missions in Afghanistan and $ra0 to 0uell terrorism and bring about socio1economic development% and the deepening global recession tightening national budgets have caused many governments to re1 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 e*penditures in light of their own nation)s struggling economies and welfare systems% with some% in contradiction to 23C. best practices% advocating for development assistance programs that also benefit the donor nation)s economies& The fiscal 0uestioning of foreign aid has further led to the 0uestioning of aid)s political roles and its value within and benefits to national governmental framewor,s% calling for it to justify its continued e*istence and its budgetary demands& urthermore% the increasingly prominent role of emerging donors such as China and $ndia has provided an altered international political situation in the conte*t of which traditional donor governments must re1evaluate their foreign policy and foreign aid strategies 4Broadman !""56& The 4re16emergence of such donors could provide new opportunities for cooperation with traditional donors and improved insights into processes and methods through which to stimulate socio1 economic development% in light of 7outh17outh cooperation 4e&g& Br8utigam !""9: de Haan !""9% !"#": .ollar !"";: /ill et al !""5: $27CPRC !""<: Ravallion !"";: Tj=nneland et !"">6& 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 43isenman and ?urlant-ic, !"">6& The 4re16emergence of China as donor and the increasingly global reach of its economic relations have often been met with a certain degree of suspicion 4noted by e&g& Br8utigam @ Tang !""9: Br8utigam !""96& .uring the Cold War% much of China)s relations with other developing countries were viewed in the conte*t of the global ideological battle and the Communist geo1strategy for world domination 4Blac, #9>;: Ai !""5: 'ush,at #95!6& However% post1Cold War post13conomic Reform and 2pening Bp% China)s foreign policy and foreign aid strategies have mar,edly changed 4Ai !""56% and should be studied as such in light of the altered global and domestic conte*ts& $t 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 e*ploratory first step in this process& $t draws together observations and conclusions from the realms of development studies% political science% international relations and economics% written over the last si*ty years% concerning the roles of foreign aid in politics& This time period was chosen as it sawC the birth of the modern incarnation of foreign aid: post1war reconstruction in the centers of pre1war wealth and power: former colonies gaining their independence: the geo1strategic ideological battle of the Cold War: the collapse not only of the second largest superpower of the time but also of the socio1political and economic framewor, 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

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within which power struggles could be mediated: the establishment of multilateral intergovernmental organi-ations such as the BD% the World Ban, and $' % and regional organi-ations li,e the 3B: 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 ta,e and highlight possible methods and theoretical lenses through which a more thorough investigation in China)s foreign relations with other developing countries could be analy-ed&

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& oreign aid policies are% li,e domestic and foreign policies% formulated in consideration of domestic political realities and the conte*t international circumstances& This means that as domestic political situations change and the international conte*t changes% foreign aid policies are reformulated to adapt to the new set of conditions& There are a number of factors within domestic political conte*ts that can influence the ways in which foreign aid policies are formulated and reformulated& Aancaster 4!""5aC #;6 calls these the domestic political forces which she defines as falling into four categoriesC Ideas: Aancaster argues that the most fundamental EideasF shaping aid are EworldviewsF% the values shared by a given society based on their culture% religion andGor ideology& These worldviews are the origins of the norms and principled beliefs of a society& Political institutions: According to Aancaster these form the Erules of the political gamesF 4!""5aC #;6& 7he analy-es the electoral rules% role of legislatures% role of local governments and semi1public entities% the political system 4parliamentary and presidential6 and the effects these have on shaping the purposes of foreign aid& Interests: These% she argues% broadly fall into three different groups% namelyC #6 commercial interest groups% !6 D/2s and public interest groups% H6 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&

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7he argues that the organi-ation of aid has a strong influence on the purposes of aid& Aancaster argues that as the international situation changes% and the domestic political forces react% purposes of aid change as well 4ibid&6& 7he 4!""5a6 states that the traditional purposes of foreign aid includeC diplomatic% developmental% commercial% cultural% and aid for humanitarian relief& 7he adds that more recent purposes of foreign aid includeC promoting economic and social transitions% promoting democracy% addressing global issues 4such as the environment and H$IGA$.76% and mitigating and managing post1conflict transitions 4ibid&6& The current authors believe that the interaction of these domestic political forces can be represented as depicted in figure # belowC

Ideas

Intere sts

Institutions

Organizat ion

Figure 1. Interaction of Domestic Political Forces, based on Lancaster (2007a).

$n her compilation of cases studies Aancaster analy-es the B7% Japanese% rench% /erman% and .anish models of foreign aid policy determination using the above described framewor,& Her findings suggest that foreign aid can only be understood through the lenses of both constructivism and realism 4ibid&6& 7he 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 less1well1off states has become a widely unchallenged norm 4ibid&6& Aancaster attributes this in part to the establishment of a political constituenc for de!elopment aid in most donor countries% both inside and outside of the government 4ibid&6& 7he states that outside the government D/2s grew in number% si-e and influence% while inside many governments aid agencies were created with increasing budgets and staff si-es along with a progressive strengthening of professional capacities% and programs to inform the general public about development issues 4ibid&6& Aancaster cites the Japanese and rench cases as proof of the influence of the domestic constituencies in guiding foreign aid towards its increased use for de!elopment purposes% as in both these countries% such constituencies are wea, or lac,ed access% and therefore the de!elopment purpose of their aid allocation is wea,est 4ibid&6& The author finds that domestic constituencies also increasingly too, the role of monitoring government aid for development purposes% complementing international pressures from multilateral organi-ations such as the 23C.1.AC% the World Ban,% and BD agencies% promoting

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the use of aid for development purposes 4ibid&6& $nterestingly% Aancaster notes that acceptance of the aid1for1development norm is dependent on whether the aid1 giving nation)s socio1economic condition is sufficiently healthy that foreign aid allocations are not seen to be sacrificing the needs of the poor at home 4ibid&6& urthermore% she adds that its acceptance is also dependent on the perceived effectiveness of government aid allocated for development purposes 4ibid&6& $n 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& Aancaster)s broad analytical framewor, captures many of the aspects concerning the roles of aid in politics as discussed below& These authors believe that the figure below% based on Aancaster)s framewor,% provides a simplified yet ade0uate representation of the interaction of domestic political forces and their further interaction with other members of the international systemC
Foreign Polity Ide as
Interest s

Foreign Polity Ide as

Interest s

Organization

Institutions

Organization

Institutions

Domestic Polity Ide Interest s as

Organization

Institutions

Foreign Polity Ide as

Interest s

Foreign Polity Ide as

Interest s

Organization

Institutions

Organization

Institutions

Figure 2. "implified representation of t#e interaction bet$een domestic and ot#er members of t#e international s stem, based on Lancaster (2007a).

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/oldstein and ?eohane 4ed&6 4#99H6 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 categori-e ideas as beingC world views% principled beliefs% and causal beliefs 4ibid&6& The authors define principled beliefs as consisting of the normative ideas used to determine right from wrong 4/oldstein @ ?eohane #99HC 96& They further define causal beliefs as beliefs concerning cause1effect relationship% based on the shared consensus of recogni-ed elites 4/oldstein @ ?eohane #99HC #"6& /oldstein and ?eohane argue that principled or causal beliefs affect policy formulation when these have become ingrained in political institutions and provide (road1maps) to assist actors in policy formulation in strategic situations where there is no uni0ue e0uilibrium 4ibid&6& They conclude that it is the combination of interests and ideas that has causal weight in the e*planation of actions& $n a similar vein Cingranelli 4#99H6 analy-es the effects of different moral positions on the relations of the B7 with the Third World through an historical analysis& He states that foreign policy formulation in the B7 is guided by a political culture composed of the values ofC individualism% capitalism% civilian control of the government% rule of law% political e0uality and democracy 4ibid&6& 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 4ibid&6& He categori-es these positions asC nationalist% e*ceptionalist% progressive% and radically progressive% although the latter position has less of a voice due to its similarity to the 'ar*ist moral position& He also analy-es 'ar*ism as a moral position ta,en 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 4ibid&6& Cingranelli defines these positions as shown in the table below% and analy-es how these positions have affected B7 relations with the Third World and other wea,er nations throughout B7 history until the Reagan and Bush senior administrations& He concludes that there has been a general trend towards the Progressi!e moral position% although this has been gradual with regular fluctuations towards the nationalist position 4ibid&6&
Leaders Should Be Leaders Should Promote: Dational $deals Bniversal $deals Their 2wn Citi-ens %ationalist Progressi!e eld !es"onsible to: The Community beyond $nternational Borders &'ceptionalist (adical Progressi!e

Table #& 'oral positions regarding foreign policy as defined by Cingranelli 4#99HC >6

Cingranelli finds that B7 policyma,ers% especially after the 7econd World War% have increasingly recogni-ed the importance of universal values and their duties towards people outside their borders 4ibid&6& He identifies these universal values% with relevance to foreign policy% asC
4#6 K7Lelf1determination or autonomy% 4!6 nonintervention into the affairs of other states e*cept under e*traordinary circumstances% 4H6 the rejection of certain means no matter how worthy the ends% 4M6 social% political% and economic justice% 4<6 the e*istence of 4and obligation to protect6 universal human rights 4as those rights are

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defined in international agreements% and 4>6 a commitment to multilateral as opposed to unilateral action N 4Cingranelli #99HC 51;6&

Cingranelli argues that this trend towards a more Progressive moral position is driven by institutional changes in foreign policy ma,ing structures and processes initiated by Progressive administrations% the Cold War rivalry% the altered role of the B7 in the international structure and the shifts in )merican values 4ibid&6& 7to,,e 4#9;96 also describes how aid policies are formulated through the interaction of the e*ternal environment with a country)s domestic environment% norms% interests and traditions& His compilation of analyses regarding the foreign aid policies of five Western middle powers# see,s to identify the e*tent to which different outcomes of foreign aid policy formulation can be e*plained with reference to the basic values and ideologies predominant in the nations under analysis% which% for the nations in 0uestion% he defined as being generally varieties of #umane internationalism 4ibid&6& $n the conte*t of foreign aid policy 7to,,e argues #umane internationalism impliesC the recognition of the responsibility of developed nations to assist the Third World% a belief that a more *ust world is in the long1term interests of developed countries% and an understanding that this is not in the disinterest of their own national economic and social welfare policies& 7to,,e analy-es 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 4ibid&6& Liberal internationalism% according to 7to,,e)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 self1interest in the short1 and long1term 4ibid&6& Aiberal internationalism% he states% recogni-es a responsibility towards the 7outh and aims for economic growth there% through see,ing to promote common interests between rich and poor countries 4ibid&6& 7to,,e argues that this is motivated by the humanitarian aspects of humane internationalism while recogni-ing the opportunities for both the Dorth and 7outh in integrating the Third World into the Western mar,et economy 4ibid&6& Aiberal internationalism% he notes% is further characteri-ed by a general objection to state and interstate intervention% as well as procurement tying% rather it favors the mobili-ation of the private sector in development efforts and the use of 2.A to support this% in addition to favoring multilateral agencies which practice open bidding 4ibid&6& 7to,,e)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&! Pratt 4#9;96 similarly conducted an analysis of #umane internationalism in four Western middle powers% through a compilation of country cases studies& H He identifies three reasons for the sensitivity of these middle powers to the development needs and aspirations of the A.Cs% although none% bar the Detherlands%M had any direct ties to them& These reasons areC #6 the internationalist orientation of their policies: !6 their responsiveness to cosmopolitan values% which
# !

Canada% .enmar,% the Detherlands% Dorway and 7weden& 7ee Table ! for further descriptions of the different forms of internationalism as defined by 7to,,e 4#9;96& H Canada% the Detherlands% Dorway and 7weden&

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he argues stems from an e*tension 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: H6 the political considerations that caused them to attach greater importance to their relations with the global 7outh% such as the domestic political gains and the favorable consideration of recipients concerning other international political issues 4ibid&6& Pratt concludes% however% that the efforts of these middle powers to create a more e0uitable world have ebbed slightly% since #9;#% in the face of an unfavorable political and economic climate internationally% the stronger influence of national loyalties compared to global responsibilities% and the lac, of cohesiveness% coordination and consistency in their efforts& Pratt)s conclusions provide part of the e*planation as to why the current international order can still not be described as an e0uitable world order& Devertheless% 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 loo,ed more specifically at certain aspects of domestic politics which influence foreign aid policy& ThOrien and DoPl 4!"""6% for e*ample% loo, 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 ma,e its own particular concepts of social justice central to the political debates of their nation 4ThOrien @ DoPl !"""6& The centrality of these conceptions of social justice in political debates% the authors argue% shapes the formulation of foreign aid policies and priorities 4ibid&6& Additionally% ThOrien and DoPl show that social1democratic parties have an influence on levels of development assistance% though the effects of this are only apparent in the long1term 4ibid&6& 'oreover% alongside the influence of political parties on foreign aid e*penditures% the authors also identify the significant roles played by welfare institutions and social spending in determining foreign aid spending 4ibid&6& These findings reflect those from their earlier study 4DoPl @ ThOrien #99<6% which proposes that the institutionali-ation 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 institutionali-ed welfare principles at the domestic level are more li,ely 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 e*tent to which socialist welfare principles are institutionali-ed 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& ThOrien 4!""!6 has further argued that evolution of foreign aid is the result of an ongoing conflict between the political Right and Aeft regarding aid policies& This conflict% he argues% is based on the relative importance each attaches to the issues
M

The Detherlands has direct ties to a number of developing nations due to its colonial heritage&

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of cost1benefit analysis and moral principles& According to ThOrien the Right is seen to be more concerned with the results of the former while the Aeft is more concerned with the latter 4ibid&6& 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 4ibid&6& The author argues that these concerns have been reflected in the introduction of new administrative practices in donor countries that increase accountability and monitor 0uality in the form of new (results1based) management systems 4ibid&6& $n contrast% ThOrien adds% the Aeft believes that aid to poor countries is a moral obligation% it argues that the benefits are larger than the costs% and it is concerned about inade0uate levels of aid 4ibid&6& As ThOrien and DoPl noted above% the Aeft)s convictions on foreign aid are based on the similarities it perceives between the domestic and international order% believing that international aid is an e*tension of the responsibilities of the domestic welfare state 4ibid&6& ThOrien states that the Aeft argues that mar,et mechanisms are incapable of achieving the optimal allocation of resources% thus state intervention is necessary to protect the poorest and most vulnerable 4ibid&6& ThOrien states that the Aeft holds the belief that foreign aid and development cooperation have been responsible% to a large e*tent% for the socio1economic developments in the Third World% such as increased health inde*es% reduced poverty% improved infrastructure% and the fall in birth rates 4ibid&6& ThOrien further argues that it is these divergent concepts% concerns and arguments that have developed the international and domestic aid regimes current today 4ibid&6& ThOrien)s findings describe the evolution of foreign aid both domestically in the countries included in his study% and to some e*tent within the international system& Bnderstanding the political debates leading to the evolution of foreign aid in China and other emerging donors would be useful for predicting future trends of foreign aid as shaped by these new donors& lec, and ?ilby 4!""#6 have studied the relationship between the allocation of B7A$. contracts across different congressional districts and voting on foreign aid policies in B7 Congress& Although B7A$. activities do provide direct economic benefits to most states in the B7% lec, and ?ilby find that the level of contract spending is not significantly related to the support for foreign aid by a representative% or other political factors 4ibid&6& The authors find no evidence that B7A$. manipulates contract allocation in order to gain political support 4ibid&6& Their findings also suggest that the level of aid contract spending only had a marginal impact on representatives) support for foreign aid 4ibid&6& lec, and ?ilby 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 B7 4ibid&6& They conclude that this appeal to commercial interests in the post1Cold War period% though a natural substitute for the ideological motivation% is unli,ely to garner the desired levels of political support and increased funding 4ibid&6& 'ilner and Tingley 4!"#"6 analy-e whether there are any systematic political economy factors which shape foreign aid policies& They find that domestic politics and the distributional conse0uences of aid have an influence on foreign aid 4ibid&6& Dotable factors influencing the support for aid% according to their findings% are the economic characteristics and the right1left ideological disposition of voting districts 4ibid&6& The authors find that for economic aid votes which have domestic distributional conse0uences% districts which are better endowed with capital are

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more supportive of economic aid% while those better endowed with labor are less supportive 4ibid&6& Additionally% 'ilner and Tingley 4!"#"6 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 li,ely to vote in favor of economic aid& 'oreover% the authors also identify the sensitivity of legislators towards the pressures of organi-ed interest groups 4ibid&6& They find that campaign contributions by organi-ed groups may account for legislator voting behavior that deviates from their dominant party ideology 4ibid&6& 'ilner and Tingley further argue that although the foreign policy concerns of the e*ecutive 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 organi-ed pressure groups within their constituency 4ibid&6& $n a separate article dealing with the effects of the economic ideology of B7 governments on foreign aid Tingley 4!"#"6 finds that economic ideology plays in important role in determining aid allocations& He suggests that progressively more conservative governments commit progressively less of their /.P to foreign aid efforts than more liberal governments 4ibid&6& This% Tingley states% is especially the case with aid allocations to poorer countries and multilateral organi-ations% which he purports indicates that conservative governments attach higher importance to trade and geopolitics than development assistance 4ibid&6& These findings reflect those of a number of studies mentioned above% such as that of ThOrien 4!"""6& An even deeper loo, into the wor,ings of foreign aid appropriations procedures was ta,en by $rwin 4!"""6& His findings provide a deeper understanding of the importance of person1to1person negotiations and personal favors% consensus building% issues coalitions% ,ey legislative actors% and public1private issue management& $rwin 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 4ibid&6& Chong and /radstein 4!"";6 analy-e the factors which influence popular support for foreign aid based on World Ialues 7urveys& $mportantly% they find that satisfaction with own government performance and individual incomes has a positive influence on the support for foreign aid 4ibid&6& Additionally% Chong and /radstein find that richer more egalitarian governments provide higher levels of aid% while inefficient governments provide lower levels 4ibid&6& inally% the authors argue that whereas recipients) economic conditions do not affect aid levels% their levels of corruption% ine0uality% political leaning and ta* systems do 4ibid&6& Chong and /radstein)s 4!"";6 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& Delson 4#9>;6 gives a comprehensive insight into the aid allocation and program planning procedures in the B7 during the Cold War period& Although his study was performed around M" years ago% these procedures and considerations

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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& Delson identifies the steps asC identifying B7 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 4ibid&6& A similar in1depth study into the wor,ings of the domestic politics in the B7 in the formulation of foreign policy and foreign aid policies% was conducted by 2)Aeary 4#9>56& He analy-es the effects of the American political culture and political opinion% the influence of Congress% and the situation of the e*ecutive on foreign aid policies& He concludes that official government commitment is not sufficient for the successful conduct of policy 4ibid6& 2)Aeary emphasi-es that public support is vital for the success of aid programs% although% he argues% this often seems to be lac,ing in the B7% and many government foreign policyma,ers fre0uently believe that B7 public opinion wor,s against them 4ibid&6& The e*tent 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& Bnderstanding 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& $n conjunction with a deeper understanding of the evolving values and beliefs of these publics resulting from their own socio1economic development% ,nowledge on the e*tent 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 4#9;;6 applies a Etwo1level gamesF approach which recogni-es the efforts of central decision ma,ers to simultaneously reconcile both domestic and international imperatives in order to analy-e the lin,ages between domestic politics and diplomacy& His findings highlight a number of significant features of these lin,ages% 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 4ibid&6& Putnam)s Etwo1level gamesF approach and his findings provide useful tools% in addition to those of Chong and /radstein% and 2)Aeary% with which to analy-e in more detail the domestic politics of foreign aid policies in China and other emerging donors& 'urshed 4!""H6 analy-es the strategic interaction in aid donor processes through principal1agent models and through endogenous policy determination& $n his analysis legislators are considered as t#e principals and the aid agencies e*ecuting the wishes of the principals are considered t#e agents& His findings suggest that agents) motivation is improved when their efforts are seen to be ta,en into account by the principals 4ibid&6& urthermore% 'urshed 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 harmoni-ed 4ibid&6& The author also notes the influence of powerful lobbies on aid policy 4ibid&6& 'urshed)s analysis provides insights not just into the public politics and lobbing in aid policy formulation% but also into the internal politics of principal1agent interaction% an essential component in the analysis of China and emerging donors&

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.omestic socio1economic and political conditions are clearly ta,en 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& 7imilar studies on the nature of the domestic political forces% as most comprehensively formulated by Aancaster 4!""5a6% in China and other 4re16emerging donors will also provide understandings into the possible changes in international foreign policy and foreign aid system&

#oti$ations 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 4bilateral6 foreign aid also includes analysis of government e*ecutive objectives and geo1strategic concerns& As is evidenced in% for e*ample% 7to,,e 4#9;96% Aancaster 4!""5a6% Pratt 4#9;96% and Hoo, 4#99<% #99>6% 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 mi*ture of reasons& This bibliography contains a number of publications which present and analy-e the different motivations% and combinations of motivations% for aid and various aid allocation priorities& An early analysis of the donor interest < and recipient needs models of donor aid provision motivation was conducted by 'ai-els and Dissan,e 4#9;M6& 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 4ibid&6& $n 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 mid1#95"s% with a reversal of these trends in the latter half of the decade 4ibid&6& The authors attribute this trend to shifts in bilateral aid budgets during the #95"s away from donor interest% and an increased emphasis on multilateral sources 4ibid&6& 'ai-els and Dissan,e state that the reversal of this trend is e*plained by two factors& irstly% donor contributions to multilateral organi-ations were cut during the #95"s 4ibid&6& 7econdly% a number of donors% most notably the B7% have been more overtly using bilateral aid as a foreign policy instrument% or tying their aid allocations to their e*port orders 4ibid&6& A later study by BerthOlemy 4!""<6 also concerning the donor interest and recipient needs models of donor aid provision motivation confirms 'ai-els and Dissan,e)s findings that donor interests ta,e 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%
<

This includes% for e*ample% donor self1interest with regard to political% economic or national security considerations&

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and most provide at least at part of their aid to the neediest recipients 4ibid&6& urthermore% BerthOlemy 4!""<6 indicates that on average aid is provided to recipients with better governance indicators% for e*ample% the absence of violent conflict or more democratic political and economic systems 4ibid&6& He identifies Austria% .enmar,% $reland% Dorway% and 7wit-erland as being more altruistic than other donors% while Australia% rance% $taly% Japan and the B7 are more egotistic 4ibid&6& The Chinese government emphasi-es recipient ownership and aligns its foreign aid with the national priorities of recipient governments 4.avies !""56& This differs from traditional donor concepts of ownership and alignment which emphasi-e broad based participation 4ibid&6& Regardless of which concept of ownership and alignment is ta,en% the above mentioned approaches and findings of 'ai-els and Dissan,e 4#9;M6 and BerthOlemy 4""<6 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 B7% rance% Japan and 7weden Hoo, 4#99<6 finds that there is a strong relationship between national interest and foreign aid& Additionally% he compares performances of these countries to the humanitarian objectives institutionali-ed in the 23C.1.AC% of which all are members& He concludes that B7 foreign aid policy is dominated by national security concerns% while rance is concerned more with maintaining colonial relationships and influence% 7weden provides most of its aid 4;"Q6 to recipients with 'ar*ist or socialist economies similar to its own domestic world views% and Japan)s foreign aid policy is driven more by commercial interests 4ibid&6& Hoo, argues that Japan)s security interests are protected by America% 7weden is neutral% and rance has security agreements with la Francop#onie therefore these three countries had little need for security considerations in their foreign aid policies 4ibid&6& Hoo, draws on Holsti)s typology to categori-e the roles these donors thus play in the international system% identifying rance as an Eactive independent%F Japan as a Eregional1subsystem collaborator%F 7weden as a Emediator%F and the B7 as a Ebloc leaderF 4Hoo, #99<C #<>6& Hoo, further analyses the differing influences of the domestic politics in the nations under study% on their foreign aid policies& He finds that in the B7 domestic politics are very important because of the lac, of public support for foreign aid% while 7weden 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 4ibid&6& urthermore% although there were also relatively high levels of support for foreign aid in rance and Japan% the domestic political forces had little influence over policy formulation due to the political distance between the e*ecutive and the general public 4ibid&6& Aancaster 4!""5a6 provides similar conclusions concerning the influence of domestic political forces in rance% Japan and the B7& 7ogge 4!""!6 dedicates a large part of his boo, to analy-ing the nature of the act of foreign aid provisio& He identifies in the foreign aid relationship inseparable acts of giving and ta,ing 4ibid&6& While also noting the commercial% strategic and humanitarian motives of aid% 7ogge states that donor nations also benefit from the brain drain and capital flight from the 7outh to the Dorth% Dorthern trade barriers and dumping in the 7outh 4ibid&6& 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 conte*t of huge flows from poor to rich 47ogge !""!C H>6& 7ogge)s study raises our awareness of the less immediate effects of foreign aid

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provision& $n later chapters he ta,es a closer loo, at the structures and institutions of the aid system to understand how they enable the perpetuation of the give and ta,e relationship of foreign aid and what effect this has on aid policies& 7ogge)s analysis of the Dorth17outh relationship% provides a useful framewor, within which to conduct an analysis of the 7outh17outh cooperation relationship of China and emerging donors& Whether the aid flows to and from recipients in the 4poorer6 7outh + 4more6 developed 7outh relationship% when ta,en beyond the narrow definition of financial aid flows% are similarly disproportionate needs to be investigated& $n the same vein of the recognition of the interdependent relationship between the global Dorth and the 7outh% Cassen et al 4#9;!6 analy-e the terms in which it is in the interests of the Dorth and 7outh promote and develop their interdependence& They state that there is no clear or simple set of conclusions which emerges from their study 4ibid&6& The authors argue that the interests and concerns vary both within and across developed nations% creating a comple*ity which they find difficult to summari-e 4ibid&6& 2ne general characteristic that they are able to identify is the absence of any effort in the Dorth to construct a new form of interdependence or Dorth17outh interdependence on different terms 4ibid&6& Cassen et al argue that economic interactions among states of the Dorth are considered to be real economic issues% while those between the Dorth and the 7outh are regarded as political diplomac 4ibid&6& 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 Dorth 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 7outh 4ibid&6& 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 self1interest used to garner domestic political support 4ibid&6& Additionally% the authors find evidence of class stratification and class consciousness among nations% preventing the rich nations of the Dorth entering alliances with groups of Third World countries 4ibid&6& Cassen et al conclude by 0uestioning the ability of world order at the time of study to provide a truly e0uitable interdependent relationship in which Third World needs are truly ta,en into consideration 4ibid&6& The observations and conclusions of Cassen et al)s study provide an impetus for analy-ing the strengthening 7outh1 7outh 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 e0uitable world order% or whether it will perpetuate a world order of dominators and dominated where a number the players have merely changed roles& Johansson 4!"##6 investigates the determinants of bilateral donor grant aid& 7he notes that the grant component of bilateral aid has been increasing over the past decades% reaching as high as 95Q of bilateral aid in !""<& However% she finds that the grant1concessional loan ratio for bilateral aid varies across different recipients 4Johansson !"##6& Johansson argues that this variation is partly e*plained by recipient needs as the grant component for poorer countries is higher between #95< and !""<% however% she finds no evidence that more indebted countries receive a higher grant component 4ibid&6& $n a related analysis% Chauvin and ?raay

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4!""56 e*amine the determinants of debt relief allocation across >! low1income countries& Their findings are similar to those of Johansson as more indebted countries are not much more li,ely to receive debt relief% however% larger countries are more li,ely to receive debt relief% especially from multilateral creditors 4ibid&6& These findings indicate that the relief of debt is not necessarily the main motivation for provision of debt relief 4ibid&6& $n his analysis of the determinants of debt forgiveness Deumayer 4!""!6 finds that one powerful determinant is the recipient)s need for debt forgiveness% while political interests% e*cluding B7 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 4ibid&6& These aspects includeC respect for democratic rights: accountability of the recipient government: and the e*tent 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 4ibid&6& The above discussions on the determinants of debt relief% and grant1 concessional loan ratios are particularly relevant to emerging donors& There are fears that the emergence of new creditors such as China and $ndia% will endanger the debt sustainability efforts of traditional donors 4see for e*ample A R2.A. !"";: .ahle Huse @ 'uya,wa !""56& China has granted debt relief and debt reductions to a number of developing countries 4A R2.A. !""5: .avies !""5: 'cCormic, !"";: 'o APRC !"">6% as has $ndia 4'cCormic, !"";6& $nvestigations into the determinants of these debt relief and debt reduction policies% as well as the grant1concessional 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 .ollar 4!"""6& They analy-ed the different motivations for aid of a number of countries% finding that while B7 and Dordic countries targeted poverty% democracy% and openness% with the B7 placing an emphasis on the 'iddle 3ast% rance was more concerned with former colonies and not with democracy or poverty% and Japan was more concerned with investment and trade relationships 4ibid&6& 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 4Alesina @ .ollar !"""6& 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 4see for e*ample Bearce @ Tirone !""9% Burnside @ .ollar !""" and !""M% ?ilby @ .reher !""9 and 'c/illivray !""H% !""M6& $n 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 $ndia 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&

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%old &ar ' Post-%old &ar Politics of Aid Although the Cold War clearly had an influence on the nature of foreign aid relations% the strategic and security interests of aid played a greater or lesser role for different nations& Bnsurprisingly% strategic and security interests played the dominant role in B7 aid provision during this period 4Aebovic !""<6& 2ther countries% however% were more concerned with commercial interests or maintaining dominant relations with former colonies 4ibid&6& Therefore% publications on the role and motivations for aid during this period can help to highlight continuities and discontinuities in trends leading up to the present day& This bibliography contains a number of publications written during% or concerning% the Cold War period% their findings should provide a deeper understanding of the relative importance of geo1 strategic and ideological considerations for different donors in their formulation of foreign aid policies& 7chraeder et al)s 4#99;6 study of the aid flows from the B7% Japan% rance and 7weden in the final decade of the Cold War% analy-ed the influence of different foreign policy interests on foreign aid allocation& Their findings refute the altruistic rhetoric of these donors% including 7weden who is often regarded with other middle powers as being more concerned with humanitarian interests 4ibid&6 urthermore they identify the importance of the ideological posture of African recipient regimes% stating that capitalist regimes which were willing to support B7 containment policies were targeted by B7 aid 4ibid&6& 7wedish aid flows% the continue% concentrated particularly on li,e1minded progressive regimes in 7outhern Africa% while Japanese aid policyma,ers preferred capitalist regimes over 'ar*ist ones 4ibid&6& With regard to rench aid% 7chraeder et al find that ideological considerations in the form of political stance were not significant% instead rench aid was motivated by the perceived necessity to ensure the spread of rench culture 4ibid&6& 'oreover% 7chraeder et al present the emergence of trade as an important determinant for aid even for the perceived altruistic 7weden 4ibid&6& The authors argue that the importance of trade as an aid determinant emerged as increasingly vocal and influential domestic actors demanded that there be a connection between foreign aid allocation and the promotion of their national economy 4ibid&6& They cite the 23C. as stating that the trend of creating a lin,age between aid and national economy promotion was prevalent during the #9;"s 4ibid&6& 7chraeder et al further propose that with the ending of the Cold War the importance of the ideological posture of recipients will decline& However% this current author argues that the promotion of democracy as a motive for foreign aid can also be interpreted as an ideological determinant of aid provision as it is based on concept of democracy being ideologically superior to its alternatives% and as such deserves to be spread around the world& /uess 4#9;>6 ta,es a closer loo, at B7 aid provision 4including military aid6 to Aatin America% Asia and the 'iddle 3ast during the Cold War& His comprehensive and in1depth study% shows the effects of different forms of aid pac,ages to a variety of regimes in achieving their goals& /uess also analy-es the domestic political processes of foreign aid% and how these shape the formulation of aid pac,ages% including the effects of Congressional distrust of the e*ecutive and the influence of the different responsibilities of different governmental departments in the

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formulation and implementation of foreign aid 4ibid&6& /uess conducts his analysis through the Bureaucratic Role Conflict model& He argues that while foreign aid is planned and funded li,e most B7 domestic policies% it differs from these as it has both a domestic and an international component 4ibid&6& He states that foreign aid has often lac,ed its own political base due to the fact that its clients are abroad% as a result it has been moved around by conflicting pressures from all directions% most often in response to the perception of military threats or developmental needs by actors such as the .o.% 7tate .epartment% Congress or the Presidency 4ibid&6& Aid allocation decisions have not been based on field assessments as the foreign aid policy ma,ing institutions are primarily concerned with other issues 4.o. with defense: Congress with domestic policy: B7.A with agriculture% etc&6 4/uess #9;>C !<56& As such foreign aid becomes a byproduct of other policy considerations 4ibid&6& /uess describes the effects of this divergence of interests in foreign aid allocations on a number of countries in Asia% Aatin America and the 'iddle 3ast& Blac, 4#9>;6 analy-ed the foreign aid strategy of the B7 at the height of the Cold War& He investigates the political% economic% defense% and humanitarian rationales for foreign aid provision during this period& He concludes that the political rationale for the B7 is clearly the dominant one during this period of ideological battle with 7oviet and Chinese Communism 4ibid&6& He argues that Communist aid is EdifferentF from B7 aid as it is part of the Communist geo1strategy for achieving world domination 4ibid&6& Blac, finds that other countries in the E ree WorldF have similar rationales to that of the B7% though they are more limited in scope and often place a greater emphasis on trade 4ibid&6& An interesting study by /oldman 4#9>56 analy-es 7oviet foreign aid during a similar period& He concludes that 7oviet aid was provided for a number of reasons% includingC economic interests% especially during the earlier stages in postwar Communist 3urope: humanitarian motives% as the 7oviet government felt a certain sympathy for nations that had suffered under colonial and imperial rule: and political self1interest 4ibid&6& Although these motives were often mi*ed% /oldman observes that there was a general dominance% as in the B7% of the political motives 4ibid&6& .uring the Cold War 'c?inlay 4#95;6 and 'c?inlay and Aittle 4#955% #95;a% #95;b% #9596 conducted research into British% rench% /erman% and B7 aid relationships with the Third World& A comparative analysis of the findings of the separate studies is presented in 'c?inlay 4#9596& 'c?inlay relates their findings on the nature of aid relationships to the concept of imperialism in which any nation maintains direct or indirect political or economic control or dominance over another 4ibid&6& He attributes this to the structure of the international system% rather than domestic structures% in which there are high levels of competition due to a lac, of a basic normative order and collective goal formulation and actions in the international system 4ibid&6& 'c?inlay argues that this differs from the domestic orders in which there are e*tensive formal and informal regulatory framewor,s% which in turn create a basic normative order 4ibid&6& He argues that the asymmetries within the relatively unregulated international environment encourage dominant nations to promote their own interests and maintain dominance through the use of control strategies 4ibid&6& ormal and informal rules do e*ist% however% 'c?inlay argues% these are far from e*tensive% and sanctions to reinforce these are wea, 4ibid&6& The author states that although the most highly developed systems of rules% sanctions and collective goals are institutionali-ed within $ntergovernmental 2rgani-ations 4$/2s6% these only have limited resources and implementable

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sanctions 4ibid&6& The resources $/2s have% 'c?inlay observes% are dependent on contributions from donor countries% and their aid provision patterns reflect% and reinforce% the international hierarchy and prevalent cleavages and tensions 4ibid&6& The author identifies two forms of imperialism active within this essentially unmoderated international framewor, in which asymmetries encourage dominant actors to promote their own national interests and maintain dominance through the use of control strategies such as foreign aid 4ibid&6& The first form% 'c?inlay argues% is political imperialism which is driven by concern for national security% therefore control strategies are employed to enhance national security 4ibid&6& The second form identified by 'c?inlay is economic imperialism which is driven by trade and investment concerns% where control strategies are employed in order to enhance the actor)s material well1being 4ibid&6& The author concludes by emphasi-ing that there are% however% important differences among donors on which interests are promoted and how systematically and comprehensively developed the foreign policy of their aid relationship is 4'c?inlay #959C M<"6& With the increasing importance of intergovernmental organi-ations% an increasingly influential global civil society% and collective goal formulations in the forms of% for e*ample% the 'illennium .evelopment /oals% it would seem that a number of the aspects of the structure of the international system that facilitated the imperial aid relationships% have progressed into more just forms& However% the asymmetrical relationships between donors and recipients remain% and still remain a concern for those in or sympathetic to Third World countries& 'eerin, et al 4#99;6 analy-e the e*planatory models of researchers concerning the B7 foreign policy behavior during and immediately after the Cold War& They suggest that it was still too early to clearly identify the altered importance of the determinants of foreign aid such as ideological motivations% as the new international distributions of power and levels of systemic threat had not become settled yet 4ibid&6& However% the authors provide precursory evidence indicating that strategic considerations are declining while ideological goals are becoming more prominent% though they state that this evidence is not yet conclusive 4ibid&6& 'eerin, et al argue that as the B7 has not been an active participant in an international environment where there was not an all1consuming threat% therefore it lac,s e*perience in formulating foreign policy and foreign aid policy in the new international system 4ibid&6& These current authors believe that the recent /lobal War on Terror might be seen as the all1consuming threat in response to which the B7 is e*perienced in drawing up its foreign policy strategies& An earlier study by /riffin 4#99#6 attributes the proliferation of foreign aid programs to the domestic political support for aid during the Cold War& He too identifies motives other than ideological ones% such as commercial and humanitarian interests% during this period 4ibid&6& However% he states that these motives played a greater role in sustaining aid programs than in initiating them% which he attributes to ideological motives prevalent at the time 4ibid&6& He concludes by 0uestioning the future of foreign aid post1Cold War% wondering if the loss of ideological motives and the reduction of the national security threat will mean a reduction in foreign aid% thus hindering development in the Third World 4ibid&6&

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Hoo,)s 4#99>6 compilation of case studies regarding the patterns and practices of foreign aid provision during the Cold War and toward the new millennium% similarly% finds that there was a lac, of a common goal for aid donors immediately after the Cold War& However% he notes that there is a general transnational trend towards promoting sustainable development% coming out of the (two1level game) of domestic politics and the international situation 4ibid&6& He further discusses the implications of this for recipients% as well as the (development parado*) which% he argues% is the inability of the planet to sustain the development of all nations if current development patterns persist 4ibid&6& Hoo, states that most foreign aid programs were launched in the conte*t of superpower rivalry and decoloni-ation% and this conte*t provided the justification to domestic constituents for foreign aid e*penditures 4ibid&6& As many aid budgets were reduced at the end of the Cold War% Hoo, observes% plans to implement BD programs for sustainable development were cut bac, 4ibid&6& .uring this period% he continues% governments faced difficulties justifying and legitimi-ing large1scale aid e*penditures that were not directly related to their own perceived national interests in the post1Cold War period 4ibid&6& The author finds that aid flows in this immediate post1Cold War period were generally towards strategic allies of the B7% former colonies of rance and Britain% and Japanese trading partners% as well as former 7oviet bloc transitions states and highly indebted middle1income countries 4ibid&6 Hoo, observes that the political meddling of the major superpowers in the world)s poorest states during the Cold War% has fre0uently been replaced by indifference and neglect after its end 4ibid&6& He argues that recipients often have to continue to align their economic% political and security interests with wealthy donors% as they had to during the Cold War 4ibid&6& Additionally% Hoo, notes that during the early #99"s% the B7 was affected by an e*ecutive1legislative impasse due to democratic administration being opposed by a majority republican Congress% which caused a preoccupation with domestic politics that obstructed the redefinition of B7 foreign aid strategy to address the new political and economic situation created by the end of the Cold War 4ibid6& He adds that 3urope similarly became preoccupied with the domestic political priorities which emerged as the Cold War ended 4ibid&6& However% Hoo, argues% leaders of the industriali-ed world have become increasingly aware of the dangers of rising foreign debt% unrest and regional conflict resulting from socioeconomic distress% rapid population growth in A.Cs and e*haustion of finite natural resources% and have found common cause with the $ $s% 23C.% and other multilateral organi-ations concerned with aid 4ibid&6& This e*panded political economy of the aid regime% he posits% has assured its longevity% although he states that there is still a lac, coherent collective action to protect the global commons 4ibid&6& Aancaster 4!""5a6 similarly finds that there has been a general trend towards an increased use of foreign aid for development purposes& Boschini and 2lofsgRrd 4!""56 confirm /riffin)s fears% and Hoo,)s findings% in their analysis of foreign aid during and after the Cold War& After testing the argument that the reduction of aggregate aid levels was due to the end of the Cold War% they too% conclude that aid budgets were cut with the end of Cold War% although they find no clear impact on aid allocation 4ibid&6& They find that these results are consistent across the #5 donor countries panel analysis 4ibid&6& The authors also argue that countries considered to be of strategic importance receive higher levels of aid% not only during the Cold War period% but also in the #99"s 4ibid&6& However% donor specific aid allocation patterns% they observe% are more

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scattered% li,ely reflecting slight variations in their motivations 4ibid&6& Boschini and 2lofsgRrd also indicate that the (war on terrorism) could have a similar effect in increasing aggregate aid flows as the Cold War did 4ibid&6& They draw attention to increased aid commitments made by a number of rich industriali-ed nations in the global war on terror 4ibid&6& /overnment development aid and national security policy publications contained in this bibliography from% for e*ample% the Australian% .anish and American governments%> also indicate the role of foreign aid in the global war on terror& lec, and ?ilby 4!"#"6 similarly draw comparisons between the geo1political roles of aid during the Cold War and the war on terror& The authors argue that the /W2T and the Bush administration have altered many aspects of the B7 foreign policy and foreign aid policy and its emphasis 4ibid&6& They find that the B7 aid budget has increased with the war on terror% however% aid to poor countries with less immediate political importance has also increased 4ibid&6& Devertheless% the emphasis on recipient needs has decreased 4ibid&6& Additionally% lec, and ?ilby find that conservative governments provide lower levels of economic assistance than liberals% ceteris paribus 4ibid&6& They state that this demonstrates the great impact that the war on terror has had on aid given that increased levels of aid were allocated by the conservative Bush administrations 4ibid&6& Aancaster 4!"";a6% in her analysis of the Bush administration)s foreign aid policy and its renovation% similarly describes the rapid increase in aid volumes following statements by President Bush on the new security strategy% which elevated development to the same level of priority as diplomacy and defense& Aid levels reached their highest level in their history during the Bush administration% with the .epartment of .efense also playing an increasingly prominent role in development aid& Aid for diplomacy started to include fighting the /lobal War on Terror 4/W2T6 however% the Bush administration also increased levels of aid for global health 4ibid&6& Rather than giving space to more humanitarian considerations in development assistance allocation motivations in the period immediately after the Cold War% the publications mentioned above describe a reduction in aid e*penditures and a preoccupation with domestic political concerns& The world)s poorest were neglected 4Hoo, #99>6 as strategic concerns and colonial relations continued to motivate aid& urthermore% aid flows were directed away from the poor nations of little strategic importance% towards former 7oviet bloc transition states% li,ely also due to strategic and security concerns 4ibid&6& Additionally% the increased aid flows to heavily indebted middle1income countries could be seen as a means of safeguarding economic and financial investments 4ibid&6& Aancaster 4!""5a6 finds that during this period of reduced aid budgets% domestic constituencies for development aid began to campaign for the increase in aid levels and a greater focus on development& .uring this period too% an increasing number of governments desired to align their aid1giving policies with the development aid standards set by the 23C. 4ibid&6& Aancaster argues that these efforts increased in the wa,e of the 9G## and other terrorist attac,s in 3urope 4ibid&6& Devertheless it was the debate on whether or not these poor states% and fragile or failing states%
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7ee also B7A$. 4!""!6% Foreign )id in t#e %ational Interest+ Promoting Freedom, "ecurit and ,pportunit % Washington% .CC B7A$.&

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have provided safe havens for terrorism that has to a large e*tent motivated highly increased aid allocations in the /lobal War on Terror% as is evidenced by the policy statements of the Australian% .anish and B7 governments& 5 China)s foreign aid motivations li,ewise moved away from the Cold War ideological and political motivations in the post1Cold War period 4ChaponniSre !""9: Cheng @ 7hi !""9: Ai !""56& An analysis of other emerging donors might show similar trends indicating a more global shift in foreign aid allocation motivations& Doting the changes in foreign aid levels and priorities of the B7 and other Western industriali-ed states in the global war on terror% an investigation into the effects of the war or terror on the foreign aid policies of China and different emerging donors might li,ewise indicate global or simply regional trends&

Aid Allocations and Political %oalitions in the () A number of researchers have been concerned with the relationship between aid allocations and political coalitions in the BD& Alpert and Bernstein 4#95M6% Rai 4#95!% #9;"6 and Witt,opf 4#95H6 conducted their analyses of this relationship at the height of the Cold War& Although Rai)s first study concluded that more evidence was needed in the discussion of the causal relationship of foreign policy and particular voting behavior% his findings did suggest that certain aspects of B7 and 7oviet foreign policy were closely related to voting in the /eneral Assembly 4Rai #95!6& His later study observed a difference between the American and 7oviet uses of aid in relation to voting in the /eneral Assembly 4Rai #9;"6& He finds that )merican aid was effectively used as an inducement for voting behavior% even though this also varied in different time periods within the study period 4#9>515>6% whereas evidence on "o!iet aid highlights its use as a re$ard or punis#ment rather than inducement 4ibid&6& However% Rai urges caution by arguing that causality cannot be concluded from correlations& Witt,opf 4#95H6% who analy-ed the B7% the 7oviet Bnion and #! members of the BD also serving on the 23C.1.AC% similarly refrains from concluding that there is a causal relationship between aid allocations and voting behavior in the BD% however% he does find associations between the two for many donors& He states that while these associations were wea,er and differed in intensity for different donors in different periods under study% the associations between aid allocations and BD voting behavior remained consistently strong for the B7 4ibid&6& A post1Cold War study of the relationship between aid allocation and BD voting behavior conducted by Wang 4#9996 found more conclusive evidence of a causal relationship with regard to B7 aid allocation and recipient voting behavior& The author focuses the study on BD voting behavior on issues considered important to the B7 4ibid&6& He states that the B7 government has made great efforts% especially since the lin,age policy of Reagan administration% to send the signal to
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or further discussion concerning terrorism and failed states see for e*ampleC Dewman% 3dward 4!""56% EWea, 7tates% 7tate ailure% and Terrorism%F in -errorism and Political .iolence% Iol& #9% Do& M% pp& M>H1M;;: Patric,% 7tewart 4!"">6% EWea, 7tates and /lobal ThreatC act or iction%F in -#e /as#ington 0uarterl % Iol& !9% Do& !% pp& !51<H: Rice% 7usan 3& 4!""H6% EThe Dew Dational 7ecurity 7trategyC ocus on ailed 7tates%F -#e 1roo2ings Institution Polic 1rief %o. 113% Washington% .CC The Broo,ings $nstitution&

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recipient nations that B7 aid allocation levels are used as reward or punishment for voting behavior in the BD on issues deemed important to the B7 4ibid&6& Wang argues that evidence from his study suggests that the B7 has been successful in these efforts to induce voter compliance on issues important to the B7 4ibid&6& He further argues that with the end of the Cold War% the B7 is still unable to use its military might to force political compliance% and thus continues to rely on the Eeconomic statecraftF to induce political compliance 4ibid&6& urthermore% Wang indicates that as aid budgets have been reduced in recent years% the marginal utility of each dollar received by recipients has increased% thus the ability of aid to induce voter compliance has also increased 4ibid&6& The findings in the study conducted by .reher et al 4!"";6% using panel data for #MH countries from #95H1!""!% also reveal the importance attached to pursuing voter compliance in BD /eneral Assembly through B7 bilateral aid allocations& When disaggregating the effectiveness of various forms of foreign aid in promoting voter compliance they indicate that general budget support% grants and untied aid are the most effective forms 4ibid&6& 2ther forms of aid% they continue% are generally preferred for other objectives 4ibid&6& They argue that project aid and concessional loans may be preferred forms to encourage the productive use of aid in recipient countries% especially in countries where local governance is not strong 4ibid&6& .reher et al add that tied aid might be favored in cases where the commercial interests of the donor are more prominent than commercial interests 4ibid&6& The authors conclude that there is strong evidence to suggest that B7 aid allocations have bought voter compliance 4ibid&6& ?u-iem,o and Wer,er 4!"">6 further analy-e B7 aid allocations to nonpermanent members of the BD 7ecurity Council& They find that developing countries serving on the BD 7ecurity Council receive% on average% an additional T#> million in aid% while in important time periods this figure can rise to as much as TM< million 4ibid&6& The authors state that rotating members of the 7ecurity Council receive at least <9 percent more B7 aid when they serve on the Council% having reached a #5" percent increase during important voting periods 4ibid&6& $n their analysis of post1Cold War voting patterns in the BD /eneral Assembly% ?im and Russett 4#99>6 observe that voting alignment is no longer along the 3ast1West split current in the bipolar international order of the Cold War% rather% they assert% it is now characteri-ed by a Dorth17outh split& The authors argue that voting alignments are li,ely to be influenced by varying notions of self1 determination and economic development% reflecting differences between rich and poor countries 4ibid&6& They argue that although the importance of Dorth17outh issues is not new% these issues were subordinated to 3ast1West concerns during the Cold War 4ibid&6 ?im and Russett 4#99>6 also note that due to the composition of the 7ecurity Council permanent membership% namely the dominance of Western industriali-ed powers% and their voting patterns and alignments% members of the 7ecurity Council have been able to hold it to a different course than the /eneral Assembly& $n a similar study of Cold War and post1Cold War voting patterns in the BD /eneral Assembly% Ioeten 4!"""6 rejects the structuralist hypothesis of ?im and Russett 4#99>6 who posited that a Dorth17outh voting alignment has superseded the Cold War 3ast1West alignment& He argues that much of the 3ast1West alignment of

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the Cold War has been carried over in the post1Cold War period& Ioeten presents a (7tability Hypothesis) in which voting alignment is motivated by security concerns as each state is seen as a potential threat 4ibid&6& He maintains that besides the fact that a number of former 7oviet bloc countries now align their security concerns with the West and a number of major 3uropean countries have shifted their alignment slightly away from the B7 in order to balance B7 power% voting behavior in the BD /eneral Assembly is still very similar to that of the Cold War period 4ibid&6& Ioeten% however% does observe the emergence of a counter hegemonic voting bloc consisting of China% $ndia and some other countries 4such as $ran% $ra0% Aibya and Dorth ?orea6 challenging the hegemony of the B7 and its Western allies 4ibid&6& urthermore% he finds that more democratic countries tend to vote more in line with the EWestF on issues concerning political and economic liberalism% though he adds that evidence of the influence of regime type on general voting behavior is inconclusive 4ibid&6& inally% though he rejects the hypothesis that the post1Cold War global conflict is characteri-ed by a Eclash of civili-ationsF% Ioeten does find some evidence of divisions between Western and non1Western countries) voting behavior% and also between non1Western% Asian% African and 'uslim countries 4ibid&6& /iven the above findings on the correlation between foreign aid allocations and BD voting behavior% $ndia)s aspirations for permanent membership on the BD 7ecurity Council%; and the fact that China)s BD 7ecurity Council membership can be attributed% at least in part% to its foreign aid efforts in the #9<"s and #9>"s 4Ai !""56% investigation in into the correlations between foreign aid allocations of China and other emerging donors and BD 4both 7ecurity Council and /eneral Assembly6 voting behavior in vital in order to highlight foreign policy strategies with regard to pursuit of BD voting objectives& This is even more pertinent given the observations of ?im and Russett 4#99>6 on the Dorth17outh alignment% and the 7outh17outh cooperation of emerging donors strengthening these trends% as well as Ioeten)s 4!"""6 finding indicating the emergence of a counter hegemonic bloc% composed of China% $ndia and a number of other states% to challenge the hegemony of the B7 and its Western allies&

Donor Influence on International Financial Institutions Another important aspect of foreign aid policy is the influence a number of donor countries e*ert on the $nternational inancial $nstitutions such as the $' % the World Ban, and regional development ban,s& As these institutions play an increasingly important role in aid policies and financial disbursements% a number of governments have attempted to e*ert pressure on them in order to pursue their own national foreign policy strategies& $nvestigating $' conditionality agreements% ?ang 4!""56 observes that conditions attached to loans varied both 0ualitatively and 0uantitatively% this is despite the $' )s official economic rules meant to determine conditionality& ?ang notes that the five biggest contributors to the $' 4namely the B7% the B?% Japan% /ermany and rance6 all e*ert influence upon the $' in order to determine $' conditionality that is not in accordance with official $' economic rules% in order to
;

7ee% for e*ample% this article on the BBC Dews websiteC httpCGGwww&bbc&co&u,GnewsGworld1 south1asia1##5##""5

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promote their own strategic agendas in developing countries 4ibid&6& He argues that this influence allows countries with national characteristics that are considered important to the five biggest contributors to enjoy easier borrowing conditionality than those that do not have such national characteristics 4ibid&6& ?ang concludes that the failure of $' loan conditionality to address the economic problems of certain recipients can be attributed% at least in part% to the political economic processes within $' which have led to conditionalities not appropriate to the situation 4ibid&6& Ta,ing a political1economy analysis approach to study $' lending practices Barro and Aee 4!""<6 identify a number of variables that e*plained the probability of $' loan approval% the si-e of $' loans and the fre0uency of participation in $' lending programs& The authors find probability and si-e of $' loans to be larger if a country has a higher level of political and economic pro*imity to the B7 and other major Western 3uropean countries% if it has a bigger 0uota% and if it has more nationals wor,ing on the $' staff 4ibid&6& Although this finding does not show an active effort on the part of the B7 and other major Western 3uropean countries to influence $' lending practices% their influence is implied through the positive correlations between probability and si-e of $' loans and the political and economic pro*imity to the B7 and other major Western 3uropean countries& Barro and Aee proceed to analy-e the effects of this political economy of recipient selection% suggesting that% in general% participation in $' loan programs is bad for economic growth 4ibid&6& Ireeland 4!""M6 similarly investigates the impact of politics on $' arrangements and thereby $' conditionality& He finds in that $' agreements signed with countries which are favored by the B7% conditionality is not very strict or it is not strictly enforced 4ibid&6& B7 influence over $' lending policies is driven by both political and economic motives% to gain or maintain political support from recipients and to protect financial interests 4ibid&6& Ireeland further analy-es a number of aspects of the domestic politics in $' loan recipient countries with regard to $' conditionality and the leveraging ability of the $' in these countries& Analy-ing B7 influence over the World Ban, in the period #9;> to !""!% lec, and ?ilby 4!"">b6 find that B7 influence over the World Ban, is characteri-ed by evolving rather than stable relationships% due to the changing interests and policies of different presidential administrations and varying economic and political situations& They indentify two B7 interests that have a significant connection to World Ban, lending allocations when the period under study 4#9>;1!!"!6 is considered as a whole% namely trade and geopolitical interests 4 lec, @ ?ilby !"">b6& Concerning trade lec, and ?ilby find that% all else being e0ual% the greater a country)s share of B7 e*ports% the higher the levels of World Ban, funds that country receives 4ibid&6& With regard to geopolitical considerations% the authors find that countries favored in B7 bilateral aid allocations were also allocated higher levels of World Ban, funds 4ibid&6& However% the authors emphasi-e e*act relations varied with different presidential administrations& $n an investigation into the conditionality of World Ban, loan disbursements% ?ilby 4!""96 finds that these are variably enforced& His findings reflect those of Ireeland 4!""M6 regarding $' conditionality and B7 influence& As was the case with $' conditionality% ?ilby 4!""96 finds that for countries friendly with the B7%

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conditionality is not generally enforced& Whereas countries which are not seen as friendly with the B7 4based on whether or not they ma,e concessions on important BD votes6 conditionality is significantly enforced 4ibid&6& He notes that these correlations remain evident through different periods of time and across different geographic regions using a number of different estimation methods 4ibid&6& Wade 4!""!6 provides an in1depth analysis of the political wor,ings of the World Ban,% and the influence e*erted on it by the B7 government in part through the B7 Treasury& Wade does this through the analysis of two cases where the B7 e*erted pressure to influence the statements made by incumbents in important ideas1controlling positions in the World Ban,& Damely statements by the chief economist Josephy 7tiglit-% who was fired% and director of the /orld De!elopment (eport 2000 Ravi ?anbur% who resigned& Wade demonstrates that the B7 is able to e*ert its influence through the administrative machinations of the Ban, in order achieve its objectives 4i&e& to have 7tiglit- fired% and the W.R rebalanced6 while appearing to act with procedural appropriateness 4Wade !""!6& However% he does identify a certain degree of autonomy for the Ban, and limits to the B7)s influence upon the organi-ation 4ibid&6& A similar investigation into the influence of donors on $ $s was conducted by ?ilby 4!"">6 which focused on the regional Asian .evelopment Ban,& He concludes that there is significant donor influence on the Asian .evelopment Ban,% most notably by the B7 and Japan& ?ilby argues that even when the cases of China and $ndia are e*cluded% donor trade interests and geopolitical interests have a greater influence than humanitarian interests 4ibid&6& He notes that selection and allocation of A.B funds discriminates against China and $ndia 4ibid6& ?ilby argues that China was discriminated against for Cold War B7 political reasons% where as $ndia was discriminated against on the basis of Japanese concerns 4ibid&6& Through comparison with his earlier study% and a number of other studies% ?ilby comes to the conclusion that donor interests e*ert even more influence in the A.B than they do in the World Ban, 4ibid&6& /iven the above findings on donor influence of $nternational inancial $nstitutions and the fact that China is also a contributor to the World Ban, $nternational .evelopment Association 9 and the $' %#" in addition to being a member of the Asian .evelopment ban,% similar investigations regarding the influence of China and emerging donors on the $ $s are needed& Results of such studies should highlight similarities and differences in the motivations and means of such influence concerning traditional and emerging donors% identifying areas where mechanisms to mitigate such influence are re0uired&

uman !ights* %orru"tion ' the +n$ironment

7ee article on Radio;>&com websiteC httpCGGen&radio;>&comGnewsGworld1ban,1welcomes1 chinas1contribution1ida1-oellic, #" 7ee article on caijing&com&cnC httpCGGenglish&caijing&com&cnG!""91"M1"!G##"#H!<!"&html& This article states that China)s contributions to the $' are said to e*ceed that of Japan and become second only to the B7&

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A more recent development in foreign aid allocation policy% since the end of the Cold War% is its use 4at least in government rhetoric6 to promote respect for human rights% reduce corruption% and% more recently% to assist in matters relating to the environment& Dot only is the priority of human rights in foreign aid allocation part of the rhetoric of many donors% such as the B7% in some nations% li,e the aforementioned% it is legally re0uired that human rights are given priority over economic and military interests 4Apodaca @ 7tohl #9996& However% B7 legislation allows for special circumstances in which there can be some deviation from this law 4ibid&6& Apodaca and 7tohl 4#9996% therefore% studied the relative importance of human rights in B7 foreign aid allocations& Their findings suggest that human rights concern considerations do play an important role in whether or not a country receives B7 foreign aid and in determining the levels of aid allocated% with poor human rights performers receiving less B7 bilateral economic aid than nations with better human rights records 4ibid&6& Devertheless% the authors observed that national security considerations trumped human rights considerations in countries perceived to be vital to B7 national security% these received aid regardless of human rights performance 4ibid&6& An earlier study focusing on the relation of human rights practices and B7 foreign aid allocation to Aatin American in fiscal year #9;! by Cingranelli and Pas0uarello 4#9;<6 aimed to identify whether or not there had been any progress towards human rights considerations in light of earlier studies which found that human rights violators tended to be rewarded while human rights champions were punished& Their findings suggest that there had been progress with regard to human rights considerations in B7 foreign aid allocation 4ibid&6& $n the two stage process of aid allocation decisions the authors find that human rights considerations did not play a role in $#et#er or not a country received economic assistance% however% recipients with better human rights performances did receive higher levels of economic assistance 4ibid&6& Cingranelli and Pas0uarello find that human rights considerations did have a significant influence on whether or not a country received military aid% as countries with poor human rights records were not allocated military aid% however% levels of military aid were not determined by human rights performances 4ibid&6& Deumayer 4!""Hb6 similarly investigates the relationship between human rights considerations and foreign aid allocations& His study on the foreign aid allocations of the !# 23C.1.AC members differentiates between civilGpolitical rights and personal integrity rights 4ibid&6& Deumayer finds that respect for civilGpolitical rights is an important determinant for most donor countries in decisions on whether or not to provide aid to a recipient% however% personal integrity rights play a much less significant role 4ibid&6& 2ne significant finding% Deumayer suggests% is that when both aspects of human rights are ta,en together% the li,e1minded countries) foreign aid provision is% as far as concern for human rights is concerned% not better than that of other donors 4ibid&6& $n fact% Deumayer finds that only Japan and the Bnited ?ingdom provide more aid to countries with greater respect for human rights% and these two countries belong to the group of big donors 4ibid&6& However% he notes that there is inconsistency in the influence of human rights considerations for most donors% concluding that not a single donor consistently refuses aid allocations to countries with lesser respect for both civilGpolitical rights and personal integrity rights% while providing higher levels to countries with greater respect for both aspects of human rights 4ibid&6&

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The effects of BDCHR condemnation on aid flows to a country are analy-ed by Aebovic and Ioeten 4!""96& Their findings show that bilateral aid flows are only mildly affected by BDHCR condemnations% while multilateral aid flows% including flows from international organi-ations are strongly affected 4ibid&6& The authors observe that poor human rights performances result in large reductions in World Ban, and multilateral aid commitments 4ibid&6& 2n a similar topic Alesina and Weder 4!""!6 investigated whether or not less corrupt governments received more foreign aid& They found no evidence of negative impact of corruption on foreign aid in their broad country analysis 4ibid&6& However% their findings do suggest differences among donors with 7candinavian donors rewarding less corrupt recipients while the B7 is more concerned with form of governance 4democracy6 than with 0uality of governance 4ibid&6&## A more recent form of aid provision is environmental aid& igaj 4!"#"6 investigates the determinants of environmental aid allocation& Her conclusions% though not complete% indicate that #6 poverty and environmental variables are determinants of whether a country received environmental aid or not% !6 aid levels are determined by economic and environmental issues 4ibid&6& igaj finds no evident differences between bilateral and multilateral environmental aid 4ibid&6& 7he also finds no evidence that political variables play a role in environmental aid allocation considerations% however% economic considerations do indicate a concern for financial viability 4ibid&6& 7he attributes this to the fact most environmental aid is in the form of loans which need to be paid bac, by recipients 4ibid&6& .iscussions concerning the relations between foreign aid allocations and human rights are particularly pertinent in the case of China and other emerging donors who are often accused of ignoring human rights performances in their foreign aid allocation considerations 4see for e*ample A R2.A. !"";: Asche @ 7chUller !"";: Cornellisen @ Taylor !""": .ahle Huse @ 'uya,wa !"";: ?onings !""56& As is evident from the findings presented above% the human rights concerns of traditional donors also leave a lot to be desired and are also highly variable& A more in depth investigation into the relationship between foreign aid allocation and human rights considerations by China and other emerging donors is necessary in order to provide an ade0uate comparison with traditional donors&

,he #oral Dimension of Foreign Aid A number of publications deal with the humanitarian motivation for foreign aid provision 4not to be confused with humanitarian aid or disaster relief6% or the motivation foreign aid provision which is based on a perceived moral obligation for richer countries to assist poorer ones& 7to,,e 4#9;96 and Aancaster 4!""5a6% for e*ample% attribute this to certain nations) particular values% norms and traditions& 'oreover% humanitarian and moral rhetoric can be employed to justify foreign aid to the general public% although% in some instances it might be provided with less altruistic motivations&#! $n Aoescher and Dichols 4#9;96 a number of authors investigate the relationship between humanitarianism and B7 foreign policy& Their
## #!

7ee also Deumayer !""!& 7ee Breuning 4#99<6 for analysis of the correlation between foreign assistance rhetoric and actual policy behavior&

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analysis addresses the issue of morality and politics while also presenting legislative and legal aspects of humanitarian assistance in B7 foreign policy& The authors do this with regard to B7 foreign assistance to Central America and the Horn of Africa& Aoescher and Dichols argue that humanitarianism is one of the core principles of America)s dominant political ideologies and traditional morals 4ibid&6& They illustrate some of the difficulties of reconciling these principles with politics in the B7 humanitarian policy% focusing on humanitarian relief provided in the wa,e of both natural and political disasters& 2ne of their contributors% 7mith 4#9;96% proposes that certain moral principles are not just intimately related to B7 national interests% but rather are at t#e core of these interests& These principles% he argues% are not universal& or e*ample% initially% the respect for human liberties was a domestically promoted principle% however% it is now a moral good that the B7 has chosen to respect and advance throughout the world 4ibid&6& Aumsdaine 4#99H6 provides a more in1depth investigation in to the role of morality as a motivation for foreign aid% drawing comparisons among different donors in the period #9M91#9;9& He further trac,s the evolution of foreign aid in light of morality as a determinant& He concludes that changes in domestic political orientations and the constantly changing ethical concerns of the publics can change the character of the international politics% for e*ample% through the institutionali-ation of various standards and best practices in the 23C.1.AC 4ibid&6& Aumsdaine argues that any e*planation of foreign aid cannot be based solely on political and economic rationales% but must also provide a central place to the humanitarian and egalitarian beliefs of the aid donors 4ibid&6& Hattori 4!""H6 similarly provides an investigation into the moral dimension of foreign aid& He argues that donations given to multilateral grant1giving organi-ations form part of the (ethical core) of a broader process of the institutionali-ation of foreign aid 4ibid&6& He claims that this institutionali-ation process is part of the collective effort of former coloni-ing countries in the postwar period% and that the ,ey organi-ation in this endeavor the 23C.1.AC 4ibid&6& He argues that .AC has ta,en the role of (moral boo,,eeper) encouraging the use of foreign aid as virtuous practice 4ibid&6& Hattori concludes that this increased ethical discourse and public scrutiny have created the incentive for donors to conform their foreign aid practices to these beneficent standards% and further discusses the implications of this on the international order 4ibid&6& An earlier study on the relation between aid and ideology was conducted by $mbeau 4#9;;6& The author develops a conceptuali-ation of international aid1giving behavior based on the notion of a bounded rationality that involves the interaction between objective and subjective factors 4$mbeau #9;;C H6& rom this he deduces four hypotheses to e*plain different levels of aid e*pendituresC instrumental% humanitarian% ideological and incremental 4ibid&6& He analy-es these hypotheses across #5 23C. donors in the years #9>>% #95#% #95> and #9;# using a regression model 4ibid&6& $mbeau concludes that the best predictors of aid as a percentage of /DP% during the periods of study% are the instrumental and ideological hypotheses% the former with a lagged value dependent variable and the latter without 4ibid&6& He finds that the humanitarian hypothesis) e*planatory value is insignificant 4ibid&6& $mbeau defines ideology as Ean organi-ed set of values and goals about the development of a societyF 4$mbeau #9;;C !M6& These values and goals% he argues% influence policy% and due to their ingrained nature in a polity% they are more or less

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constant when considered within !" year periods 4ibid&6& The author argues that it has been shown that in order to gain a reliable picture of foreign policy decision ma,ing% it is necessary to simultaneously assess the relationship between objective and subjective factors 4such attitudes and values6% and foreign policy behavior 4ibid&6&

%onclusion As has become apparent from this brief introduction on a few of the aspects of the roles of foreign aid in politics% foreign aid is a comple* issue& oreign aid is used to serve a multitude of purposes and any given donor)s foreign aid policy composition changes periodically& Policies are formulated in consideration of domestic determinants + such as socio1economic climate% dominant norms and values% constituent pressures% government strategy + in view of the international conte*t 4e&g& national security concerns% geo1political positioning6& This bibliography ma,es certain recurring and emerging trends apparent% for e*ample% the increased use of aid for commercial reasons in times of economic downturns to promote domestic economic development% and the trend towards more altruistic motivations in times where there are fewer economic and political concerns& The variable nature of aid should also put into perspective any investigation into the nature of the relations of China and other emerging donors with less developed countries% begging the 0uestion whether these relations are so different to those of Western industriali-ed nations with their less developed counterparts% both past and present 4Br8utigam !""96& $t is important at this juncture to repeat that China is not a new donor& .ue to the changing domestic and political conte*ts following the end of the Cold War% the economic reforms since #95;% the opening up to foreign investment during the #99"s% and the more recent Eoutward boundF policies which promote the foreign investment by Chinese companies% its foreign policy and foreign aid strategies and composition has changed 4ChaponniSre !""9: Cheng @ 7hi !""9: Ai !""56& $t no longer pursues the geo1strategic foreign aid policies intended to spread Communism 4ibid&6& A comparative analysis of Chinese% Japanese% rench% B7% and Dordic foreign aid policies would li,ely reveal that Chinese foreign aid policies hold a lot in common with the foreign aid policies all of these traditional donors& There are elements of the commercial interests found in Japanese aid 4e&g& Br8utigam !""9: Broadman !""5: ChaponniSre !""9: $27CPRC !""<: 'o APRC !"">6& There are elements of building regional influence% li,e that found in rench and Japanese foreign aid policies% although the terminology used by the Chinese government is that of building friendships% partnerships and trust 4$27CPRC !""<: Ai !""5: 'o APRC !"">6& #H There are% moreover% similarities with the B7 national security concerns 4$27CPRC !""<6& #M And finally% there are also aspects of the humane internationalism of Dordic countries% such as the policy of nonintervention 4'o APRC !"">6% though it is not clear whether or not the Chinese government believes it is morally responsible for assisting in the development of less developed countries& Publics in both Japan and rance have had little influence
#H

Dote% for e*ample% China)s activities within the framewor, of the 7hanghai Cooperation 2rgani-ation& #M 7ee note M above% as well as Chinese participation in the /lobal War on Terror&

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of their governments) foreign aid policy formulation 4Aancaster !""5a6% as is clearly the case in China too& A greater understanding of the domestic political forces shaping Chinese foreign policy and foreign aid policy is needed to understand its foreign relations and foreign policy strategies& Aancaster 4!""5a6 provides a useful framewor, for analysis through the categori-ation of these domestic political forces intoC ideas% interests% political institutions and the organi-ation of aid& /oldstein and ?eohane)s 4#99H6 analytic framewor, concerning the role of ideas in shaping policy could provide a useful underpinning to such an analysis& Assumptions are easily made based on notions of Communism% planned and controlled economies and authoritarian regimes% however% there are other elements of the domestic political forces in China% such as worldviews% traditions% morals% principled and causal beliefs% which need to be investigated and ta,en into consideration& The effects of Asian values and Confucianism on foreign relations and foreign policy strategy would need to be studied% as well the e*tent to which foreign policy and foreign aid policy are guided by 'ar*istG7ocialistG'aoistGCommunist ideologies and the reformist concepts of .eng Viaoping& /iven the importance of 4uan'i 4relationships6 in Chinese society% and the fact that an overwhelming proportion of senior government officials have relatives in senior business positions% #< the e*tent to which these relationships% as one of the domestic political forces% drives or guides foreign policy formulation needs to be investigated and understood& Additionally% analyses such as that conducted by $mbeau 4#9;;6 concerning the relationship between objective and subjective political factors and foreign policy behavior will li,ely produce a better understanding of China)s foreign policy decision ma,ing& Additionally% the effect of ThOrien and DoPl)s 4!"""6 findings that parties who remain in power for e*tended periods of time have been able to ma,e their own concepts of social justice central to national political debates% thus shaping foreign aid policies and priorities% needs to be investigated with regard to China& $t might also be fruitful ta,e the lens of #umane internationalism% as 7to,,e 4#9;96 and Pratt 4#9;96 did% and consider to what e*tent Chinese relations with the less developed countries fits within the different forms of this broad ideology% as socialist ideological elements play a large part in humane internationalism and Communism& Rather than being a #umane internationalist or an international realist could China be a #umane international realist or a liberal internationalistW urthermore% is China more sensitive to recipient needs than traditional donorsW $f so% to what e*tent can this sensitivity be e*plained by Pratt)s 4#9;96 theory as to why certain countries are more sensitive to recipient needs than othersW $t is clear that part of China)s sensitivity could be attributed to the pursuit of favorable consideration by recipients concerning other international political issues 4Ai !""56% and due to the fact that China itself is still a developing country 4$27CPRC !""<: 'o APRC !"">6& Additionally% using Holsti)s typology as Hoo, 4#99>6 did what role would China playW Would it play the role of the Eregional1subsytem collaboratorF which does not want to play a global role% but% instead wants to build wide cooperative
#<

or further details seeC Xu% 2& 4!"";6% ECorruption in China)s 3conomic ReformC A Review of Recent 2bservations and 3*planations%F in 5rime, La$ and "ocial 5#ange% Iol& <"% Do& H% pp& #>#1#5>% 7pringer Detherlands&

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communitiesW $t is obvious that through China)s global reach and increasingly intense economic and political activities% it has already outgrown this role& urther% China)s aid provision and association with voting behavior in the BD could be investigated% especially given the fact that China)s membership can be attributed to the result of their aid efforts in Africa in the #9<"s and #9>"s 4Ai !""56& $t is clear that a lot is ,nown about the history and politics of foreign aid provided by Western industriali-ed nations& Although there is a growing literature on China)s foreign aid policies% these need to be put into the perspective provided by the aid practices% both past and present% of Western industriali-ed nations% as well as the conte*t of China)s own domestic political forces&

)ote This annotated bibliography is a compilation of the conclusions% e*ecutive summaries% and e*cerpts from important contributions concerning the role of aid in foreign policy and politics& References contained in the compilation below refer to references in the publications% for further information please refer to the publication in 0uestion& The functions which aid serves varies over time and for different nations depending on the configurations of circumstances 4both domestically and abroad6% therefore careful attention should be paid to the date of publication of the articles and boo,s below% in order to understand both the conte*t and the changes in the role of aid in foreign policy and politics&

%O),+),S 4Bibliography on Chinese engagement with the developing world on pg& MH!6

Alesina* Alberto and Dollar* Da$id -.///0* 1&ho 2i$es Foreign Aid to &hom and &hy34 in Journal of Economic Growth* 5ol6 7* )o6 8* ""6 99:96
'ost observers agree that foreign aid has been% at best% only partially successful at promoting growth and reducing poverty& 2ne reason is the poor performance of the bureaucracies of the receiving countries& The other reason 4documented in this paper6 is the pattern of the flows of foreign aid& The allocation of bilateral aid across

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recipient countries provides evidence as to why it is not more effective at promoting growth and poverty reduction& actors such as colonial past and voting patterns in the Bnited Dations e*plain more of the distribution of aid than the political institutions or economic policy of recipients& 'ost stri,ing here is that a non1 democratic former colony gets about twice as much aid as a democratic non1colony& A similar result holds for former colonies that are closed to trade versus open non1 colonies& rom the point of view of efficient aid% each of the Ebig threeF donorsYB&7&% Japan% and rance Y has a different distortionC the B&7& has targeted about one1third of its total assistance to 3gypt and $srael: rance has given overwhelmingly to its former colonies: and Japan)s aid is highly correlated with BD voting patterns 4countries that vote in tandem with Japan receive more assistance6& These countries) aid allocations may be very effective at promoting strategic interests% but the result is that bilateral aid has only a wea, association with poverty% democracy% and good policy& When we estimate e0uations for individual donors% we find stri,ing differences in their allocations& After controlling for its special interest in 3gypt and $srael% B&7& aid is targeted to poverty% democracy% and openness& The Dordic countries have a similar pattern e*cept that they do not have the same sharp focus on the 'iddle 3ast& rench assistance% on the other hand% has little relationship to poverty or democracy even after controlling for their strategic interests in former colonies and BD friends& The same conclusion holds for Japan% with the caveat that its strategic alliance may be built around investment and trade relationships% more than former colonial ties& We also loo,ed at the time series relationships between aid% on the one hand% and democracy and openness% on the other& There is a very clear trend for democrati-ers to get a substantial increase in assistance 4<" percent on average6% and but no strong tendency for economic liberali-ers to be boosted& $n terms of the incentives implicit in aid allocations% this time series dimension is what is importantC it reveals what a particular country can e*pect as it reforms political institutions and economic policy& inally% we estimated an e0uation for the flow of direct foreign investment% which provides a useful reference point for aid allocations& We found no mutual dependence of private flows and bilateral aid& Private flows respond to the rule of law and good economic policy% and are largely indifferent to democracy or the strategic considerations that play such an important role in aid allocations& Ceteris paribus% private flows go to higher income developing countries% perhaps because they have larger mar,ets& This last finding is important% because it reveals that low1 income countries cannot e*pect much in the way of private flows even if they have good rule of law and sound economic policies&

Alesina* Alberto and &eder* Beatrice* -.//.0 1Do %orru"t

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2o$ernments !ecei$e Less Foreign Aid34* in American Economic Review* 5ol6 ;.* )o6 <* ""6 88.:=889>6
The answer to the 0uestion posed in the title is Eno&F There is no evidence that less corrupt governments receive more foreign aid& 2ur vast e*ploration of the data never uncovered any even wea, evidence of a negative effect of corruption on received foreign aid& The same result applies to debt relief program% an additional form of aid& We found significant differences across donors& 7candinavian donors 4the most generous in per capita terms6 do reward less corrupt receivers& 2n the other hand% the Bnited 7tates appears to favor democracies% but seems to pay no attention to 0uality of government of receiving countries& inally% we find indications of a Evoracity effectF of foreign aid&

Al"ert* +ugene ?6 and Bernstein* Samuel* ?6 -8;><0* 1International Bargaining and Political %oalitions: (S Foreign Aid and %hina@s Admission to the ()*4 in The Western Political Quarterly* 5ol6 .>* )o6 .* ""6 98<-9.>* (ni$ersity of (tah6
This model has provided a useful framewor, for e*amining the nature of coalition formation in the Bnited Dations on an important issue involving a conflict between the interests of the Bnited 7tates and the 7oviet Bnion& The selection of B&7& foreign aid as an independent variable in e*plaining the voting patterns of B&D& members

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reveals some significant information about the dynamics of coalition building from #9># to #9>;& The major findings include support for a minimum winning coalition as a primary goal of the coalition leaders& The nature of foreign aid and its limited supply prevents its distribution on a purely random basis& $nstead% nations such as the Bnited 7tates and the 7oviet Bnion have used this resource to their political advantage% and this model provides for an e*amination of its rational use& $t appears that the Bnited 7tates embar,ed on an aid program during the early si*ties that was initially 0uite inefficient& Aid was distributed in a capricious manner% with too much aid being distributed in some cases and not enough in others& $n subse0uent years% aid was decreased and reallocated on a more practical basis% especially as a result of increased information 4though not at all perfect6 and the demands 4or re0uests6 of the newly independent countries that swelled the B&D& membership rolls during this period& The Bnited 7tates provided most of its coalition with a minimum level of aid% but when it miscalculated the tolerance of a country for this level of aid% it usually had to pay increased side1payments to cajole the country to return to the coalition& 'any countries were Efree%F since their particularly close ties to either the B&7& or China already provided them with ade0uate incentives& 7ome were easily courted by to,en levels of aid% while others had to be romanced by large doses of aid% and all because of the uncertainty as to the voting intentions of each country for each voting year& 2ccasionally the B&7& tried to see, out members of the opposing coalition% partly for information purposes about the receptivity of possible favorable vote changes in response to B&7& aid and also for the opening of communication channels in case e*tra votes might be needed in the future& Cases were found where aid increases were associated with favorable changes of vote from X37 to AB7TA$D or Do% but for the most part the Bnited 7tates was more successful in changing votes from AB7TA$D to Do& The Bnited 7tates was least successful in its aid appropriations to countries also receiving 7oviet foreign aid& After a series of probings% B&7& aid gradually receded% but it is interesting to try to understand that despite its effectiveness against B&7& foreign aid% the 7oviet Bnion did not overtly attempt to e*pand its coalition beyond a certain limit& We can either surmise that B&7& aid was an ade0uate deter1rent to 7oviet advances% particularly in Aatin America and selected African nations% or that 7oviet aid was very limited and could be used only conservatively& Horvath hypothesi-es that while the efficiency of 7oviet foreign aid per monetary unit tends to be very high% the high leverage of 7oviet economic aid seems to% be more effective in the short run and that often the initial good will contacts 0uic,ly cool off to the e*tent of an actual rebound of bad will& !> This notion along with the relative stability of the B&7& coalition indicates that the representation of China and the e*pulsion of the Dationalists could probably have been prevented for a number of years% e*cept for the 7ummer #95# announcement of Di*onZs visit to China% ma,ing the subse0uent B&D& vote on admission essentially moot&

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Although we do not provide any statistical evidence of a causal relationship between foreign aid and B&D& voting% the associations revealed by the framewor, presented here tempt one to ma,e the transition to a cause and effect e*planation& However% alternative e*planations are still possible and the comple*ities of the time lags and small numbers of cases in some instances are a few of the arguments against such assertions& Devertheless% the model does present an interesting way to observe% post hoc% the activities of international bargaining% since there are usually so few opportunities that provide ade0uate data resources& The use of foreign aid as side1payments is by no means the only ,ind that can be traded in this type of coalition formation& 2ur definition of B&7& foreign aid is a narrow one% not entailing military e*penditures% which may really be the decisive factor& $nstead of pondering the real value and significance of these e*penditures% we chose simply a representative sub1sample of aid transfers& By e*plaining the fluctuations and levels of aid within the framewor, of this model% we have been successfully able to e*plain a significant amount of nationsZ behavior% indicating that perhaps our choice was a representatively good one& Theoretically% the approach used here can be used in other international bodies and for other uses% but only after careful e*amination of the e*tent to which the conditions of the model can be satisfied& 7ituations approaching -ero1sum games are difficult to find and the growing detente between the Bnited 7tates and 7oviet Bnion signals an era of cooperation% compromise% and non1-ero sum games&

A"odaca* %lair and Stohl* #ichael -8;;;0* 1(nited States uman !ights Policy and Foreign Assistance*4 in International Studies Quarterly* 5ol6 <9* )o6 8* ""6 8A7=;A* BlacBCell Publishing6
B&7& law re0uires that the government give human rights priority over other foreign policy considerations% such as economic interest or military presence% in the allocation of foreign aid& But human rights are not an absolute criterion for the dispersion of aid& The legislation allows for lawful digression from the human rights re0uirement in cases of [e*traordinary circumstances[ or when the aid will directly help needy people& $s there a relationship between the allocation of foreign economic and military aid and human rights performanceW 2ur study is the most

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comprehensive research to date on the relationship between human rights and foreign aid& Dot only did we include more country cases% but we also e*panded the time of study to include the Bush and Clinton administrations& At the gate,eeping stage we established that human rights concerns did impact whether a country received B&7& economic aid or not 4with the e*ception of the Clinton administration6& A countryZs human rights performance significantly determined how much aid the country received& Those countries with bad human rights records received less B&7& bilateral economic aid than those countries with better records& B&7& military presence% measured by the number of military personnel stationed within the country% also determined the sum of economic aid allocated& Rhetoric notwithstanding% we found that% on a worldwide scale% the amount of economic aid allocated was remar,ably consistent between administrations& Bsing the Carter administration as our referent% we found no statistically significant differences in the amount of aid allotted to each country among the administrations& $n sum% we find that human rights do play a role in the decision of who receives B&7& bilateral foreign assistance% and how much aid they are allotted& But other national security interests play a more prominent role& Countries perceived to be of vital importance to B&7& national security% as measured by the presence of a large number of military personnel% along with Aatin America% receive aid regardless of their human rights records&

Ar$in* #aB B6 and DreCes* ,orben -8;;A0* 1Biases in the Allocation of %anadian Official De$elo"ment Assistance*4 in Applied Economics etters* 5ol6 7* )o6 8.* ""6 >>9-7* !outledge ,aylor ' Francis 2rou"6
A strong inverse relationship between per capita assistance and population of aid1 receiving countries is found in an e*amination of Canadian bilateral foreign aid to HH countries over the period #9;!+9!& However% the middle1income bias present in aid allocation of some other countries is not found in the case of Canada& $nstead% there is a bias associated with the recipient)s membership to the Commonwealth& K rom abstractL

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Ar$in* #aB B6 and DreCes* ,orben -.//80* 1Are ,here Biases in 2erman Bilateral Aid Allocations34* in Applied Economics etters* 5ol6 A* )o6 9* ""6 8>9=>6
A strong inverse relationship between per capita assistance and population of aid1 receiving countries is found in an e*amination of /erman bilateral foreign aid to ;< countries over the period #95H1#99<& However% the middle1income bias present in aid allocation of some other countries is not found in the case of /ermany& $nstead% there is a bias associated with a recipient)s coverage under the AomO Convention& Results generally appear to be consistent with both donor interest and recipient need models of foreign aid&

Aryeetey* +rnest and Dinello* )atalia -eds60 -.//>0* Testin! Glo"al Interdependence# Issues on Trade$ Aid$ %i!ration and &evelopment* %heltenham -(D0 and )ortham"ton -(S0: +dCard +lgar Publishing6 Australian 2o$ernment* AusAid* 'eature Stories of
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AusAI& ( Tac)lin! Terrorism* retrie$ed from htt":EECCC6indo6ausaid6go$6auE featurestoriesEtacBlingterroris m6html on )o$ember .8st* ./8/6
AustraliaZs aid program is involved in a number of longterm anti1terrorism projects in the Asia1Pacific region& These projects are helping the region to understand and change the conditions that can foster terrorism& The shoc,ing events of ## 7eptember !""# and #! 2ctober !""! forced the issue of international terrorism onto the front page of every newspaper in the Asia1Pacific region& The world is now grappling with the issue of how to defeat global terrorism& The Bnited Dations and other international organisations% such as the 2rganisation for 3conomic Cooperation and .evelopment 423C.6% are wor,ing with their members to develop the capabilities needed to combat terrorism& Countries are now re0uired by the Bnited Dations and the 23C. to strengthen areas such as customs and the ban,ing sector& The regionZs forums% li,e the A73AD Regional orum and AP3C 4Asia1Pacific 3conomic Cooperation6% have also agreed on anti1terrorism measures& Australia is wor,ing closely with its neighbours to assist them in meeting the commitments they have agreed to implement& Providing Australian aid in areas such as customs and finance will help the region to restore growth and confidence and develop anti1terrorism measures&

Ball* !ichard and ?ohnson* %hristo"her -8;;:0* 1Political* +conomic and umanitarian #oti$ations for PL <A/ Food Aid: +$idence from Africa*4 in Economic &evelopment and
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*ultural *han!e* 5ol6 <<* )o6 9* ""6 787-79>6

When we consider all titles of PA M;" and all !" years of our sample% geopolitical interests and surpluses of American agricultural commodities appear to have been the most influential factors in the allocation of B&7& food aid among African recipients& Humanitarian considerations also appear to play a role% but the evidence on this issue is less compelling& The one hypothesi-ed motivation for the PA M;" program that does not appear statistically significant is the mar,et development objective& As we have discussed% however% it is not clear whether this result indicates that the goal of developing commercial mar,ets has in fact not influenced food aid allocations or whether it reflects measurement difficulties& When we disaggregate the sample% we find that the these various KsicL objectives are given different weights in the different titles& or Title $ aid alone% political factors are more important than in the sample as a whole% and there is no evidence that allocations were affected by humanitarian considerations& $n sharp contrast% in the regression for Title $$ the political variables are not statistically significant% and the humanitarian variables have a much stronger influence than in the sample as a whole& These results are broadly consistent with the different stated objectives of these two titles& The results that we find most stri,ing concern changes in the motivations shaping food aid policy that occurred between the #95"s and #9;"s& When we e*amine the data from the #95"s alone% political factors and surplus disposal are strongly significant in e*plaining patterns of PA M;" distribution% but the humanitarian indicators have little influence& Particularly notable in the #95"s is that even in the Title $$ regression% which we e*pect to be most heavily influenced by humanitarian concerns% food aid receipts are not significantly related to infant mortality& The data for the #9;"s% on the other hand% show precisely the opposite patternC neither the political variables nor B&7& grain surpluses turn out to be statistically significant% but the indicators of humanitarian needs are strongly significant& Remar,ably% none of the three political variables are significant in any of the three regressions for the #9;"s&HH This evolution in the motivations behind PA M;" aid is consistent with larger trends in international politics over the period we study% particularly the waning influence of the Cold War& 3ven before the fall of the Berlin Wall in #99" or 'argaret ThatcherZs #9;; declaration that EThe Cold War is over%F HM the strategic significance of Africa as an 3ast1West battleground was declining& According to .& Rothchild and J& Ravenhill% Ethe actions of the 7oviet Bnion in Africa since the mid1#9;"s as well as the statements of ,ey policyma,ers have signaled a major 7oviet withdrawal from the continent&FH< The view of Africa as Emerely another chessboard on which the superpowers were playing out their global struggle%F these authors argue% Ehas become increasingly irrelevant&F H> The lac, of significance of any of the political variables in our regressions for the #9;"s indicates that AfricaZs changing geopolitical significance has been reflected in American food aid policy&

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Aoo,ing ahead to the ne*t #" years% we e*pect that some of the patterns of food aid allocation that we have observed will be maintained% but that others will continue to evolve& The greatest continuity that we e*pect is in the differential motivations behind the different titles of PA M;"& Aegislation passed in #99" puts administration of Title $ entirely in the hands of the B7.A% with the e*plicit mandate of promoting B&7& agricultural interests% and puts Title $$ entirely in the hands of B7A$.% with the e*plicit mandate of providing humanitarian relief and development assistance& H5 The distinctions between the objectives pursued with the different Titles of PA M;" should therefore be maintained or even sharpened& $n addition% we e*pect that the political uses to which food aid is put will continue to evolve& $n particular% the post1 Cold War foreign policy of fostering free mar,ets and democratic political systems is already influencing the programming of American food aid& Dew legislation referred to as E ood for Progress%F first introduced in the #9;< farm bill and amended in #99"% now provides food aid to countries engaged in liberali-ation of agricultural mar,ets% as well as to Enewly emerging democracies&F H; $t appears that food aid will continue to serve multiple objectives and that these objectives will continue to evolve in response to changes in the global political and economic environment&

Bandyo"adhyay* Subhayu and &all* oCard -.//>0* 1,he Determinants of Aid in the Post %old-&ar +ra*4 in 'ederal Reserve +an) of St, ouis Review* 5ol6 A;* )o6 :* ""6 799= 7<>6
$n this paper% we have estimated the responsiveness of total aid in the post1Cold War era to the needs% civilGpolitical rights% and government effectiveness of recipient countries& To do so% we used the approach espoused in Trumbull and Wall 4#99M6C to use fi*ed effects to control for donor interests& We have found that aid in this era generally responded negatively to per capita /.P and positively to infant mortality% rights% and government effectiveness& This is in contrast with much of the e*isting literature% which% while tending to find a negative lin, between aid and per capita income% has been decidedly more mi*ed in terms of the other variables&

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Barro* !obert ?6 and Lee* ?ong&ha -.//70* 1I#F Programs: &ho is %hosen and &hat are the +ffects34 in Journal of %onetary Economics* 5ol6 7.* ""6 8.<7-8.:;6
We began with a political1economy approach to the $' )s lending decisions& Holding fi*ed a set of standard economic variables% the probability and si-e of $' loans were larger when a country had a bigger 0uota% more nationals wor,ing on the professional staff% and more political and economic pro*imity to the Bnited 7tates and the major Western 3uropean countries& We measured political pro*imity by voting patterns in the B&D& /eneral Assembly and economic pro*imity by bilateral trading volume& The set of political1economy variables was statistically significant overall for e*plaining the si-e of $' loans% the fre0uency of participation in $' lending programs% and the probability of $' loan approval& This political1economy analysis of $' lending practices is of substantial interest for its own sa,e& 'ore importantly for present purposes% the results allow us to create instrumental variables to use to estimate the effects of $' loan programs on economic outcomes& $f we do not instrument% we find that the $' loan+/.P ratio has a substantial inverse relation to economic growth in the contemporaneous <1 year period& However% the instrumental estimates indicate that the contemporaneous relation of the $' loan+/.P ratio to economic growth is statistically insignificant& Thus% the apparent inverse relation li,ely reflects the endogenous response of $' lending to wea, economic conditions& $n contrast% the instrumental estimates still show that the $' loan1participation rate has a statistically significant negative influence on economic growth& Therefore% greater $' program participation% rather than larger loans% seems to retard growth& We also analy-ed the effects of $' loan programs on other economic and political variablesYinvestment% inflation% government consumption% international openness% democracy% and the rule of law& The most important result was a negative effect of $' loan participation on the rule of law& This channel implies a further% negative indirect effect of $' loan participation on economic growth& 2ur results do not e*plain what the direct negative effects of $' loan participation on economic growth represent& We ,now that these effects do not derive from channels involving the e*planatory variables that were held constant in the growth regressions shown in Table 5& However% the $' may matter through channels involving additional variables&

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As an e*ample% the moral ha-ard created by the potential for $' loans may cause governments to spend e*cessively on public investment or transfers% which were not included in our government consumption variable& The $' programs may also encourage inefficient behavior on the part of government bureaucrats& $' conditionality may harm economies in ways not captured by the inflation rate and the other variables considered& or e*ample% there may be effects on ta* structure and regulations& inally% $' loan programs may influence the si-e and structure of private credit mar,ets& These possibilities constitute promising avenues for future research& inally% we end with something of a pu--le& 2ur results suggest that participation in $' loan programs is bad for the economy% at least bad for economic growth& Why then do host governments choose to participate in $' loan programsW !< 2r% to put it more strongly% why do countries in politically favored positionsYbecause of large 0uotas% large $' staffs% and political and economic pro*imity to the $' )s main shareholding countriesYuse their clout to obtain $' loans when these loans apparently retard economic growthW We have several possible answers& irst% $' lending may be bad for the economy but good for the governments and individual politicians who arrange the lending& 7econd% the $' lending may lower real /.P but raise a country)s income% which is augmented by the subsidy element of an $' program& Third% $' lending may lower growth in the short run but raise growth in the long run& However% our analysis fails to find the higher long1run growth at least over a <1year hori-on& inally% there may be a time1consistency issue& A country may be better off if it can commit in advance not to participate in $' programs 4or% possibly% in foreign aid% and so on6& However% e* post% the country may be better off accepting the assistance& We plan to address these issues in future research&

Bearce* Da$id 6 and ,irone* Daniel %6 -.//;0* 1Foreign Aid +ffecti$eness and the Strategic 2oals of Donor 2o$ernments*4 in The Journal of Politics* 5ol6 >.* )o6 9* ""6 A9>-A78* %ambridge (ni$ersity Press6
Having argued that foreign aid from Western donors can help promote economic growth in recipient countries by incentivi-ing economic reform% but only when the strategic benefits associated with providing aid are small% we have presented evidence consistent with both the cause and the effect of this argument& irst% we

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showed that Western aid has promoted economic reform after #99" when the strategic benefits of providing aid were relatively small% but not before #99# when the strategic benefits were comparatively large& 7econd% we have also shown that foreign aid has promoted economic growth in recipient national economies% but only in the post1Cold War era as the strategic benefits associated with aid provision declined for most Western donors& $n response to this evidence% one might argue that increased foreign aid effectiveness in the post1Cold War era can be e*plained by other factors% namely increased economic globali-ation andGor the so1called EWashington consensusF that emerged around #99"& $t is thus important to discuss why these alternative e*planations fail to e*plain the empirical evidence presented in this paper& Regarding the possibility that our empirical results stem more from increased economic globali-ation post1#99" than from the reduced strategic content of Western aid in the post1Cold War era% we offer two responses& irst% our statistical model made a strong effort to control for economic globali-ation in terms of international monetary and trade flows through the &'c#ange (ate% &'ports% and Imports variables& To the e*tent that these three control variables are insufficient% our model also included a set of year fi*ed effects% which should have pic,ed up any additional economic shoc,s and globali-ation pressures that were common to all units in any given year& Thus% we would argue that our )id coefficients captured the marginal effect of Western aid when #olding constant t#e effect of economic globali6ation& 7econd% to the e*tent that there remain unmeasured economic globali-ation effects that might have been pic,ed up by our )id coefficients% we would argue that globali-ation tends to wor, against finding a statistically significant positive result in the post1#99" period& This argument is based on the understanding that economic globali-ation has opened up new channels 4e&g&% commercial ban, lending% foreign direct investment6 through which capital can move from where it is abundant in rich countries to where it is scarce in poorer ones& And if economic globali-ation has created more substitutes for the scarce capital once provided primarily by foreign aid% then Western donors should have become less, not more% able to enforce the reform conditions associated with their foreign aid& $ndeed% this understanding would suggest that we may have underestimated foreign aid effectiveness in the post1Cold War era given the greater opportunities for developing countries to obtain e*ternal capital with e*panding globali-ation& Readers have also suggested that our empirical results could be e*plained by the so1called EWashington consensusF that emerged circa #99" 4Williamson #99"6& The Washington consensus constitutes a set of beliefs held by policy elites in the Bnited 7tates and in certain other Western governments about what constitutes good economic policy 4e&g&% trade liberali-ation% reduced government intervention% and more secure property rights6 along with the e*pectation that policy change in this direction 4or what we defined as Eeconomic reformF6 would produce economic growth and stability& Thus% foreign aid might have been growth ineffective before #99" because Western policy elites did not believe in economic reform% but it became growth effective after #99" due to this new belief& $t is thus important to evaluate this alternative e*planation in terms of its causal power& Regarding the relationship between reform and growth% it is hard to see how

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a new belief in economic reform could directl cause a positive relationship between reform and growth& Reform may lead to economic growth% as argued here% but this would have been true even when Western policy elites 4and recipient government elites6 believed otherwise& But it is certainly possible that a new belief in the importance of economic reform could cause Western policyma,ers to insist that aid recipient governments engage in mar,et1oriented economic reform% thus leading to greater economic growth& But even if it is true that policy beliefs among donor elites have this indirect causal effect on economic growth in recipient national economies% one still needs to as, why Washington policy elites began to believe in reform around #99"% but not earlier& The argument presented in this paper provides at least a partial answer to this 0uestion& $t would have been hard to believeYat least during the Cold WarY that Western aid could leverage economic reform leading to greater economic growth because Western policy elites understood that they could not credibly enforce their conditions for economic reform given their strategic motivations for providing foreign aid& But as these strategic motivations got smaller with the end of the Cold War% Western policy elites came to believe that their aid conditions would become enforceable% thus leading to a new consensus about the value of economic reform& $ndeed% based on this logic% one could even argue that the Washington consensus was endogenous to the strategic character of Western aidC when aid was highly strategic as it was during the Cold War% such a consensus was unli,ely& We now conclude with a brief discussion about what our argument about the strategic content of Western aid implies for foreign aid effectiveness post1!""#& As our empirical analysis focused on recipient country1years #9><+!""#% the geopolitical era sometimes identified as the (Fwar on terrorF is out1of sample& However% our model does ma,e a prediction about foreign aid effectiveness after !""#% and it is not a particularly optimistic one% at least not in terms of economic growth and development& As should be obvious% our model predicts declining foreign aid effectiveness after !""# since certain Western governments may again be in a situation where they can no longer credibly enforce their conditions for economic reform& To the e*tent that the B&7& government now finds its foreign aid to be an indispensable policy instrument in its war on terror% then the strategic benefits of providing financial assistance to developing national economies have effectively increased% ma,ing less credible its threats to curtail aid when recipient governments do not engage in economic reform& Conse0uently% donor governments Yincluding% but not limited to% the Bnited 7tatesYface a major foreign policy tradeoffC as foreign aid once again becomes more useful for military1strategic purposes% it becomes less effective at promoting economic growth and development& 7imilarly% if foreign aid is to be effective at promoting growth and development in poorer regions of the globe% Western governments cannot also use it as an instrument to recruit and retain allies in the war on terror&

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BeenstocB* #ichael -8;A/0* 1Political +conometry of Official De$elo"ment Assistance*4 in World &evelopment* 5ol6 A* )o6 .* ""6 89>-<<* +lse$ier Science* Ltd6
The main objective of this paper has been to e*plore the possibility of modelling the aid1giving process& $t is inevitable that a study of this nature will be highly speculative% since this re0uires the specification of government objectives and constraints which may be unstable over time% unstable between countries or both& Devertheless% as a first attempt at such an e*ercise% the results reported in 7ection H are encouraging enough% especially when the decision variable is hypothesi-ed to be net 2.A disbursements measured in nominal terms& Having said this% it is difficult to be more precise in identifying how the constraint variables influence 2.A% since a variety of competing specifications proved to be satisfactory from a statistical point of view& 'oreover% the incidence of serial correlation among disturbances indicates that it should be possible to improve upon the specifications in future wor,& 2ne possibility is that the correlation reflects dynamic misspecification% in which case the lag between disbursements and commitments may be relevant& Another is that it is necessary to add further constraint variables and that% while a start has been made in this paper% the political decision1ma,ing process is more complicated than has been assumed here& At the very least% the present investigation indicates that factors additional to /DP have an important bearing upon aid performance&

BerthFlemy* ?-%6 -.//70* 1Bilateral Donors@ Interests $s !eci"ients@ De$elo"ment #oti$es in Aid Allocation: Do All Donors Beha$e the Same34*
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in Review of &evelopment Economics* 5ol6 8/* )o6 .* ""6 8>;-8;<6

'y results show that most donors behave in a rather egoistic wayC all but one partially target their assistance to their most significant trading partners& Devertheless% most donors ta,e some care of the neediest recipient countries& 'oreover% on average% donors target recipients with better governance indicators% such as democracy or absence of violent conflicts& inally% they act as complement of multilateral financial institutions& All these results suggest that% in spite of the egoism of their policies% bilateral donors also implement some sort of selectivity rules based on recipient needs and merits& 7uch average results are very robust and do not change 0ualitatively from one decade to the other% in spite of the end of the cold war& These results are also very consistent with those found previously by BerthOlemy and Tichit 4!""M6% using a random effect Tobit model& $n particular% $ confirm the negative influence of recipient income per capita and population% and the positive influence of democracy and of trade lin,ages& But $ have also obtained here a host of complementary results% for new e*planatory variables 4conflicts% indebtedness% multilateral aid% aid of other bilateral donors% and regional dummy variables6% which could not be included in the random effect Tobit model for computational reasons& $n this paper% $ have also uncovered some stri,ing differences among donors& 7wit-erland% Austria% $reland% and the Dordic donors 4with the relative e*ception of inland% and possibly 7weden6 have been so far much more altruistic than other donors& Conversely% Australia% rance% $taly% and to a significant e*tent Japan and the Bnited 7tates% are more egoistic than the other donors& This clustering of donors differs significantly from results obtained by BerthOlemy and Tichit 4!""M6% who found that rance% /ermany% Bnited ?ingdom% and Bnited 7tates were relatively altruistic% and that Australia% Austria% and Dew \ealand were relatively egoistic& $n fact% my list of relatively altruistic countries is consistent with other information available on their development assistance policies& 2n average% .enmar,% the Detherlands% and Dorway have over the #9;"s and #99"s the highest aid performances% with total aid to /.P ratio close to "&9Q& $reland% who was initially a much poorer country that KsicL the others% had in the #9;"s and the #99"s a relatively small aid budget% but channeled more that <"Q of its assistance through multilateral aid% instead of through bilateral aid& 7wit-erland is yet a different case% with also relatively modest levels of aid budget 4"&HHQ of /.P6% and not much assistance channeled through multilaterals& However% in the case of 7wit-erland% such data should be interpreted cautiously% given that this country became member of the World Ban, only in #99!% and of the Bnited Dations only in !""!& 'oreover% 7wit-erland has consistently offered untied aid to developing countries% unli,e most other donors& Conversely% Australia% rance% $taly% and the Bnited 7tates% are ,nown for fre0uently tying their assistance&

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BerthFlemy* ?-%6 -.//>0* 1!entSeeBing Beha$iors and Per"etuation of Aid De"endence: ,he Donor-Side Story*4 in Aryteey* +6 and Dinello* )6 -eds60 Testin! Glo"al Interdependence# Issues on Trade$ Aid$ %i!ration and &evelopment* %heltenham -(D0 and )ortham"ton -(S0: +dCard +lgar Publishing6
A successful transition from aid dependence may be impeded by political factors + that is% by the fact that some rent1see,ing economic agents with vested interests in perpetuating aid dependence have a say in aid allocation decisions& $ considered here the donor side of the story& $ provided empirical evidence consistent with the rent1see,ing hypothesis by showing that aid allocation policies implemented by donors% or at least by a vast majority of them% are significantly correlated with their business interests% as measured by trade lin,ages& $n order to do so% $ e*amined in detail the motives of bilateral aid allocation decisions% as they are revealed by data on bilateral aid commitments& $ identified both self1interest motives and recipient needs and merit motives of aid allocation& Bilateral variables which describe self1interest motives are related to economic and political ties between donors and recipients& $ then used such variables to define what $ call the bilateralism effect in aid allocation decisions% development assistance in favor of relatively good performers& This is% of course% only a second best% because bilateralism in aid allocation is unavoidably blended by motives which have nothing to do with economic development& $n any case% such self1interested motives cannot be prevented if one relies on a bilateral aid system% because they are part and parcel of the reasons why most bilateral donors provide assistance to developing countries when they are not the main motive itself&

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$n such a system% the multilaterals should concentrate their efforts on assistance to the neediest recipients% instead of targeting good performers% to correct the bias of bilateral aid in favor of their major trading partners and their geopolitical allies& $f the multilateral agencies focus too much on aid efficiency% the need countries which are not significant political allies of the bilateral donors will be inevitably almost e*cluded from all aid sources% because almost by definition their poor economic performances reduce their attractiveness as business partners& This sharing of responsibilities between bilateral and multilateral donors would also avoid a too heavy concentration of aid on a few good performers% that would be inevitable if all donors adopted the same pattern of aid allocation as the multilateral agencies& According to my econometric estimates% this diversification of overall aid allocation would also be reinforced by the fact that there is a negative correlation between the bilateral aid commitments of a donor and aid provided by other donors& $n this framewor,% one difficult aspect would be the refinancing of the grant element of multilateral agency operations& Their actions are clearly of a global public good nature% with all the classical difficulties arising in global public1good financing& But this problem already e*ists in the current setting% and the framewor, that $ propose would merely ma,e it more e*plicit& $n fact% ma,ing it e*plicit that the role of multilateral institutions is fully to ta,e care of pure global1public goods might possibly facilitate discussions on their financing& The recent success encountered by global public good schemes such as the /lobal und to ight A$.7% Tuberculosis and 'alaria% and the /lobal Alliance for Iaccines and $mmuni-ation% suggests that this approach has some value&

BerthFlemy* ?-%6 and ,ichit* A6 -.//<0* 1Bilateral Donors@ Aid Allocation Decisions: A ,hreeDimensional Panel Analysis*4 in International Review of Economics and 'inance* 5ol6 89* )o6 9* ""6 .79-.><6
The database that we have assembled provides a wealth of information and analysis on aid allocation policies implemented by bilateral donors over the #9;"s and #99"s decades& 2ur analysis identifies a number of variables% describing both recipients) needs and performances% as well as the donors) self1interests% which

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have influenced assistance policies& /iven the amount of information available% we have also been able to compare aid policies before and after the end of the cold war% and among donors& 2ur conclusions are as followsC + Aid budgets have faced an autonomous declining trend at a rate of more than >Q a year% in real terms% since the end of the cold war: + 2verall% aid is progressive% although with a declining intensity over time: + Although with a declining intensity% the best way to attract bilateral assistance is to go democratic& This is particularly true with regard to the American and Australian assistance: + Postcolonial traditional lin,s still have a strong% but declining over time% influence on aid allocation policies of the former colonial ruling countries: + Trade lin,ages have conversely a growing impact% although still with a small magnitude: + 7mall donors% who need to speciali-e because of the small si-e of their aid budgets% tend to target their trading partners more than big donors% with the e*ception of Japan: + 2n average% donors condition their assistance on positive social performances of the recipients% particularly after the end of the cold war% but some donors prefer to provide aid to countries with the biggest social needs: + /ood economic performances have on average been rewarded by donors in the #99"s&

BlacB* Lloyd D6 -8;:A0* 1%ha"ter .: ,he !ationale = &hy Foreign Aid3*4 in BlacB* Lloyd D6* The Strate!y of 'orei!n Aid* ""6 89-.8* Princeton: D6 5an )ostrand6
ive presidents% twelve congresses% hundreds of public groups% and a substantial proportion of the American people% e*pressing their views in national public opinion polls% have endorsed and supported foreign aid as a vital element of B&7& foreign policy& Xet% thousands of articulate spo,esmen have condemned B&7& foreign aid as

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a Egive1away%F as a waste of resources% as a boondoggle% as support for Communism% as a bulwar, of corruption% etc&% etc& Random scanning of the 5ongressional (ecord reveals opinions such as theseC $t is the road to ban,ruptcy% and not a very long road at that& We have no basic international policy% having definitely ignored the #!<1year1 old 'onroe .octrine& && $n its place has been substituted a hodge1podge of e*ecutive orders and gifts of large sums of money to foreign nations% founded upon no principle at all& N $f $ believed the e*penditure of this amount of money would stop the spread of Communism% $ would support it& && But in the light of history% in the light of facts% how can any 7enator rise on this floor and say it will stop Communism& NW They are deliberating selling America short& N 2ur Bncle K7amL in his flirtations has become an easy prey of foreign and domestic grafters% vampires% and gold diggers& $n place of governing ourselves% in place of loo,ing after our own people% we are now trying to bribe and govern the world& Congress is lost in the dismal swamps of foreign intrigue& # The above 0uotes were not made in #9>;& The first three were made in #9M; during the 7enate debate on the 'arshall Plan& The last three were made in #9<" during the House debate on Point our& Why% then% have the American people made available more than T#"" billion in military and economic aid during the past generationW The reasons have been stated thousands of times by thousands of people and in as many different ways& They all stem from the abiding objective of our foreign policy% which is to attain the ,ind of world projected in the Preamble and Articles # and ! of the Bnited Dations Charter& $n the words of the 7ecretary of 7tate .ean Rus,% this meansC 1 1 1 1 1 A world free of aggression + aggression by whatever means A world of independent nations% each with the institutions of its own choice by cooperating with one another to their mutual advantage A world of economic and social advance for all peoples A world which provides sure and e0uitable means for the peaceful settlement of disputes and which moves steadily toward a rule of law A world in which the powers of state over the individual are limited by law and custom% in which the personal freedoms essential to the dignity of man are secure

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1 1

A world free of hate and discrimination based on race% or nationality or color% or economic or social status% or religious beliefs And a world of e0ual rights and e0ual opportunities for the entire human race

The oreign Assistance Act of #9>#% as amended% provides a clear e*position of the reasons for foreign aid& The preamble states the overall purpose of foreign assistanceC ETo promote the foreign policy% security% and general welfare of the Bnited 7tates by assisting peoples of the world in their efforts toward economic development and internal and e*ternal security% and for other purposes&F The 7tatement of Policy 47ection #"!6 reads% in part% as followsC $t is the sense of the Congress that peace depends on wider recognition of the dignity and interdependence of men% and survival of free institutions in the Bnited 7tates can best be assured in a worldwide atmosphere of freedom& To this end% the Bnited 7tates has in the past provided assistance to help strengthen the forces of freedom by aiding peoples of less developed friendly countries of the world to develop their resources and improve their living standards% to reali-e their aspirations for justice% education% dignity% and respect as individual human beings% and to establish responsible governments& The Congress declares it to be a primacy necessity% opportunity% and responsibility of the Bnited 7tates% and consistent with its traditions and ideals% to renew the spirit which lay behind these past efforts% and to help ma,e a historic demonstration that economic growth and political democracy can go hand in hand to the end that an enlarged community of free% stable% and self1 reliant countries can reduce world tensions and insecurity& $t is the policy of the Bnited 7tates to strengthen friendly foreign countries by encouraging the development of their free economic institutions and productive capabilities% and by minimi-ing or eliminating barriers to the flow of private investment capital& Also% the Congress reaffirms its conviction that the peace of the world and the security of the Bnited 7tates are endangered as long as international Communism continues to attempt to bring under Communist domination peoples now free and independent and to ,eep under domination peoples once free but not subject to such domination& $t is% therefore% the policy of the Bnited 7tates to continue to ma,e available to other free countries and peoples% upon re0uest% assistance of such nature and in such amounts as the Bnited 7tates deems advisable and as may be effectively used to free countries and peoples to help them maintain their freedom& Assistance shall be based upon sound plans and programs: be directed toward the social as well as economic aspects of economic development: be responsive to the efforts of the recipient countries to mobili-e their own resources and help themselves: be cogni-ant of the e*ternal and internal pressures which hamper their growth: and shall emphasi-e long1range development assistance as the primary instrument of such growth&

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The 7tatement of Policy also ma,es reference to EN increased economic cooperation and trade among countries& NF urther% it reaffirms the belief of Congress in the importance of Eregional organi-ations of free peoples for mutual assistance&F What does all this boil down to in e*plaining the real reasons for foreign aidW There is a defense rationale% there is an economic rationale% there is a political rationale% and there is a #umanitarian rationale& -#e Defense (ationale Between #9M< and #9<" Communist aggression in 3urope and Asia subjugated some #M nations% covering over < million s0uare miles and including more than 5"" million people& The ree World is still threatened by the most dangerous aggregation of aggressive power in history& The 7oviet Bnion and Communist China maintain the largest collection of men under arms ever assembled in peacetime& They possess nuclear weapons and are striving steadily to increase their nuclear capabilities& They posses or control great 0uantities of raw materials& Bninhibited by moral or humanitarian considerations% their leaders have imposed a massive system of domination under which all human and material resources are marshaled in pursuit of the e*tension of Communist power& Their leaders have vowed that their system will eventually dominate the entire world& The Communist menace lies not so much in its theory as in its practice of using force or threats of force or propaganda or internal subversion to attain its fre0uently stated goal of world domination and control& 'any e*amples readily come to mind% such as the Berlin Bloc,ade in #9M;% the con0uest of 'ainland China in #9M9% the ?orean invasion in #9<"% the fall of Tibet in #9<#% control over Dorth Iietnam in #9<M% the invasion of Aaos in #9>"1>#% the Cuban crisis in #9>!% and the intensified attempt to ta,e over 7outh Iietnam in #9><1>5& These are only a few e*amples of Communist aggression& A complete list would include other events such as insurrection in the Philippines% 'alaya% Burma% and $ndonesia following World War $$% Communist involvement in the Congo in #9>M% Communist ta,e1over in \an-ibar in #9>M% and many others& Beginning in #9M5% under the provisions of Articles <# and <! of the Bnited Dations Charter% the B&7& began to establish% with other nations% a worldwide networ, of mutual defense alliances and undertoo, to assist its partners to increase their strength by providing weapons% e0uipment% and training% plus essential economic support& The B&7& also sought rights to construct and maintain additional air bases and other military facilities at strategic locations& The B&7& and its partners agreed on a series of trade controls to ,eep strategic goods from moving to Communist areas& While the need for military bases has lessened in the missile age% some are still considered vital to the security of the B&7& The need for collective security arrangements and the military and economic strength to support them continues to be in the B&7& national interest& 'ilitary and economic aid are necessary to maintain this strength% for they create a shield behind which economic and social development can continue& -#e &conomic (ationale

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The long1range economic well1being of the B&7& re0uires a continuing and e*panding world commerce as well as an increasing supply of imported raw materials& This dual re0uirement depends in large part upon the peaceful and sustained economic development of other countries& The foreign aid programs of the B&7& and other donor nations help to maintain the security of and promote the economic development of the less developed nations& The recent BDCTA. Conference in /eneva made it abundantly clear that the assistance of the industrial donor nations should not only be maintained but greatly increased& The 55 countries describing themselves as the EdevelopingF nations forcefully went on record that their rates of growth in recent years have been generally unsatisfactory% that sustained development is not possible on the basis of their own resources alone% and that the accelerated growth so urgently needed re0uires increased efforts by themselves and by the developed countries& .espite the reliance of the industrial nations upon raw material imports from the underdeveloped areas and the reliance of the underdeveloped areas upon capital good and other manufactures from the developed areas% it is nevertheless true that as a general proposition the greatest trade ta,es place between the most developed countries& Therefore% if sustained economic growth of the developing nations can be continued% trade will increase% to the mutual benefit of all& or some years B&7& e*ports have been e*panding% partly% to be sure% as a result of foreign aid shipments 4including PA M;" commodities6& or many years before foreign aid began% B&7& agriculture e*ported roughly #"Q of its production& This has generally been the margin between a prosperous economy and a recession& With greatly increased agricultural and industrial e*ports in recent years% not to mention even better prospects for the future% the B&7& economy has a tremendous sta,e in foreign aid& An aspect of trade that is often overloo,ed% or is given inade0uate emphasis% concerns our imports& 2ur dependence upon other areas of the world in this respect is staggering& or some years% the Automobile 'anufacturers Association has issued a chart showing the ;< or so imported items that enter into the manufacture of an automobile and their principal sources of origin& $n #9<# the Foreign 5ommerce /ee2l 4now International 5ommerce6 published a list of B&7& imports divided into three major categoriesC 4#6 articles for which the B&7& is wholly or largely dependent in imports and for which substitutes are none*istent or not satisfactory 4e&g&% chrome% manganese% nic,el% tin% graphite% industrial diamonds% jute% sisal% 0uinine% shellac% coffee% tea% cocoa% palm oil6: 4!6 articles which are wholly or mainly imported% but for which% in most or all of their uses% a domestic product can be satisfactorily substituted 4e&g&% crude natural rubber% cryolite6: 4H6 articles which are largely supplied by domestic production% but for which considerable imports are necessary to supplement domestic production 4e&g&% cane sugar% wood% wood pulp% copper% lead% -inc6& Commodities in each of the three categories were subdivided into EnecessitiesF 4e&g&% manganese6 and Esemi1necessitiesF 4e&g&% coffee6& A similar listing in #9>5 would not be much different from the #9<# list& The important point is that we are vitally dependent upon many areas of the world for a large number of essential imports& Dumerous studies% ranging from the landmar, report of the Paley

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Commission! in #9<! to more current ones% indicate that the B&7& is becoming increasingly dependent on e*ternal sources for essential raw materials& -#e Political (ationale The basic% long1range goal of foreign aid is political& $t is not economic development per se& The primary purpose of foreign aid is to supplement and complement the efforts of the developing nations to enhance their strength and stability and to defend their freedom& 7uccess in these efforts is necessary to counter the spread of Communism& urther% the growth of strong independent nations which are successfully meeting the economic% social% and political needs and demands of their people contributes in many other ways to B&7& interests& A few of many aspects of the political rationale for foreign aid are discussed below& $n the parlance of aid appropriations there are two major categories of economic aid + Edevelopment assistanceF and Esupporting assistance&F The latter term refers to aid which has a strategic or political rationale and usually cannot be justified on economic grounds alone& $t is used to protect and advance immediate B&7& foreign policy interests& As stated in A$.)s X #9>> 7ummary Presentation to the CongressC $t is provided primarily to enable larger defense e*ports to be underta,en in less1developed nations threatened by Communist e*pansion and to avert situations of dangerous instability in sensitive areas& $n a few instances it is also provided to encourage independence of action in nations susceptible to Russian or Chinese Communist domination% to assure access to B&7& military bases and in other ways to support or promote economic or political stability& 2ver ;"Q of the supporting assistance re0uested by X #9>> was intended for Iietnam% Aaos% Thailand% and ?orea& Jordan and the Congo accounted for some #MQ and the small remainder was for small programs in a few other countries& $n the event of unforeseen political crises re0uiring rapid aid infusions% the President)s contingency fund could be drawn upon% although its most fre0uent use is for emergency relief to victims of national disasters such as floods and earth0ua,es& The distinctions between appropriations categories are really artificial and bureaucratic% for EdevelopmentF aid also serves many political purposes& Regardless of what A$. officials say publicly% the political rationale is fre0uently preponderant in decisions to provide aid& This is a continuing source of friction and disagreement between A$. officials and 7tate .epartment officers& 2ne EgoodF Communist scare in the past has 0uic,ly led to a stepped1up tempo of aid activity& This is so widely recogni-ed% in fact% that government officials in more than a few countries where Communism has not been a problem have asserted that they should EimportF #%""" Communists as a means of getting a larger share of B&7& aid& The Communists are also aware of this political reality& $n fact% they have even gone so far as to use it as an argument for a recipient country to accept 7oviet aid + that in so doing the country could e*pect more B&7& aid] The 7tate .epartment also places high value on the employment of foreign aid to bolster the incumbency of political leaders believed best for B&7& interests or to tip the balance against recognition of the Chinese Communists or to swing critical votes in international bodies& While it is often stated by high B&7& officials that the purpose of foreign aid is not to buy votes or popularity% it nevertheless must be

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borne in mind that the BD membership 4currently ##96 has more than doubled in the past decade or so& $n #9<"% there were only four BD members from Africa: now there are H9] 3ach of the newly independent nations has one vote + just the same as the big powers& $n the recent past% the EAfro1AsianF bloc and the E55F countries of BDCTA. renown have concerted their efforts to swing votes contrary to the desires of the major industrial countries& While BD votes may not% and should not% be a primary determinant of aid decisions% it is reasonable to assert that they cannot be ignored + nor are they& rom this brief introduction it can be readily seen that there are many aspects to the political rationale for foreign aid& 2ne illustration of the magnitude of this way was the widespread belief% at least by 3uropeans in the late forties and early fifties% that the 'arshall Plan country directors e*erted more power than the B&7& Ambassador& -#e 7umanitarian 8oti!e rom the onset% B&7& aid programs have always had an underlying humanitarian and ideological basis& $n helping others% however% we are acting in our own self1interest& $n the words of President Johnson EN the pages of history can be searched in vain for another power whose pursuit of that self1interest was so infused with grandeur of spirit and morality of purpose&F The humanitarian basis of B&7& government foreign aid stems from the ideals and actions of the American people as they have evolved ever since the landing of the Pilgrim fathers& These ideals and actions were nurtured and developed by the religious% political% and personal freedoms guaranteed under the Constitution and made possible by our heritage of resources and their development% which has resulted in the highest per capita wealth of any nation in the world& The actions of the B&7& government in rapidly meeting emergencies arising from natural disasters% war% and internal insurrection have been inspired by the continuing e*amples set by the churches and other non1governmental groups over the past century or so& Thus% it has been in the American tradition to help the poor and the needy& "ummar $n summary% then% there are valid reasons for the continuance of foreign aid& $f clearly conceived and properly administered% such aid may be e*pected to serve the interests of the Bnited 7tates by promoting its defense and the security of the ree World% by contributing to its economic growth and spiritual strength% and by helping to develop a world environment of freedom in which the American people may prosper and live in peace& The rationale of other donor nations of the ree World may be considered not unli,e that of the Bnited 7tates% though somewhat narrower in scope& Among significant differences% perhaps% may be mentioned the more limited scope of their aid programs% the greater emphasis on trade in the case of some% and the general absence or subordination of the humanitarian motive& As for Communist aid% the rationale is 0uite different& Their aid has become an increasingly important element in the Communist geo1strategy of world domination as well as a trade outlet not otherwise capable of achievement&

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Bobba* #atteo and PoCell* AndreC -.//>0* 1Aid +ffecti$eness: Politics #atters*4 Inter-American &evelopment +an) Research &epartment Wor)in! Paper .o, /01* &ashington* D%: InterAmerican De$elo"ment BanB6
$n this paper we have revisited the debate on whether foreign aid is effective in enhancing economic performance in recipient countries and in particular in spurring growth& 2ur main hypothesis is that the way aid is allocated is important in determining aid effectiveness& A consistent result of the aid allocation literature is that politics matters and hence it seems natural to 0uestion whether politics also matters for aid effectiveness& 2ur main finding is that aid e*tended to non1allies has a strong positive impact on recipient countries) economic growth% whereas aid to political allies has a negative impact& These results are robust across different samples% model specifications% time hori-ons% estimators and instrumentation strategies& While there are always caveats that must accompany any empirical analysis of this nature% our results do appear to be stri,ing in terms of both 0uantitative impact and robustness& $n particular% we feel our instruments more ade0uately e*plain the pattern of aid than standard donor1recipient time1invariant factors that may e*plain the pattern of aid between allies but not between non1allies& We remain agnostic regarding the precise mechanism behind our results but consider two li,ely possibilities supported by additional evidenceC i6 aid is used to buy political allegiance and hence its effectiveness for growth may be at best a secondary consideration% and ii6 aid between allies may be more tied in other dimensions than aid between non1allies& These results carry strong policy conclusions& They show that foreign aid can be very beneficial to economic development around the world independent of recipient policies& $ndeed% the results stress the role played by donors rather than by recipients& This emphasis stands in contrast to much of the recent debate regarding aid effectiveness% which has focused on recipient policies& We suggest here that donors) allocation policies should be seen as a leading determinant of aid effectiveness&

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Boone* P6 -8;;:0* 1Politics and the +ffecti$eness of Foreign Aid*4 in European Economic Review* 5ol6 </* )o6 .* ""6 .A;= 9.;6
The aim of this paper was to relate the effectiveness of foreign aid programs to the political regime of recipient countries& $ presented a simple analytical framewor, where poverty is caused or enhanced by distortionary policies introduced by politicians& $n my framewor,% aid does not promote economic development for two reasonsC Poverty is not caused by capital shortage% and it is not optimal for politicians to adjust distortionary policies when they receive aid flows& Between #95# and #99" most long1term aid was provided on a regular basis with little or no effective conditionality& $ found this aid increased consumption but higher consumption did not benefit the poor& The point estimates in my regressions show there was an insignificant impact on investment in countries that received less than #<Q of /DP in aid% though standard errors on these estimates were large& $ also found that aid had an insignificant impact on improvements in basic measures of human development such as infant mortality and primary schooling ratios& These results suggest that even while particular programs such as immuni-ation and research can be effective% the bul, of long1term aid programs have had little impact on human development and investment between #95# and #99"& 'y empirical results are consistent with a model where politicians ma*imi-e welfare of a wealthy elite% and consistent with the pessimistic predictions of Bauer 4#95#6 and riedman 4#9<;6& Past e*perience has proven it is possible to dramatically improve human development indicators at low cost over a ten to twenty year period& .re-e and 7en 4#9;!6 argue that the failure of governments to reduce infant mortality and improve basic human development indicators reflects public choice& The findings in this paper suggest that aid programs have not substantially changed government)s incentives to carry out these programs% nor have aid programs engendered or correlated with the basic ingredients that cause investment and growth& These findings emphasi-e the need to better understand the potential role of aid as a tool in changing political incentives& Casella and 3ichengreen 4#99M6 e*amine the potential efficacy of aid in ending harmful wars of attrition between political actors% and 7achs 4#99M6 concludes that short1term aid has in the past played a ,ey role in promoting stabili-ation and maintaining political stability& $n my model aid can be effective when it is conditional on policy andGor political reforms% and it can be effective in narrow cases where aid is non1fungible&

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$ presented some evidence that political reforms alone can play an important role& $n my empirical wor, $ concluded that while at the margin all political systems allocate aid to the elite% liberal political regimes% ceteris paribus% have appro*imately H"Q lower infant mortality than the least free regimes& This may reflect a willingness of liberal regimes to provide more of the basic% though ine*pensive services that are needed to prevent famine and improve human development indicators& But it may also reflect other cultural factors or economic conditions that $ was unable to control for in these regressions& 'y coefficient estimates imply that in order to achieve the same reduction in infant mortality through e*isting long1term aid programs% donors would have to provide annual aid e0ual to #<"Q of /DP for ten years to the recipient country& 2ne plausible implication is that short1term aid programs targeted to support new liberal political regimes% and to encourage greater political and social liberties% may be a more effective means of promoting sustainable development and reducing poverty than current aid programs& $f these new regimes stay in power long enough to improve literacy% health care% and education then they may sufficiently empower the poor in the political system so that poverty reduction becomes self sustaining& But alternatively% it may be that the underlying factors that support liberal regimes and poverty reduction are rooted in historical% cultural and institutional factors that are not affected by new governments& $n this case% new liberal regimes will not survive% or they may not implement the basic policies needed to reduce poverty and promote development&

Boschini* Anne and OlofsgGrd* Anders -.//>0* 1Foreign Aid: An Instrument for Fighting %ommunism34* in Journal of &evelopment Studies* 5ol6 <9* )o6 <* ""6 :..-:<A6
We have analysed why the aggregate supply of development aid decreased so much in the #99"s% focusing in particular on the impact of the end of the Cold War& $n a dynamic panel analysis of #5 donor countries% we found that total aid disbursements were positively correlated with the military e*penditures of the former Warsaw Pact countries in the #95"s and #9;"s% but not in the #99"s& Hence% the end of the Cold War led to cuts in the aid budgets because one important motivation for aid disbursements altogether disappeared& $n an analysis of aid allocation among recipient countries% on the other hand% we found that strategically important countries in the #95"s and #9;"s + defined as those receiving B7 military

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aid during the period + obtained more development aid than comparable countries not only in the #95"s and #9;"s% but also in the #99"s& However% disaggregating the data into donor specific allocation patterns revealed a much more scattered outcome% which probably reflects a combination of different donor patterns and the difficulty of coming up with an appropriate measure of strategic motives for the allocation analysis& As always% a few words of caution are needed when interpreting econometric results& We have throughout the study done our best to control for other potential e*planatory variables 4in particular those that can be argued to be correlated with military e*penditures in the former 3astern Bloc6% but% of course% some of the nuances of the decision ma,ing process are impossible to capture& $n particular% the influence that different donors have on each other% and the influence on political decisions from shifts in public opinion% are li,ely to be important factors that we can only partially account for& However% there is no strong reason to believe that these factors are particularly highly correlated with our primary variable of interest% so even if our picture is incomplete% there is no reason to believe that the effect of the military threat is seriously biased& The intuitive sense% and robustness of our results throughout different specifications% at least convinces us that we are measuring something real& The findings from this paper should be put in the conte*t of the current debate about the future of development aid& The conclusions from this study are that the end of the Cold War triggered a substantial reduction in aggregate aid levels% whereas no clear impact on aid allocation could be established& $f the (war on terrorism) has a similar effect as the Cold War% then we should e*pect an increase in aggregate aid flows whereas the effect on aid allocation should be small& A thorough analysis of whether this has happened is beyond the reach of this paper% but some recent evolutions can put this in perspective& Aoo,ing at aggregate aid disbursements% B7 terrorism1related assistance increased on the order of TH&H billion in fiscal year !""! 4Weiner% !""!6& Also after that% pledged aid commitments have increased in several countries& or instance% #< members of the 3uropean Bnion agreed to substantially increase their aid budgets up to year !"#" at a meeting in Brussels in 'ay !""< 4despite the continents current economic and political problems6% and the world)s richest countries pledged another significant increase in aid commitments at the /; summit in /leneagles% 7cotland% in July of !""<& 2n the allocation of aid% the picture is less clear& The 'illennium Challenge Account 4'CA6 announced by President /eorge W& Bush in 'arch !""! will allocate funding based on objective selection criteria emphasising good governance and sound economic policies% which seems to preclude the option to target strategically important countries& urthermore% much of the recent focus has been on increasing aid to Africa% and on debt forgiveness and fighting diseases that are not concentrated in what should be e*pected to be countries of particular importance in the (war on terrorism)& But% on the other hand% there are currently substantial aid flows being directed to $ra0 and Afghanistan& urthermore% the Bush administration)s sudden decision in Dovember !""! to e*pand the pool of eligible 'CA countries to middle income countries 4including now strategically important countries such as Jordan% 3gypt and Russia6% have been seen as a move to reward countries ta,ing sides with the B7 in the conflict 4Brainard% !""H6& inally% as pointed out in Radelet

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4!""!6% countries li,e 3gypt and China 0ualify for 'CA assistance under current conditions% despite their histories of wasted aid inflows and human rights deficiencies& To conclude% the recent history% from the end of the Cold War to the (war on terrorism)% has had a fundamental impact on the determinants of foreign aid& Aearning from past e*periences can thus be important to better understand what the li,ely effects of current events are going to be& The finding that the drop in aid levels can be attributed to a large e*tent to the end of the Cold War% should be contrasted with the more positive findings that total aid budgets have become less strategically motivated in the #99"s&

Bose* Anurdha -8;;80* 1Aid and the Business Lobby*4 in Bose* Anurdha and Burnell* Peter -eds60 -8;;80* +ritain2s 3verseas Aid Since 1454# +etween Idealism and SelfInterest* ""6 8.7-8<7* #anchester: #anchester (ni$ersity Press6
$n spite of the Conservatives) declared impatience with organi-ed interests% the business lobby continues to operate within the 2.A K2verseas .evelopment AgencyL& The consultation process% an integral part of the political culture% is still very much alive within the 2.A% since ingrained habits and conventions die hard in Whitehall& However% the scope of the discussions has been narrowed considerably owing to the designation of (no go) areas in aid policy& The business lobby has to function within the parameters of limits on public spending and the absence of any significant increases in the aid programme& Therefore the business lobby as a whole and its constituent parts have had to develop a modus !i!endi within the 2.A& This has not proved too difficult since the inherent tendency in British government has always been to factori-e thorny policy issues into manageable units& H# The business lobby has continued to cooperate with the government on certain issues and not on others& Devertheless% since #959 the interactions of the business lobby with the government has become more fraught with problems than the former

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would care to admit& 2ne basic problem of the business community is how to critici-e the government that they all support without seeming to undermine it& $n theory the commercial interests are in full agreement with it about the need for free trade and unfettered competition in the world mar,et& Xet in practice it continues to loo, for generous subsidies and other concessions in order to penetrate or retrain a share of developing country mar,ets& The business lobby has been able to capitali-e upon the government)s #9;" aim of reorienting aid policy by giving more weight in the allocation process to commercial and industrial considerations& However% this has not granted the business lobby unfettered access to the aid budget% for several reasons& $ncrementalism in government% which allows competing viewpoints to be accommodated% persists& Pledges and forward commitments inherited by the Conservatives have also acted as a bra,e on the plans of the business lobby& $n their first term the Conservatives tried to involve the private sector more fully in the overseas aid programme through joint 2.A1CB$ KConfederation of British $ndustryL seminars% but these efforts were gently deflected by the business lobby& British business interests have always considered overseas aid as primarily a governmental activity% preferring to concentrate on lobby specific issues such as an increase in the ATP KAid and Trade ProvisionL and better gearing costs for firms& $t is the author)s contention that the relative success enjoyed by business interests in winning concessions from the government owes as much to the reorientation of aid policy since #9;" as to the s,ill and influence of the lobby itself& The fact that commercial and industrial considerations were made e*plicit criteria for aid giving allowed the .T$ K.epartment of Trade and $ndustryL + a powerful bac,er of the business lobby + more of a voice in the allocation process& $n fact the 2.A)s departmental ethos% which has always shown a strong bias towards money1moving through large capital1intensive projects% has been legitimi-ed even further under the Conservatives& This rare convergence of interests between politicians% the civil service and the business lobby has allowed business interests to ma,e gains where they can% but still within the limits imposed by government policy&

Bressand* Albert -8;A.0* 1!ich %ountry Interests and ,hird &orld De$elo"ment: France*4 in %assen* !obert* ?olly* !ichard* SeCell* ?ohn* and &ood* !obert -eds60 Rich
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*ountry Interests and Third World &evelopment* ""6 9/>99.* London: %room elm6
An analysis of rench objectives and performance in relations with the Third World can therefore contribute% at least in the view of the author% to e*plaining the parado* of rance)s actual or would1be distinctiveness& $t is clear that% when analy-ed in World Ban, 3nglish% rench policies are only marginally different% in either their strengths or their wea,nesses% from those of other countries& As the point is made below even when it comes to geographical emphasis% rench trade policy is no longer characteri-ed by the (chasses gardOes) mentality of the colonial period& The rench ranc -one is no longer a special and major trading partner& Whatever yardstic, is chosen to measure it 4i&e& including or e*cluding some or all overseas provinces6% the rench aid effort is at most slightly above 23C. averages and at best ten per cent short of the internationally agreed target of "&5 per cent of /DP% neither disreputable nor an e*ceptional achievement& rench positions on the standard D$32 KDew $nternational 3conomic 2rderL issues% as e*pressed in BD Resolutions% have been on the whole marginally more forthcoming than those of other major Western countries% even if on some particular issues% other countries ta,e a more (progressive) position when they have the will and the financial means to do so% as was the case for /ermany on the debt cancellations& rench distinctiveness lies elsewhere% and can only be understood if one broadens the analytical framewor,& $t is to be found in the deeper emotional reactions% which Third World causes have evo,ed% under varying forms% among the rench intelligentsia and political class& $t is to be found in the more e*plicit recognition of the political and security dimensions of Dorth17outh relations& And it is to be found also in the way in which the (standard) development co1operation and economic relations are managed 4notably in terms of bilateralGmultilateral and geographic emphasis6 to ta,e into account this broader conte*t as well as the increasingly crucial issues related to the dialogue on energy& $s this overall policy posture li,ely to be adapted to the needs of the #9;"sW Contrary to the reluctance with which many specialists in the pure science of economics tend to view political factors% the present author believes that this association is li,ely to be more and more called for by the international environment& To view countries such as 7audi Arabia% Bra-il% 'e*ico% Algeria% not to mention China or Cuba% only as economic actors or even more narrowly% only as outlets for manufactured goods% is to ignore the nature of international relations& The special circumstances which prevailed after the 7econd World War and the fact that some of the most successful (developing nations) of the time 4Japan and% later% ?orea6 had little political room for maneuver have made it possible for economists to ta,e the political and security framewor, for granted and therefore to thin, in terms of what appeared as (depolitici-ed) economic relations& But in an increasingly multipolar world% a country li,e rance needs to perceive developing countries as

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political actors as well and to accept the conse0uences of that perception& 'e*ican or Bra-ilian trade barriers% the new role of investment as a precondition or even substitute for direct e*ports% are political as well as economic facts understandable only as the e*pression of global national development objectives& $t so happens that the rench attitude towards the developing world% although it evolved in part as a way to cope with the decoloni-ation problem and in the conte*t of 3ast1West rather than Dorth17outh diplomacy is able to encompass a global approach more easily than purely economic approaches& This is certainly not to say that% in its concrete e*pression% this approach is necessarily well adapted to the present conte*t& 2n the contrary% rench policies have tended to display rigidities which suggest that a regular process of reassessment will be needed& Among the numerous issues which would have to be addressed% three seem to be of paramount importanceC 4#6 the human aspects of relations% both in terms of the presence of rench e*patriates in the Third World and of the presence of migrant wor,ers in rance: 4!6 the geographical emphasis of the various aspects of rench policy: and 4H6 the concrete translation into practical policies of the slogans of industrial restructuring 4(redOploiement industriel)6 and (organi-ed trade e*pansion) which so far have provided little more than a conceptual framewor, for the rench search for a new role in the world economic order& 4Dot addressed here because it would deserve a separate essay in a global 3uropean perspective% 3uropean co1operation must have a major impact on rench policy formulation% notably on the last two of these issues&6 (a)-#e #uman aspects of rench relations with the Third World should be seen as a two1way relationship& Whereas in the #9>"s several million migrant wor,ers had been needed to fill the gap between rench growth and rench human resources% it is now rench e*patriates wor,ing in developing countries% on short and medium term assignments% who are li,ely to be the new e*pression of economic interdependence& The massive presence of rench (coopOrants) in African countries will% at the same time% have to continue its evolution from direct involvement in the economic and cultural life of these countries towards a contribution to training local managers to do the job and set up self1sustaining technical progress& Although there are about #&< million rench people living in foreign countries% including M""%""" whom rench consulates are aware of as living permanently or temporarily in the Third World% rench companies find it e*tremely difficult to recruit enough personnel to develop their presence overseas& The reluctance to e*patriate oneself seems decidedly greater in rance than in other Western countries& Hence the very high 4and even% in the light of growing $ndian and ?orean competition% e*travagant6 price tag of rench e*pertise& The creation% within the oreign 'inistry of a (.irection de ran^ais de l)3tranger) illustrated the growing reali-ation of the importance of this problem& But much more would be needed as part of a global employment policy& 2ne should note in particular that while there

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are more than M"%""" rench people living in $vory Coast% there are only !M%""" in the whole of Asia and M5%""" in Aatin America& At the same time the presence in rance of #&; million migrant wor,ers 4two1thirds of whom come from the Third World6 and of a total migrant population of M million has become a domestic political issue& The new socialist government will have to find a war to remain faithful to its commitment to put an end to the policies of the previous government 4which combined financial incentives for departing migrants with a heavy1handed policy on illegal immigration6 while pursuing its goal of reducing domestic unemployment& (b) -#e geograp#ical emp#asis of relations with the Third World will also present rench decision1ma,ers with difficult choices& 'any foreign observers have described these relations as organi-ed around three circlesC 4#6 the inner circle of blac, African countries which participate in the annual (Conference ranco1Africaine)% recently set up as a small1scale replica of Commonwealth meeting% and which receive the bul, of the development co1 operation efforts: 4!6 a second circle consisting of the other African countries as well as Caribbean% Pacific and 'editerranean countries to which the 33C AomO Convention and (global 'editerranean policy) address themselves: and 4H6 a third circle defined negatively as the (non1associate) A.Cs which have no preferential agreement lin,s to rance either directly or through the 33C& This view is of course not deprived of factual bases and can even be considered as a rough appro*imation of the institutional setting for the rench de!elopment cooperation policy& 7imilarly after more than one century of colonial involvement% rench political relations with the Third World cannot be but influenced by historical factors& Xet it would be a mista,e to e*trapolate to the economic level this political fact1of1life and to conclude hastily that rench economic relations with the Third World are organi-ed around the preservation of protected mar,ets 4(chasses gardOes)6& This would ignore a major reorientation which has brought the share of the rench ranc \one in total rench e*ports from about one1third per cent in the early #9>"s to five per cent in #95;& 7imilarly the importance of the \one in terms of rench currency holdings has almost vanished although the \one continues to represent an element of stability and solvency for the African member countries& An economic e*planation of rench security concerns in Africa would li,ewise overloo, the relative independence of political and economic factors in rench policy& rance had indeed very little economic interest to protect in 7haba where its investments are M" times smaller than those of Belgium and ten times smaller than those of America& 3ven its imports of cobalt come from 'orocco and not \aire& Devertheless% a clear wea,ness is the insufficiency of the rench presence in the more advanced countries& 7teps have been ta,en to correct this situation such as the funding of H"" fellowships a year for students of a do-en rapidly industriali-ing countries% the signing of a significant oil deal with 'e*ico and numerous presidential and ministerial official trips to such countries& Xet American financial flows towards the seven most advanced A.Cs were H< times higher in #95< than similar flows of rench origin while they were #! times lower in the case of rench1

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spea,ing Africa& /ermany% with financial flows to the seven most advanced A.Cs si* times higher than rance% has also clearly ta,en a lead of major economic significance& 2bviously% rance cannot allow% without ris,% its (portfolio) of interests in the Third World to remain so much out of balance with the intrinsic importance of the countries considered& (c) The third major issue which rance has to address in her relations with the Third World is that of the economic conse9uences on Frenc# industr of the emerging new international division of labor& Dot that trade with developing countries is the most important source of difficulties for rench industryC technological change and competition from 23C. countries are on the contrary considered by rench e*perts as having a much stronger impact& But competition from low wage countries does represent a highly visible threat for certain industrial branches and% more importantly for a number of poorer regions 4ten departments out of 9! according to a recent study6 in which these branches had been the ,eystone of regional development policies during the #9>"s& 'oreover% in spite of findings to the contrary by the group of e*perts which wor,ed 4under the Chairmanship of Xves Berthelot6 on the subject% MM per cent of rench public opinion does consider 4according to a 7eptember #959 poll6 this competition to be one of the major reasons for present unemployment levels& 2bjective and subjective reasons therefore e*plain why the rench government% even at the time when the emphasis was put on adjusting to free mar,et forces% has been more sensitive to the need to ,eep the pace of the adjustment process within socially and politically acceptable limits& Hence its emphasis on the need to (organi-e) the e*pansion of trade% a concern to which the new government will probably give a more systematic e*pression& Bnderstandable as it can be in the rench conte*t% this policy does however raise considerable implementation problems& The translation into /erman and 3nglish of the slogan (libOralisme ogranisO) under which it has 4imprudently6 first been presented has an 2rwellian (double1thin,) flavor which has aroused little sympathy& Aside from the 'ulti1fibre Agreement% few concrete e*pression of this policy have justified so far the political cost of a conceptual attitude which other Western countries have often 0uietly put in practice while reasserting very loudly their commitment to liberalism& 2n this issue as on many other ones% rance is therefore confronted with the difficult search for a synthesis between the distinctiveness that results from the rench way of loo,ing at the world and the need to ta,e increasingly into account the common constraints of interdependence&

Breuning* #ariHBe -8;;70* 1&ords and Deeds: Foreign Assistance !hetoric and Policy
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Beha$ior in the )etherlands* Belgium* and the (nited Dingdom*4 in International Studies Quarterly* 5ol6 9;* )o6 .* ""6 .97-7<* BlacBCell Publishing* Ltd6
The foreign assistance rhetoric and policy behavior of the Detherlands% Belgium% and the Bnited ?ingdom are different& 2n balance% the rhetoric of the .utch and British decision ma,ers shows greater evidence for the hypothesi-ed role conceptions than that of the Belgians& The policy behavior measures distinguish the three states 0uite well and are mostly in the hypothesi-ed directions& Table #" summari-es the results for each of the three states& A comparison with Table # shows that the Detherlands and the Bnited ?ingdom fit the rhetoric and behavior measures for% respectively% the activist and power bro,er role conceptions 0uite well& The Belgian case combines policy behavior associated with the merchant role conception with rhetoric that emphasi-es activist and merchant themes about e0ually& This incongruence between rhetoric and behavior is perhaps e*plained by the structure of Belgian debateC foreign assistance% foreign trade% and foreign affairs are debated jointly during many parliamentary years& or purposes of comparison% only those portions of these joint debates were coded in which the Belgian decision ma,ers t#emsel!es indicated they were addressing foreign assistance& This was done to preserve cross1national e0uivalence in the debates used for coding& This strategy may have s,ewed the results in favor of the activist role conception& However% including the combined debates in their entirety would most li,ely have s,ewed the results in favor of a greater volume of merchant themes& This implies that foreign assistance may not be perceived as a wholly separate and distinct issue area by the Belgian decision ma,ers& $t is possible that securing BelgiumZs economic interests is so important that it permeates all of its foreign relations% including foreign assistance& The assumption that decision ma,ers perceive foreign assistance as a distinct issue area is based in the widespread usage of the issue area concept 4see \immerman% #95H: Potter% #9;": 3vangelista% #9;96& $t is an almost self1evident device to investigate some aspect of foreign policy rather than all of it& While for both the .utch and British cases the concept poses no problem% the Belgian case indicates that decision ma,ers may not necessarily slice up the whole of foreign policy in the same manner as the analyst& $f so% then the Belgian case violates an assumption of the framewor, and thereby points out a limiting condition for the framewor,Zs applicability&

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BelgiumZs distinct language communities provide another potential e*planation for the inconclusive findingsC to the e*tent that the two groups perceive themselves as separate communities% another assumption of the role conception framewor, is violated% namely% that a common societal1cultural bac,ground results in common cognitive biases& There are indeed slight differences in the relative emphasis lemish and Walloon members of Parliament place on the various role conceptions 4Breuning% #99Mb6& The significance of these differences is unclear& They intersect with differences in party affiliation& The ministerZs party affiliation does not have a significant impact on the variability of relative emphasis on the various role conceptions& Ai,ewise% the slight difference between lemish and Walloon members of Parliament may not be significant& 2n the basis of the results presented here% it is indeed legitimate to spea, of national role conceptions& The observed shifts in the relative emphasis in the rhetoric cannot be attributed to ministerial agenda1setting& Xet% the members of Parliament react differently to ministers with different party affiliations& $t appears% then% that there is a consensus about the stateZs role in the foreign assistance issue area& Parliament appears to act to preserve the consensus& Whether this is uni0ue to the foreign assistance issue area or might be found in other policy domains is an empirical 0uestion that only further research can answer& As indicated% most policy behavior measures are in the hypothesi-ed direction for all three cases& The e*ception is the greater than e*pected emphasis on bilateral aid of both the Detherlands and Belgium% which is more in line with the behavior hypothesi-ed for the power bro,er role& This runs counter to 3ast)s 4#95H6 finding that small states rely more on multilateral foreign policy because of their lesser capacity to administer and implement programs on their own& 2f course% 3astZs research concerned the foreign policies of small states more generally% and it is possible that foreign assistance provides a payoff that ma,es it worth the effort for small states& Bilateral assistance gives the donor state greater control over the destination of such aid% which may enhance the potential usefulness of foreign assistance in the service of trade relations& This e*planation fits well with the merchant% but less well with the activist role conception& The focus of multilateral aid was hypothesi-ed to be on the World Ban, and associated institutions for both the power bro,er and merchant role conceptions% and on BD agencies for the activist& Although the relative emphasis on BD agencies does not stand out if compared to other .utch multilateral allocations% it is consistently higher than the comparable emphasis of Belgium and the Bnited ?ingdom& Both of the latter favor the World Ban, over BD agencies& The tying status of bilateral aid clearly distinguishes the Detherlands from both Belgium and the Bnited ?ingdom& The latter two ma,e e*tensive use of tied aid& The Detherlands consistently provide a substantial proportion of its aid untied& 'ost of the remainder is partially rather than wholly tied& $n sum% the empirical evidence shows a congruence between the rhetoric and policy behavior of the foreign assistance decision ma,ers of the Detherlands and the Bnited ?ingdom that conforms to the hypothesi-ed role conceptions& The rhetoric and policy behavior of the Belgian decision ma,ers does not e*hibit a similar congruence& The lac, of distinction between foreign assistance and foreign

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economic relations partially e*plains the failure of the Belgian case to fit the framewor,& Rhetoric and policy behavior co1vary in two of the three cases& This suggests that there is some relation between the two& The congruence between rhetoric and behavior found in this study shows that this approach promises to enhance the understanding of cross1national differences in policy behavior& Parliamentary debates% li,e other rhetorical data% are not a EcleanF measure of motivation& However% the themes emphasi-ed in parliamentary debates are not randomly distributed across time and states& Assessments of foreign assistance policy motivation are therefore strengthened when separate measures of rhetoric and behavior point in the same direction& Words and deeds will enlighten us more about foreign assistance policy motivation than deeds alone&

BroCn* Deith and ,irnauer* ?ill -.//;0* Trends in 6S 'orei!n Assistance 3ver the Past &ecade# Report Produced for Review "y 6SAI&* &ashington* D%: #anagement Systems International6
'ajor events and changes during the past decade have had dramatic impact on the means by which the B&7& /overnment and its citi-ens engage the world& Terrorism% substantial and sustained war efforts% the spread of H$IGA$.7% the financial crisisY though far from a complete listYare some of the more significant happenings that have shaped the international conte*t for the Bnited 7tates& With these changes have come associated shifts in the organi-ation and delivery of B&7& foreign assistance& The Bnited 7tates Agency for $nternational .evelopment 4B7A$.6 has commissioned 'anagement 7ystems $nternational to write a series of papers to help the Agency better understand the trends in B&7& foreign assistance and international evaluation theory and practice% and its implications for evaluation of development programs& This paper focuses on the trends in foreign assistance programming and the changes in how foreign aid has been delivered over the past decade& $t does not attempt to provide recommendations for how foreign assistance should be structured under the new Administration& /lobal official development assistance 42.A6 doubled over the past decade% increasing from T<!&# billion in #999 to T##9&; billion in !"";% with the Bnited 7tates accounting for !! percent of all 2.A& B&7& 2.A grew at a faster rate% almost

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tripling from T9&# billion to T!> billion& 3ven with this growth% B7A$.)s share of bilateral and multilateral 2.A fell from >M&H percent in #99; to H;&; percent in !""< according to the .evelopment Assistance Committee 4.AC6& According to the .epartment of 7tate% it rebounded to M5 percent in !""5 as B7A$. too, on greater responsibility for stabili-ation activities in $ra0 and Afghanistan and for implementing programs under the President)s 3mergency Plan for A$.7 Relief 4P3P AR6& Although it seemed as though decision1ma,ing was becoming more centrali-ed with foreign assistance reforms% foreign aid continued to fragment with the creation of new entities such as the 'illennium Challenge Corporation 4'CC6 and the 2ffice of the B&7& /lobal A$.7 Coordinator 42/AC6 in the 7tate .epartment& urthermore% both the .epartment of .efense 4.2.6 and Treasury e*panded their authority and their total share of foreign assistance& Between its inception in X !""H and the end of X !"";% the 'CC has entered into compact agreements worth T>&H billion& .uring the same period% threshold programs administered by B7A$. reached TMM" million& 2/AC is responsible for administering the P3P AR% the single largest foreign assistance program& unding for P3P AR through the /lobal H$IGA$.7 $nitiative 4/HA$6 account is e*pected to reach almost TM&; billion in X !""9& 2ther new programs and entities at the 7tate .epartment include the .emocracy and Human Rights und% the 'iddle 3ast Partnership $nitiative 4'3P$6% and the 2ffice of the Coordinator for Reconstruction and 7tabili-ation 47GCR76& Whereas foreign assistance has always been aimed at reconstruction efforts in the aftermath of conflict% B&7& aid gained greater prominence during the decade with the elevation of development to an e0ual footing with defense and diplomacy& The Dational 7ecurity 7trategy in !""! and again in !""> e*tolled its importance& With the advent of the conflicts in Afghanistan and $ra0% foreign assistance is becoming increasingly militari-ed as the .epartment of .efense plays a bigger role in stabili-ation efforts& .2. increased its share of total foreign assistance from <&! percent in !""# to #< percent in !""5 4B7A$. !"";e6& Bnder a number of e*panded and new accounts and authorities% .2. is providing development1type assistance 4e&g&% infrastructure% democracy promotion% and economic development6% which% along with the creation of the 2ffice of the Coordinator for Reconstruction and 7tabili-ation further blurs the line between the different agencies& Health became the predominate sector for foreign assistance during the past decade% with e*plosive growth due to the H$IGA$.7 epidemic& unding for health programs rose from T!<"&5 million in Child 7urvival and Health 4C7H6 funds in #999 to TH&9 billion in C7H and /HA$ funds in !""9& P3P AR began in !""M with a legislative commitment of T#< billion over five years& The majority of this funding went to fifteen focus countries% almost all of which are located in Africa& $n !"";% the reauthori-ation act increased funding for P3P AR for TM; billion over the ne*t five years% including T< billion for malaria and TM billion for tuberculosis& Another trend in development assistance was the shift of funding toward Africa& /lobal 2.A for Africa increased from T#"&H billion in #999 to T!M&< billion in !""9& 'oreover B&7& foreign assistance to the continent grew at a faster rate% 0uadrupling to T< billion for X !""9& $n addition to P3P AR funding% the reasons for this growth included the signing of eight 'CC compacts% new presidential initiatives in areas including trade% education and food security% and counter1terrorism initiatives&

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.evelopment Assistance to Africa increased <#&< percent and 3conomic 7upport unds increased 9"&H percent over the same time period& The theme of Eaid effectivenessF has emerged over the past decade& To address criticism regarding the effectiveness and utility of donor assistance% the .evelopment Assistance Committee 4.AC6 is wor,ing to promote% support and monitor progress on harmoni-ation and alignment of aid& The Paris .eclaration% signed in !""<% set forth concrete actions for donors and recipient countries around five principlesC local ownership% donor alignment% harmoni-ation of aid% managing for results% and mutual accountability& The Bnited 7tates has lagged behind other donors in the implementation of the Paris .eclaration: however% actions have been ta,en to continue and e*pand managing for results and improved coordination with partner countries and other donors pool funding% move towards general budgetary support and shift away from projects& There are also more private actors in foreign assistance& Private sources now account for over ;" percent of total B&7& based financial flows to developing countries& Remittances from the Bnited 7tates% the largest contributor% reached TM<&> billion in !""5% up from T!5&M billion in #999& Aow1income countries received some TH"<&H billion dollars& oundation giving increased from TH&! billion in !""" to T<&M billion in !""5% mostly due to the establishment of the Bill and 'elinda /ates oundation& Corporate giving was estimated at T<&< billion in !"">& 7tructurally% the delivery of foreign assistance also changed& $n #99; B7A$. became a statutory agency% reporting directly to the 7ecretary of 7tate& To coordinate foreign assistance more effectively% the 7ecretary created the 2ffice of the .irector of oreign Assistance 47tateG 6& The oreign Assistance ramewor,% created in !"">% became the organi-ing framewor, for the delivery of aid% and is supposed to tie programming to budgeting and performance& Aastly% operational planning% which moved B7A$. from long1term strategies to short1term planning% became the basis for coordinating programming& $n !"""% in response to growing private flows to the developing world and the desire to leverage this growth% B7A$. created the 2ffice of /lobal .evelopment Alliance 4/.A6% a fourth pillar in the Agency at that time& Although it has been moved to the 2ffice of .evelopment Partners% it and the public1private alliances it promotes remain an important mechanism for implementing development programs& By mid1 !"";% /.A claimed that >;" alliances had been formed% and more than T9 billion dollars of private funding had been leveraged& The e*pansion of presidential initiatives also occurred during the decade& 7ome !! initiatives were announced& 7ome of these were funded with new monies% and others were programs cobbled together to meet these e*ecutive directives& These initiatives were important% but typically created without a strategy on how to integrate it with e*isting programs on the ground& $nitiatives also added to the heavy reporting burden placed on B7A$. staff& B7A$. capacity for implementing foreign assistance had been diminishing since the mid #9;"s& Hiring free-es have placed a heavier burden on staff as funding and program re0uirements increased over the past decade& The increased need for coordination among programs and initiatives has also added to this burden&

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Compounding the problem of overburdened staff is the growing number of employees becoming eligible for retirement in the near future& The agency e*pects that H# percent of all civil servants and MM percent of all oreign 7ervice 2fficers will be eligible to retire in !"#!& To increase staff capacity% both in numbers and s,ill levels% B7A$. instituted the .evelopment Aeadership $nitiative in X !"";% which is aimed at hiring up to 9"" new staff and increasing training in technical and Esoft1 s,illF topics& The global financial crisis will have a profound impact on developing countries through reduced growth& The World Ban, estimates that global /.P will contract by #&5 percent in !""9& $n the developing regions% the Ban, estimates that /.P will fall by ! percent in 3urope and Central Asia% by #&9 percent in 7outh Asia% !&< percent in 7ub17aharan Africa 4World Ban, !""9d6& The Ban, estimates that when there is a # percent decline in development countries) growth rates% an additional !" million people fall into poverty& Hard hit will be countries with large numbers of people whose incomes hover around the poverty rate& The view on 2.A is mi*ed& The BD predicts a cut in !" percent% whereas the World Ban, is e*pecting to triple lending to TH< billion in !""9% and the Bnited 7tates Administration has promised a doubling of aid for X !"#"& Private capital flows will decrease but some of the largest foundations% including the Bill and 'elinda /ates oundation% vow to maintain or increase funding despite shrin,ing endowments& Predictions for growth in !"#" remain positive% although a continued contraction will have major repercussions for B&7& foreign assistance and developing countries&

BroCn* &illiam -.//;0* 1!econsidering the Aid !elationshi": International !elations and Social De$elo"ment*4 in The Round Ta"le* 5ol6 ;A* )o6 <.A* ""6 .A7-.;;6
The foregoing discussion now allows at least a preliminary answer to the two 0uestions $ posed& Ta,ing them in reverse order we can see that any donor policy based on an e*pectation of African political and institutional conformity to a simplistic liberal ideal is li,ely to face considerable obstacles& The framewor, presented above would also suggest that those donors or analysts who describe us a world consisting of unproblematic uniform processes% whether they be the spread of liberal governance% the dominance of neoliberalism or the spread of capitalist

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social relations% are somewhat wide of the mar,& $nstead we have a much more comple* agenda for future research% not least of which is the issue of unevenness of change within Africa& Harrison% for one% has pointed to the variability with which different African states have adhered to the World Ban,)s governance agenda 4!""M: see also Whitfield% !""96& He is also surely right to point out that the long histories of interaction between African societies and the wider world have produced differing configurations of liberal and illiberal social forces within Africa 4Harrison% !""M% pp& MM+M96&#" Xet% by specifying political variation and combined development as general% rather than specifically African% features of the world% it also allows us to bring into 0uestion the self1image of donors themselves& Policy rhetoric might well portray an easy adherence to liberal ideals of law bound states e*isting in a world of liberalised mar,ets but the inability of donors to carry out their side of the liberal bargain itself demonstrates the absence of any simple homogeneity among even the developed states& While the liberal consensus continues to have political force within and outside of Africa there is also clearly a significant gap between rhetoric and reality& As a conse0uence we can e*pect continuing tension in the aid relationship as a mechanism by which donors and recipients struggle over the content of this particular international relationship& 7uch tension turns ultimately on the differences between the character of state1society relationships in Africa on the one hand and the ,ind of liberal capitalist social development donorsYand some African leadersY say they want to see created on the other& 3ven if high1level politics presents us with a new consensus on aid% deep issues of social development need to be addressed for us to produce a rounded account of this aspect of international relations& The disciplinary and theoretical conte*t outlined at the start of this article was a twin challenge to analysts of Africa)s international relationsC to situate understandings of the geopolitics of Africa)s international relations in a broader conception of processes of social development: and to incorporate within theoretical framewor,s the variation in social and state forms and% indeed% historical e*perience& Although in many ways only a preliminary investigation% the analysis presented above suggests that these challenges can be met% and moreover% that serious attention to these aspects of international relations opens up useful ways to reframe research into other aspects of Africa)s international relations&

Bueno de #esIuita* Bruce and Smith* Alastair -.//>0* 1Foreign Aid and Policy %oncessions*4 in Journal of

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*onflict Resolution* 5ol6 78* )o6 .* ""6 .78-.A<6

We propose a theory of aid1for1policy deals& While we believe this is a major determinant of aid giving% we do not deny that aid might be given for other purposes& Aid is just one weapon in the foreign policy arsenal of leaders 4Baldwin #9;<6& $n this article% our approach has been to embed our e*planation of aid giving within the conte*t of the selectorate theory of political survival& As Bueno de 'es0uita et al& 4!""H6 show% the selectorate model e*plains many other features of domestic and international politics& 2n the international side% for instance% it e*plains immigration and emigration% the democratic peace% and patterns in nation building& That a single theoretical framewor, can e*plain results in many disparate political arenas provides reassurance relative to a tailor1made application to account for one aspect of the larger political pu--le& 2ur model offers important policy advice for those who wish to help the needy around the world& Receiving aid is most li,ely to improve the welfare of citi-ens in large coalition systems& $n such systems% the majority of the additional resources are allocated to public goods% and the leader can retain only limited resources for her own discretionary projects& Aid given to such systems is li,ely to promote economic growth and enhance social welfare& B&7& reconstruction aid to Western 3urope under the 'arshall Plan is an e*ample of such a success story& $n small coalition systems% aid resources disproportionately end up in the hands of the leader and her cronies in the form of private goods& Aid does little to promote growth and development 4Burnside and .ollar !"""6& $n terms of promoting development% the theory)s implications are clearC political reform needs to precede economic development& The democratic institutions of Western 3urope ensured that the B&7& 'arshall Plan)s dollars promoted vigorous growth and produced a counterbalance to 7oviet incursions into 3urope& Aid to poor democracies around the world would li,ewise generate effective development& An emphasis on enlarging winning coalition si-e around the world is the most effective way to alleviate poverty& Bnfortunately% such goals are generally inconsistent with the survival incentives of leaders in large coalition donor countries& The survival of leaders in large / systems depends on providing for the welfare of their supporters and not on the welfare of people abroad& $t is far easier for leaders to buy the public goods their citi-ens value from a small coalition state than from a large coalition democratic system& Bnless it is the case that the policy goals in the donor state are furthered by enhancing growth in the recipient states 4as we might argue was the case under the 'arshall Plan6 or the citi-ens in the donor state really care about promoting growth abroad 4as% for e*ample% Aumsdaine K#99HL and Doel and Therien K#99<L have argued is the case for 7candinavian nations6% then leaders in donor states promote their political survival better by buying policy from autocrats than they do by pushing for the institutional reforms necessary for effective development& As van de Walle 4!""#6 observes% aid often undermines the attempts at democratic reforms& The

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selectorate theory paints a depressing picture about the li,ely effectiveness of foreign aid for alleviating poverty around the world&

Burnell* Peter -8;;80* 1Introduction to BritainJs O$erseas Aid: BetCeen Idealism and Self-Interest*4 in Bose* Anurdha and Burnell* Peter -eds60* +ritain2s 3verseas Aid Since 1454# +etween Idealism and Self-Interest* ""6 8-98* #anchester: #anchester (ni$ersity Press6 Burnell* Peter -8;;90* 12ood 2o$ernment and Democratization: A SideCays LooB at Aid and %onditionality*4 in &emocrati7ation* 5ol6 8* )o6 .* ""6 <A7-7/96

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7ome aspects of the aid donorsZ current interest in political conditionality are e*amined in the light of perspectives from the aid receiving world& The chances of implementing policies for good government successfully through the attachment of political conditions to aid will be served byC clarity of aims and objectives on the part of the donors: transparency of purpose and consistency in application: a strategic grasp of the political comple*ities of each aid receiving country% in order that the application of conditionality does not wea,en the friends of good government and arm its opponents& $deally% the modus operandi of political conditionality should e*hibit the very same characteristics that are held to provide the reasons for attaching the conditions% such as transparency and greater openness% accountability and the rule of law& $n practice this ideal may be unattainable% especially with regard to reconciling the moral of political accountability in the aid1receiving countries with the realities of power and influence in international relations&

Burnell* Peter -8;;>0* 1,he %hanging Politics of Foreign Aid = &here to )eKt34 in Politics* 5ol6 8>* )o6 .* ""6 88>-8.7* Political Studies Association6
Aid cannot be proven to have become more% or less political with the passage of time& $n the #99"s there is a new politics of aid whose intention is to promote systemic political change in recipient countries& But the old politics% incorporated in e*change conditions% have not gone away& $ndeed% aidZs tie with what donors understand as their national interests is (virtually a*iomatic) 4Hoo,% #99<C *i6& Thus% some familiar goals continue to motivate the what% who% why and wherefores of foreign aid% with conse0uences that often conflict with pure models of aid for good governance% democracy and human rights& The nature of aid relationships continue to be coloured by the respective bargaining strengths of the participants& urthermore% there is a belief that the conditionalities of structural economic adjustment% which continue to be attached to aid% threaten to undermine the democratic prospects% in two ways& $n so far as they are responsible for social discontents which produce divisions in society% the consolidation of stable democratic government is made more difficult& And to the e*tent that these economic measures are believed to be imposed by non1accountable e*ternal bodies and in far from transparent ways% national self1determination becomes a chimera& That means societies have some cause to become more apathetic about the

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electoral process and indifferent to whether elections reshuffle government& 'oreover% democratisation that is accepted primarily as an unproven passport to sustained economic progress could prove a shallow rooted phenomenon% rendered vulnerable to disappointed material e*pectations& $n any case% democracy understood as a condition of political e0uality% achievable only in the absence of great socio1economic ine0ualities% seems not to be an aim& Also e*cluded is the democratic reform of international and multilateral development and other organisations where big powers% wealthier 23C. countries in particular% tend to dominate% especially the $nternational 'onetary und% World Ban, and Bnited Dations 7ecurity Council& 7ome observers are deeply sceptical about aid)s ability to survive much longer on anything li,e its former scale& They see it being overta,en by the benefits of vastly increased international private capital flows and globalisation more generally& But for many countries% aid that buys1bac, or forgives accumulated foreign debt is essential to improved development prospects& $n any case some poor countries are being increasingly marginalised in the world economy& or others% the value of aid as a compensatory device will increase% if globalisation brings disadvantages due to profound asymmetries in the structure of international economic relations 4Raffer and 7inger% #99>% chapter !6& 3lsewhere% where gains are undoubtedly being achieved from greater integration% increases in social deprivation are not uncommon& The growth in the poor% to well over one billion people 4around H" per cent of the worldZs population live on less than a dollar e0uivalent a day6 remains the most common justification for aid among its supporters in the West& However% the argument that social objectives of poverty reduction should be introduced more forcefully onto aidZs agenda% including forming a third generation conditionality% is not without difficulties& There is little hard evidence to demonstrate the li,ely effectiveness& And among economists who argue the superior merits of unsubsidi-ed economic and financial mar,ets% and counsel a reducing role for concessionary flows% some believe grant aid especially encourages pauperisation 4Ryrie #99<% p& ##M6& Thus% even if confidence in todayZs politics of aid soon starts to erode% the connections between aid and poverty will remain relevant to research agendas studying the relationships between development% democratisation and international influences% probably for 0uite some time to come&

Burnett* Stanton -8;;.0* Investin! in Security# Economic Aid for .on-Economic Purposes* &ashington* D%:

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%enter for Strategic International Studies6

"tarting at t#e &nd+ /#at t#e "tud 8eans for Polic ma2ers

and

Although the analyses done for this study have spar,ed controversies of interpretation among the groups steering the wor, 4composed principally of social scientists from C7$7% congressional staffers e*pert in B&7& foreign assistance% and government officials bearing program responsibility6% some findings are so clear and agreed that they constitute lessons of history that the future cannot possibly ignore& The overall record of B&7& economic assistance during the cold war period% of which this study analyses a slice% is clearly a record studded with successes: the difficulties e*amined here do not detract from the fact that both globally and in many single countries the many programs that transferred B&7& resources to other nations in order to achieve B&7& foreign policy objectives did just that& 7ometimes the paths ta,en were surprising: some of the successes were almost accidental% others were buried under failures% problems and unintended conse0uences: some desired outcomes even came about in spite of conceptual failures on Washington)s part& But B&7& economic and military assistance played a ,ey role in winning the cold war and therefore deser!e unblin,ing analysis in order to increase the odds for success in the new era& The evidence provided by four full1scale country case studies was broadened by comparison with a C7$7 study of similar issues in five sub17aharan African countries and then by an informal search by the Center)s regional study programs for significant cases that would contradict or complicate the main general themes& Painful though they may be% the conclusions that must be drawn from some of the failures of B&7& wishful thin,ing% and from some successes and unintended conse0uences% are too powerful and consistent to go away as foreign economic assistance is considered at a time of sharply limited resources& The successes in this history have a common threadC $#at $as best ac#ie!ed la at ground 6ero relati!e to t#e o!ert purpose of t#e aid & That is% whether the aim was economic or noneconomic% programs that were soundly designed and effectively administered were able to achieve t#eir most immediate goals & $t proved possible to give aid to build a dam and have the dam built& $t proved possible to Epay rentF on a military base and then use the base&# 1ut distance from t#ese o!ert, primar ob*ecti!es reduced t#e li2eli#ood of success and opened t#e door for increased unintended conse9uences. $f the building of the dam is designed to provide power for a group of towns% that too can probably be accomplished& $f the reason for doing t#at is to trigger an overall economic improvement in the region% the odds go down and the unpredictability is increased& $f the reason for t#at 4improving the entire economy of the region6 is to ma,e the governments of that region pro1B&7& liberal democracies% the connections get much less reliable& And if the ultimate goal is to ma,e the citi6ens pro1B&7& liberal

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democrats% no one who reads this record can invest any serious hope in such a proposition& Although important comple*ities must be introduced in the body of this report% they will not reduce the force of the call that history ma,es on B&7& policyma,ers% in both the administration and the Congress% to recogni-e that they should only decide to invest to build the dam if they are satisfied with the immediate resultC getting the dam built& Achieving the immediate ends of such overseas assistance is difficult enoughC this study demonstrates the ris,s of putting forward anything beyond the immediate goal as the reason for ma,ing the investment& But it recogni-es that programs with multiple and noneconomic goals are still going to be manufactured and so charts a path with the bet odds for success% noting the avoidable traps& As 3rnest Preeg)s Philippine case study demonstrates% the failure to devise sound and achievable overt objectives and then maintain these objectives as t#e entire content of our serious aspirations for $#at $e intend t#e aid to accomplis# can lead to the result that more #arm t#an good is accomplis#ed for o!erall :.". ob*ecti!es & And% corollary to this% all the case studies demonstrate that e*tended political and security objectives can be e'pected to undermine t#e ac#ie!ement of t#e o!ert economic ob*ecti!es& The aid community in the Bnited 7tates has long argued for greater purity of purpose 4i&e&% sound economic goals only6 in B&7& foreign assistance% and the study dramati-es why it feels this way& But the study also recogni-es that objectives just as compelling as the EoldF cold war objectives are already thrusting themselves upon policyma,ers and so e*amines the 0uestion of how best 4and worst6 to achieve noneconomic goals with these economic tools: there is little li,elihood that policyma,ers will desist from trying& $ndeed% the study recogni-es that there have been important noneconomic successes in the past and% with proper strategy and e*ecution% there can be in the future& The case studies and additional cases informally surveyed confirm a consistent pattern of potential effecti!eness for economic assistance $#en t#e e'pectations, planning, e'ecution, and o!ert goals of t#e aid are mutuall consistent, along $it# a record of failed $is#ful t#in2ing in cases not ad#ering to t#is discipline & The case studies and additional research touch fre0uently on the relationship between the donor)s objectives and the recipient)s objectives and predispositions& /#ere t#e :.". goal conflicted $it# interests of t#e recipient regime, or $it# its perception of t#ose interests, or $ould #a!e a significant impact on t#e political struggle bet$een factions in t#e politics of t#e recei!ing countr , c#ances of accomplis#ing t#e aid;s purposes $ere steepl diminis#ed & The perceptions of ruling groups abroad may currently be undergoing some change as a result of the recently observed effects of prosperity on stability The findings also permit the formulation of important guidelines on whether aid can be anything more than a catalyst for political change% on economic objectives as fa^ade for political intentions% on long1term versus short1term objectives for aid% on the phenomena created by having multiple goals for the same program% on Ebac,lash%F and on B&7& legislation&

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And the guidelines below also indicate the advantages and disadvantages that can be e*pected from cooperation $it# allies in foreign assistance and how political impact and leverage can be ma*imi-ed& Although the scholars carrying out the case studies have focused on the effectiveness of economic aid for achieving selected noneconomic objectives% they were consistently struc, b t#e damage t#ese ob*ecti!es inflicted on effecti!e use, in economic terms, of t#e aid for its o!er primar ob*ecti!es & This is a proper part of their analysis% because it is part of the cost of this use of aid and other ,inds of economic assistance& The reader will find with consistency in the impression that the cost was very high& There is a discussion in chapter $$$ of a pattern found in the case studies that is suggestive but for which the case studies offer insufficient evidence to label it a Efinding&F $ points out that recipients of large amounts of aid% such as the Philippines and Pa,istan% have poor economic growth and development records% while 'e*ico% a recipient only of assistance ot#er t#an official aid% is currently doing remar,ably well economically& This is suggestive and significant because of the li,ely search% under budget pressure% for modes of assistance in the future more similar to the help given 'e*ico than to official aid for the goal of economic development 4as distinguished from humanitarian relief6& The political reality is that political and security purposes were often advanced as the reasons for economic assistance pac,ages% especially if a credible lin, to the cold war offered itself& The fact that nothing as compelling as the cold war is li,ely to replace it raises legitimate concerns about the future appropriations for economic assistance coming from legislatures wit the twin dogs of constituency politics and budget deficits snarling at their heels& The 0uestion may come down to whether there is significant political support in the Bnited 7tates for some forms of humanitarian assistance% for international altruism& 3ven though the purposes of aid are more li,ely to be achieved if they are not hidden behind other% more Emar,etableF goals% the political difficulty of coping with suffering abroad when there is suffering at home may cause leaders to continue to base aid re0uests on whatever rationale has the most domestic appeal& A second possibility% of course% is that environmental concerns will ta,e on the same urgency% with the same level of national consensus developing behind action and investment% that prevailed during the cold war& Dothing% however% in the action surrounding either the Rio 3arth 7ummit or the early stages of the #99! B&7& election suggests that Americans are near to this level of national accord and fervor& But should saving the planet become a new absolutely central national crusade% the Bnited 7tates will face the same challenges defined by this studyC avoiding unfounded hopes that generali-ed economic aid% or even good capital projects that are% nonetheless% unrelated to environmental action% can lead to desired behavior in a different sector& Will a generali-ed bribe to country V really induce it to protect its rain forest over the long runW Aid for the development and mar,eting of forest products might have a direct impact in the desired direction% but what response should be made to the country that claims simply that the level of economic

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desperation is too great to permit fancy environmental policies% that says ECure the desperation and then we)ll tal, about the forestsFW This study suggest pessimism about cutting such a deal& -#e Fro6en "pigot Another hard lesson for policyma,ers that emerges from this study is that t#e effecti!eness of :.". influence o!er recipient<countr action is in in!erse proportion to t#e percei!ed importance t#at /as#ington attac#es to t#e relations#ip & $f the receiving country believes that the spigot is fro-en in the open position% that for reasons of strategic necessity or domestic politics it is not feasible for Washington to close the spigot% the influence the Bnited 7tates derives from the aid sin,s close to -ero& This piece of common sense is verified throughout the study% as is the Washington habit of acting as though the world did not operate that way& Do policyma,er reading this evidence can avoid the necessity of have a credible hand on a turntable spigot in order to influence recipient1country action& If t#e aim is economic reform and sustained de!elopment, /as#ington must be prepared to suspend aid if t#e recei!ing countr falters in its commitment to t#e economic program t#at t#e aid is designed to support & The B&7& government must be legally and politicall capable of turning down or turning off the flow of assistance& 2ne does not li,e to thin, of an unreliable flow while% at the same time% suggesting carefully conceived capital projects have the best chances of successC they need reliability of e*pectations% the ability to plan without mercurial political meddling& The only way to avoid the tension between these factors is to limit one)s e*pectations about broad influence in the first place& The study clearly indicates the wisdom of this course& The spigot1leverage relationship is e*plored below in the more detailed loo, at the findings& But the most general implication of these findings is that t#e probabilit of success for :.". economic aid programs $ill !ar enormousl from countr to countr & Whether% however% the economic objective is easy or difficult to attain% ac#ie!ement of t#e political or securit ends t#at are supposed to flo$ from t#e economic c#anges. It is nonet#eless possible to en#ance t#e c#ances for success of t#e latter. ,f central importance in doings so is t#e factor of le!erage, $#ic# means t#at t#e aid s#ould be conditioned on t#e performance of t#e recei!ing countr , $it# t#e flo$ of aid credibl lin2ed to realistic and $ell<understood performance criteria. A 0uestion about whether B&7& policyma,ers really believed that they could wor, the changes on Philippine or Pa,istani economic performance that were announced as the aid)s aim& Whatever the case% politics% not economics% clearly drove the process in the Bnited 7tates and economic aid was perceived as useful for political purposes& 7o it is stri,ing that this general rule of what can be accomplished and what probably cannot be accomplished holds up even in these cases& EPerformance criteriaF in the above formulations is a factor usually attached to economic performance% but the rules of leverage are just as much at wor, in noneconomic spheres& -#e 4uidelines The headlines for policyma,ers announced above are among a number of broad normative guidelines that the findings permit& Behind them lies a set of conclusions

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that are li,ewise supported by 4#6 the four case studies carried out in this period% # 4!6 five studies of sub17aharan African countries carried out in another C7$7 project% ! 4H6 a series of meetings with e*perts to grapple with the issues of what was general and what was particular in those studies% and 4M6 a review of the findings and an informal search for counterevidence% that is% for instances that appeared to cut across the tentative findings% carried out with the assistance of the all the regional KsicL study programs at the Center for 7trategic and $nternational 7tudies& These findings go to the 0uestions of why the strategy being e*amined + B&7& use of economic means for noneconomic 4i&e&% security and political6 purposes in the Third World + wor,ed sometimes and sometimes did not& 7pecifically% the study loo,ed at the relationship of the strategy and instruments of economic assistance to the pursuit of the noneconomic policy objectives of the Bnited 7tates 4and some of its allies6% especially national security% democrati-ation% and international stability& What are the conditions% the goals% and the tactics most li,ely to lead to success or failureW .espite the warning contained in the headlines% the participants in the study% scholars and officials ali,e% believed that t#ere $ill instances in t#e future $#en :.". polic ma2ers are attracted to t#e use of economic aid for noneconomic purposes. But if Washington decides anew to taste this dangerous fruit% the study suggests that the B&7& government should pursue this strategy in a way radically different from that which has become traditional& 3ven ta,ing all this good guidance about conditions% goals% and tactics into account% the achieving of the intended conse0uences is not certain% and the arrival on the doorstep of serious unintended conse0uences almost inevitable& -#e fundamental message is, to use t#e instance abo!e+ onl in!est in t#e building of a dam if ou $ill be satisfied $it# t#e e'istence of t#e dam, t#at and not#ing more, as a pa off on t#e in!estment. 1ut if t#e $arning is not #eeded, and /as#ington decides to build t#e dam in order to accomplis# some furt#er political and securit ob*ecti!es, t#e cases studied pro!ide critical lessons for t#ose ma2ing and implementing t#e program. The one case where a long1term objective was stated early and then apparently achieved was the goal of ?orean self1sufficiency as it related to the subse0uent Eeconomic miracleF and the approach to 4but not full achievement of6 security self1sufficiency& The 0uestion of cause1and1effect is treated in the ?orea case study itself& But even in this case% the first lesson advanced by the author of the study is that Eeconomic aid is a blunt% not subtle% too&F urther% in ?orea certain slices of aid were targeted toward the goal of economic self1sufficiency with enough directness to ma,e t#is the immediate goal 4thereby also demonstrating that the immediacy of the goal and whether it is long1term or short1term are two different issues6& Another ,ey long1 term goal in ?orea was the fostering of democracy& But it was never the direct% immediate objective of any slice of the aid& The result was that% despite the si-e of the aid program% authoritarian government continued in ?orea& The findings also lead to the following conclusionsC 3ven on a purely economic level% $e s#ould not e'pect economic aid to be more t#an a catal st. -#is is e!en more true $#ere t#e goal is political c#ange. The

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real energy and commitment to improve economic performance must come from the host1country leadership% local constituencies% and private investment& The role of aid% at best% can be to induce the receiving government to put its economic house in order and to foster an environment in which private enterprise can flourish& 3ven in the five sub17aharan African countries studied% where aid donors succeeded in providing some impetus for economic reform% the driving force for political change came from inside the countries& 4This lesson is all the more important in view of the modest si-e of the B&7& aid program in relation to the total resources needed by Third World economies&6 The relationship here between the economic and noneconomic is fairly crudeC the unleashing of mar,et forces leads to the creation of a liberal cosmopolitan middle class% which has proved to be dynamite for authoritarianism& The case studies do not indicate the impossibility of achieving some limited political or security objectives with aid from Washington& But where the desired political result is something more precise than that of the blunt relationship just described% the studies show that if t#e main purpose is political, it is a mista2e to de!ise elaborate economic ob*ecti!es, pretending t#at t#ese are t#e main purpose of t#e aid& 'any of the EnewF noneconomic goals that may become part of the objectives of foreign assistance programs are% by nature% long1term& Although this is not the same as having goals that are secondary or part of a comple* pac,age of objectives% the long<term c#aracter of t#ese goals $ill create problems of (1) measurement of effecti!eness and (2) maintenance of t#e pressure for recipient< countr performance& Devertheless% aid will usually be long1term 4?orean model6% with occasional short1term instances 4some Philippine e*amples6& The critical finding of the study is that $#ere long< and s#ort<term ob*ecti!es occur toget#er, t#e o!erall problem of multiple goals 4below6 is muc# e'acerbated. The tension between long1term goals 4economic self1sufficiency% democracy% social reform6 and short1term cold war goals in Pa,istan become a serious drawbac,& 4$n the case of Pa,istan% the case study author came to the conclusion that smaller amounts of economic assistance over a longer1period% with a predictable disbursement pattern% would do more good than sudden infusions of larger sums&6 2n the 0uestion of cooperation with other donor countries% the study finds ad!antages in t#e effecti!eness of t#e political statement t#e aid ma2es and ad!antages in le!erage if t#e aid flo$ is regulated b an international agenc $it# a reputation for toug#ness in relating recipient<countr performance to spigot<control. )n informal consortium or mere parallel indi!idual<countr gi!ing tend to diminish le!erage% for reasons discussed in the last chapter& The Bnited 7tates is capable of improving the probability of effectiveness of any multiple1donor initiative by ta,ing the lead in organi-ing for the policy objectives among all the aid donors and urging each to ma,e its own aid conditional upon appropriate behavior by the recipient& Although the cases studies focused on the attempt to accomplish noneconomic ends through all the means of economic assistance% the bac2las# of the initiatives studied became an important part of the story in all cases& There is a consistent pattern of *eopardi6ing t#e ac#ie!ement of t#e principal stated economic goals b t#e presence of ot#er, non economic goals & The Philippine case study finds

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that the priority given to noneconomic objectives distorted and damaged the economic program and prevent support for some sectors of the program& 4The author predicts that if aid to the Philippines continues to be lin,ed% or even to be percei!ed to be lin,ed% to noneconomic objectives% B&7& trade and investment will lose ground to donors not ma,ing the same mista,e&6 The history of the B&7&1 Pa,istan aid relationship is also one of the economic value of aid being limited because of noneconomic objectives& This consistent finding e*plains the antagonism of much of the aid community toward program objectives that damage EtheirF priorities& But the point is crucial because of the importance that economic performance is li,ely to have among aid objectives of the future& 7o a stri,ing conclusion of the research is not just the difficulty and unli,elihood of achieving secondary and tertiary objectives% objectives not immediate to the e*act aid given% but t#e strongl deleterious effect of t#ese =ot#er> ob*ecti!es on t#e accomplis#ing of t#e economic ob*ecti!es (including t#ose of commercial conse9uence)& Powerfully dramati-ed by 3rnest Preeg)s study% this factor is present in all the cases& An interesting phenomenon found in the studies is that of re!erse damage% the instances in which economic reform and progress wor, counter to such political objectives as stability& The 'e*ican case suggests that this is mainly a s#ort<term phenomenon& The factors of damage to the accomplishment of economic objectives% and short1term reverse damage% are really just sub1sets of a larger% very consistent% finding in the case studies% the additional African cases% and the review by C7$7 regional study programsC the presence of multiple ob*ecti!es of an 2ind for t#e same program of economic assistance s#arpl reduces t#e c#ances of ac#ie!ing all but t#e most immediate primar goal, and $ill inflict at least some damage on t#at primar effort also. The 'e*ican study suggests that Washington had not thought out systematically the relationship between its economic strategy and the achievement of its noneconomic objective& $n ?orea% B&7& officials are found e*pressing confusion about which group of goals had priority& $n the Philippines% the multiple objectives that got in each other)s way were even on the same side of Ethe lineF 4between the economic and the noneconomic6C the lin,age to base rights adversely affected political objectives& At times when Washington)s strategic interest in Pa,istan has been at one of its high points% the Bnited 7tates has failed to use economic assistance effectively to achieve other goals& /en& /rave)s judgment on the basis of the five African studies is that Edonors intent on supporting both a transition to democratic government and economic policy reform will face the dilemma of whether to give priority to the political survival of the fledgling government or to economic change& $n aid programs political and economic objectives have often been N in conflict&F H The le!erage<spigot relationship is summari-ed in a special section above& Put simply% le!erage to affect t#e reforms, policies, and ot#er be#a!ior of t#e recei!ing countr is directl tied to t#e credibilit of t#e donor;s abilit and $illingness (legal, administrati!e, and political) to regulate t#e flo$ of aid in response to recipient performance & This factor operates with special intensity and

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comple*ity in the case of an economic assistance program with multiple goals% and phenomenon treated in the ne*t point& $n ?orea% the leverage over recipient policies was minimi6ed during the 7yngman Rhee period because withholding aid would have jeopardi-ed objectives that were perceived 4correctly6 by ?oreans as having an e*tremely high priority in Washington& 7pecifically% 7eoul ,new that the primary B&7& goal was to advance its own position in the cold war in the short run% and so ?orean leaders reasoned that the goal of democrati-ation was postponable without any 4believable6 ris, that Washington would react at the spigot& 2ver the course of about M" years of B&7& grant assistance there was no enduring progress toward a real democracy% despite all the B&7& efforts& $f B&7& assistance helped promote some of the economic conditions that in turn produced the social conditions that in turn produced the political conditions for the recent movement toward democrati-ation% that outcome is very different from any serious ?orean response to the paper tiger of B&7& pressure during the earlier period& .emocrati-ation is occurring now% when ?orea)s dependence on B&7& aid has ended& 4The point on the predispositions of the recipient country)s ruling factions% also e*plored in this section of the report% was also in play in our inability to force or induce political reforms&6 The credibility of the hand on the spigot can also be wea,ened by confusion over the level of aid or the factors that will affect it% as is seen in the Philippine case& And in this case% so long as 'anila thought that the Americans simply #ad to retain the military bases% they could ignore any threats about delay or suspension of assistance on this or other topics& The aid could be disbursed as political patronage% ignoring the objective of democratic reform& These relationships were so clear that Communists could portray the Bnited 7tates as being under the thumb of 8arcos;s leverage& The intention of Washington policyma,ers and legislators that B&7& support would lead to both economic and political reform was frustrated because the leverage was missing& The single noneconomic objective 4the bases6 damaged everything else& 3ven with the change of regime% the aid given to show political support for Cora-on A0uino had so little perceived relation to either Philippine needs or performance that it carried no leverage for economic reform and functioned only as a crude one1time statement of political support% unrelated to genuine leverage to influence future events& $n Pa,istan% everything that enhanced the perceived importance of Pa,istan in Washington)s regional security strategy reduced spigot1credibility and leverage& The 7oviet invasion of Afghanistan destroyed the remaining shreds of credibility for the idea that Washington would actually suspend or delay the aid flow in response to Pa,istani performance on other aid objectives& Dote that the 7oviet withdrawal from Afghanistan was followed by a free-e on aid: the Pa,istani calculation had been correct& The period when all goals other than Pa,istan)s cooperation on Afghanistan was secondary had ended& The factor of multiple goals is% in some of the cases% lin,ed to that of spigot1 control to create the worst possible situation for e*erting leverage on the recipient& If one or some of t#e goals of a multiple<goal program are seen as !itall important to t#e :nited "tates, le!erage is destro ed relati!e to all ot#er goals? if it is not credible t#at t#e :nited "tates $ill turn off t#e spigot because it attac#es so muc#

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importance to @, t#e recipient #as no reason to #eed /as#ington;s demands on an ot#er ob*ecti!es. All cases and associated research underscore the importance of t#e relations#ip bet$een t#e donor;s ob*ecti!es and t#ose of t#e recipient countr . This rather obvious point is given its proper complications by the casesC when spea,ing of Ethe recipient countryF what really counts is the ruling group;s perception of t#ose interests& Within this% the cases point to the ruling group)s perceptions of its o$n, not t#e countr ;s, interests, and other the de!elopment of counter< constituencies for the aid if it% or the conditions it would promote% are seen as a threat to any of the significant competitors in the internal struggle for power& Although ta,ing these predispositions into account would seem to be a prudent calculation that all policyma,ers would underta,e% the cases reveal that Washington has fre0uently missed this step% or had the political ground shift under its feet 4in ways that should not% however% have caused surprise6& What should not be ignored in the future is the need to design aid programs to pro!ide results t#at $ill be ad!antageous (and be percei!ed to be ad!antageous) to bot# /as#ington and t#e recipient% recogni-ing that Ethe recipientF might mean several factions powerful enough to control the success or failure of the aid& )ccount must be ta2en of ot#er donors of economic assistance & This means more than the logical relationships among the programs% their ends% and their procedures& $t means also understanding and planning strategy around the constituencies that are affected by% even developed by% the aid programs of other donors& The tangled history of the interplay of multiple donors in the same recipient country would afford interesting analysis but probably few generali-ations to guide policy1ma,ers on subse0uent occasions% beyond the admonition that% in most cases% the Bnited 7tates is not alone& $n general the case the studies illustrate that where the interests of the recipient country and the noneconomic goals of the Bnited 7tates coincided% such use of B&7& economic aid successfully accomplished its purpose& Both the donor and recipient benefited& When% however% the B&7& goal conflicted with the interests of the administration of the recipient country or threatened the e*istence of that group% B&7& economic aid failed to accomplish its foreign policy purpose& 3specially was this true if the national security objective of the Bnited 7tates in the recipient country was ,nown to be of high priority to the Bnited 7tates& $n the case of ?orea% B&7& economic aid was a source of patronage that helped to ,eep 7yngman Rhee in power: it was therefore important to him& The same was true of erdinand 'arcos in the Philippines& $n each country the granting of human rights and ending oppression would have threatened the e*istence of the strongman: no progress was made by the Bnited 7tates toward the goal of democracy and in fact the Bnited 7tates did not rigorously& $n each country% moreover% B&7& threats to withdraw aid were not credible: the recipient ,new that the prime B&7& goal was advancing its own position in the cold war in the short run and that democrati-ation as a goal was postponable&M $n fact% bargaining power lay with the recipient% not with the aid donor& $n contrast to 7yngman Rhee% who had no real interest in the economy of his country or in development aid per se% Par, Chung Hee decided early in his tenure that Elong1term B&7& sponsorship was no longer guaranteed&F < He rejected the Ecalculated dependence of the Rhee years%F and sought greater economic and

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military independence from the Bnited 7tates& $n other words% B&7& and ?orean goals as donor and recipient coincided& The conse0uence was an improvement in bilateral relations and% within a decade% the end of B&7& economic aid and the start of the ?orean economic miracle& The long1term B&7& goals of putting ?orea into a position of being able to maintain a strong defense force and operate and an acceptable level of living without B&7& aid were accomplished: democrati-ation% however% was still a hope for the future& The case studies are replete with instance where the predisposition of politically powerful factions% including the country)s ruling group% were pivotal and% when push came to shove% were not shoved out of the way by the will of the donor& 'oving to a mar,et economy in 'e*ico interfered with the subsidies received by favored constituencies& 'any of the new governments in sub17aharan Africa owe their rise to power to constituencies that benefit from the status 0uo and would be damaged by economic reform& ailure to achieve human rights goals in ?orea stemmed from the threat this constituted to 7yngman Rhee% as did any moves toward democracy% another goal imposed on the aid program& $n 'e*ico% the overall threat affecting 'e*ican predispositions came from the idea that an economy based on individual initiative might undermine the authoritarian civic culture& The Philippine government went all the way in defending the difference between its and Washington)s goals when it demanded rent1labeled1as1rent for the military bases% freeing it to use the money for its own purposes& 2n occasion% mi*ing into internal politics has been an important 4though seldom advertised6 part of B&7& objectives% well beyond such simple formulations as the promotion of democrati-ation& 2ne reason for Washington)s interest in the establishment of a functioning mar,et economy in 'e*ico is the hope that this would discredit the policy descriptions of the 'e*ican Aeft& $n fact% the 'e*ican case study shows that the measure of consensus achieved on economic policy has moderated the e*treme Aeft and also undermined the scare tactics of the far Right& $n such cases% the relationship between the aid and internal political factions was deliberate& -#e stud does not pro!ide decisi!e support for t#e idea of re$riting t#e Foreign )ssistance )ct. 2ne could underta,e to write new legislation in order to limit strictly the purposes for which aid may be provided + and do so reading the lessons of this study + but the legislative chances for a major revision are unclear% and once started down that road in the Congress% the finishing point is unpredictable& Among participants in the study were admirers of the Hamilton1 /ilman report but also those with strong 0uestions about the wisdom of trying to dictate all the purposes of aid in a piece of general legislation& Because of the slices of history studied% the noneconomic objectives were mostly cold war1related security and political goals& 1ut neit#er t#e case studies nor t#e e'perts in!ol!ed in t#e stud suggest t#at t#e lessons learned are confined to t#ose particular noneconomic ob*ecti!es. The same mista,es could be made in efforts with other noneconomic ends in view% from narcotics control to environmental protection&

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 The ?orean case study ma,es an interesting case for striving for public% rather than government% support for aid objectives& Because this was the only study to focus on public diplomac as a factor in the strategic thin,ing relative to economic assistance% the discussion in that case study cannot properly be called a finding or recommendation of the project as a whole& But it is suggestive of paths to follow in subse0uent wor,& $n the final section an attempt is made to put together the principal characteristic of a foreign assistance program with the best odds for success% according to the study)s findings& The central conclusion is that the best odds obtain when the ob*ecti!e is economic? closel related to 4or e*actly the same as6 t#e specific $or2 to be carried out b t#e aid pro*ect? s#ort<term? genuinel supported b t#e political leaders#ip of the recipient country: not burdened $it# secondar ob*ecti!es : and disbursed% delayed or suspended according to a credible and tig#t connection to t#e donor;s insistence on clear performance standards % whether the donor is the Bnited 7tates alone% the Bnited 7tates and its allies% or an international agency& KNL -#e 7istorical 8oment $t was decisively important for the political significance of this study that it was launched as the Berlin Wall fell and the 7oviet 3mpire unraveled& The end of the cold war means a necessary rethin,ing of the political engine behind much of B&7& foreign economic assistance over the last M" years& The study% even if the timing was more fortuitous than calculated% offers itself as the logical starting place for that rethin,ing& With the shadow of the superpower rivalry removed% we can see more clearly those other dangers and opportunities for which aid might be an effective instrument + if the lessons of recent history are understood and heeded& /lobal and regional stability are now threatened by poverty% the maldistribution of resources% disease% the narcotics trade% ethnic strife% the abuse of human rights% mass migration% nuclear proliferation and the spread of other weapons of mass destruction and% long range% environmental degradation& This array of threats will constitute a drain on% perhaps the e*haustion of% the resources and vitality of the international system& The resources that were thrown% often on the basis of guesswor, and wishful thin,ing% at cold war objectives will not be available to the Bnited 7tates and its allies in the future& And there are also the unreali-ed opportunities& .espite the political earth0ua,e of the last three years% neither mar,et1based free enterprise nor Western1style pluralistic government has been installed as the worldwide pattern& The historical conte*t is one that demands a far more stringent relationship between reality and goals% and then between goals and investment% than that to which cold war policy ma,ers were accustomed& .uring the cold war% the Bnited 7tates used economic and security assistance as major policy instruments in its rivalry with the 7oviet Bnion& Three of the four case studies reported on below describe situations dominated by cold war concerns: and the citation above from .r& Baer)s study of 'e*ico dramati-es the high importance

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of cold war factors even in that case& The cases show% as does the history we all ,now% that various combinations of such assistance made a major contribution to the success of the Western alliance and the maintenance of the B&7& position in several corners of the earth& $n many cases economic assistance was used in pursuit of noneconomic objectives% bolstered either by apparently tight reasoning or by obvious wishful thin,ing in the connection asserted between the aid and its goals& $t has been% and remains% a controversial concept& But it is one that will continue to offer itself to policyma,ers& Wherever we have relative wealth and no easy direct path to achieving desired political and security goals% the idea that maybe an investment of this ,ind will pay off is going to spring to mind& $f it does not% the potential recipient countries will find ways to suggest it& The response% if it is to be more than guesswor, 4and a fresh supply of wishful thin,ing6% must be based on analysis of what wor,s% what does not% and under what conditions& The case studies and their conte*t in history show how often Washington turned to economic aid as a cold war weapon& oreign aid is still considered to be a useful foreign policy tool by official Washington% even with the end of the cold war& But in all the ferment of new ideas being offered for revising the goals of the aid programs% few in either the e*ecutive or legislative branches have suggested using economic aid solely for purposes of improving the economic conditions and performance in receiving countries& That is the star, conte*t of this study&

Burnside* %raig and Dollar* Da$id -.///0* 1Aid* "olicies and groCth*4 in American Economic Review* 5ol6 ;/* )o6 <* ""6 A<>= A:A6
$n this paper we have investigated several 0uestions regarding the interactions among foreign aid% economic policies% and growth& 2ur primary 0uestion concerned the effect of aid on growth& Consistent with other authors% we found that on average aid has had little impact on growth% although a robust finding was that aid has had a more positive impact on growth in good policy environments& This effect goes beyond the direct impact that the policies themselves have on growth& A second 0uestion concerned the allocation of aidC do donors favor good policyW We found no significant tendency for total aid or bilateral aid to favor good policy& 2n the other hand% aid that is managed multilaterally 4about one1third of the total6 is

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allocated in favor of good policy& These findings% combined with a separate finding that bilateral aid is strongly positively correlated with government consumption% may help to e*plain why the impact of foreign aid on growth is not more broadly positive& 2ur results indicate that ma,ing aid more systematically conditional on the 0uality of policies would li,ely increase its impact on developing country growth& This would be true as long as conditional aid of this type had plausible incentive effects& A final point is that there is a mar,ed trend toward better policy among poor countries% which means that the climate for effective aid is improving& $n our sample the mean of the policy inde* reached a nadir of #&" in the #9;!1#9;< period% and then climbed to a pea, of #&; in the most recent period% #99"1#99H& 2ur 2A7 results suggest that the effect of aid was significantly positive for a policy level of !&MC by #99"1#99H% #< of our M" poor countries had attained that level& $ronically% the past few years have seen cutbac,s in the financing of foreign aidC in #995 23C. countries gave less% as a share of their /DP% than they have in decades& Thus% the climate for effective aid is improving% while the amount of aid diminishes&

Burnside* %raig and Dollar* Da$id -.//<0* 1Aid* Policies* and 2roCth: !e$isiting the +$idence*4 World +an) Policy Research Wor)in! Paper .o, 89:;6
$n conclusion% our original finding that aid spurs growth conditional on the 0uality of institutions and policies is 0uite robust& We find the relationship in a new data set focusing on the #99"s and using an overall measure of institutional 0uality& 2ur strongest conclusion from the cross1country wor, is that there is far more evidence that aid spurs growth conditional on institutions% than for the competing hypothesis that aid has the same positive effect in all institutional environments& 2n the other hand% because all cross1country statistical results are fragile% we cannot completely reject the hypothesis that aid never wor,s anywhere& Ai,e most economists we believe that institutions and policies matter for growth% but it is possible to find specifications in which the institutional 0uality variable is not significant% so a limitation of the cross1country approach is that it cannot definitively settle some debates& ortunately% policy ma,ers do not form judgments based simply on cross1country regressions& There are other types of information that are useful for those trying to establish effective aid policies& irst% one should not underestimate the importance

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of theory& /iven that institutions and policies affect growth% it is difficult to write down a coherent growth modelYunless one assumes international capital mar,ets are perfectYin which the impact of aid would not be conditional on the same institutions and policies&> or aid to have no impact in a low1income country% regardless of the 0uality of institutions% would re0uire a degree of perfection in international capital mar,ets that we find implausible& 7o% based on theory% it is 0uite plausible that aid would promote growth in poor countries that manage to put good institutions into place& A second type of information that is relevant comes from case studies& There is fairly broad agreement that the 'arshall Plan accelerated 3uropean growth after World War $$C this is the ideal e*ample of the model we have in mind% with a significant volume of finance pumped into an environment of solid institutions and social infrastructure& We would argue that this one case disproves hypothesis _H% that aid is always money down the rat hole& There are 0uite a few case studies of aid to developing countries& 'any of these support the view that money channeled to a highly corrupt government with distorted economic policies provides no lasting benefit& 2n the other hand% studies of successful aid typically emphasi-e that the recipient government had a good set of policies to enhance growth and directed assistance to useful investments in roads% schools% and the li,e& A third type of evidence that is relevant comes from data on individual projects financed by aid& $n a variety of sectors% projects are more li,ely to be successful in countries with growth1enhancing institutions and policies K$sham and ?aufmann 4#9996L& When 7outh ?orea was a low1income country with a large amount of aid in the #9>"s% most projects% of many different types% were successful& $n ?enya and \imbabwe in recent decades% on the other hand% many projects% of all types% have failed% in the sense that they have not provided the services or benefits anticipated from the investment& $f aid were not fungible% this project level evidence would settle the debate& However% it is possible that all of the good projects in ?orea would have been financed by private capital in the absence of aid% so that project1level evidence alone cannot settle the debate about aid effectiveness& 2nce we combine the evidence from case studies and projects with the cross1country correlations% however% we feel more confident that aid effectiveness depends on institutions and policies& We were also interested to see the results of a global poll commissioned by the World Ban, from a private survey company KP7RA 4!""H6L& The poll focused on Eopinion ma,ersF in a wide range of developing and developed countries 4that is% government officials% academics% the media% trade union leaders% D/2s% etc&6& $n 7ub17aharan Africa% ;MQ of opinion ma,ers agreed with the statement that% EBecause of corruption% foreign assistance to developing countries is mostly wasted&F $n other regions of the developing world% similarly large majorities agreed with the statement& 2pinion ma,ers in the rich countries were the least s,eptical 4only <;Q agreed with the statement6& 7o% while first1world academics may find some specifications in which aid wor,s in all institutional environments% that argument is going to be a tough sell in the developing world& A final important point in this debate concerns incentive effects& We and others have found that in t#e past aid has not systematically led to improvements in institutions and policies& But the phrase Ein the pastF is 0uite important& $n the past

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aid has been allocated indiscriminately with regard to the institutions that are critical for growth& $f the allocation rule changes% then the past evidence tells us little about what may happen in the future& We would not e*pect aidYeven well managedYto to be a main determinant of reform& But if aid is systematically allocated to low1income countries with relatively good institutions% then we would e*pect that this would increase the probability that reforms are successful and politically sustainable& Thus% aid could be a useful support to reform even if it is not its main determinant& 2ur line of reasoning is speculative% but it is not unreasonable to thin, that allocating aid to relatively good governments would have a positive incentive effect& Based on all the evidence% we thin, that it is good news that aid is now more systematically allocated to countries with sound institutions and policies& $f anything% we would encourage aid1givers to strengthen this trend even more&

Byrd* Peter -8;;80* 1Foreign Policy and O$erseas Aid*4 in Bose* Anuradha and Burnell* Peter -eds60 +ritain<s 3verseas Aid Since 1454# +etween Idealism and Self-Interest* ""6 <;->9* #anchester: #anchester (ni$ersity Press6
The Conservative government found that it was e*tremely difficult to fulfill its aspiration of #959 in reordering aid on a clear foreign1policy framewor, of assisting friends and promoting e*ports& #> By the mid1#9;"s% under Raison% a clear development priority had reasserted itself 4alongside the commericial pressures on the aid budget6% although the 2.A 42verseas .evelopment Agency6 and its 'inisters lac,ed the political clout to recover the major cuts in the budget imposed in the immediate post1#959 period& As a tool of foreign policy aid has shown itself to be too infle*ible and too strongly shaped by forces of inertia& 'oreover% it has been too small in si-e to be an effective instrument% e*cept in isolated cases& Those e*ceptional cases are not insignificant + the use of aid as part of a policy of securing regional influence% as in the case of 'o-ambi0ue: the e*clusion and then prospective re1accommodation into the aid programme of such states as Iietnam: the use of the aid programme as an instrument of trade promotion and industrial policy% as in the case of $ndia: the use of aid as part of a prime ministerial foreign

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policy coup to mend a bro,en relationship% as in the case of 'alaysia& But as an instrument of foreign policy in the #9;"s overseas aid has remained of only marginal significance&

%able* 5ince -8;A.0* 1British Interests and ,hird &orld De$elo"ment*4 in %assen* !obert* ?olly* !ichard* SeCell* ?ohn* and &ood* !obert -eds60 Rich *ountry Interests and Third World &evelopment* ""6 8A.-.8<* London: %room elm6
To the e*tent that it is possible to pull together the various strands into an overall assessment of how the British government views its interests in developing countries% the conclusion is not too encouraging from a mutual1interests standpoint& The current British government simply does not relate to the ?eynesian framewor, of economics which underlies much of the Brandt analysis& There is little interest% either% in proposals for intergovernmental regulation of commodity mar,ets% or the transfer of technology% or restructuring% on other than a commercial basis% of contractual debt& Aiberali-ation of mar,ets is closer to its ideological heart but where this might help developing countries 4lifting restrictions on imports of competing manufactures and agricultural goods and% above all% people6 there are major political obstacles and some genuine% if e*aggerated% frictional costs& The virtual ending of any British need for imported energy% the increasing self1 sufficiency 4albeit at great cost6 of 3uropean and British agriculture% and disengagement of British and other Western mining companies from developing countries% have substantially wea,ened formerly strong sources of economic interdependence& Political interests have waned with winding up of 3mpire and the ending of all but nominal military involvement& What is ,nown of public opinion also indicates some hostility or% at least% indifference& The present government has signalled its attitude towards Dorth17outh relations in general by representation at conferences which is low in level and negative in tone and by even sharper cuts in the aid budget than in public e*penditure in general& Although its tone was more conciliatory and its policies% on aid notably% more generous% the last Aabour government showed no evidence of being persuaded that an accommodating approach to the demands of A.Cs was in Britain)s interest& This bac,ground helps to

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e*plain% in large part% the cool government response to the Brandt report& oreign 2ffice ministers have since made more positive noises% but not due to any real reappraisal of (interests): rather because of a greater sensitivity to the country)s image overseas and in deference to the strength of (moral) feeling + in the Church% Parliament and in some sectors of public opinion& However% there is evidence% which this survey has tried to bring together% that there are some British interests in developing countries which are of growing and perhaps underestimated importance& The share of A.Cs as a mar,et for British e*ports of goods and services is increasing again after decades of decline& Private foreign investment in developing countries is now of growing relative importance and is given high priority by the present government& There is strong interest in stabili-ing the international monetary system not least because of the heavy involvement in A.Cs by B?1based ban,s and the role of sterling as petrocurrency& There are signs that austere monetarism is giving way to greater concern for economic e*pansion at home and abroad& $t might be said that all of these aspects of interdependence are well ,nown and understood and are best dealt with problem by problem and country by country% corresponding to the reality that developing countries differ greatly in outloo,% economic potential and political importance& $t is at this% modest% level that the Brandt report may prove to have been useful: not in persuading this% or other% British governments that a radical new international economic order is in their interests + of which there is little prospect + but in promoting an outloo, towards A.Cs which is somewhat more positive% longsighted and generous in spirit than before&

%arleton* Da$id and Stohl* #6 -8;A70* 1,he Foreign Policy of uman !ights: !hetoric and !eality from ?immy %arter to !onald !eagan*4 in =uman Ri!hts Quarterly* 5ol6 >* )o6 .* ""6 ./7-..;6
$n sum% Bnited 7tates foreign policy under both Presidents Carter and Reagan has been characteri-ed by a sharp distinction between the rhetoric and the reality of human rights policy& 'oreover% there is a sharp difference in the rhetoric of the two administrations& We have seen that the rhetorical aspects of the Reagan criti0ue and reformulation of human rights policy have demonstrated empirical and logical flaws& $n contrast% the practice of the Carter and Reagan Administrations on foreign

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aid distribution has been remar,ably similar& Deither administration has acted in accordance with the established human rights legislative pac,age& Thus% while the Reagan administration has produced a rhetoric on human rights policy that is radically different from that of the Carter administration% the policy outputs in the area of foreign assistance are not any more coherent& .ecisions on the distribution of Bnited 7tates foreign assistance continue to be made with interests other than human rights in mind& While CarterZs policy may have failed while raising e*pectations% ReaganZs policy offers no hope whatsoever&

%assen* !obert* ?olly* !ichard* #athieson* ?ohn and SeCell* ?ohn -8;A.0* 1O$er$ieC*4 in %assen* !obert* ?olly* !ichard* SeCell* ?ohn* and &ood* !obert -eds60 Rich *ountry Interests and Third World &evelopment* ""6 8-</* London: %room elm6
What can be concluded from the studies for the futureW $t would be dishonest to pretend that a clear and simple set of conclusions emerges& $nterests there are and strong they may be + but there is a comple*ity in the way they arise from the differing concerns of different groups within and across the developed countries which ma,es it difficult to compile a summary& This is hardly surprising& Clear and strong interdependence e*ists between companies and unions within any of the countries of the Dorth% or between% say% the economies of the 3uropean 3conomic Community& But the mere e*istence of this interdependence does not permit a simple summary of mutual interests% let alone a logical economic deduction that all forms of progress of one group or country necessarily will benefit all the others& 'utual progress can be mutually beneficial and co1operation to pursue this may be in the strong economic interests of the various parties in pursuing it& $f all this is true within and among the developed countries% why should it not also be true of the interdependence between the developed and developing countriesW Thus the critical 0uestion is not (does interdependence between Dorth and 7outh e*istW) but (on what terms is it in the interests of the Dorth and 7outh to pursue and fashion interdependence between them in the #9;"sW) The acceptance of

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interdependence then becomes less a deduction from economic facts than a declaration of economic and political will& The essence of the 'arshall Plan was not an econometric calculation of multipliers and lin,ages but the statesman1li,e vision that a reasonable post1war world re0uired a reconstructed 3urope and Japan and that it was in the broad interests of the Bnited 7tates to provide major economic support for its achievement& The terms on which interdependence was reconstructed included financial transfers% five year plans and the 233C% an organi-ation for co1ordinating economic advance and interaction& The starting point with the Third World today is 0uite different& Parts of the Third World are growing rapidly and strongly% while many of the poorer parts are stagnating& The world economy is stagnating + if not in recession and crisis& The 0uestion posed isC does anyone have the vision for a purposeful reconstruction of a more dynamic world system + and how do the different groups of Third World countries fit into such a systemW The answers to this are even more difficult than to earlier 0uestions& 7ome will probably say that such a 0uestion is totally incongruous at the present time% politically and philosophically% because of widespread disillusion with the commitments to and capacity of international institutions and organi-ations& 7uch commentators may be (realistic) in their disillusionment& The vision may be beyond our grasp& But what the country1studies depict is the absence of any striving for a reconstruction of a new interdependence% a widespread failure to grasp the importance of what is at sta,e& $n country after country of the Dorth% economic interactions within the Dorth are treated as serious economic issues% economic interactions with the 7outh are treated as political diplomac & Xet as the studies also show% the economic facts are otherwiseC the Third World matters economically% the structural adjustments already facing the Dorth in energy% food production% trade and finance% give it even greater incentives to establish new economic relationships with the 7outh: and finally% in the conte*t of continuing recession% there is a special area of mutual interest in any measures which would stimulate a greater level of economic activity through the growth of world trade& While all the countries of the Dorth have a variety of ties of interdependence with the large number of middle1income countries of the 7outh% it is hard to see from the case studies what they have to gain economically from the prosperity% or even the continued e*istence% or the poorest among developing countries% even if security is considered an important factor& A Depal% a Bangladesh% a Aesotho% a Haiti% could go the way of Cambodia in more or less disappearing from the West)s international community% with hardly a ripple of effect on the immediate well1being of the Dorth)s inhabitants% and even in the longest of long runs% with only a rather marginal loss of some opportunities for trade or the chance to import cheap immigrant labour at some distant time when the migration1potential of sources closer to hand is e*hausted& The satisfaction of humanitarian wishes that we should see, to aid the Depalese and the Haitians can hardly% therefore% call arguments from self1interest in support& The case must rest mainly on support for measures of common humanity and poverty eradication% of shared membership in a (world society) which have been mentioned throughout the case studies&

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The papers discuss the factors which tend to strengthen support for this sort of action% in particular on the marginal incremental effects of binding arrangements involving partial renunciation of national autonomy for some collective interest& $t is worth% finally% addressing one particular sort of international development + the entrenchment of (class stratification) among the nations of the world& 'ost of the case studies e*amine the effects of (class consciousness) in inhibiting the rich nations from (defecting) into alliance with groups of Third World countries in confrontational situations& 7imilarly% there have been occasions% at the C$3C meetings% for e*ample% when 2P3C countries have seemed about to use their oil power while consciously in the interests of poor countries as whole% and not just in their own national interest or in the interests of an Arab or $slamic grouping& To be sure% such solidarity remains wea, in practice% and it is not clear that it will ever become a decisive force& 2n the other hand% there are other possibilities& The effect of widening gaps in living standards is difficult to calculate& $f the oil countries) industriali-ation and moderni-ation plans turn sour and they remain the world)s nou!eau' ric#es% when will they feel they are entitled to be viewed as something betterW Perhaps increased density of communications will have an effectC what 'ar* said the railways did for wor,ing1class consciousness in /ermany% the jumbo jet and international conference might do for Third World consciousness& $f there were such a development% the effects would be uncertain just as the rise of class consciousness was for the Western democracies in the nineteenth century + on the one hand raising the level of dissension% on the other hand leading% eventually% to the (incorporation) of dissenters because the cost of the dissension to the ruling groups proved too great& That process of incorporation enabled the very poorest who had no bargaining power to have their claims to citi-enship recogni-ed by riding on the coat1tails of those whose bargaining power was stronger& This may be true of such countries as Depal and Haiti& The Third World countries as a whole have a considerable role in determining the nature of the objective situation in which the rich countries find themselves and base their interest on& While coalitions of specific interests could lead to progress on some limited issues% they do not seem ade0uate to forge a new order of a ,ind which would promise more solid opportunities of development for the Third World& or that% the 0uestion is whether the real interests in the areas of energy and economic security can bring the Dorth to a greater understanding of the relevance to their own peace and prosperity of other economic and political issues in the Third World + or whether they feel they can do sufficiently well with the past strategy of maintaining the status 9uo% ma,ing a concession here and an advance there% and hoping they can get by without anything that seems to have major costs for themselves& $t is not the conclusion of this analysis that all issues have to be negotiated simultaneously& The negotiating process in the Bnited Dations has suffered rather than gained from ma,ing attempts in that direction& But there evidently must be enough items on the agenda to ma,e the potential outcome satisfactory for all parties& That there are mutual gains to be achieved seems clear: but they may only emerge in a situation where some bargaining of positive and negative elements is possible& $t also seems clear from this analysis that progress in this endeavor is worth striving for% for the Dorth)s sa,e as well as the 7outh)s& The choice is between a world of growing poverty% instability% rapid population growth resource depletion%

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conflict and insecurity + and a more manageable future& The idea that business can indefinitely continue as usual may prove to be an e*pensive illusion&

%assen* !obert -8;;80* 1AfterCord*4 in Bose* Anuradha and Burnell* Peter -eds60 +ritain<s 3verseas Aid Since 1454# +etween Idealism and Self-Interest* ""6 ./<-./;* #anchester: #anchester (ni$ersity Press6
Aid is often described as beginning with Truman)s Point our programme: in fact its origins in both the B7 and 3urope go bac, before the 7econd World War& The present volume is mainly concerned with the 2verseas .evelopment Administration and its wor,% which began effectively in #9>M& But it is as well to remember that governments recogni-ed some claim on their resources from developing countries long before that& Worldwide aid grew fairly steadily up to #9;>% when the effects of the steady diminution of Arab aid since #9;"% which had reached B7 T#M billion at its height% began to outweigh increases elsewhere& C'3A assistance rose from B7 T!&; billion in #9;" to B7 T< billion in #9;5 but has fallen slightly over recent years& The aid of members of the 23C. .evelopment Assistance Committee has been growing consistently since #95"% apart from downturns in #95H% #9;# and #9;5& .ifferent countries have ta,en the lead in adding to volumeC as B7 volume stagnated or fell% $taly became a significant donor in the #9;"s% and in #99" Japan became the biggest of all& Britain is still a major donor% but with a low percentage of /DPC at "&H! per cent in #9;; 4having reached "&MM per cent in the #95"s6 it was below the .AC average of "&H> per cent: only four countries in the 23C. league table 4including the B7% at "&!# per cent6 had a lower score& 7uccessive British governments have fairly cynically reiterated their commitment to the "&5 per cent of /DP BD target for aid% but without a date& The Aabor Party)s #99" policy documents% however% promise to achieve the goal within five years&

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The British aid programme in #99" almost defies assessment& $t has achievements of high technical 0uality to its credit: its projects in Africa have had more success than those of many other donors& $t has given e*pression% if in many cases only belatedly and thinly% to concern about poverty% gender and environment& $t has shown both compassion and toughness& At the same time it has been subject to + and has often yielded to + commercial pressures& $t has declined in real value terms over most of the #9;"s% until #9;;% when it rose 4and there is now a government commitment for it to rise in real terms over the ne*t three years6& $t is spread over an e*cessive number of recipient countries& $t has contributed growing amounts to 3C aid programmes% about which it is not happy% though it has had little ability to improve them& All in all% it is a create of the cross1currents of political% foreign1policy% economic and social interests of the national life% with a genuine mi* of altruism sustained by outside pressure which meets a ready response in many parts of Whitehall& $t is a thoroughly British compromise& 5ommercial )spects The B?)s aid programme is among the most affected by commercial influences& At #5 per cent of bilateral aid untied% it has one of the lowest scores of donors for whom such information is given + though these do not include rance% Japan or the Bnited 7tates&# While it can be argued that% without efforts to satisfy commercial interests% governments might find support for aid less easy to come by% some of the actual forms of commerciali-ation are peculiarly damaging to the purposes of aid& That is especially true of the Aid and Trade Provision% which this boo, correctly describes as a (wretched abuse of ta*payers) money) 4p& #!M6& $t is sometimes argued that Britain has been forced to ta,e such action to compete with other donors who do similar things + the rench were the first% with their crAdits mi'tes& Certainly where other governments help their companies compete by improving credit terms% those which do not do so may lose out& But it would be better to attempt to improve the international machinery which is supposed to govern credit competition& The ATP cannot strictly be described as matching others) credit behavior in competitive situations& $t is often applied in particular deals where big contracts are at sta,e between B? firms and foreign governments% and aid acts as a (sweetener)& The ATP ta,es scarce concessional resources away from poor countries and poor people: it has created% as Toye observes% a vested interest which lobbies for the scheme)s e*pansion& $t benefits a small number of 4often large6 firms% but conveys no obvious good to the country as a whole& $t has been ad discredit to the Aabor government of #955 which introduced it% and to the succeeding Conservative government% which nailed its flag to the mast of Competition% but enlarged and preserved it& Anurdha Bose)s account of business lobbying in Chapter 5 only supports this afterword)s view of the comple*ities of the 2.A& The lobbies studied support the ATP% with varying intensity& They see, other forms of access to aid contracts& They recogni-e% some of them% to some e*tent% the developmental aims of British aid& And many parts of the aid programme are not accessible to them& 2ther Whitehall departments are often instrumental in assisting them in their

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objectives& The forces contend for the 2.A)s virtue% within and outside it% and the battle is neither won nor lost& %4,s A further case in point is the channeling of aid through D/2s% now 0uite a major programme 4Chapter 96& This reflects in part a genuine attempt to meet the anti1 poverty objectives of British aid% in part an attempt to deflect criticism about failure to do so by other means% and in part a means of saving on administrative costs& An incidental effect% as 'ar, Robinson points out % in Chapter 9% has been some muting of criticism of official aid by D/2s + though it would be too 'achiavellian to suggest that this was an aim of the policy& At the same time% actual practice has borne out many of the 2.A)s virtuesC a concern for performance evaluation by D/2s% which has not been pushed to the point of e*cessive obtrusiveness: using D/2s to give humanitarian aid in countries where governments are not to be relied on: even some sensitivity to the dangers for the D/2s in getting too close to officialdom& But% as Robinson)s account of the selective availability of the bloc, grant shows% even on administrative matters principle is not ta,en too far: if it is aw,ward to follow precedent consistently it can be pragmatically accepted that li,e cases need not be treated ali,e& -#e &n!ironment British aid has become virtuous on the environment& $t began the #9;"s without an environmental policy and with some considerable destruction of its scientific capacity& But after the Prime 'inister)s conversion to the environmental cause its own 4modest6 programmes and% perhaps more important% its role on the international scene have become creditable& As described by Brian Wal,er in Chapter #"% the B? has played a significant part in influencing policy in the World Ban, and the Bnited Dations 3nvironment Programme% and in promoting arguments and recommendations of the Brundtland report& Foreign Polic and t#e Distribution of )id $t is hardly surprising that in Chapter H Peter Byrd characteri-es the foreign policy of British aid as (pragmatic)& Do consistent thread can be found in the various uses of aid& $nstead% aid is used sometimes for highly specific foreign1policy purposes% such as assisting the resumption of relations with 'alaysia in #9;>% or attempting to improve the B? (presence) in southern Africa by providing assistance to 'o-ambi0ue& 'ore often% aid simply lubricates the conduct of foreign relations + this is why B? aid is spread over #!" countries in rather small pac,ets& The geographical pattern of British aid has changed over the years& 'any commentators particularly regret the decline of $ndo1British relations& ! $ndia received !"&< per cent of British bilateral aid in #95"15#: by #9;51;; this was down to > per cent&H The B? compares reasonably well with other donors in the proportion of aid it gives to the poorest fifty countries 4>; per cent in #9;56 and to Africa 4M9 per cent6 + it is Africa which has gained at Asia)s e*pense& M $t is interesting to speculate on the reasons for this shift% common to most donorsC it at least runs counter to the (economic interests) view of aid% since these are arguably greater in Asia than in Africa for virtually all donors& $t is indeed true that what has attracted

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aid to that continent has been the dar,ening economic prospects there% leading to an international response to Africa)s plight% standard theories of international relations have something to e*plain& Britain)s contribution to multilateral aid institutions is also fairly (virtuous)C M> per cent of its aid% including 3C aid% or !5&! per cent 4compared to the .AC average of !M&> per cent6 e*cluding 3C contributions& The 2.A has found the steady increase in this proportion somewhat frustrating% particularly the amounts going to 3C programmes% much of which it would rather see going through its own bilateral channels& Adrian Hewitt has detailed some of the B?)s dissatisfaction with 3C aid programmes and policies in Chapter <% though the present author gives more credence than Hewitt to British efforts to reform 3C aid: it is perhaps not so much that the B? has never tried as that% when it has tried% it has not been supported by other 3C members& Also the secretiveness of 3C functionaries ma,es it difficult for outside bodies to document the failings of 3C aid and support attempts at reform + though from time to time the 3C)s own Court of Audit produces some fairly damning commentary& &ffecti!eness British aid has a reputation for technical 0uality& The World Ban,)s study of aid to African agriculture% for e*ample% found the B? among the more accomplished of the donors it covered + a fact which it attributed in part to Britain)s long e*perience on the continent&< The present volume pays tribute at various points to the ability and dedication of 2.A professionals + tributes which are for the most part thoroughly well deserved& As with much bilateral aid% however% objective ,nowledge about effectiveness is limited& James Winpenny ma,es it clear in Chapter ! that the 2.A ta,es evaluation seriously and puts lots of effort both into the techni0ues of evaluation and into implementing its findings& But by no means all aid activity is subjected to formal evaluation% and only recently have evaluation reports been made available to outsiders&> $n this respect the most (virtuous) agency is the Bnited 7tates) B7A$.% which is uni0ue among bilateral donors in evaluating almost all its aid 4the World Ban, is the only other agency to do so6 and publishing almost all its evaluations& $t would be gratifying if the 2.A were to move in this direction& There is enough sophistication in the aid community for the publication of evaluations% both positive and negative% to be possible without harm + indeed% with much value + to the aid programme as a whole and public interest in it&

%hau$in* )icholas De"etris and Draay* Aart -.//>0* 1&ho 2ets Debt !elief34 in Journal of European Economic
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Association* 5ol6 7* )o6 .-9* ""6 999-9<.6

$n this short paper we have presented new results on the cross1country and overtime allocation of debt relief in low1income countries& Although debt relief has become a highly visible form of assistance to low1income countries over the past #" years% we as yet ,now little about how it is allocated across countries% or what its impact has been& This is in part due to wea,nesses with e*isting published data on debt relief that we are trying to remedy in a ongoingwor, KsicL& Bsing preliminary results from this project we document that debt relief is much less responsive to cross1country differences in per capita income% and somewhat more responsive to cross1country differences in policy and institutional performance% than are other forms of aid& We also find% somewhat surprisingly% that debt relief is in most cases not significantly associated with higher debt burdens% suggesting that reducing debt overhang per se is not a major motivation for debt relief& We also find some evidence that large debtor countries are more li,ely to receive debt relief% particularly from multilateral creditors& inally% we have seen that the strong observed persistence in debt relief is primarily due to relatively persistent country characteristics& This in turn suggests that% unless debt relief changes these characteristics% it may be difficult for debtor countriesYas well as creditorsYto escape from repeated cycles of debt relief&

%hong* Alberto and 2radstein* #arB -.//A0 1&hat Determines Foreign Aid3 ,he Donor@s Pers"ecti$e*4 in Journal of &evelopment Economics* 5ol6 A>* )o6 8* ""6 8=896
Recently industrial countries have been hard pressed to reconsider their foreign aid policies by focusing on good policies and good institutions in the recipient countries and some influential research has studied the efficiency of aid disbursement in this regard& $nterestingly% no attention has been given to the possible determinants of aid giving in donor countries despite the commonplace policyma,ers) rhetoric to enhance it& This paper purports to fill this gap by e*amining the factors affecting the support for foreign aid among voters in donor countries&

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The styli-ed theoretical model% which considers an endogenous determination of official and private aid flows% suggests that own government efficiency is an important factor in this regard% and also relates individual income to aid support% which has the implication that income ine0uality is detrimental for a political support for foreign aid& The empirical analysis of individual attitudes% based on the World Ialues 7urveys% reveals that satisfaction with the own government performance and the individual income are positively related to the willingness to provide foreign aid& urthermore% consistent with these results% when using donor country data we find that aid is lin,ed with ine0uality% corruption% political leaning% and ta*es in donor countries% but has little relationship with the economic conditions in the receiving country& $t is worth emphasi-ing that aid generosity is found to be mainly affected by own governmentZs efficiency and less by the recipient one&

%hristian Aid -.//<0* The Politics of Poverty# Aid in the .ew *old War* htt":EECCC6unngls6orgE"oliticsL./of L./"o$erty6"df* accessed 8;E88E./8/6
Britain% the B7 and much of the industrialised world enter the summer of !""M confronting the cold reality of a clear and present terrorist threat& or those countries with forces embroiled in $ra0% the menace is most ,eenly felt& $n Aondon% it is no longer (if) a major terrorist attac, will come + but (when)& A chill wind% however% is also starting to blow across the developing world& $t is being whistled up by the very people + rich aid1donor countries + who claim to do the most to alleviate strife and suffering in the poorest parts of the globe& or moves currently being made among members of the biggest and most influential (rich1country clubs) betray a worrying shift in how they see aid commitments& Aid is viewed increasingly as a means of promoting and safeguarding the donors) own interests% particularly their security% rather than addressing the real needs of poor people& Aid% in other words% is being co1opted to serve in the global (War on Terror)& Aid has always% to some e*tent% been given with at least one eye on the self1interest of the giver + be it to secure influence% trade or strategic resources& But the past #< years have seen a mar,ed change% advocated for and applauded by Christian Aid% towards vital aid funds being far better targeted at alleviating poverty& Dow% however% we seem poised to return to some of the worst e*cesses of the recent past% when whole nations and regions were blighted by the subsuming of their interests to a global crusade& Aid was then allotted on the basis of where a country

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stood in the great Cold War confrontation& Whether% indeed% a government was (with us or against us)& 7ome nations did very well out of this& 3urope was the recipient of the first great aid distribution + the 'arshall Plan + which allowed the continent to wor, its way out of the devastation wrea,ed by the second world war& 3ven some countries given blatantly politicised aid used the opportunity to prosper% particularly in 7outheast Asia& 2thers% however% saw the irreducible logic of the Cold War blight their nascent futures& Pro*y wars were funded and fought: corrupt and repressive regimes were installed and bac,ed purely on the basis of whether the people involved were (ours) or (theirs)& Particularly in Africa% the legacy of that period is with us still& The language of (you)re either with us or against us) used by President Bush in the aftermath of the 7eptember ##% !""# terrorist attac,s on Dew Xor, and Washington% has an eerie% retro ring& Xet% as this report demonstrates% it is not just the language of the Cold War that is starting to return& ollowing the collapse of the Berlin Wall in #9;9% and with it the great divide that had dominated world politics for more than half a century% there was an opportunity to ta,e stoc, and thin, again about the relationship between Dorth and 7outh% rich and poor& There was even a blueprint from the Cold War years to show the way ahead + the reports produced by the Brandt Commission in the #95"s and #9;"s + and during the #99"s the language gradually swung away from rich nations pursuing purely selfish ends towards addressing the developing world)s pressing needs& These changes were shadowed% and sometimes led% by an increasing public pressure to (do the right thing)& 'ass movements% such as Aive Aid in the mid1#9;"s and Jubilee !""" in the late1#99"s% moreover% demonstrated that there was political advantage to be gained in democratic countries from ta,ing the issues of world poverty seriously& 2r% from a more politically jaundiced point of view% the cynical use of aid budgets became less and less of an option& 'edia e*posure of some of the worst abuses of politicised aid + for instance% that given in e*change for defence contracts + meant that they were progressively addressed& $n Britain% the new Aabour government in #995 went as far as changing legislation to ensure that government aid money was e*pressly and e*clusively targeted at poverty& As the end of the century approached% the then #;9 member countries of the Bnited Dations signed up to the 'illennium .evelopment /oals + which aim to half world poverty levels by !"#<& This was by no means a golden age& 7elf1interest continued to play a significant part in aid provision& But the tide was definitely moving in the right direction& $n the aftermath of 9G##% many of these gains seem at ris,& This report argues that the tide is on the turn% and loo,s set to start running in the opposite direction& The past couple of years have seen the B7% the 3B and a number of individual governments starting to use the rhetoric of (opposing terrorism) as a basis on which to allocate aid& There have also been worrying developments at the 2rganisation for 3conomic Cooperation and .evelopment 423C.6% where the rules governing how

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member states give aid are being changed to include terrorism prevention and a range of military activities& 30ually% (humanitarian) language has been increasingly recruited to justify military operations lin,ed to the War on Terror + particularly in Afghanistan and $ra0& The British government is also starting to ma,e unwelcome connections& Aid to projects for poor communities in (middle income) countries% particularly in Aatin America% was last year overtly diverted to $ra0% despite previous assurances from none other than Prime 'inister Tony Blair that this would not happen& $n April% /ordon Brown% the Chancellor of the 3*che0uer% was in Paris to garner support for his $nternational inance acility + the only way% he said% that the 'illennium .evelopment /oals could still be met& He issued a (call to action) to other international finance ministers% which Christian Aid can only support& $n a deviation from his published speech% however% he also showed himself capable of singing from the War on Terror hymn sheet& He saidC (We understand that it is not just morally and ethically right that developing countries move from poverty to prosperity% but that it is a political imperative + central to our long1term national security and peace + to tac,le the poverty that leads to civil wars% failed states and safe havens for terrorists&) 2f course there is a genuine threat from terrorism and a duty on governments to do all they can to protect their citi-ens& But this should not and cannot be done by anne*ing the language and budgets of aid& This will not only fail to address the real issues of poverty& The ris, is that if narrow security concerns are used to shape aid allocation% it could well lead to an intensification of terrorism& We have been here before& We e*amine the case of (ganda% which illustrates how the Bgandan government)s manipulation of the War of Terror has led to an intensification of the conflict in the north of the country and so to the displacement of hundreds of thousands of people& Hopes of a peace deal have dimmed% while succor has been given to an increasingly repressive regime& 7ound familiarW We also loo, at Afghanistan + the last battlefield of the Cold War and first in the War on Terror + to show how the hopes for stability and reconstruction that followed the fall of the Taliban have stalled& 7ecurity is the ,ey to rebuilding post1war Afghanistan& But the emphasis placed on the B71led coalition)s goals + the hunting down of al1`aeda and Taliban forces + has abandoned most of the country to lawlessness& Here% the confusion between the roles of combat troops and peace1,eepers% often under the same command% has also led to a shrin,ing (humanitarian space) in which aid organisations can operate& or those% li,e Christian Aid and its partners% who are trying to build a better life for Afghanistan)s people% the situation has now become more dangerous than under the Taliban& A rising toll of murdered aid wor,ers in the country is a tragic testament to this situation& The result is that whole areas of the country have been placed off1limits and aid programmes abandoned& The growing politicisation of aid% then% threatens to obscure the goal of poverty reduction& The allocation of military aid to those perceived to be fighting the War on

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Terror also has the potential to encourage human rights abuses and to sow the seeds of future conflicts& $n this report% Christian Aid is calling for a strong and robust reaffirmation of the principle that poverty reduction should be aid)s primary driving force& The fortunes of the world)s poorest people must not be held hostage to the fortunes of the War on Terror& Among the recommendations of this report are thatC the British government must use its leadership% weight and influence to halt and then reverse the trend towards lin,ing aid to the War on Terror + starting by reinstating the funds it has already diverted from poor people in middle1 income countries British ministers should actively lobby members of the 23C. to ensure that the definition of aid is not e*tended to include military or security1related assistance the 3B must stop the drift towards politicising its aid budget: the neutrality and impartiality of 3B humanitarian aid must be maintained donor governments% belligerents and military forces in conflicts around the world must respect and uphold the neutrality% impartiality and independence of humanitarian action&

$n !""<% the British government has a uni0ue opportunity to ma,e its views heard& $n the summer it will chair the /; conference and then hold the 3B presidency until the end of the year& Before that% the Commission on Africa% launched by Tony Blair this year% will have delivered its own blueprint for the future of the world)s poorest continent& Christian Aid calls on the Prime 'inister to use this opportunity to re1 focus the world)s richest countries on the plight of the poorest& $n this report we set out the mista,es of the past and show how they are already starting to be repeated& 2ur message% however% is that it is not too late to re,indle the noble% humanitarian aim of aid + to eradicate world poverty& $t is also a warningC if the rich world fails in this endeavour% then our future security will also be undermined& Already some of the world)s poorest people are paying for the War on Terror& Programmes designed to help them have been cut% budgets reallocated and hopes dashed as donor priorities have switched to addressing the needs of (global security)& This must not be allowed to continue& The needs of these people must not% yet again% be bulldo-ed by the contingencies of a global strategy in which they have no voice&

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%ingranelli* Da$id L6 and PasIuarello* ,homas +6 -8;A70* 1 uman !ights Practices and the Distribution of (6S6 Foreign Aid to Latin American %ountries*4 in American Journal of Political Science* 5ol6 .;* )o6 9* ""6 79;-7:96
$t is important to ,eep the findings of this research in perspective& The Bnited 7tates gives some type of economic or military assistance to appro*imately one hundred nations& A few countries li,e $srael% 3gypt% $ndia% and 3l 7alvador receive disproportionate shares of that aid when compared with their neighbors& 2ur analysis says little about why those countries have been singled out for preferential treatment& Aid decisions pertaining to these most favored countries often involve national security interests% are nonroutine and controversial% and can probably be e*plained only on a case1by1case basis& However% we are confident that our analysis of the process by which the B&7& government ma,es more routine decisions regarding the distribution of foreign aid to Aatin American nations is accurate% and may be e*tended to e*plain disbursements of B&7& foreign aid to nations in other regions of the world& We found that decisions regarding the distribution of foreign aid to Aatin America were made in two stages& Table 5 summari-es our findings concerning the role of human rights considerations during both stages of decisions pertaining to the distribution of B&7& economic and military aid& .uring the gate,eeping stage of economic aid decisions% more developed nations were e*cluded% and human rights records were not a consideration in determining which nations received economic assistance& When B&7& policyma,ers decided upon amounts of economic assistance% however% higher levels of economic assistance were provided to nations with relatively enlightened human rights practices& or military aid% nations with poor human rights records often were e*cluded at the gate,eeping stage% but once the decision had been made to provide military assistance% the level of assistance could not be e*plained by the human rights practices of the recipients& Do simple generali-ations about the role of human rights in the ma,ing of all B&7& foreign aid policies are possible& We do not wish to e*aggerate our findings concerning the role of human rights in the decision to provide B&7& military aid to other nations& 3ven at the gate,eeping

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stage of military aid decisions% human rights practices were not found to be as important as was e*pected& $f our analysis had been confined to the relationship between a governmentZs respect for rights of the integrity of the person% or what might be referred to as anti1torture rights% we would have found a wea,er relationship between human rights practices and military aid disbursements to Aatin American nations& The evidence regarding military aid allocations reflects a concern among B&7& decision1ma,ers with respect for civil and political rights& or some 4e&g&% Aeyton1Brown% #9;H6% the change in emphasis represents an abdication of B&7& human rights policy as it is applied to military aid allocations& or others% it only represents a change of emphasis in the implementation of that policy& $n either case% the evidence suggests that the president retains substantial influence over the distribution of B&7& military assistance& We were particularly surprised to find no consistent relationship between changes in human rights practices in Aatin American nations and subse0uent levels of B&7& foreign aid& 'uch of the policy debate concerning B&7& aid decisions has focused upon recent improvements or declines in practices& $n fact% Congress sometimes re0uires that the 7tate .epartment EcertifyF that selected countries have improved their human rights practices before it will consent to the provision of B&7& foreign aid& Though our results are not conclusive on this point% they do indicate that the relative levels of respect which various governments in Aatin America give to the human rights of their citi-ens may be more important to B&7& policyma,ers than recent changes in their practices& This 0uestion merits further research% involving the measurement of human rights practices and aid levels at several points in time and the e*amination of responsiveness of aid to changes in human rights policies& $n general% our findings conflict with others which have demonstrated the importance of B&7& national security and trading interests in determining B&7& aid policies& $n part our findings differ because our research was focused upon routine foreign aid decisions& 2ur findings are also based upon a research design that accounts for a wide variety of plausible alternative e*planations of the distribution of B&7& foreign aid& 'ost previous research on this topic has utili-ed the case study approach& Do previous systematic research e*plaining the distribution of B&7& foreign aid attempted to measure the importance of human rights practices and also controlled for competing e*planations of foreign aid decisions& Bivariate relationships can be misleading& $n addition% B&7& human rights policies have re0uired important substantive and procedural changes in the way in which Congress and the administration ma,e foreign aid decisions& .ifficulties in implementing the new policies have been well documented 4e&g&% Bloomfield% #9;!6% and may help to e*plain the delay in policy effects& /iven the somewhat regional orientation of the B&7& foreign assistance program% and the fact that the determinants of B&7& foreign policy may change% only further research can determine the e*tent to which our findings herald a more humanistic thrust in B&7& foreign policy& There was a time when Aatin America represented a special case for the application of B&7& human rights policy& $t was a region where the B&7& was dominant and could afford to critici-e Aatin American nations for poor human rights practices without much threat to B&7& economic or security interests& $t is encouraging that human rights considerations have become a more important determinant of the distribution of B&7& foreign aid in this region during the same period that B&7& dominance has been severely threatened&

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%ingranelli* Da$id Louis -8;;90* Ethics$ American 'orei!n Policy and the Third World* )eC MorB: St6 #artinJs Press6
5#apter 1+ ) - polog of 8oral Positions Bpp. C<2DE 2ne caveatC it is not my purpose here to argue that any particular position on morality and foreign policy is best& Although my own position is generally Progressive and $ do not attempt to hide it% my goals was to conduct an objective% analytical% descriptive% and historical in0uiring into what intentions have guided actual American foreign policies toward the Third World& The typology of positions presented in this chapter provides an analytical reference point for that in0uiry& Chapter ! e*plores in greater detail the mainstream debate among Dationalists% 3*ceptionalists% and Progressives& Chapter H is devoted to a similar in1depth e*ploration of the 'ar*ist position% which is one important stream of thought that often leads to a Radical Progressive position on B&7& behavior toward the Third World& Ta,en together% these two chapters provide a fairly complete picture of alternative moral reasonings about foreign policy% that is% which EgoodF should be ma*imi-ed and why& 'ost of the remainder of the boo, e*amines different historical periods of B&7& foreign relations with the Third World% identifying the most significant goals during each period% with special emphasis on the post1World War $$ era& $n each chapter% the rhetoric of B&7& policyma,ers is compared with actual B&7& foreign policy during their terms of office& 'ilitary interventions% ,nown covert operations% and B&7& government responses to action1forcing events in the Third World are described& The methodology employed is historical analysis% because history provides real e*amples of how B&7& leaders have responded to real moral dilemmas in the ma,ing of foreign policy& This approach allows us to identify the hierarchy of values and objectives that B&7& leaders have e*pressed in public statements on B&7& foreign policy toward the Third World% to loo, for patterns of congruence and divergence between public statements and foreign policy as actually implemented% and% based on this evidence% to draw conclusions about changes in the hierarchy of foreign policy values& An understanding of notable developments in B&7&1Third World relations also enhances our sensitivity to differences between other historical times and our own% increases our ability to perceive and e*plain significant changes over time% and heightens our awareness of basic continuities in policy& $dentifying foreign policy goals is an important and intellectually challenging tas,% but one that is also fraught with danger& The evidence is indirect% fragmentary% and open to alternative interpretation& Because motives can never be observed directly% they must be inferred from public statements and government actions& 7ince the

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foreign policy decision1ma,ing process itself tends to be secret 4for good and obvious reasons6% even the factual record about what actions were ta,en is incomplete& 'oreover% the available facts never spea, for themselves& Thus% different analysis viewing the same facts may draw different conclusions from them about the motives of the decision ma,er& These problems are discussed in greater detail in Chapter M& $f these problems are not overcome% discussions of the morality of foreign policies must be avoided altogether& Chapters < and >% which ma,e up Part $$ of the boo,% briefly discuss the early history of B&7& foreign policy toward wea,er nations& Chapter < begins at the beginning by briefly e*amining the relations between the B&7& government and the American $ndians and 'e*ico between #55> and the end of the nineteenth century% with special emphasis on B&7& involvement in the Philippines and Aatin America& The term -#ird /orld% though of recent origin% is applied in chapters < and > retrospectively to countries that would have fit the definition in earlier times& Part $$$ 4chapters 5196 provides a more detailed account of significant developments in B&7&1 Third World relations between the end of World War $$ and the beginning of the Reagan and Bush era& As noted% this was a period of fairly rapid movement toward Progressive principles% especially during the Truman% ?ennedy% and Carter administrations& Part $I 4Chapters #" and ##6 focuses on the Reagan and Bush administrations and the future& Chapter #" in this section e*amines the most recent B&7& foreign policy choices and directions on Dorth17outh issues& $t presents a snapshot of the present at a time in history when many of the rules of international relations are being rewritten& The final chapter is both retrospective and predictive& irst% it reviews the evidence showing that there has been a long1term trend towards Progressivism in B&7& foreign policy rhetoric and behavior toward the Third World& Then% it e*amines three possible scenarios for B&7& foreign policy toward the Third World in the twenty1 first century& K&&L

5#apter 2+ -#e 5ontemporar Debate Bpp. C0<F2E Actual B&7& foreign policy toward the Third World since World War $$ has represented a blend of Dationalist% 3*ceptionalist and Progressive principles& These principles are closely related to perspectives on human nature% the international system% the most important targets of foreign policy% and the causes of poverty and instability in less developed countries& These different premises lead to different conclusions about the larger ends% concrete objectives% and acceptable means of foreign policy& Although there is a lively debate over the proper ends and means of B&7& foreign policy toward the Third World% few American argue against the preeminence of national economic prosperity and military power goals& 7ince economic and military power are ine*tricably lin,ed% both must be maintained at a minimum threshold& Dationalist and Progressive thin,ers argue about the location of that minimum threshold% the definition of national interest% the intrinsic value of some Progressive objectives% the morality of unilateral intervention and counterrevolutionary policies% and the consistency of Dationalist and Progressive objectives& The 3*ceptionalist voice within the mainstream debate emphasi-es the responsibilities of the Bnited

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7tates to people living beyond its borders and urges a foreign policy that would ma,e the world over in the B&7& image& The main thrust of the Radical Progressive positions to oppose unilateral intervention in the Third World under any circumstances: to support the implementation of a Dew $nternational 3conomic 2rder: and to advance other reforms that would reduce poverty in the Third World and increase the voice of the Third World nations in international affairs& K&&L

5#apter C+ -#e 8ar'ists Bpp. FC<3GE According to 'ar*ists% throughout its history the Bnited 7tates has been guilty of bad motives when ma,ing foreign policy toward wea,er states% because it has been concerned primarily with promoting its economic interests& $ndeed% the Bnited 7tates) foreign policy has been an e*tension of and a more subtle form of colonialism% ensuring that most Third World states remain fragile% repressive and dependent on the developed world for manufactured products% national security% and a substandard level of well1being& Poverty in the Third World is no accident: it is the direct result of activities orchestrated by the B&7& government& The Third World is not underdeveloped: it is overe*ploited& Capital investment in the Third World has not brought prosperity: it has brought deeper and deeper debt and ever greater ine0uality in the distribution of wealth and well1being within Third World societies& 'ar*ist theorists and Third World leaders would prefer a B&7& foreign policy that was based on multilateralism and noninterventionism& They would also prefer a policy in which the B&7& leaders cared e0ually about the welfare of all the world)s people% ma,ing no distinction between the people within B&7& territorial boundaries and people residing elsewhere& 'ar*ists often argue that such a foreign policy would emerge as a natural conse0uence of world socialism& The moral imperative behind Progressivism% the mainstream school of thought closest to 'ar*ism% is Ewhen it is in your power to do good for another who needs it at no serious ris, to yourself% your duty is to do so&F 'ar*ist theorists and Third World leaders reject this standard as too modest& $n their view% because the Bnited 7tates and other advanced industrial states bear such great responsibility for the underdevelopment of Third World states% the e*ploiters must underta,e an aggressive program of affirmative action benefiting Third World countries& This program is summed up by the /roup of 55)s proposals for debt relief and a Dew $nternational 3conomic 2rder that was described in the last chapter& $n contrast% most B&7& leaders have proudly proclaimed the economic foreign policy objectives that 'ar*ist critics and some Third World leaders find so reprehensible& or them% the real issue is not whether the Bnited 7tates has pursued economic interests in the Third World& 2f course it has& 'ainstream thin,ers differ with 'ar*ist theorists mostly over the morality of economic and cultural e*pansionism% the degree to which economic objectives have motivated B&7& foreign policy% the ethics of unilateralism% covert action and coercion% and how and whether the hierarchy of B&7& foreign policy objectives has changed over time& KNL

5#apter H+ Ino$ing 8oti!es? (econciling 8eans and &nds Bpp. 3D<GHE

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'ost political scientists avoid analy-ing the motives of policyma,ers because motives are not directly observable& $nstead% they must be inferred from other ,inds of information& However% since this boo, is about the morality% or% at a minimum% the goals of American foreign policy toward the Third World the problem of inferring motives cannot be avoided in the analysis that follows& The efforts and impact tests described in this chapter% though imperfect% are the best tools available for the tas, and are loosely applied in the chapters that follow& 'achiavelli)s advice to the Prince about foreign policy methods was that EHe should not depart for the good if he can hold to it% but he should be ready to enter on evil if #e #as toF 4emphasis added6& This advice would be sufficient to prohibit the B&7& government from engaging in covert campaign activities abroad% but it is too vague to be of much help in guiding action in other circumstances& 'ost% if not all% B&7& leaders have recogni-ed that they could not avoid using violence% deception% and bro,en promise to achieve good ends% but they have differed a great deal in their willingness to resort to such methods& Dationalist and 3*ceptionalist leaders in the Bnited 7tates% having less respect for the universal value of nonintervention and multilateralism% have been more willing to engage in overt and covert unilateral actions in the Third World& Progressives have been less willing to engage in such actions% and Radical Progressives deem them morally unacceptable& KNL

5#apter 11+ -#e Past, Perestroi2a, and t#e Future Bpp. 217<2CFE 2ver time and especially since World War $$% B&7& policyma,ers have increasingly recogni-ed the relative importance of universal values and of the duties to people living in other nations& This trend has not been linear% but it is visible in the changing rhetoric% actions% and conse0uences of B&7& foreign policy toward the Third World over the past two hundred years& As the history of the B&7&1Third World relations reviewed in Chapters <1#" illustrates% the Progressive evolution in B&7& foreign policy has been caused% in part% by the Bnited 7tates) changing place within the international power structure% by the longstanding rivalry with the former 7oviet Bnion over alternative conceptions of the Egood society%F by the lessons learned from the Iietnam War% and% most importantly% by the institutional changes in foreign policy decision1ma,ing structures and processes wrought by Progressive administrations& The evolution toward a more Progressive foreign policy is li,ely being fueled by a shift in American values as well& We sometimes lose sight of the trend toward Progressive foreign policy values and objectives because of a fi*ation on notable e*ceptions% cycles of party control that can obscure longer1term developments% and inability or unwillingness to step bac, from current events to see the larger historical picture% and an adherence to absolute rather than relative standards of performance& $n this chapter% the main pieces of evidence supporting this thesis are viewed along with some alternative standards that might be used to evaluate it& Then% three scenarios of future B&7&1 Third World relations are developed% leading alternatively to greater isolation of the Bnited 7tates from Dorth17outh issues% a regression to previous patterns of gunboat diplomacy% or accelerated Progressivism& Past Patterns

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7ince World War $$% the number of Progressive objectives e*pressed in relevant symbolic policy statements has increased& The record of B&7& actions in the Third World% whether unprovo,ed or in response to action1forcing events% demonstrates that the emphasis given to Progressive values and objectives in the ma,ing of B&7& foreign policy toward A.Cs has also increased& The change in priorities guiding action has not been steady: it has been halting and cyclical% but over a long period of time% the overall direction of movement seems clear& or the first #!< years of the Bnited 7tates) e*istence as a nation% there was little% if anything that was Progressive about its foreign policy goals% objectives or methods in conducting relations with its wea,er neighbors& $n the last century% B&7& leaders have continued to place primary emphasis on Dationalist objectives in conducting those relations% but% at the margins% they have pursued others that are not solely connected with the national self1interest& 3ven since the beginning of the Cold War 4and partly as a response to it6% B&7& foreign policy has become increasingly affected by Progressive elements of the foreign policy agenda& Progressive thin,ers might argue over what sets of values and objectives should guide B&7& foreign policy and% within that set% certainly would argue over which ones were most important& or almost all of them% the set would include support for human rights% self1determination and autonomy% economic development% and social justice& $t would also include adherence to the structures of international law% generally% and the principle of nonintervention% specifically& 2ver the years% at least some B&7& presidents have recogni-ed all these elements as worth pursuing& Jimmy Carter was probably the only one who attempted to increase the priority of all of them in relation to other economic and military objectives in B&7& foreign policy& 7till% with the possible e*ception of his administration% the overall record of adherence to the spirit of international law has been abysmal& The order in which different values were introduced into the foreign policy debate is important% because a ,ind of primacy principle is at wor,& Dationalist goals of maintaining sovereignty% security from e*ternal threat% and national macroeconomic prosperity are fundamental& $n the early years% when the Bnited 7tates was itself a developing country% they were the only mainsprings of foreign policy& These values were not replaced by later% more Progressive ideals& $nstead% later objectives were added and generally have not been pursued vigorously e*cept when prior goals have been satisfied or at least have not been seriously endangered& 7imilarly% the order in which Progressive values and objectives were interjected into B&7& foreign policy rhetoric is also significant + support for democracy% economic development% social justice% and human rights% in that se0uence& The earliest ones accepted as part of the B&7& foreign policy debate continue to dominate over those introduced later& "elf<determination. 7upport for democratic or% at a minimum% for elections in A.Cs has been a feature of foreign policy rhetoric at least since the 7panish1American War% when it was used as an important rationale for freeing Cuba from 7panish rule and then granting that state independence& This theme is so old and has been so persistent B&7& foreign policy that it would be difficult to argue that a particular administration initiated it&

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&conomic de!elopment. Although many B&7& leaders had e*pressed compassion for people living in poverty in the Third World% Truman% in the immediate aftermath of the 7econd World War% was the first to initiate a substantial public program to do something about it& The foreign aid and technical assistance programs his administration initiated and the international lending agencies it helped form provided the foundations for contemporary B&7& policies designed to foster Third World economic development& "ocial Justice. By #9>" B&7& policyma,ers recogni-ed that aggregate economic development% by itself% would not necessarily have a beneficial effect on the poorest people in Third World societies& The ?ennedy administration% through both its rhetoric and its deeds% heightened B&7& concern for issues of social justice and political reform& .uring his brief tenure in office% ?ennedy dramatically e*panded the food aid program% established the Agency for $nternational .evelopment and the Peace Corps% and was the first B&7& president to sanction 7outh Africa for its policies of apartheid& 7uman (ig#ts. $n #95> Jimmy Carter added promotion of human rights to the by now substantial Progressive foreign policy agenda& or Carter% protecting human rights primarily meant ensuring that individuals would not be abused by their governments& The Reagan and Bush administrations have chosen to emphasi-e the protection of individual)s civil and political rights& Today the term #uman rig#ts encompasses much of the Progressive foreign policy agenda& As a result% much of the current empirical research on ethical issues in B&7& foreign policy focuses on whether% to what e*tent% and in what way human rights considerations affect B&7& foreign policy toward the Third World& Recently% a few studies have also been conducted on whether B&7& foreign policy has any impact on the human rights practices of the Third World targets of those policies& Progressive values and objectives have become more numerous in the rhetoric of B&7& foreign policy& They have also become more e*plicit in the legislation that guides the implementation of that policy and% arguably% more important in shaping the reality of that policy as well& However% the record on other important aspects of the Progressive agenda + general adherence to international law% reliance on a multilateral approach to international affairs% avoidance of the use of covert action e*cept as a last resort% and observance of the principle of nonintervention% in particular + has not been impressive& Among B&7& presidents since World War $$% only Carter wor,ed had to adhere to these Progressive goals and principles& And Carter)s four short years in office were not enough to ma,e much progress in these areas& $t is too soon to gauge President Bush)s position in these previously neglected areas& Certainly% his handling of the Panama situation violated the spirit of international law% B&7& prohibitions against using covert action to assassinate foreign leaders% and the norm against unilateral military intervention& However% his administration)s response to $ra0)s invasion of ?uwait was 0uite different& At least during the early stages of that crisis% administration actions were consistent with 4though at times they anticipated6 pertinent resolutions of the Bnited Dations 7ecurity Council& However% during those early stages the 7ecurity Council adopted% with minor modifications% every resolution advanced by the B&7& representative& The real test will come when the Bnited 7tates is forced to choose between its own

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foreign policy preferences and those e*pressed by the Bnited Dations or by a conference of regional leaders& There has been continuity in B&7& foreign policy since World War $$ in the sense that Dationalist objectives have maintained their preeminent places in the hierarchy& Progressive objectives% because they are newer and their positions less fi*ed% have received slightly different priorities by different administrations& The statements and actions of the Reagan and Bush administrations seem to reflect the following priorities among Progressive goalsC 4#6 encourage the development of democratic institutions and civil and political liberties: 4!6 assist 4free mar,et6 economic development efforts: 4H6 promote human rights of the integrity of the person: 4M6 promote social justice: 4<6 respect international law: and 4>6 avoid unilateral over or covert intervention& Iarious B&7& administrations have differed not only on the relative positions of different Progressive objectives of B&7& foreign policy toward the Third World% but also on the willingness to ma,e tradeoffs between Dationalist and Progressive values& As noted at the outset% ethical choices rarely involve choosing between good and evil& Rather% one must usually choose between good and better or between bad and worse& oreign policyma,ers must choose among inconsistent goals& As an e*ample% anti1e*propriation policies may promote the Bnited 7tates) short1 and long1term economic self1interest% but such policies may also impede the ability of some underdeveloped nations to control assets such as natural resources within their own jurisdictions& This hurts the ability of Third World states to achieve either economic development or social justice& As another e*ample% providing large amounts of military aid to a less developed country may allow it to cooperate more effectively in the Bnited 7tates) own military defense effort% but it may also increase the power of the military sector of a Third World society to the point where civilian leaders are unable to rule effectively& Bnder such circumstances% democracy will fail or will e*ist only as an empty form& 7ince World War $$% B&7& foreign policyma,ers have been increasingly willing to ma,e tradeoffs that place Dationalist foreign policy values and objectives at significant ris,& The Carter administration was critici-ed for ta,ing too many ris,s of this type& But even the reactions of the Reagan administration to democratic movements in 7outh ?orea% the Philippines% and Haiti are all e*amples of ris,s ta,en by an otherwise ris,1averse administration to promote democratic movements in the Third World& The historical record since World War $$ also illustrates that .emocrats have e*panded the Progressive foreign policy agenda rhetorically and have made greater efforts to follow through on that rhetoric& .emocratic presidents% presidential candidates% and members of Congress generally have advocated #& /iving more foreign aid to developing countries& !& Providing a higher proportion of economic 4as opposed to military6 aid& H& Placing more emphasis on aiding self1determination and true democracy% not just on establishing regular elections& M& /iving less emphasis on private investment as a foreign policy tool&

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<& Bsing less military intervention and covert action& >& Relying more heavily on need and human rights performance as criteria in the disbursement of economic aid& 5& /iving a higher proportion of foreign assistance in the form of multilateral 4as opposed to bilateral6 aid in the form of grants 4as opposed to loans6& ;& Relying more heavily on regional and international 4as opposed to unilateral6 solutions to problems& Republican administrations have tended to be more Dationalist in their approach to foreign policy& Hence% when .emocrats have controlled the B&7& government% there has been a ratchet effect on the place of Progressive moral principles in B&7& foreign policy toward the Third World& $f progress is measured as the addition of new foreign policy objectives related to improving the welfare of the poorest people in the Third World or as a willingness to ta,e greater ris,s in the attainment of Dationalist objectives to achieve Progressive objectives% then .emocrats have tended to ratchet the policy toward Progressivism during their tenures in terms of both rhetoric and actions& Republicans have tended to allow that upward progress to erode somewhat during their terms of office% but they have not turned the cloc, bac, completely& Thus% despite the current cycle away from the trajectory set by Carter% the trend over time since the end of World War $$ still is moving toward higher priority for Progressive foreign policy principles as guides for the conduct of B&7&1Third World relations& "tandards of &!aluations 3valuation of any policy re0uires establishing an implicit or e*plicit measurement standard& The presentation of historical material about B&7&1Third World relations in this wor, implies the use of past foreign policy behavior as a standard for evaluating present behavior& 'ost people who addresses the issue of ethics in international affairs do not use past behavior as their standard of evaluation& $nstead% they have absolute standards of ethical behavior in mind& Dations li,e the Bnited 7tates either achieve or do not achieve them& B&7& foreign policy% as e*plained earlier% it is not yet truly Progressive in any absolute sense& Thus% when absolute standards are used% the Bnited 7tates will fail& $nstead% we employ relative comparisons& Then% we should as, whether% in the Bnited 7tates% Progressive policies have been implemented 4the efforts test6 and whether Progressive goals have been achieved 4the impact test6& These tests are still demanding% but they are more realistic& (elati!e 5omparisons& 2ne reasonable way to evaluate the e*tent to which B&7& foreign policy toward the Third World adheres to Progressive principles is to compare B&7& policies to those of other developed nations& With regard to promoting human rights around the world% Jac, .onnelly% who is generally a critic of B&7& foreign policy% admits that E$t is difficult to find countries that have done much more than the Bnited 7tates&F# A brief e*amination of the foreign policies of the former state of the 7oviet Bnion and present1day Canada will serve to illustrate this point& Do other nation e*cept what was formerly the 7oviet Bnion has been a military superpower in the international system since World War $$& 7uperpower status

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places constraints on B&7& foreign policy options that other nations with fewer international responsibilities do not face: therefore% a comparison with 7oviet policies from #9<" to #9;9 is instructive& The former state of the 7oviet Bnion viewed the international system as it presently e*ists as fundamentally unjust& $n the view of its leadership% since capitalism and colonialism had caused underdevelopment in the Third World% fundamental revolutionary change was the best and perhaps the only way the Third World could receive justice& A nurturing foreign policy toward A.Cs would only have supported the unjust structure of power and prolonged the inevitable& Thus% the vast majority of the 7oviet Bnion)s foreign aid to Third World states was in the form of military assistance to communist or pro1communist allies% helping them to ma,e the transition from capitalism to socialism in a politically and economically hostile international environment& Historically% the 7oviet Bnion)s main objective was to develop a networ, of Third World allies who would be willing to adopt the 7oviet economic and political model& There is little evidence that the 7oviets had humanitarian objectives or even that they generally embraced the goal of assisting the economic development efforts of less developed countries& .oing so would have forced them to prop up the world capitalist system& The 7oviet position was that economic aid was compensation paid by former colonial powers for past e*ploitation& Dever having been a colonial power itself% it owed no such compensation& Consistent with its philosophical position% the 7oviet Bnion% unli,e the Bnited 7tates% contributed little to international development agencies& ! $nstead% 7oviet economic relations with A.Cs were presumed to be mutually beneficial and were structured by what they called economic cooperation agreements& H Bsually% the agreements presaged loans from the 7oviet Bnion to Third World signatories a t concessionary rates of interest& 7uch loans were often repayable in the form of local commodities& The 7oviet Bnion was more Progressive in its relations with Third World countries in its choices of methods to achieve its own foreign policy objectives& 'ore than the Bnited 7tates% the 7oviet Bnion showed respect for international law% for the sovereignty of other wea,er states% and for the principle of nonintervention& With the notable e*ception of the invasion of Afghanistan% the 7oviet Bnion generally did not use military force against Third World states& $t is not clear whether this practice resulted from adherence to ethical principles or from fear of retaliation by the Bnited 7tates and its Western allies& 'any accept the Efear of retaliationF e*planation% because the 7oviet Bnion% li,e the Bnited 7tates% was willing to use covert methods to achieve preferred policy outcomes in militarily wea,er states& Canadian foreign policy provides an opportunity for a different ,ind of comparison& $ts policies% li,e those of the Bnited 7tates% are affected by a recent frontier e*perience and by Anglo1American values and traditions& 'any of its people and leaders favor Progressive foreign policy principles& Conse0uently% Canadian leaders must face many of the same ,inds of tradeoffs as those considered by B&7& policyma,ers& However% because of its geographic location and its place as a middle power within the international power hierarchy% its interests in the Third World are less intense and narrower in scope& We would e*pect this combination of attributes to ma,e Canada a leader in the application of Progressive thin,ing to foreign policy toward Third World states% but it

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has not& Canada has adopted Progressive principles regarding the methods% but not the goals and objectives% of foreign policy& Canada probably seldom uses covert actions and has never used direct unilateral military intervention to achieve its foreign policy objectives in the Third World& Deither has it assumed a leadership role in national or international forums to promote Progressive objectives in the Third World& $ndeed% Canada has lagged well behind the Bnited 7tates in the use of foreign policy statements or actions to promote improved human rights practices by Third World regimes& $n most other respects% Canada has shown about the same mi* of Dationalism and Progressivism in its foreign policy objectives in the Third World as the Bnited 7tates& Canadian foreign policy toward the Third World has been designed mainly to further its own national economic objectives: to fulfill Canada)s obligations stemming from its membership in various Western security% political% and economic alliances: and to avoid conflict with and maintain independence from the Bnited 7tates% the leading power in many of those alliances& Canadian foreign policy toward Central America has been independent of B&7& policy but not necessarily more Progressive& According to Rhoda Howard and Jac, .onnelly% the three cornerstones of Canada)s foreign policy toward Central America are a recognition that the instability in this part of the world is a product ofC poverty% the unfair distribution of wealth% and social injustice: a preference for regional and multilateral solutions to unrest rather than unilateral intervention by the Bnited 7tates: and a focus on maintaining relations% especially trade relations% will all states% regardless of the practices of their governments& M 2n the basis of these criteria% over the past decade the Canadian government has maintained generally friendly relations with 3l 7alvador% Honduras% Cuba% and Dicaragua& 2ne criticism of B&7& economic aid policies is that much of the aid provided is tied to the condition that it be used to purchase B&7& goods and services& < This proviso reduces the purchasing discretion of the recipient% and% therefore% the value of the monetary transfer% by as much as !" percent& However% justifying foreign aid partly on the basis of developing mar,ets for the donor country)s goods and services is one way an e*ecutive administration in a democratic government maintains a winning legislative coalition in favor of its foreign aid program& The Bnited 7tates is not uni0ue in this respect& 'ore of Canada)s economic aid is tied to the purchases of its own products and services than any other donor in the world e*cept Australia&> $n absolute terms% the Bnited 7tates provided about si* times as much official development assistance to Third World states in #9;> than did Canada% but Canada gave a higher amount as percentage of /DP 4"&MM percent to "&!! percent6& 5 2nly since #9;5 has Canada had a re0uirement lin,ing economic aid to the human rights performance of potential recipients% and that re0uirement is much more ambiguous than the one stated in B&7& legislation& $t appears as a statement in an obscure Canadian .evelopment Agency report% and it states only that human rights protection is now one criterion of eligibility for foreign aid& ; $mplementation of the new policy will be impeded because% unli,e the Bnited 7tates% Canada does not re0uire any agency to measure the human rights practices of other nations and then report periodically to policyma,ers& $ndeed% only two other governments in the world compile reasonably comprehensive reports on the human rights practices of other countries + Dorway% since #9;<% and even more recently% the Detherlands&

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Apparently% as in the Bnited 7tates% there is some gap between human rights rhetoric and actual practices& A recent study concluded that Canada gives far more foreign aid in absolute terms to countries with poor human rights records than to countries with good ones&9 And% perhaps because of a concern about disrupting trade relations% Canada has been even more reluctant than the Bnited 7tates to impose trade sanctions on 7outh Africa& #" As in the Bnited 7tates% promotion of Canadian arms sales to Third World countries has become an important objective of the Canadian government& Canadian law on military assistance is similar to B&7& law% prohibiting the e*port of arms to Ecountries whose governments have a persistent record of serious violations of the human rights of their citi-ens% unless it can be demonstrated that there is no reasonable ris, that the goods might be used against the civilian population&F## However% according to Project Ploughshares% in #9;> Canadian arms were sold to the repressive governments of Argentina% Chile% /uatemala% $ndonesia% Pa,istan% Paraguay% the Philippines% 7outh ?orea% and 7yria& #! Whereas B&7& law re0uires reasonably full disclosure of all arms sales% Canada has no such obligation&#H Bnli,e the situation in the Bnited 7tates% Canadian representatives on the boards of international financial institutions such as the World Ban, are not instructed to consider the status of human rights observance in the applicant)s country when ma,ing loan decisions& $n this case% the Canadian government)s policy against promotion of human rights is based on principle& $n #9;; the minister of finance wroteC E$ believe that the introduction of the human rights criteria would politici-e the World Ban,)s decision ma,ing with negative conse0uences for its activities&F #M -#e &fforts -est. Xet another approach to assessing whether or not Progressive principles have motivated B&7& foreign policy behavior is to employ the efforts test& As described in this te*t% to see whether stated policies actually have been implemented% it is necessary to e*amine the patterns of actual foreign policy behavior& A total lac, of effort or only minimal effort to implement a publicly states policy would be evidence of official deception and immorality& 'uch research have been conducted on the e*tent to which the Bnited 7tates has a more favorable foreign policy toward states with better human rights records% as is re0uired by e*isting B&7& legislation% but the evidence is not conclusive& There have been several statistical studies of the relationship between the human rights practices of A.Cs and the amounts and ,inds of B&7& foreign aid they have received& 7tudies of this type tend to measure human rights in a way that is consistent with Carter)s emphasis on respect for rights of the integrity of the individual& The findings from Cingranelli and Pas0uarello)s research on the relationship between human rights practices and the distribution of economic and military assistance among Aatin American countries in X#9;H indicated that no simple generali-ations about the role of human rights in decisions regarding the distribution of B&7& foreign aid were possible&#< We found that decisions regarding the distribution of foreign aid to Aatin America were made in two stages& .uring the gate,eeping stage of economic aid decisions% when certain countries may be e*cluded from the pool of potential aid recipients in a particular budget year% more developed nations often were eliminated% and human rights records were not a consideration in determining which nations received economic assistance& When B&7& policyma,ers decided on amounts of economic assistance% however% higher levels of economic assistance were provided

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to nations with relatively enlightened human rights practices& or military aid% nations with poor human rights records often were e*cluded at the gate,eeping stage% but once the decision had been made to provide military assistance% the human rights practices of the recipients could not e*plain the level of assistance& $n other words% we found that the human rights records of potential recipients played a role in some decisions but not in others& Pas0uarello replicated this research% this time focusing on the distribution of foreign aid among African nations% and found that human rights considerations played a role% but a different one than was found for Aatin America& #> 7teven Poe recently conducted research adopting our Egate,eeping1levelF distinction% but e*amining a wider sample of countries& He also found statistical evidence suggesting that human rights concerns affected some aspects of foreign aid allocations% in ways prescribed by e*isting B&7& human rights legislation&#5 'any other studies have reported no relationship between the human rights records of Third World states and the level of foreign assistance provided by the Bnited 7tates&#; $n doing so% some have critici-ed our Aatin American case study on methodological gorunds&#9 But the debate contains some philosophical differences as well& 7ome analysts prefer to draw their conclusions from observing the human rights conditions that prevail within the boundaries of the largest recipients of B&7& economic assistance& $n Aatin America% for e*ample% economic assistance to 3l 7alvador accounts for appro*imately !< percent of all B&7& aid supplied to the region& Human rights conditions in 3l 7alvador are terrible% and some of the worst violations have allegedly been perpetrated by elements of that nation)s military& The military itself is not under unified control and is not especially responsive to the civilian authorities& $f we consider only or mainly B&7& foreign policy toward 3l 7alvador% it is hard to argue that the B&7& government has more favorable economic assistance policies toward nations with good human rights practices& $f% on the other hand% we admit the lesson of B&7& involvement in 3l 7alvador% but then loo, at the distribution of B&7& economic assistance among the other Aatin American nations% we find that in these less visible% more EroutineF cases% nations with better human rights records receive higher levels of aid& But which piece of evidence is more revealing of the efforts of B&7& policyma,ers to achieve Progressive outcomes in the Third WorldW B&7& policies toward 3l 7alvador and Dicaragua since #9;# reflect the preferences of two Republican administrations with the reluctant cooperation of Congress& oreign policy toward most of the other nations in Aatin America% on the other hand% is less the subject of press reports and congressional debates& $nstead% it is the product of longer standing decision rules% institutional arrangements% and policy processes& Presidential administrations have great control over the ma,ing of foreign policy e*cept in those areas where Congress% through legislation% has ensured a role for itself& Because of the e*istence of human rights legislation% during the Reagan administration of Congress was able to use hearings and to enact numerous pieces of country1specific legislation to alter or at least to call into 0uestion B&7& foreign policy toward many countries including 3l 7alvador% Dicaragua% /uatemala% Chile% Argentina% 7outh Africa% and 7outh ?orea on human rights grounds& Congress can prohibit human rights violators from receiving any military assistance% but it e*ercises much less control over how much a country will receive if it does not

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implement that prohibition& Dot surprisingly% therefore% no study has shown the le!el of military aid a country received to be proportionate to any measure of the human rights practices of the recipient country)s government during any president)s administration& The e*istence of a legislative platform does not guarantee close congressional oversight of administrative actions% but the absence of one ma,es such oversight almost impossible& -#e Impact -est& 7ince morality is bound ine*tricably to consideration of conse0uences% the impact test is important too& Although we can find some anecdotal bright spots in the impacts of B&7& efforts to achieve Progressive foreign policy goals in the Third World% especially during the Carter administration% there has been very little systematic research on the impact of B&7& foreign policy on underdeveloped countries& And the limited wor, that has been conducted on this 0uestion shows very little evidence that Progressive objectives have had much impact& There are four possible reasons for these disappointing findings& irst% in order for foreign policy to be effective% it must provide resources or apply sanctions that are significant to the target& !" The Bnited 7tates has lost some of its significance to many Third World countries because it has shifted much of its aid from bilateral to multilateral programs& Wealthier Third World nations li,e Bra-il% Iene-uela% and 7ingapore rely less on bilateral aid and more on loans from private international ban,s and public multilateral development ban,s 4'.Bs6& Although the Bnited 7tates remains a strong voice in the lending policies of '.Bs% its own priorities much be tempered by the need to persuade other voting members& 'oreover% although the Bnited 7tates is still among the largest providers of official development assistance to the Third World% Japan has e*ceeded the Bnited 7tates in its absolute level of giving& The gap between the Bnited 7tates and other contributors is shrin,ing as well& $n some Third World countries% the B&7& aid program is so small that manipulating its si-e marginally is not li,ely to have any effect& 7econd% to have any systematic impact% the B&7& policyma,ers) commitment to Progressive foreign policy objectives must be clear% sincere% and consistent& !# The Reagan and Bush administrations gave anti1communist and other Dationalist objectives such high priority that Progressive objectives did not have a consistent impact on foreign policy rhetoric or actions& The Reagan and Bush pattern has been to provide foreign aid and other foreign policy benefits to noncommunist% mar,et1 oriented Third World regimes% pushing for Progressive reforms only when it was relatively safe and convenient to do so& urthermore% their commitment to a domestic policy of tric,le1down economics led them to subtly move away from aid programs directly benefitting the neediest in Third World countries to programs designed to stimulate macroeconomic growth instead& By pushing hard only when there were e*traordinary targets of opportunities for democrati-ation% the Reagan and Bush administrations have sent mi*ed messages to Third World leaders about their priorities& Third% it is hard to measure the short1term impact of foreign policy& 'ost foreign policy is conducted through 0uiet% routine% low1intensity instruments& $ts impacts are e*pected to be durable and long term& The symbolic emphasis of promotion of human rights through B&7& foreign policy is very new% so it is unrealistic to e*pect dramatic results& $t would be difficult enough to identify the impacts of high1priority

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B&7& foreign policy goals on the behavior of Third World states& $t is especially unrealistic to e*pect to find compelling evidence of the impacts of medium1 and low1priority goals on policy outcomes% because much of the time they will be overshadowed by higher priority ones& inally% employing the impact test leads to disappointment because the instruments of B&7& foreign policy in the Third World are based too heavily on sanctions rather than on positive reinforcements& Congressional legislation designed to promote human rights around the world has not carrots in it% only stic,s& The language of the legislation implies that human rights can be measured% so that the human rights practices of all nations can be at least ran,ed from best to worst& $t also implies a threshold for the tolerance of human rights violations& When cross the implied threshold% the statutes re0uire the B&7& government to react by voting against loans or by stopping bilateral foreign aid& The policy would have greater impact if nations received levels of rewards in proportion to the e*tent to which each e*ceeded the threshold& Dations with the best human rights practices% other things being e0ual% would receive higher levels of benefits from B&7& foreign policy than those just above the threshold& Those below the threshold would receive no benefits at all& 2r the policy could reward improvements in practices regardless of the initial ran, or starting point& The few statistical studies of the impact of B&7& foreign policies on the targets of those policies have not found much evidence of achievement of Progressive goals& $n a crude test of the effectiveness of B&7& human rights policy in improving the human rights conditions in A.Cs% .avid Carleton and 'ichael 7tohl selected a sample of <9 A.Cs 4from which the Bnited 7tates admits refugees6 and found that political terror in 9 of the <9 countries lessened% but in M of the <9 it worsened& $n the first five years of the Reagan administration% the number of cases where political terror worsened and where it improved was nearly e0ual& While the Carter record is a little better% the difference in impact between the two administrations could be due to chance rather than to the effects of different foreign policies& !! 2n the basis of such slim evidence% it is hard to argue that the Carter administration had much impact on improving human rights performance& But Carleton and 7tohl note that the foreign policy rhetoric of the Carter administration had profoundly positive effect on the oppressed and downtrodden in Third World states by providing them with hope& The authors noted that the Reagan and Bush E0uiet diplomacyF approach% on the other hand% offers the victims much less hope& !H Future -rends The Bnited 7tates emerged from the 7econd World War as the richest and least damaged of the major world powers& Bsing these advantages% it helped finance the reconstruction of 3urope% was the first nation to develop a substantial bilateral foreign aid program to assist development in the Third World% and was a leader in the establishment of several international development agencies& $n recent years% however% things have changed dramatically& Today the Bnited 7tates has severe budget problems% and its economy is second to Japan and is losing ground to /ermany& As recently as #9;H% the Bnited 7tates was the world)s largest creditor nation% but by the end of #9;9% it was the world)s number one debtor% falling T>MM billion in the hole to foreigners% primarily the British and Japanese& $n this environment of resource scarcity% new demands were made to cut bac, on the use

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of B&7& ta* dollars to finance social% economic% and political improvements in the less developed countries& While the budget resources were shrin,ing% potential demand on B&7& foreign aid s,yroc,eted& Beginning in #9;9% in the domestic arena% the 7oviet Bnion% under the leadership of 'i,hail /orbachev% too, a sharp turn away from political authoritarianism and economic central planning toward democracy and free mar,et economies& $n the area of foreign policy% /orbachev proposed an end to the Cold War% advanced major new agreements limiting the development and deployment of nuclear and conventional weapons% pulled the 7oviet military out of Afghanistan% and reduced its support for revolutionary movements in the Third World& At least some of these momentous changes will be long lasting& $ndeed% the 7oviet Bnion% the Bnited 7tates) principal ideological and military rival for more than half a century% no longer e*ists% having been replaced by a loose confederation of national called the Commonwealth of $ndependent 7tates& 7o a total ree*amination and reorientation of 3ast1West foreign policy is ta,ing place& 'ajor changes in the former state of the 7oviet Bnion touched off similar reforms in many 3astern 3uropean countries% including Poland% C-echoslova,ia% and 3ast /ermany% highlighted by the tearing down of the Berlin Wall in #9;9& 'ost B&7& policyma,ers want the Bnited 7tates to be an active participant in these transformations& $f current reforms succeed and become permanent% the result will be a safer world for the Bnited 7tates and its DAT2 allies& $n the wa,e of these major changes in what used to be called the 7oviet bloc% the Bnited 7tates confronts new demands to help finance democrati-ation and free mar,et reforms in 3astern 3urope and the nations ma,ing up the Commonwealth of $ndependent 7tates& A less hostile international environment may allows a decrease in the percentage of the annual B&7& budget allocated to national defense% from about one third during the early #9;"s to as low as !" percent& These EwindfallF savings could be used to offset the large budget deficit% attac, problems of poverty and environmental degradation domestically% or finance substantial new foreign assistance programs aimed at 3astern 3urope and the Third World& These dramatic developments in 3ast1West relations are li,ely to alter the rules of the game for Dorth17outh relations as well& With respect to the world distribution of military power% the Bnited 7tates now holds a larger share& However% in the distribution of economic power% the Bnited 7tates is losing ground& The movement towards a single economy in 3urope and the free mar,et reforms in the former 7oviet bloc are sure to produce even more economic competition in the near future& Because of these poor economic conditions% it is unli,ely that transfers of ta* dollars from the Bnited 7tates to Third World states will grow any faster than the rate of inflation for at least a decade& Beyond that% three alternative models of B&7&1Third World relations in the twenty1 first century seem possible and illustrate the range of choices& 2ne possibility + the isolation model + predicts that the Bnited 7tates will lose interest in the Third World and drastically cut the level of bilateral and multilateral economic assistance it provides developing countries& Another scenario + the regressive model + is that the Bnited 7tates% now unchec,ed by its previous superpower rival% will ta,e even greater license in manipulating Third World nations to achieve its own self1 interested ends& Xet another possibility + the Progressive model + is that B&7&

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leaders% now freed from viewing Third World nations as pri-es in the balance of power among the superpower% will give greater weight to items on the Progressive foreign policy agenda& -#e Isolation 8odel& Dow that the threat of Russian aggression has declined% B&7& leaders could begin to thin, about national defense beginning at the B&7& border& This would mean that the Bnited 7tates would be less interested in the internal political% social% and economic affairs of wea,er states& $nstead% B&7& resources would be used almost e*clusively for domestic programs& Assuming the world is a relatively peaceful one% the Bnited 7tates will continue to provide foreign aid at about the same level as before% shifting the balance gradually away from military aid and toward economic aid& 2f course% some of this aid will be siphoned off to help Russia and the members of the Commonwealth of $ndependent 7tates and 3astern 3urope% so the Third World)s share will be diminished& 'oreover% it is li,ely to be even more concentrated on allies whose cooperation is important for the continued macroeconomic prosperity and military security of the Bnited 7tates& Consistent with this model% 7enator Robert .ole% majority leader in the 7enate% suggested in early #99" that the Bnited 7tates reduce its foreign aid to the top five recipients + $ndia% 3gypt% Pa,istan% $srael% and the Philippines + and redistribute the EsavingsF to the less developed% newly democrati-ing nations of 3astern 3urope& 7everal pieces of historical evidence support this scenario& The B&7& foreign aid program was initiated when the B&7& economy was healthy% after the great depression and World War $$ had ended& $n times of economic decline% the Bnited 7tates has not been particularly generous in providing ta* dollars to poorer% less fortunate countries& 'oreover% just as the 'arshall Plan diverted foreign aid to Western 3urope that might have been used for economic development in the Third World% B&7& participation in the reconstruction of 3astern 3urope may have the same effect& What is more% aid levels to the Third World might even be reduced without a dramatic shift toward relative emphasis on economic aid& World peace would ma,e it easier for the Bnited 7tates to ma,e such a shift% but $ra0)s invasion of ?uwait will ma,e B&7& policyma,ers wonder whether there really will be much peace in the Third World& Just as the ?orean War caused a shift from economic development aid to military aid% the confrontation between $ra0 may stir fears of future wars with Third World dictators& -#e (egressi!e 8odel& Confronted by a militarily wea,er% less resolute superpower adversary% B&7& leaders might be emboldened to become more imperious in relations with Third World states& 7ome observers see evidence of this strategy in recent B&7& interventions into Aebanon% Aibya% /renada% and Panama% in the support of the Contra war against the government of Dicaragua% in the patrolling of the Persian /ulf during the $ran1$ra0 War% and the in the 0uic, and militant B&7& response to the $ra0i invasion of ?uwait& As further evidence% 7ecretary of .efense Richard Cheney has argued that in a world where nuclear weapons are less li,ely to be used% the Bnited 7tates must be more concerned about other threats from lesser powers including biological% chemical% and conventional warfare& The new bu--word at the Pentagon is A$C% for low1intensity conflict& Planners in the .epartment of .efense are advocating that

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the Bnited 7tates further develop its capability for the rapid deployment and projection of highly mobile military forces to fight limited wars& $f they get their way% there may be no peace dividend after all& $n short% the Bnited 7tates may return to a model of foreign policy resembling the diplomacy of a century ago + the morali-ing% big stic,% ma,e1the1world1safe1for1 democracy variety&!M The two military confrontations with Third World states in the post1Cold War era 4with Panama and $ra06 have some characteristics in common and may be a preview of B&7&1Third World relations in the twenty1first centuryC #& An obno*ious Third World dictator& 'ore dictators will certainly emerge% and many li,e 7addam Hussein will have chemical% biological% or even nuclear weapons& !& An absence of superpower sta,es in the conflict& $t is a one1superpower world& Balance of power concerns are no longer particularly important& H& A lac, of B&7& inhibitions& Dote the lifting of the prohibition against assassinating foreign leaders prior to the invasion of Panama& 2bserving those events% /raham uller of the Rand Corporation observed that EThe 7oviets feel deeply unhappy about unilateral American power projection& 'oscow)s worry is that the Bnited 7tates will treat the current disarray in the 3ast Bloc as an unfettered opportunity to use our power&F !< M& A tendency toward over,ill& $f ten thousand troops could do the job% send fifty thousand to intimidate the opposition and minimi-e the ris, of losing& <& Aittle respect for Third World leaders& Just as Adolfo de la Huerta of 'e*ico had been a Eplug uglyF to Woodrow Wilson% 'anuel Doriega was presented to the American public as a EthugF and 7addam Hussein as Esic,&F The implication in both recent cases was obviousC there is no need to negotiate with uncivili-ed people li,e that& -#e Progressi!e 8odel. inally% the easing of tensions between 3ast and West should lessen the concern about the e*pansion of 7oviet1style communism% leading B&7& policyma,ers to be more tolerant of communist movements% socialist e*periments% and instability in the Third World& Bnder these circumstances% foreign aid and other types of active B&7& assistance will be provided mainly to democratic governments that have an e0uitable distribution of political power and wealth within their societies% good human rights practices% and peaceful relations with their neighbors& B&7& leaders will give more attention to Dorth17outh issues and will wor, to facilitate necessary reforms in the Third World& These actions will increase the security of the Bnited 7tates from e*ternal threat and law the foundation for mutually beneficial economic relations between the Bnited 7tates and less economically developed countries& As a first step% B&7& leaders will convince the public that the foreign aid program is essential to world peace and% therefore% to national defense& ollowing the guidelines suggested by the Dew $nternational 3conomic 2rder% the Bnited 7tates gradually will increase its foreign aid from a meager "&!! percent of /DP to # percent or more& Congress will insist that cover action and unilateral military intervention not be used e*cept under the most e*traordinary circumstances and

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will insist on the right to veto proposed covert actions& $t will censure any president who does not abide by the spirit as well as the letter of international law& 3ach of these scenarios represents a different combination of choices with respect to many value dimensions& How much should the Bnited 7tates try to affect the internal affairs% including the domestic policies% of less developed countriesW To what e*tent should scarce B&7& ta* dollars be used to finance economic% social% and political reforms and economic development in Third World statesW Bnder what conditions and to what degree should Dationalist objectives of e*pansion of B&7& military and economic power be ris,ed in order to achieve Progressive objectives in the Third WorldW The three scenarios do not reflect all the possible permutations% but they do describe three distinctly different% yet possible% courses of action& A Progressive tradition in B&7& foreign policy toward the Third World is emerging% but there is no guarantee that it will continue&

%laessens* StiHn* %assimon* Danny and 5an %am"enhout* BHorn -.//;0* 1+$idence on %hanges in Aid Allocation %riteria*4 in The World +an) Economic Review* 5ol6 .9* )o6 .* ""6 8A7-./A6
This study observed behavioral changes over time in actual aid flows toward what appear to be more optimal allocations across countries& 7pecifically% the roles of poverty and countries) policy and institutional environment increased while the effects of small si-e and the debt burden diminished& 'ost of these changes occurred in the #99"s and intensified in the more recent period& While these changes li,ely relate in part to reforms of the international aid architecture% it is unclear which institutional changes at the international or bilateral level have driven the changes in behavior& Aong1standing multilateral financial institutionsYsuch as the $nternational 'onetary und% World Ban,% Paris Club% and consultative group meetingsYhave introduced many changes% which li,ely have affected the behavior of bilateral aid flows& 'ore attention has also been paid to aid allocation beginning in the late #99"s% in part due to research begun in the mid1 #99"s& And changes such as the H$PC .ebt $nitiative and the Poverty Reduction 7trategy Papers process diminished the influence of debt on donor flows and increased donor selectivity& While these and numerous other changes all li,ely

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influenced aid flows% studies% including this one% have not been able to document specific evidence of their impacts& urther precision in the institutional factors driving changes in behavior is important for understanding how to ma,e the international aid system wor, better for developing countries& The constraint is the lac, of good measures of changes in such factors as financial policies% transparency% and coordination at the donor country and international level& Wor, on documenting institutional changes in a rigorous and 0uantitative way may help identify the most influential changes& However% this study observesYas other haveYlarge remaining differences among donors in revealed selectivity that appear to be related to donors) institutional environments& This suggests that reforms will have to be multifaceted and include further changes to the political economy and accountability in donor countries as well& $t would be desirable for future research to ta,e into account the policy and institutional environment not only in recipient countries% but also in donor countries% and to consider how this affects selectivity&

%larBe* D6 P6 -8;;80* 1,rade 5ersus Aid: Distributions of ,hird &orld De$elo"mental Assistance*4 in Economic &evelopment and *ultural *han!e* 5ol6 9;* )o6 <* ""6 A.;= A9>6
This study measures and compares the degrees of /7P K/enerali-ed 7ystem of Preferences + scheme proposed at the first BD conferences on Trade and .evelopment 4BDCTA.6 in #9>ML trade and foreign aid concentration among beneficiaries under programs offered by Japan and the Bnited 7tates& Although tariff preferences are advanced as a means of encouraging economic development through EtradeF rather than Eaid%F the two forms of development assistance are distributed 0uite differently across countries displaying disparate levels of economic well1being& The /7P trade is found to be concentrated among the higher1income beneficiaries% more so under the B&7& scheme than under Japan)s& The 2.A tends to be focused more on the lower1income beneficiaries% particularly in the Japanese case& This does not mean that issues of e0uity dominate foreign aid disbursement decisions& 3conomic or strategic self1interest of each donor appears to play a major

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role in the allocation of bilateral 2.A& 'odifications of /7P schemes must be underta,en in conjunction with developing country initiatives to improve their utili-ation of the /7P&

%larBe* D6 P6 -8;;.0* 1Distributions of Official De$elo"ment Assistance Among De$elo"ing %ountry Aid !eci"ients*4 in The &evelopin! Economics* 5ol6 9/* )o6 9* ""6 8A<=8;>* ID+-?+,!O6
This study measures and compares the degree of 2.A aid concentration among recipients under schemes offered by eighteen .AC donors and multilateral agencies& 2nly the B7 bilateral 2.A pattern is found to display pronounced Emiddle1 incomeF bias& 2.A flows of individual .AC donors are much more concentrated among the poorer recipients than are 2.A flows under the bilateral B7 aid scheme& This does not mean that issues of e0uity dominate any of the bilateral aid disbursement programs& 3conomic and strategic self1interests of individual donors influence the allocation of bilateral aid& 2.A flows from multilateral agencies are found to be distributed in a more e0uitable manner than bilateral 2.A disbursements from major .AC donors& This finding suggests multilateral aid should be assigned a greater role in economic development assistance&

%ollier* Paul and Dollar* Da$id -.//80* 1%an the &orld %ut Po$erty in alf3 oC Policy !eform and +ffecti$e Aid %an #eet International
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De$elo"ment 2oals*4 in World &evelopment* 5ol6 .;* )o6 88* ""6 8>A>-8A/.* +lse$ier Science* Ltd6
Although aid may be allocated coherently% it is allocated inefficiently with respect to poverty reduction& At present% aid is allocated partly as an inducement to policy reform and partly for a variety of historical and strategic reasons& This produces a pattern in which aid is targeted to wea, policy environments and to countries which do not have severe poverty problems& The diversion of aid from poverty reduction to policy improvement would be justifiable were there evidence that the offer of finance is effective in inducing policy improvement& However% the evidence suggests that finance is ineffective in inducing either policy reform or growth in a bad policy environment& 3ven with the current inefficiencies% we estimate that in our sample of countries the present allocation of aid lifts #" million people permanently out of poverty each year& With a poverty1efficient allocation this would increase to #9 million per year& Hence% the attempt over the past decades to use aid to induce policy reform has come at a large cost&

%ollier* Paul and Dollar* Da$id -.//.0* 1Aid Allocation and Po$erty !eduction*4 in European Economic Review* 5ol6 .:* )o6 A* ""6 8<>7=87//* +lse$ier Science B656
Poverty reduction + in the world or in a particular region or country + depends primarily on the 0uality of economic policy& Where we find in the developing world good environments for households and firms to save and invest% we generally observe poverty reduction& oreign aid can accelerate the process& $t can assist the government and society to provide public services% including critical ones needed by poor households to participate in the mar,et economy&

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$n this paper we developed and estimated a model of efficient aid in which policy and aid interact in several important waysC 1 aid increases the benefits from good policy% while at the same time good policy increases the impact of aid: thus% the combination of good policy and aid produces especially good results in terms of growth and poverty reduction: by introducing the concept of marginal utility of poverty reduction to first world ta*payers% we ma,e the volume of aid endogenous: in particular% it increases when policies are improved% because in the better policy environment more aid can be used effectively: we assume that policy is determined by developing country political processes and is independent of aid: however% the fact that aid increases the benefits of reform suggests that a high level of aid to strong reformers may increase the li,elihood that good policy is sustained 4an idea ratified in a number of recent case studies of low1income reformers6: to the e*tent that this is the case% our estimates of the benefit of good aid to good policy countries are low&

The main conclusions of our wor, can be shown in a simple diagram% which could represent an individual country or a whole region such as Africa 4 igure !6& 2n the vertical a*is is a measure of developing country policy% and on the hori-ontal% a measure of first world EconcernF 4marginal utility of poverty reduction6& The iso0uant traces out combinations of policy and concern that would achieve a certain level of poverty reduction 4for e*ample% <"Q by !"#<6& 2ur first finding is that we are not operating on this efficiency frontier& With the same level of concern% we could achieve much more poverty reduction by allocating aid on the basis of how poor countries are and the 0uality of their policies& That change alone would double the projected poverty reduction for sub17aharan Africa: it would put as at a point such as EAF on the poverty reduction a H"Q by !"#< iso0uant& The curvature of the iso0uant results from diminishing returns to aid& /iven the current levels of policies in Africa% simply increasing irst World concern is not going to have much impact& $ntuitively% once aid is allocated efficiently% there remain no great opportunities for effective aid% given the current state of policies& We argue that the best hope for moving to the poverty reduction a <"Q iso0uant is the combination of policy reform in Africa and growing concern in rich countries& $f Africa achieved the same level of policy as 7outh Asia 4which seems a realistic target6 and irst World concern grows at about the same rate as first world income 4HQ per year6% we would just about ma,e it to the international development goal for poverty reduction] Please do not ta,e the point estimates too seriously& But do ta,e seriously the notion that global poverty reduction re0uires a partnership in which Third World societies and governments improve economic policy% while irst World citi-ens and governments show concern for poverty and translate concern into effective assistance&

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%oo"er* %harles and $an ,hemaat* ?oan 5erloren -8;A;0* 1Dutch Aid Determinants* 8;>9-A7: %ontinuity and %hange*4 in StoBBe* Ola$ -ed60* Western %iddle Powers and Glo"al Poverty# The &eterminants of the Aid Policies of *anada$ &enmar)$ the .etherlands$ .orway and Sweden* ""6 88>-87A* (""sala* SCeden: ,he Scandina$ian Institute of African Studies6
Aid policies are influenced by a multitude of factors& This study has identified a number of those which have given the Detherlands) aid policies their distinct direction& 7everal levels of influence have been distinguished& 7ome specific features of the policies are influenced by specific foreign1policy considerations% such as the .utch attitude to multilateral1aid agencies% some specific economic considerations and interests% some by the aid bureaucracy itself and some solidarity and human1rights pressure groups& Done of these forces is autonomous% however& All of them are in turn influenced by more fundamental shifts and patterns in society& $n analy-ing why certain changes in the e*ternal environment have provo,ed specific changes in the aid policies of certain countries and not in those of other countries% one has to loo, to the differences in the domestic aid environment% as well as to the way in a country is affected by e*ternal forces& $n this conclusion% we attempt to draw up a certain hierarchy of these factors& To begin with% we believe that the aid policies of the Detherlands% both the stable broad orientations and the recent changes% are most importantly formed by domestic factors and not by foreign1policy considerations& The most important of these are the e*pectations which the public and the political parties have of the role

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of the state in domestic affairs& This e*pectation is transferred to the relations with developing countries& The central place which the transfer of income to low1income countries and groups holds in aid policies and its broad poverty orientations originate from this& The relative absence of directly productive activities in the sector allocation of aid also stems from the domestic welfare1state concept& To understand why the state is loo,ed upon somewhat differently in Holland than in other countries% one has to trace the specific history of the .utch state& This factor suggests that a different role of the state in domestic affairs will go hand1in1hand with a different role of the state in aid policies& The more recent criticism of the domestic role tends to support this thesis& $t calls for an approach where the aid policy is considered in the setting of domestic politics if the aim is to change the aid policy& 2ther domestic factors% especially economic interests% play a minor though distinct role in .utch aid policies& This is related to the relatively small economic role of the state in domestic affairs and partly to differences of interest within the private sector& This role% however% has been increasing in recent years& D/2s% although occasionally successful in their lobbying activities !is<K<!is the government% are not a major influence in the shaping of aid policies& This is due to some e*tent to the financial dependence of the D/2s on the government& Don1domestic factors also play a role in the shaping of policies& There has been 0uite a number of instances in which specific foreign1policy considerations have influenced aid policies& This is most clearly e*pressed in the choice of recipient countries& The fate of Iietnam% Cuba% 3gypt% Dorth Xemen and Dicaragua is lin,ed to these considerations% but the importance attached to multilateral organi-ations is lin,ed to them as well& $nternational organi-ations% especially the BD% the .AC and the World Ban,% in turn influence aid policies to 0uite an e*tent& $n particular% the sectoral allocation of aid% targets in the A.Cs% instruments such as (policy dialogues)% and aid approaches to Africa)s stagnation% are heavily influenced by the policy recommendations of these organi-ations& The socio1economic policies of recipient countries plays a certain role in the 0uantity of aid and the aid pac,age which recipients receive& This role% however% has declined in recent years& Human rights play only a small and declining role in aid policies& The government uses this criterion mainly in a reactive way% that is if serious violations occur& The clearest case in which this has happened has been the suspension of aid to the e*1 colony 7urinam after serious violations of human rights in #9;!& The last factor is the role of the aid bureaucracy itself& $ts role in the general orientation of aid is not a very strong one& Because of its smallness and lac, of professionalism% it can only give a certain direction to the type of projects which are being implemented% their design and the way in which they are e*ecuted& However% in the end% it has through this power% 0uite an effect on the ultimate results and the shaping of aid policies in the Detherlands&

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%oK* Daniel 26 and Duffin* Diane L6 -.//A0* 1%old &ar* Public O"inion* and Foreign Policy S"ending Decisions: Dynamic !e"resentation by %ongress and the President*4 in *on!ress and the Presidency* 5ol6 97* )o6 8* ""6 .;-786
The results of this study clearly demonstrate that understanding the relationship between public opinion and B&7& foreign policy depends on understanding that neither is monolithic& That the public holds different opinions regarding different aspects of foreign policy is nothing new& That elected lawma,ers respond to those e*pressions of opinion differently is% though& We have shown ongoing congruence between public opinion and defense spending% and an absence of congruence between public opinion and foreign economic aid& Although our model of defense spending proposals builds directly on the wor, of others% it reveals some new and important lessonsC 4#6 the congruence between defense spending and public opinion continued into the post1cold war era: 4!6 institutional actors in American national government accommodate the partisan composition of the 7enate in ma,ing their defense spending proposals: and 4H6 no one branch of government or chamber of Congress carries the load of representing public opinion in setting defense spending levelsYall are about e0ually responsive% demonstrating the vitality of dynamic representation in this policy area& When trying to model the effect of these same political variables on foreign economic assistance% we find that the ,ey variable of interest% public opinion% is entangled with the end of the cold war& .isentangling this ,not reveals that the cold war)s end was regarded by the public as an opportunity to curtail foreign aid% but by political institutions as an opportunity to increase it% which they did& The effect of public opinion on foreign economic aid proposals is null% leaving us with the evidence that aid proposals continue to be driven more by geopolitical circumstancesYnamely% the presence or absence of the cold war and the

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opportunities and constraints inherent to eachYand less by domestic political forces&

Danish #inistry of Foreign Affairs* Principles Governin! &anish &evelopment Assistance for the 'i!ht A!ainst the .ew Terrorism* retrie$ed from htt":EECCC6um6dBE"ubliBatione rEdanidaEstrategierEPrinci"les6" df on )o$ember .8st* ./8/6
The world is changing rapidly + tomorrow)s threats% opportunities and challenges will be different from those of yesterday& .anish assistance for the fight against terrorism must ta,e its point of departure in the urgent problems in the developing countries that we are able to identify now and the problems we can see on the hori-on& $n this respect% development assistance is an active foreign policy instrument& This applies in particular to the objective of promoting stability% security and the fight against terrorism& The /overnment will% therefore% increase the development assistance contribution to the fight against global terrorism as part of overall .anish anti1terrorist efforts with the aim of ta,ing counteraction here and now against the current terrorist threat and of ma,ing a long1term effort directed at the growing recruitment and sympathy base for the new terrorism& Through our development assistance% .enmar, is already contributing significantly to the fight against international terrorism% especially through comprehensive .anish assistance to Afghanistan and $ra0& $n addition% there is the /overnment)s new Arab initiative% which also includes measures in Dorth Africa& The principles set out here in this document establish the framewor, and earmar, the funds for the forthcoming wor, of carrying through new% specific efforts in selected developing countries and regions& The commitment and will to promote change 1 modernisation and development: democracy% human rights and good governance + as well as dialogue% ownership and co1responsibility are some of the fundamental principles governing the action&

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While many efforts in terms of development assistance + first and foremost the initiative for conflict prevention and conflict management% human rights% democratisation and good governance 1 are targeted at some of the underlying causes of terrorism% the principles included in this document focus on the altogether e*tra efforts which either directly enhance the potential of poor countries to combat international terrorism or are directly targeted at vulnerable groups in countries and areas where developments indicate a noticeable radicalisation of society& The efforts to combat terrorism must be seen as part of the general% much broader development action% which also contributes to promoting a more peaceful and stable world characterised by growth and progress& With appro*imately .?? #M< million earmar,ed for new% specific efforts in the period !""M1!"">% .enmar, will% also in the special sphere of countering terrorism% endeavour to contribute to ma,ing a difference for the better& or the benefit of the societies affected + and our own society&

Diamond* Larry -.//A0* 1Foreign Aid in the )ational Interest: ,he Im"ortance of Democracy and 2o$ernance*4 in Picard* Louis A6* 2roelsema* !obert and Buss* ,erry F6 -eds60* 'orei!n Aid and 'orei!n Policy# essons for the .e>t =alf *entury* ""6 :8-A7* )eC MorB: #6 +6 Shar"e* Inc6
/lobal democratic progress has slumped in recent years& 'any countries that once seemed Ein transitionF have settled into authoritarian rule& And even many electoral democracies are performing poorly and loosing public confidence& .emocracy assistance has achieved uneven results% and in some countries% si-able efforts in some sectors appear to have had little if any impact& Done of this is cause for despair& The world has seen stri,ing democratic progress in the past two decades% and most people still want to be governed in democracy and freedom& However% if a broad reversal of democratic progress is to be averted% if development is to be

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generated where it has been bloc,ed and stalled% and if we are to prevent the collapse of more states into catastrophic cycles of political violence% social chaos% rampant criminality% and humanitarian crisis% we must induce sweeping transformations in the 0uality of governance& As described in this chapter% if we can e*tend and institutionalise the significant innovations of B&7& foreign aid strategy and structure from recent years% designed to induce% support% and reward fundamental governance reforms: if the Bnited 7tates can partner with its fellow donors to coordinate international pressure and incentives for such reforms: and if we can% with patience and adaptive savvy% sustain this approach with appropriate resources for two or three decades% we can help to generate the economic and political transformations that will lift nations% and hundreds of millions of people% out of poverty& This effort should be a higher priority in B&7& foreign policy and% if successful% will enhance the national security of the Bnited 7tates&

Dolan* #ichael B6 and ,omlin* Brian &6 -8;A/0* 1First &orld,hird &orld LinBages: +Kternal !elations and +conomic De$elo"ment*4 in International 3r!ani7ation* 5ol6 9<* )o6 8* ""6 <8-:96
The recent spate of cross1national% 0uantitative studies prompted by dependencia e*planations of underdevelopment has provided new evidence on the conse0uences of foreign economic lin,ages for the economies of developing countries& We argued at the outset of this paper that the findings of these studies are important insofar as they bear upon the general problems addressed in the field of political economy& The subse0uent analysis produced results which should be of considerable interest both to those who must endeavor to fashion policies in response to these problems and those attempting to theori-e about the causes and conse0uences of development and underdevelopment& $n the first place% the findings of this study provide virtually no support for the postulates of conventional economic theories concerning the effects of lin,ages upon economic growth& 2n the contrary% the conclusions arrived at by Bornschier% et al& concerning the impact of direct foreign investment are corroborated hereC direct foreign investment is cumulati!el related to decreases in the relative rate of

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economic growth of countries& Perhaps e0ually important% however% is our finding that% in the short1term% investment is positively associated% at virtually the same magnitude% with increasing rates of economic growth& The importance of these findings% of course% is in their joint occurrenceC any theory of development must e*plain both the short1term and contrary cumulative effects of investment& ollowing on a suggestion made by Bornschier% et al&% we e*plored the effects of foreign investment on growth as they vary by economic sector& Previous studies indicated that foreign investment in manufacturing has the largest negative relationship with growth% while the effects of investment in e*tractive industry are positive&H> 2ur analysis% however% suggests that various sectoral concentrations of foreign capital do not have statistically significant differential effects on economic growth& These contradictory findings re0uire further analysis on this 0uestion% especially in light of the apparent shift toward internationali-ation of production on the part of multinational corporations& Beyond investment% the analysis of the remaining types of lin,age also failed to support the propositions derived from conventional economics& The effects of both aid and trade on economic growth were minimal& Trade is related to increased sectoral imbalance in the economy of a country: however% distributions of productivity and wealth within countries were found to be unrelated to the other lin,age variables& This finding may be due to the use of levels% as opposed to changes in distribution& Any particular distribution of wealth or productivity is li,ely due to a variety of historical conditions% whereas lin,ages are more appropriate in accounting for changes in these distributions& $n subse0uent research% we intend to e*plore the impact of lin,ages on changes in the e*tent of sectoral imbalance in the economy&H5 $n terms of the general problem of fostering economic growth faced by most underdeveloped countries% this analysis suggests that the role of foreign economic lin,ages might best be given secondary consideration& A synchronic design will normally leave a large percentage of variance une*plained& However% especially for the poorer countries in our sample% it is clear that a host of other economic% social% and political forces are the primary determinants of economic growth& The analysis of the effects of the concentration of lin,ages on economic growth and distribution was included in order that this broad% cross1national study might be more easily related to previous dependence1based analyses which focus on various forms of partner and commodity concentration& 'any regional studies of dependence have% not unnaturally% placed primary emphasis upon lin,age concentrations in efforts to e*plain development& Conventional economic theory% however% does not assign importance to mar,et and commodity diversification% or its absence& We find nothing in the results of this analysis to support a refutation of the stance adopted by conventional economics& The results concerning the differential statistical relationships between investment stoc,s and flows% and rates of economic growth provide the most suggestive findings of this analysis& 'uch remains to be done% of course% to establish the causes of these relationships& Devertheless% the possibility that the long1 and short1 term effects of direct foreign investment on rates of economic growth are opposite% and nearly e0ual% is one that ought now to be considered seriously by both policy

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ma,ers and theorists attempting to deal with the problem of economic growth in the Third World&

Dollar* Da$id* Le$in* 5ictoria* -.//:0 1,he Increasing Selecti$ity of Foreign Aid* 8;A<=.//9*4 in World &evelopment * 5ol6 9<* )o6 8.* ""6 ./9<=./<:6
$n the past two decades% foreign aid overall has become more selective in the following senseC in the second half of the #9;"s% aid was allocated in favor of countries with poor economic governance% as measured by an inde* of property rights and rule of law& Aid was allocated in favor of democracies% but among low income countries there is not much relationship between democracy and economic governance& 3conomic governance plays a ,ey role in creating a climate for growth and poverty reduction% and also for aid effectiveness& or countries at the same level of per capita income% aid was channeled to those with wea, economic institutions% where it was often not well used& 'ore recently% a clear tendency toward selectivity in terms of economic governance has emerged among multilateral development agencies& or multilateral assistance% significantly more aid is channeled to countries with good economic governance% the opposite of the case in the #9;M+;9 period& 'ultilateral aid is more selective than bilateral aid& $n the most recent period the latter has a slight relationship to good governance% but one that is not statistically different from -ero&

Dore* !oland -8;A.0* 1?a"an and the ,hird &orld: %oincidence or Di$ergence of Interests*4 in %assen* !obert* ?olly* !ichard* SeCell* ?ohn* and
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&ood* !obert -eds60 Rich *ountry Interests and Third World &evelopment* ""6 8.A877* London: %room elm6
$n a number of senses% Japan differs more from the leading 23C. countries than those countries differ from each otherC in internal economic structure% in international involvements and in cultural predispositions and views of the outside world& $ begin with the last& KNL Current Japanese perceptions of Japan)s interests in seeing the Third World develop are% it is argued% rather unclear& Japan)s dependence on some Third World countries is recogni-ed% if regretted& As long as 7audi Arabia controls the oil% 7audi Arabia must be appeased% but it would be much better for all of us if it were under American occupation& There is little thought that the 7audis might become more (reasonable) as they become richer& 2ther countries have a greater significance to Japan as e*port mar,ets and fields for foreign investment and here + in 7outheast Asia and 7outh1Central America + there is a much clearer perception of the possibilities of all1round benefits from continued economic growth in those countries& As for Africa% the $ndian subcontinent and the non1oil 'iddle 3ast% however% there is little disposition to see much profit accruing to Japan from their development e*cept in so far as that contributes generally to the buoyancy of world demand& $t is hard to see that these perceptions of where Japan)s interests lie will change in the future% given the li,ely prospects for either a change in value priorities of the groups in power% or a change in the relative strength of the different groups which now influence policy& Dor does this writer have the wit or the hubris to discern where the reality perceptions of the Japanese 4about what policies might have what conse0uences6 might be mista,en& The present general pattern of perceptions would be intensified if new world protectionism and intensified nationalism led to a (vertical) restructuring of the world with Japan forced to concentrate on consolidating an Asian sphere of influence% perhaps in consort with China& That pattern would% on the other hand% be substantially modified by a second + remote + possibility% namely that the concern for Japan)s (international standing) might ma,e attractive what one might call the (super17candinavian option) + the adoption of a general (friend of the Third World) policy in international affairs& $t is doubtful% however% for the reasons listed earlier% whether the cultural bases for such a policy e*ist& There is% at any rate% very little sign of any interest in following such a line% even among potential members of alternative left1wing governments&

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DoCling* ?6 #6 and iemenz* (lrich -8;A70* 1Biases in the Allocation of Foreign Aid: Some )eC +$idence*4 in World &evelopment* 5ol6 89* )o6 <* ""6 797-7<86
A survey of previous studies and the new evidence presented in this paper suggest a number of lessons concerning the allocation of development assistance among countries& There is a bias in per capita aid flows against large% populous countries that was again confirmed by the more recent data in our analysis& The e*istence of a middle1income bias could% however% not be confirmed& The relationship between aid flows and level of development is highly sensitive to variations in model and data coverage& A middle1income bias may result from political distortions of aid flows and from the inclusion of small island economies which receive small absolute amounts of aid but have a high inflow per capita& $n a sample of about 9" countries where such distortions are widely eliminated% a middle1income bias was found neither for the #95"15! period nor for the #95>15; period& $nstead% regressions on #95>15; aid flows and per capita incomes of recipient countries seem to suggest a low1income bias% i&e& low1income countries 4as distinguished from e*tremely poor countries6 received more aid per capita than middle1income countries& Whether this welcome shift in the pattern of aid allocation reflects a lasting change of development policies of donor countries and agencies can% however% not be established on the basis of the available evidence& But even if this were the case% a further reallocation of aid flows towards populous poor countries such as Bangladesh and $ndia would seem to be desirable&

Dreher* AKel* )unnenBam"* Peter and ,hiele* !ainer -.//A0* 1Does (S Aid Buy () 2eneral Assembly 5otes3 A Disaggregated Analysis*4 in
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Pu"lic *hoice* 89;-8:<6

5ol6

89:*

""6

We empirically investigated the hypothesis that foreign aid is used as an instrument to influence the voting behavior of recipients in the BD /eneral Assembly& As the main innovation of this paper% we employed disaggregated aid data in order to assess which aid categories were effective in inducing voting compliance with the donor& .ifferent forms of aid may differ in their ability to induce political support by recipients& $n particular% program aid 4notably in the form of general budget support6% grants% and untied aid are most li,ely to shape BD voting behavior& 2ther forms of aid are less li,ely to be employed for buying political support& .onors may prefer project1related aid and concessional loans when pursuing other objectives% e&g&% providing incentives for a productive use of aid in the recipient countries 4especially where local governance is wea,6& Tied aid may be preferred when commercial donor interests dominate over political motivations& The focus of our analysis is on B7 aid and its effects on voting patterns in the BD /eneral Assembly over the period #95H+!""!& Compared to other bilateral donors% the Bnited 7tates is widely believed to be less altruistic in allocating aid& Apart from pursuing economic self1interests% B7 aid is supposed to be used to buy political support from recipient countries& Iarious BD members are susceptible to bilateral pressure by the world)s super1power% and BD voting is considered to be relevant by the Bnited 7tates in defining bilateral relationships and foreign policy& Accounting for the potential endogeneity of aid% our results provide strong evidence that B7 aid has indeed bought voting compliance& 'ore specifically% the results suggest that general budget support and grants are the major aid categories with which recipients have been induced to vote in line with the Bnited 7tates& When replicating the results for the other /5 countries% however% we did not find a similar pattern& By relying on specific aid categories% our analysis provides a more nuanced account than previous studies of how the Bnited 7tates might bribe recipient countries& As a means of obtaining a yet more complete picture of the relationship between political interests and aid allocation% one fruitful avenue for future research would be to e*tend the analysis of disaggregated aid data to other political spheres such as decision ma,ing in the BD 7ecurity Council& We intend to address this in future research& As concerns the normative implications of our findings% it may be tempting to demand that aid should no longer be used to buy political support of recipient countries in the BD /eneral Assembly 4or anywhere else6& 7imilar demands have been made before with respect to the practice of pursuing trade1related donor interests by tying aid to the procurement of goods and services from the donor country& The reason is that tied aid delivers fewer economic benefits to the recipients than untied aid& 7imilarly% the effectiveness of aid in fostering the

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economic and social development of recipient countries tends to be compromised when aid is conditioned on political favors& The developmental impact of aid% in terms of raising growth and alleviating poverty% is li,ely to be reduced if political donor motivations result in the diversion of aid from the neediest recipients to recipients offering political support to the donor& However% the welfare implications of using aid to induce BD voting compliance are less clear than these concerns tend to suggest& With respect to the recipient governments of politically motivated aid% it seems safe to conclude that their utility% though not necessarily the welfare of the neediest population segments in these countries% increasesYconsidering that they appear to prefer voting in line with the donor over forgoing aid& The welfare of other recipient countries depends on whether politically motivated aid is additional to aid given for altruistic reasons% or rather diverts aid away from the needy but politically less compliant recipients& This tric,y issue should be addressed in future research& inally% as concerns the Bnited 7tates% it appears to be politically naive to demand from the world)s super1power not to use financial instruments to induce compliant voting behavior in international organi-ations such as the Bnited Dations& 2ur finding that aid is effective in this respect tends to imply that politically motivated aid raises B7 welfare& 7till% the use of one single 4financial6 instrument for multiple purposes is unli,ely to be efficient& 'oreover% it would help transparency and donor accountability if separate financial facilities were clearly related to specific donor motives& Politically motivated support as well as trade1related support should therefore be separated from the development aid budget& 7maller donors may show the way to enhanced transparency and accountability for the Bnited 7tates& or e*ample% 7weden and 7wit-erland appear to have a clearer division of responsibilities between different government agencies in dealing with developing countries& $n the case of 7weden% the 7wedish $nternational .evelopment Cooperation Agency 47$.A6% the 'inistry of oreign Affairs and the 3*port Credits /uarantee Board are all considered to be official donors but% as it seems% with distinct mandates in international financial cooperation& $f the Bnited 7tates had separate budget positions along similar lines% it would become more transparent what purposes the announced increase in B7 aid is actually meant to serve% e&g&% developmental objectives such as helping achieve the 'illennium .evelopment /oals or political objectives such as forming coalitions in the Bnited Dations&

Drury* A6 %oo"er* Olson* !ichard Stuart and 5an Belle* Douglas A6 -.//70* 1,he Politics of umanitarian Aid:
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(6S6 Foreign Disaster Assistance* 8;:<=8;;7*4 in Journal of Politics* 5ol6 :>* )o6 .* ""6 <7<=<>96
We began this paper by as,ing if 4and if yes% the degree to which6 political factors influence B&7& foreign disaster assistance% rhetorically the most nonpolitical component of B&7& foreign aid& 2verall% our analysis puts to rest the notion that B&7& foreign disaster assistance is purely objective and nonpolitical& $t is not even close& Rather% B&7& humanitarian aid is strongly political% although more so in the granting stage than in the allocative stage& $ndeed% our results paint a picture of high B&7& foreign policy decision ma,ers as realists at heart% seeing disasters as opportunities to enhance security& The subse0uent decision of how much aid to allocate% however% appears to be left more to the foreign disaster assistance bureaucracy 42 .A6 and turns out to be only slightly less political because in addition to the humanitarian criterion% 2 .A officials also see, to be sensitive to a variety of domestic B&7& concerns% in part to protect their own agency& $ntriguing is the fact that B&7& federal deficits and domestic disaster costs depress the li,elihood that any foreign disaster assistance will be awarded% even with 2 .AZs relatively open spending ceiling& While B&7& disaster injuries appear initially to enhance empathy for foreign events% this empathy shifts to cost concerns once 2 .A officials face allocation decisions& A stri,ing finding% however% centers on the powerful impact of a disasterZs media salience% with one Dew Xor, Times article being worth more disaster aid dollars than #%<"" fatalities& The same 2 .A officials who lament the negative influence of politics concern themselves with doing what is politically relevant: that is% allocating aid to salient events& That B&7& officials use 4consciously or not6 such information in their decisions underscores the power of the media& Donetheless% the observed difference between the overtly political stage and the somewhat less political allocation stage in foreign disaster assistance merits further thought& /iven that 2 .A prides itself on its humanitarian mission but is located down and within a strongly political B7A$.G7tate .epartment structure% our findings may reflect an une0ual values conflict between the humanitarian norms of the foreign disaster assistance professionals% which receive at least some e*pression in the allocative stage% and the almost e*clusively political interests of the higher levels that dominate the granting decisions& Additionally% the contrast between a strong political reality and the oft1repeated claim that B&7& foreign disaster assistance is nonpolitical is probably undercutting B&7& credibility& $t must certainly be fostering cynicism& $f foreign governments% international organi-ations% and nongovernmental organi-ations see + apparently accurately + that B&7& disaster assistance has strong political motivations% but B&7&

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officials maintain that their decisions are purely humanitarian% then those entities cannot help but doubt B&7& intentions& Conse0uently% the coordination of response and recovery efforts is li,ely more difficult& inally% because the values conflict 4humanitarian versus political6 seems to touch on some fundamental tensions within B&7& foreign policy% further research is certainly indicated on this calculus 0uestion in B&7& foreign disaster assistance& As additional data become available% analyses of the post1Cold War and post1 7eptember ##th eras should deepen our understanding of why% when% and how the B&7& government chooses to respond 4or not to respond6 to emergencies and disasters around the world& The results should be both telling and provocative&

Dudley* Leonard and #ontmarIuette* %laude -8;>:0* 1A #odel of the Su""ly of Bilateral Foreign Aid*4 in American Economic Review* 5ol6 ::* )o6 8* ""6 89.-8<.6
This paper has presented two versions of a model of the supply of foreign aid& The model attempted to e*plain two decisions made by the donor country& irst was the decision whether or not to grant aid to a given developing country& The model suggested that the probability of granting aid was a decreasing function of the recipient)s per capita income% as well as a function of economic% political% and bandwagon considerations& The empirical results supported these hypotheses and also indicated that perhaps because of administrative costs that increase less rapidly than the amount of aid granted to a given country% the probability of granting aid increases with the potential recipient)s population& 7econdly% the model attempted to e*plain the amount of aid granted once the decision to give to a particular country had been ta,en& The apparent small country bias in the granting of per capita aid which was observed in an earlier study does not seem to be due primarily to distortion on the part of donor countries in favor of recipients with small populations& Rather it would seem to be mainly a result of misspecification of the foreign aid supply model in particular% the omission of economic% political% and bandwagon effects& inally% there appear to be strongly decreasing returns to a donor in converting its foreign aid into impact on a given recipient country&

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Dunning* ,had -.//<0* 1%onditioning the +ffects of Aid: %old &ar Politics* Donor %redibility* and Democracy in Africa*4 in International 3r!ani7ation* 5ol6 7A* )o6 .* ""6 </;-.96
The findings $ present in this research note ma,e two contributions to the debate concerning the effectiveness of foreign aid conditionality& irst% the analysis suggests that the causal impact of aid on regime type may be historically contingent in ways not appreciated by previous research& The relationship between foreign aid and democracy in sub17aharan Africa appears to be highly conditioned by the distinction between the Cold War and post+Cold War periods& 3arlier empirical research% therefore% may have reported misleading averages that in fact mas,ed temporally defined shifts in causal patterns across subgroups of cases& 7econdly% the causal mechanism to which $ have pointed to e*plain this divergence is 0uite distinct from the increasingly popular Emoral ha-ardF or EperversityF theory of aid& Whether the latter theory is correct or incorrect% it clearly ma,es no prediction about temporal variation in the effect of aid on democracy& $n other words% there is no a priori reason to e*pect the allegedly EperverseF effect of aid on democracy to strengthen or wea,en over time& The predictions of my credible commitment story% on the other hand% contain an important temporal dimension% because the disappearance of the geostrategic threat from the 7oviet Bnion may have made threats from Western donors to withdraw aid much more credible& The empirical results $ present in this article are consistent with the predictions of the credible commitment story but not with the Eperversity thesis&F The results therefore suggest that further theoretical attention should be focused on the issue of credible commitment in the allocation of foreign aid& These empirical and theoretical points justify increased attention as well to the geopolitics of aid provision in future research& $n contrast to recent arguments advanced by some of foreign aid)s critics% the li,elihood that aid may effectively promote democracy will in fact increase when the role of strategic or geopolitical factors in allocating aid diminishes& ormer World Ban, economist William 3asterly recently launched a scathing criticism of donor organi-ations% entitled EThe Cartel of /ood $ntentionsF in which he statesC

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among the most popular concepts the aid community has recently discovered is EselectivityFYthe principle that aid will only wor, in countries with good economic policies and efficient% s0uea,y1clean institutions& The moment of aid donors) conversion on this point supposedly came with the end of the Cold War% but in truth% selectivity 4and other EnewF ideas6 has been a recurrent aid theme over the last M" yearsN&Bnfortunately% evidence of a true conversion on selectivity remains mi*ed&H; $n fact% the suggestion that aid conditionality is a recycled notion may be irrelevant& What may matter is not whether donor EselectivityF is a new idea% or whether aid will only Ewor,F in countries with institutions that are already Es0uea,y1clean&F $nstead% a crucial factor may be whether the threats of international donors to withdraw aid if democratic reforms are not adopted can be made credible and therefore effective& The theory and evidence presented above suggest that conditioning aid on levels of democracy in recipient countries may only be credible under certain global geostrategic circumstancesYfor e*ample% those provided in Africa by the end of the Cold War& The empirical evidence presented above should provide a small measure of encouragement to the proponents of foreign aid& At the same time% for those concerned with promoting democracy in Africa% there is no guarantee that the propitious conditions posed by the end of the Cold War will persist& B&7& policyma,ers have recently begun point out the strategic nature of West and Central African oil reserves% implying that geopolitical criteria could play an important role in pending aid allocation decisions& H9 The research presented here should thus also sound a note of alarm about the future dangers that geopolitical factors could pose to the effectiveness of aid conditionality&

+asterly* &illiam -.//90* 1%an Foreign Aid Buy 2roCth34 in Journal of Economic Perspectives* 5ol6 8>* )o6 9* ""6 .9=<A6
The widely publici-ed finding that Eaid promotes growth in a good policy environmentF is not robust to the inclusion of new data or alternative definitions of EaidF% EpolicyF or EgrowthF& The idea that Eaid buys growthF is on sha,y ground theoretically and empirically& $t doesn)t help that aid agencies face poor incentives to deliver results and underinvest in enforcing aid conditions and performing scientific evaluations& Aid should set more modest goals% li,e helping some of the people some of the time% rather than trying to be the catalyst for society1wide transformation&

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+asterly* &illiam* Le$ine* !oss and !oodman* Da$id -.//90 1)eC Data* )eC Doubt: !e$isiting Aid* Policies and 2roCth*4 *enter for Glo"al &evelopment Wor)in! Paper .o, 8/* &ashington* D%* (nited States: %enter for 2lobal De$elo"ment6
This paper reduces the confidence that one can have in the conclusion that aid promotes growth in countries with sound policies& The paper does not argue that aid is ineffective& We ma,e a much more limited claim& We simply note that adding additional data to the B. study of aid effectiveness raises new doubts about the effectiveness of aid and suggests that economists and policyma,ers should be less sanguine about concluding that foreign aid will boost growth in countries with good policies& We believe that B. should be a seminal paper that stimulates additional wor, on aid effectiveness% but not yet the final answer on this critical issue& We hope that further research will continue to e*plore pressing macroeconomic and microeconomic 0uestions surrounding foreign aid% such as whether aid can foment reforms in policies and institutions that in turn foster economic growth% whether some foreign aid delivery mechanisms wor, better than others% and what is the political economy of aid in both the donor and the recipient&

+asterly* &illiam* Le$ine* !oss and !oodman* Da$id -.//<0* 1Aid* Policies* and 2roCth: %omment*4 in American

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Economic Review* 5ol6 ;<* )o69* ""6 >><=A/6

This paper reduces the confidence that one can have in the conclusion that aid promotes growth in countries with sound policies& The paper does not argue that aid is ineffective& We ma,e a much more limited claim& We simply note that adding additional data to the B. KBurnside @ .ollarL study of aid effectiveness raises new doubts about the effectiveness of aid and suggests that economists and policy ma,ers should be less sanguine about concluding that foreign aid will boost growth in countries with good policies& We believe that B. should be a seminal paper that stimulates additional wor, on aid effectiveness% but not yet the final answer on this critical issue& We hope that further research will continue to e*plore pressing macroeconomic and microeconomic 0uestions surrounding foreign aid% such as whether aid can foment reforms in policies and institutions that in turn foster economic growth% whether some foreign aid delivery mechanisms wor, better than others% and what is the political economy of aid in both the donor and the recipient&

+sseK* ?amey -.//Aa0* 1,he )eoliberalization of De$elo"ment: ,rade %a"acity Building and Security at the (S Agency for International De$elo"ment*4 in Antipode* 5ol6 </* )o6 .* ""6 ..;-.786
$ have provided an e*amination of the way in which a particular B7 state institution% the B7 Agency for $nternational .evelopment% has acted as site and strategy for the reconfiguration of state and class1relevant practices regarding development% trade% and security& This reconfiguration% occurring in and through the structure and strategic selectivity of the B7 state% forms a ,ey part of a broader transition between state and hegemonic projects% and produces a new cartography of development that centers internationali-ing mar,et relations 4Jessop #99"% !""#% !""!: 'c'ichael !""!a: Peet and Watts #99H6& While this is not to suggest that this transition is complete or total% it does emphasi-e the ways in which a relative unity of action and ideological commitmentYin this case to trade liberali-ation and a particularly narrow definition of securityYis enforced in and through state

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institutions& B7A$.% as a pivotal state agency with a great deal of power over dominant understandings and practices of development% demonstrates one way in which the production and maintenance of neoliberali-ation occursYin this case% through the adoption of TCB KTrade Capacity BuildingL% which posits liberali-ed trade as the only appropriate path to economic development% and a security discourse that casts underdevelopment as a national security threat& The e*ample of food aid and food security begins to illustrate how this configuration centers the needs of internationali-ing capital and the geopolitical concerns of the B7 stateY not new in the wor, of B7A$.% but to be achieved in mar,edly new ways& This paper is an initial foray into identifying specific ways in which class1relevant struggles have coalesced around B7A$.)s internal constitution and e*ternal relations: the ne*t tas, is to identify how these struggles may be advanced to promote something beyond the democracy of the mar,etplace and the security of capitalist accumulation&

+sseK* ?amey -.//Ab0* 1Deser$edness* De$elo"ment* and the State: 2eogra"hic %ategorization in the (S Agency for International De$elo"ment@s Foreign Assistance FrameCorB*4 in Geoforum* 5ol6 9;* ""6 8:.78:9:6
The continued refinement and implementation of the oreign Assistance ramewor, promises deep and significant changes in the nature of official development assistance% and in dominant understandings of the relationship between development and security& Crucially% it reinforces and e*tends state and hegemonic projects of neoliberal globali-ation% which hinge on instituting neoliberal state forms built on strategic openness to capitalist internationali-ation% and the increasing prevalence of authoritarian governance in controlling resultant or already e*isting social resistance and insecurity& The cartography of development institutionali-ed in and by the framewor, e*hibits a particularly diabolical moral calculus of deservedness% dependent on allocating aid to those that have already helped themselves% and leaving others out of the necessarily une0ual and limited moral

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community delimited by capitalist internationali-ation& At the least% the framewor, advances a restricting influence on recipients) strategic selectivity% narrowing the potential uses of aid% and reproducing the asymmetrical power relationships and ethical ambivalences that come with aid 4?orf% !""56& or B7A$.% it deepens the structural displacement of contradictions in the B7 state)s neoliberal project onto the agency% re1integrating it more fully into foreign policy structures while demanding more in terms of accountability and aid effectiveness& The potential outcomes of continued agency restructuring based on the framewor, will li,ely focus on further integration with the 7tate .epartment and whittling of B7A$.)s role to that of development program subcontractor& inally% an understudied but necessary component in e*tending this research is consideration of how developing states encourage and internali-e the categori-ations found in the framewor,& This follows Ran,in)s 4!""M% p& >96 argument that Eglobali-ation studies should e*plicitly consider the role and position of the periphery in globali-ing processesF to better e*plain and resist neoliberali-ation& $n accordance with the strategic1relational approach employed in this paper% further investigation would necessitate a focus on the class1relevant basis of aid allocation and use% particularly where related to the identification and e*ercise of the Epolitical willF that forms a pivotal criterion for aid deservedness& This would% once B7A$. fully implements the framewor, and longer1term research on its effects becomes possible% also answer the appeal Roberts et al& 4!""H% pp& ;;5% ;9!6 ma,e to engage with both neoliberalism)s Einterarticulation with certain dangerous supplements% including% not least of all% the violence of American military forceF% and the definition of developing states and societies by reference to their representation as Ea lac,% a hole% a stain% and a site of rejectionF& Critically analy-ing how such interarticulations are forged necessitates ta,ing seriously the comple* spatialities of neoliberali-ation as it proceeds 4and is perhaps chec,ed6 through geographic categories li,e those found in the oreign Assistance ramewor,&

+$erts* ?acob -8;A.0* 1!ich %ountry Interests and ,hird &orld De$elo"ment: ,he )etherlands*4 in %assen* !obert* ?olly* !ichard* SeCell* ?ohn* and &ood* !obert -eds60 !ich %ountry Interests and

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,hird &orld De$elo"ment* ""6 .<A-.>A* London: %room elm6 Fariss* %hristo"her ?6 -./8/0* 1,he Strategic Substitution of (nited States Foreign Aid*4 in 'orei!n Policy Analysis* 5ol6 :* ""6 8/>-8986
The results demonstrate over a robust set of models that as human rights on the ground worsen% the probability for a state to be selected into the food aid recipient pool increases and% once selected% so too does the allotment of food aid& The needy people provision in the B7 foreign aid legislation seems to allow foreign policyma,ers a degree of leeway probably not found with other economic aid programs when crafting food aid pac,ages& The results from the multinomial logit models suggest that the conditional relationship between human rights and strategic interests is an important part of the determination of the type of foreign aid that a country receives& The results from the Hec,man model% however% suggest that the conditional relationship between human rights and strategic interests does not affect the allocated amount of food aid: however% the linear1additive effect of human rights is substantively important during this stage& The four1category distinction of foreign aid 4no aid% food aid only% economic aid only% or food aid and economic aid6 has provided a rich view of the conditional relationship of human rights on the selection of different types of aid recipients when compared with the two1category distinction& To reiterate% the main hypothesi-ed relationships are substantively and statistically important in determining the probability of a state receiving one of the four combinations of aid in the multinomial logit model: however% these relationships are not statistically important in determining the probability of food aid or no food aid in the first stage of the Hec,man model& This difference suggests that a simple increase in the comple*ity of how foreign aid is conceptuali-ed will allow for the discovery of previously unobserved relationships& 2verall% the results from both models have shed some light on policy outcomes that emerge from a complicated% interdependent decision1ma,ing process& Donetheless% the policyma,ing picture is% at best% still incomplete& or e*ample $ have not accounted for the varying interests and strategic interaction of the B7A$.% .epartment of Agriculture% .epartment of 7tate% .epartment of the Treasury%

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Congress and the President in my theory or models& How does the strategic interaction of these competing groups change depending on the foreign policy output in 0uestionW How does this competition influence the crafting of aid pac,agesW inally% the pu--le of which aid options are more or less restricted than others and what types of mechanisms cause such restrictions are still open research 0uestions& Again% the evidence obtained in this study is suggestive of a substitution effect: however% to answer these 0uestions and to integrate the findings from this study and other foreign policy research !# future studies would be enhanced by the use of more sophisticated research designs such as nonparametric matching as recommended by Ho% $mai% ?ing% and 7tuart 4!""56 or strategic interaction models as recommended by Braumoeller 4!""H6& Bntangling the varied purposes of these programs% while difficult% will provide a much more nuanced understanding of the B7 aid giving process and enhance efforts to integrate the findings of e*isting foreign policy research&!! urthermore% such information would allow for better coordination between governments and D/2s to food1related crises such as those that occurred around the world in early !"";& At the very least% such information may allow D/2s to anticipate donor behaviors towards specific countries under specific conditions&

Fielden* #attheC B6 -8;;A0* 1,he 2eo"olitics of Aid: ,he Pro$ision and ,ermination of Aid to Afghan !efugees in )orth &est Frontier Pro$ince* PaBistan*4 in Political Geo!raphy* 5ol6 8>* )o6 <* ""6 <7;-<A>* +lse$ier Science* Ltd6
Aid and refugees are emerging areas of academic discourse& This paper see,s to e*plore the geopolitics of aid in the conte*t of the provision and termination of international humanitarian and development assistance to Afghan refugees in the Dorth West rontier Province of Pa,istan& .iscussion locates the origins of the (refugee crisis) in the 7oviet invasion of Afghanistan in .ecember #959& The e*odus of Afghans following this foreign intervention is e*amined in its socio1cultural conte*t& .iscussion then progresses to consider the geopolitical motivations behind the provision of assistance and the way the aid supplied became heavily politici-ed&

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Aevels of aid are shown to have fallen dramatically in the post17oviet era% and this downturn is lin,ed to the geopolitical repercussions of the dissolution of the 7oviet Bnion& The policy reasonings behind the ending of assistance reflect these changed geopolitical priorities% and are considered from the perspectives of both D/2 and donor institutions& The geopolitics of the ongoing pro*y war is carefully considered and the ending of assistance to Afghan refugees is shown to be highly problematic in humanitarian terms& inally% discussion considers the broader implications of the conclusions drawn from the Afghan conte*t& KNL -#e )fg#an conte't $nternational humanitarian assistance to Afghans forcibly displaced by the 7oviet invasion of Afghanistan in .ecember #959 was targeted at (refugees)& Research has suggested that this label of social identity is highly problematic and contains a number of legal and theoretical omissions& $t misses the socio1culturally nuanced Afghan and Pa,istani conte*ts into which aid was delivered& .iscussion has also demonstrated that the decision to provide assistance to Afghans in Pa,istan was an inherently political act reflecting Cold War priorities& The presence of Afghan refugees in Dorth West rontier Province is argued to have served a number of geopolitical agendas& or Pa,istan% these forced migrants were used to defuse demands for an independent Pus#tunistun and as a bargaining tool for leverage on the West& or the Bnited 7tates the Afghan refugees were a vital strategic buffer against 7oviet e*pansionism% and part of a broad anti1Communist strategy& $n many ways B7 aid was an e*tension of the war effort against the 7oviet Bnion% and Afghanistan a bleeding wound leading to the ultimate demise of the B77R& The politici-ation of Afghan refugees was achieved by only granting refugee status to individuals who were members of Afghan resistance parties& This paper has argued that aid itself was a political instrument% utili-ed to further military campaigns& $t was% however% important for aid to be seen to be humanitarian so that the underlying geopolitical agendas could remain obscured& $n the post17oviet era the levels of assistance to Afghan refugees have fallen dramatically& This paper has demonstrated that there are clear relationships between declining political interest in Afghanistan and declining amounts of aid to Afghan refugees& These trends are argued to be directly lin,ed to the enormous repercussions of the collapse of the 7oviet Bnion on the geopolitical priorities of the international 4aid6 community& The decision to terminate aid is argued to be a thoroughly geopolitical act% and donor influence was of paramount importance& Dow that the refugees no longer fulfill a strategic role% there appears to be little concern about them in the West% even with the current interest in the rise of the -aliban militia& This paper has demonstrated that BDHCR has altered its priorities in the post1Cold War era& 3ven though it claims to be apolitical% it is still bound by the geopolitical agendas of the donors upon which it is dependent& While the world community at large may have forgotten Afghanistan% this paper argues that a pro*y war continues to fight out the competing geopolitical agendas of Afghanistan)s neighbours& Afghanistan retains its strategic significance as it is at the centre of an emerging economic% cultural and social bloc of non1Arab $slamic nations& The regional powers have been shown to be competing for influence in a future Afghan government& Hopeful conclusions about the prospects for peace

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bedevil many accounts of Afghanistan)s pro*y war& This paper eschews such optimistic geopolitical assessments& $t is better to hold a sceptical vision of Afghanistan)s future and be proved wrong% than for over1optimistic e*pectations of the chances for peace to be confounded& Afghanistan is li,ely to remain politically unstable and a source area of refugees well into the foreseeable future& 3nding the pro*y war is difficult because attempts to secure peace involve increased foreign intervention which ma,e the conflict all the more intractable& The ending of assistance to Afghan refugees has been shown to be tied to attempts to rebuild Afghanistan as a geopolitical entity& The use of the nation1state as a structure upon which to rebuild Afghanistan is highly problematic% and clashes with locali-ed power structures& The ending of aid was also based on the erroneous assumption that peace would settle in Afghanistan& This paper argues that in humanitarian terms aid has been ended prematurely% given the continued arrival of hundreds of thousands of Afghans displaced by the ongoing pro*y war% and the needs of vulnerable refugees that remain in Pa,istan)s Dorth West rontier Province& The research for this paper suggests repatriation has adverse humanitarian conse0uences but is very important geopolitically& 1roader implications Aid is a geopolitical instrument and part of the foreign policies of donor states& The importance of overseas development assistance is argued to lie in the realm of geopolitics rather than officially proclaimed humanitarian intentions& As the world community enters a post17oviet era% changes in foreign aid provision are part of a wider redefinition of donor states) overall foreign policy priorities or (geopolitical codes) 4/rant and Dijman% #99<C !#<6& This paper has suggested that prospects for achieving the humanitarian intentions of foreign aid are limited as long as world affairs are orchestrated by nation states% and the process of providing aid is lin,ed to national geopolitical agendas& $t is important for the academy to loo, beyond% and theorise alternatives to% the nation1state as the fundamental unit of geopolitics& This paper argues that it is important to 0uestion whose interests are being served by international assistance in the conte*t of refugee situationsC the host countries% the donors% the assisting agencies or the recipients& $t appears that the D/2s serving refugees are more accountable to their donors than to their beneficiaries& BDHCR is also donor1dependent and charged with the geopolitical role of (defending) the borders of the world)s growing community of nation states% by ensuring that population movements across international boundaries are redressed by (the preferred solution) 42gata% cited in 'itchell% #99<C H6 of repatriation& The imperatives of this geopolitical mandate may ignore the problematic humanitarian realities of the (refugee) situations BDHCR is attempting to resolve& The origins of the Afghan (refugee crisis) and the continued conflict in Afghanistan are products of conflicting geopolitical agendas& $t is important to conclude with the understanding that the decisions to provide and end assistance to Afghan refugees ma,e perfect geopolitical sense but are highly problematic in #umanitarian terms& This paper strongly contests /orman)s conclusion 4/orman% #99HC !9#6 that political and humanitarian objectives (must be forged into an ongoing partnership)& As long as the world community allows the provision of foreign aid to be lin,ed to

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geopolitics% international humanitarian and development assistance in refugee conte*ts will be inconsistent% counterproductive and highly contradictory& The number of refugees in the world today is the largest it has ever been& There are estimated to be about !H million refugees world1wide and another !> million internally displaced 42gata% cited in 'itchell% #99<C M6& While the number of (refugee) situations re0uiring international assistance has risen% the amount of Western overseas development assistance available has fallen to T<H billion% its lowest figure in the last !H years 4Brown% #99>C #<;6& As the #99"s come to an end% growing numbers of (refugee crises) are li,ely to emerge as the nation1state comes under increasing pressure as a viable geopolitical entity& This will bring the geopolitical decision ma,ing behind the provision and termination of aid into increasing focus% as growing numbers of (refugee crises) stretch increasingly limited aid resources&

FigaH* #oniBa -./8/0* 1&ho 2ets +n$ironmental Aid3 ,he %haracteristics of 2lobal +n$ironmental Aid Distribution*4 in Environmental Economics and Policy Studies* 5ol6 8.* ""6 ;>-88<6
Just as it is important which variables proved significant in the regression% it is also important which variables amongst the group analy-ed did not prove significant& .emocracy inde*% colonial past% government efficiency inde*% natural capital inde*% and 'uslim countries are amongst those variables that do not have a significant e*planatory value for the sum of environmental aid allocated& Therefore% donors were not guided by these variables when distributing aid& However% the results presented in this article e*plain 5!Q+;9Q of the donor)s environmental aid allocation e*plaining the amount of funds given: thus% there is still room for further analysis and possibilities of including new variables& Do clear differences appeared between bilateral and multilateral donors% which may suggest similarities in their approaches& rom both the regressions% two different patterns emerged& $n deciding which country will receive aid% the poverty+wealth related and environmental variables proved to be significant& This fits into the donors) 4e*cept /3 K/lobal 3nvironment acilityL6 main mission of poverty alleviation& 3nvironmental aid is determined

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within this primary activity& Xet% in determining e*act aid amounts% it is the economic and environmental issues that appeared as significant& .espite the strong correlation between environmental and economic variables in the linear regression 4 .$% import amounts% C2! emissions% /3 biodiversity inde*% number of threatened species% and environmental vulnerability6% it is the economic variables that dominated and had the largest statistical significance in determining the increase of aid& Hence% donors allocating environmental aid amounts loo, not only at environmental issues% but also at economic ones& This is related to the fact that most environmental aid distributed is in the form of loans% and the funds received need to be paid bac, by the recipient government& or that reason the recipient country must be financially viable% hence the importance of economic indicators in aid distribution& 3nvironmental aid distribution is not a political issue% because political variables played no role in either regression output& Therefore% one can assume that environmental issues are separated from wider political concerns& This study does not confirm previous research results on this topic& However% the newly added 3gypt variable% which is lin,ed to political and national security concerns% did prove to be an important determinant for one donor 4the B7A6% because being 3gypt was shown to be a very significant variable& This variable has gained strength since the attac,s of 7eptember !""#& or environmental variables% the number of threatened mammals% environmental vulnerability% number of environmental treaties% environmental sustainability% C2! emissions% and biodiversity were areas of special donor concern& These variables are mostly a measurement of the e*tent of environmental degradation& Allocating aid based on these indicators is the most fruitful path to fighting environmental degradation& or all the analy-ed donors% at least one environmental variable proved to be significant for distributing environmental aid and deciding on its amount& Regional variables were present in all the donor linear regression outputs% but were absent in the logit outputs& Thus% regions are not the main guide to allocating aid% although they do play a role when determining the aid amount& 2ut of the four donors% two 4Japan and World Ban,6 specifi cally focused on Asia& Don1Asian countries for /3 and 3gypt for B7A were also statistically significant& Therefore% environmental aid amounts are regionali-ed for donors% because each one of them has a geographical preference&

FlecB* !obert D6 and Dilby* %hristo"her -.//80* 1Foreign Aid and Domestic Politics: 5oting in %ongress and the
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Allocation of (SAID %ontracts Across %ongressional Districts*4 in Southern Economic Journal* 5ol6 :>* )o6 9* ""6 7;A-:8>6
A variety of factors + B7A$.Zs promotional literature% anecdotes about political influence% and the simple correlation between contract spending and congressional votes + suggest lin,s between the geographic distribution of B7A$. contract spending within the Bnited 7tates and support for foreign aid in Congress& Xet econometric analysis% based on data for all B7A$. contracts active during the #"Mth Congress% reveals only wea, lin,s& 2nce we control for differences in contractor 0ualifications across districts% the level of contract spending does not depend substantially on the representativeZs support for foreign aid or other political variables& Although B7A$. activities do provide Edirect economic benefitsF to Ealmost every state in the Bnion%F there is little indication that B7A$. systematically manipulates the allocation of contracts in an attempt to garner political support& urthermore% the level of contract spending in a representative)s home district has at most a small effect on his or her support for aid 4e*cept in the case of Beltway Republicans6& The larger 0uestion raised by this research is whether domestic economic benefits significantly increase support for foreign aid programs& Although we e*plored only one dimension of the issue% we find little evidence that the economic benefits of aid translate into support for foreign aid in Congress& Traditional por,1barrel politics% which lin, votes to the distribution of benefits across districts% are not apparent in the data& $f the commercial benefits of foreign aid programs have little effect on support for aid% a coalition that substitutes commercial interests for waning national security concerns is unli,ely to win increased funding& Xet the costs of such a coalition may be high& Catering to commercial interests is li,ely to reduce development effectiveness and% especially in the long run% undermine public support 4Jay and 'ichalopoulos #9;9: \immerman and Hoo, #99>6& $n sum% trading away 0uality is unli,ely to obtain a substantially higher 0uantity of foreign aid&

FlecB* !obert D6 and Dilby* %hristo"her -.//:a0* 1 oC Do Political %hanges Influence (6S6
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Bilateral Aid Allocations3 +$idence from Panel Data*4 in Review of &evelopment Economics* 5ol6 8/* )o6 .* ""6 .8/=..96
2ur analysis of panel data from #9>" to #995 indicates that several aid allocation criteriaYdevelopment concerns% commercial importance% strategic importance% and democrati-ationYplay a role in the allocation of B7 bilateral aid& 'oreover% aid allocation criteria differ systematically and substantially between liberal and conservative regimes& Bnder liberal regimes% the distribution of B7 bilateral aid more closely mirrors that of small donors ,nown for their development1oriented and humanitarian approach to aid& Commercial concerns have greater weight under conservative regimes than under liberal regimes& 7pecifically% under conservative Congresses 4relative to liberal Congresses6% the B7 allocates aid in a manner that appears more mercantilist1oriented& Conservatives appear to place greater weight on whether the B7 e*ports much to% and does not import much from% aid1receiving countries& These findings contribute directly to the understanding of the domestic politics of B7 aid and% by doing so% provide new insight into the prospects for reforming aid policy& 2ver the last decade% a vigorous debate over how to improve aid effectiveness has led to calls by aid agencies and scholars for a policy of e* post selectivityYless funding for traditional projects and structural adjustment programs% more general budgetary support for developing country governments that have already demonstrated improved governance 4World Ban,% #99;6& Proponents of this position attribute the failure of traditional aid programs at least in part to la* donor enforcementC even when recipients flout aid conditions% donors often continue ma,ing disbursements and even new commitments 4'osley et al&% #99<6& 3* post selectivity may be able to solve this enforcement problem 4because aid flows will not occur until after reform ta,es place6% but only if donors consistently reward desired changes in developing countries& $n other words% selectivity can wor, only if donors can credibly commit to the policy& Xet if donor policy changes with the political cycleYand in the B7 it apparently doesYthe ability for the donor to ma,e a credible commitment is 0uestionable& Bnderstanding the aid allocation process is also central to the debate over the effect of aid on growth& The fact that development aid is targeted toward countries with poor records of growth has long clouded measurement of the lin, between aid and growth& Recent attempts to solve this potential endogeneity problem ma,e use of factors that influence aid allocations yet do not depend on recipient need: the most notable of these factors stem from the political motive for aid 4Boone% #99>: Burnside and .ollar% !"""6& This debate remains contentious 43asterly et al&% !""M: Hansen and Tarp% !""#: Roodman% !""M6% and a more fully developed model of the

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political economy of aid allocation would allow more precise estimation of the effects of aid& 2ur findings are a step toward such a model& urthermore% our results point to an important caveat for those attempting to instrument for aid with political variablesC the political circumstances in donor countries are li,ely to affect not only the amounts of aid to developing countries% but the moti!ation for providing that aid Yincluding the e*tent to which aid is focused on reaching development objectives& Thus% political variables may instrument% in part% for the purpose of aid& And the purpose of aid will li,ely influence the effects of aid on development&

FlecB* !obert D6 and Dilby* %hristo"her -.//:b0* 1&orld BanB Inde"endence: A #odel and Statistical Analysis of (S Influence*4 in Review of &evelopment Economics* 5ol6 8/* )o6 .* ""6 ..<-.</6
The empirical analysis% motivated by a model of agency1donor interaction% yields results largely consistent with significant B7 influence over World Ban, lending% but through evolving rather than stable relationships& B7 interests in and policy toward the World Ban, change fre0uently with presidential administrations and with economic and political circumstances& Ta,ing the #9>; to !""! period as a whole% two measures of B7 interests have a significant and robust lin, with World Ban, lending allocations& The first relates to trade& While there is no apparent lin, with world trade% the differential impact of purchasing of B7 e*ports is positiveC ceteris paribus% the greater the share of B7 e*ports that a country purchased% the more funds the country got from the World Ban,& This is consistent with the political economy of trade in the B7% which favors e*ports over imports& The second significant measure may be interpreted as geopolitical& After including a number of controls for development concerns% we find countries favored in B7 bilateral aid allocations also received a disproportionate share of World Ban, funds& These aggregate results mas, significant variation across the period% both in B7 policy toward the World Ban, and in underlying B7 interests& rom the Johnson administration through the first Bush administration% the lin, with B7 e*ports remains positive and% e*cept in Di*on)s first term% significant& The first Clinton administration saw a change with a negative though insignificant relationship%

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reflecting large aid flows to transition economies which had no established trade ties with the B7& The years since then suggest this may be a transitory pattern with trade interests reemerging as a significant influence& The relative consistency of the trade variable% as compared to the financial flow indicators% mirrors the more long term nature of trade ties& The lin, between B7 aid and World Ban, lending is more variable: we would e*pect this since bilateral and multilateral aid are distinct foreign policy tools& $n many situations when a powerful donor wishes to fund a recipient country% it would provide its own funds and pressure the multilateral agency to supplement these& However% in some cases% the logic is reversed% for e*ample when the donor cannot publicly support the recipient& This may e*plain why B7 bilateral aid enters positively and significantly in the ord% Carter% and first Clinton administrations% but negatively and significantly in the second Reagan administration& Ta,en as a whole% the evidence points to B7 influence over the World Ban,% influence used in pursuit of B7 economic and strategic interests& These lin,s are substantial though not overwhelming&## Donetheless% when a multilateral organi-ation serves the narrow interests of a powerful member% its uni0ue character Yits legitimacyYis necessarily eroded& 30ually% the ability to commit credibly to future policies is reduced as donor objectives change with its domestic political cycle& This poses a critical problem for the World Ban, and its current pursuit of selectivity& The policy of e* post conditionality promises substantial funding for developing countries governments only after reforms have ta,en place& /overnments) willingness to do this depends heavily on faith in the reform pac,age and the implicit promise of future loans% that is% on the World Ban,)s legitimacy and credibility&

FlecB* !obert D6 and Dilby* %hristo"her -./8/0* 1%hanging Aid !egimes3 (S Foreign Aid from the %old &ar to the &ar on ,error*4 in Journal of &evelopment Economics* 5ol6 ;8* ""6 8A7-8;>6
The advent of the War on Terror and the leadership of the /eorge W& Bush administration have clearly reshaped and refocused many aspects of B&7& foreign policy& There is considerable concern in the development community that the

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renewed importance of foreign aid as a geopolitical tool has undermined the development orientation of aid& 2ne notable possibility is a re1emergence of Cold War practices% with less emphasis on need and hence declining funds for poor but geopolitically unimportant countries& $n this paper% we analy-e changes in aid funding from the Cold War to the War on Terror% assess the impact of these changes on aid to poor countries% and e*plore new trends in B&7& aid allocation policies& The current decade began with a shift from a liberal to a conservative government% followed by a huge increase in foreign aid& 2ur analysis of the overall B&7& aid budget over a longer time hori-on 4#9<< to !"">6% however% finds that conservative governments typically provide substantially less economic aid than do liberal governments% all else e0ual& This suggests that a simple comparison of budget levels understates the effect of the War on Terror and underscores the enormous impact of the War on Terror on aid& But what about the allocation of this larger budgetW .oes the War on Terror signal a return to Cold War aid practices + less funding for poor countries% less emphasis on need + as some scholars have suggestedW According to our evidence% as the overall B&7& economic aid budget has increased with the War on Terror% so too has B&7& aid to poor countries of little immediate geopolitical importance& $ndeed% since #99> e*pected aid to lower income countries has increased steadily& But there has been an important shift in another aspect of B&7& aid allocation% one that coincides precisely with the /eorge W& Bush administration ta,ing office and the start of the War on Terror& or the H< years preceding the War on Terror% there was a clear upward trend in the weight given to need in the allocation of aid to core recipients& $n the years since% the weight given to need has decreased rapidly and steadily& This sharp reversal is not well e*plained by other developments% such as the shift toward greater selectivity in aid allocation& With the general increase in aid% thus far the decreased weight on need has merely slowed the growth of B&7& aid to poorer countries rather than actually reducing aid levels& But if this policy shift away from need outlives the general increase in the aid budget% B&7& aid to the poorest developing countries will decrease&

Forsythe* Da$id !6 -8;A;0* 1 umanitarian Assistance in (6S6 Foreign Policy*4 in Loescher* 2il ?6 and )ichols* Bruce -eds60* ""6 :9-;/* The %oral .ation# =umanitarianism
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and 6S 'orei!n Policy Today* )otre Dame: (ni$ersity of )otre Dame Press6
7ome observers would li,e to return to a system of international humanitarian assistance which is essentially private& <! This view reflects and erroneous understanding of the situation& The reason that governments and intergovernmental organi-ations became involved was that the PI2s ac,nowledged the lac, of financial and commodity resources to handle the problems% and as,ed the public authorities for aid& $t is only governments% especially the B&7& government% which have access to money and commodities in sufficient 0uantity to respond to the si-eable humanitarian problems arising principally out of the developing countries& Particularly from the standpoint of donations of all types% but also at times from the standpoint of logistical support% governments must necessarily play a central role in international humanitarian assistance& The B&7& government is li,ely to remain directly involved in all phases of international humanitarian relief% whether it is disaster relief centered around food% war relief% or refugee relief& The lead agencies li,e the $CRC and the BDHCR depend on that support% as do the charitable PI2s themselves& There is strong support for an active humanitarian assistance program in Congress% with some elements trying to increase the level of funding despite general budgetary and economic problems&<H With considerable public support% Congress has protected the moral and humanitarian aspects of the ood for Peace Program& There is increased competency in A$. and its 2ffice of .isaster Relief% although 0uestions remain about the sufficiency of ties to intelligence sources% proper staffing% and clarity of priorities& D/2s li,e the $CRC% as well as $/2s li,e the BDHCR and the World ood Program% remain important to the Bnited 7tates as lead agencies and focal points for action& 'any charitable PI2s are still seen as acceptable% fle*ible% ,nowledgeable conduits for assistance& The tas, for the B&7& is to find the proper mi* of public and private agencies that will provide the best and most rapid delivery of assistance to those civilians in e*ceptional need& The Bnited 7tates has shown over the years that there can be an assistance policy that is primarily driven by humanitarian concerns% even if at times strategic and economic considerations of an e*pediential sort get mi*ed in& <M 7ome of this is inevitable in an imperfect world& The use of multilateral agencies and PI2s can help restrain this sort of influence% so that% at least at the margins of its foreign assistance program% the Bnited 7tates can claim without controversy to be a moral nation& 7o much the better is this form of morality turns out to be e*pediential as well&

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FuBuyama* Francis -.//<0* 1,he Im"erati$es of State Building*4 in Journal of &emocracy* 5ol6 87* )o6.* ""6 8>=986
7tate1buildingYthe creation of new governmental institutions and the strengthening of e*isting onesYis a crucial issue for the world community today& Wea, or failed states are close to the root of many of the world)s most serious problems% from poverty and A$.7 to drug traffic,ing and terrorism& While we ,now a lot about state1 building% there is a great deal that we do not ,now% particularly about how to transfer strong institutions to developing countries& We ,now how to transfer resources% people% and technology across cultural borders& But well1functioning public institutions re0uire certain habits of mind% and operate in comple* ways that resist being moved& We need to focus a great deal more thought% attention% and research on this area& The idea that building up% rather than limiting or cutting bac, the state% should be at the top of our agenda may stri,e some as odd or even perverse& After all% the dominant trend in world politics for the past generation has been the criti0ue of Ebig governmentF and the attempt to move activities from the state sector to private mar,ets or to civil society& Xet particularly in the developing world% wea,% incompetent% or none*istent government has been and continues to be a source of severe difficulties& or e*ample% the A$.7 epidemic in Africa has infected more than !< million people and will ta,e a staggering toll of lives& A$.7 can be treated% as it has been in the developed world% with anti1retroviral drugs& There has been a strong push to provide foreign assistance for A$.7 medicines or else to force pharmaceutical companies to permit the mar,eting of cheaper forms of their products in Africa and other parts of the Third World& While part of the A$.7 problem is a matter of resources% another important aspect is the government capacity to manage health programs& Anti1retroviral drugs are not only costly% but complicated to administer& Bnli,e one1shot vaccines% they must be ta,en in comple* doses over long periods of time: failure to follow the proper regimen may actually ma,e the epidemic worse by allowing the H$I virus to mutate and develop drug resistance& 3ffective treatment re0uires a strong public1health infrastructure% public education% and ,nowledge about the epidemiology of the disease in specific regions& 3ven if the resources were there% the institutional capacity to treat the disease is lac,ing in most countries in sub17aharan Africa 4though some% li,e Bganda% have done a much better job than others6& .ealing with this epidemic thus re0uires helping afflicted countries develop the institutional capacity to use what resources they may ac0uire&

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Aac, of state capacity in poor countries has come to haunt the developed world much more directly& The end of the Cold War left a band of failed or wea, states stretching from the Bal,ans through the Caucasus% the 'iddle 3ast% Central Asia% and 7outh Asia& 7tate collapse or wea,ness had already created major humanitarian and human rights disasters with hundreds of thousands of victims during the #99"s in 7omalia% Haiti% Cambodia% Bosnia% ?osovo% and 3ast Timor& or a while% the Bnited 7tates and other countries could pretend that these problems were just local% but the terrorist attac,s of 7eptember ## proved that state wea,ness constituted a huge strategic challenge as well& Radical $slamist terrorism combined with the availability of weapons of mass destruction added a major security dimension to the burden of problems created by wea, governance& $n the wa,e of military actions ta,en since 9G##% the Bnited 7tates has ta,en on major new responsibilities for nation1building and state1building in Afghanistan and $ra0& 7uddenly the ability to shore up or create from whole cloth missing state capabilities and institutions has risen to the top of the global agenda and seems li,ely to be a major condition for the possibility of security in important parts of the world& Thus state wea,ness is both a national and an international issue today of the first order&

2oldstein* ?udith and Deohane* !obert /6 -eds60 -8;;90* Ideas and 'orei!n Policy# +eliefs$ Institutions$ and Political *han!e* Ithaca* )6M6: %ornell (ni$ersity Press6 2oldstein* ?udith and Deohane* !obert /6 -8;;90* 1Ideas and Foreign Policy: An Analytical FrameCorB*4 in 2oldstein* ?udith and Deohane* !obert /6
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-eds60* Ideas and 'orei!n Policy# +eliefs$ Institutions$ and Political *han!e* ""6 9-9/* Ithaca* )6M6: %ornell (ni$ersity Press6
This boo, is about how ideas% which we define as beliefs held by individuals% help to e*plain political outcomes% particularly those related to foreign policy& As social scientists we are interested in using empirical evidence to evaluate the hypothesis that ideas are often important determinants of government policy& 2ur argument is that ideas influence policy when the principled or causal beliefs they embody provide road maps that increase actors) clarity about goals or ends1means relationships% when they affect outcomes of strategic situations in which there is no uni0ue e0uilibrium% and when they become embedded in political institutions& or millennia philosophers and historians have wrestled with the issue of the role of ideas in social and political life% and for as long as social sciences has e*isted its practitioners have debated these 0uestions& $n many ways this volume is an e*tension of the approach first enunciated by 'a* Weber& Ai,e Weber% we do not argue that ideas rat#er t#an interests 4as interpreted by human beings6 move the world& $nstead% we suggest that ideas as $ell as interests have causal weight in e*planations of human action& $f the study of impact of ideas on policy is so old% why revive it nowW 7imply because in modern political economy and in international relations% the impressive elaboration of rationalist e*planations of behavior has called into 0uestion old assumptions about whether the substantive content of people)s ideas really matters for policy& To many economists% and to political scientists captivated by their modes of thin,ing% ideas are unimportant or epiphenomenal either because agents correctly anticipate the results of their actions or because some selective process ensures that only agents who behave as if they were rational succeed& $n such functional arguments% effects e*plain causes through rational anticipation or natural selection&# The e*treme version of this argument is that ideas are just hoo,sC competing elites sei-e on popular ideas to propagate and legitimi-e their interests% but the ideas themselves do not play a causal role& ! These interests may be strictly material + in many economic models% individuals are wealth1ma*imi-ers + but they also may encompass broader utility functions% in which such values as status and power are included& Whatever the details% in this rationalist view interests are given and logically prior to any beliefs held by the actors& The most widely accepted systemic approaches to the study of international relations% realism and liberal institutionalism% ta,e rationalist models as their starting points& Both realism and institutionalism assume that self1interested actors ma*imi-e their utility% subject to constraints& $n such models% actors) preferences

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and causal beliefs are given% and attention focuses on the variants in the constraints faced by actors&H 'ore analysts who rely on such approaches have relegated ideas to a minor role&M KNL -#ree - pes of 1eliefs At the most fundamental level% ideas define the universe of possibilities for action& As John Ruggie has pointed out% Efundamental modernist concepts such as mar,et rationality% sovereignty% and personal privacy would not have been comprehensible before the development of appropriate terms of social discourse&F #H These conceptions of possibility% or $orld !ie$s% are embedded in the symbolism of a culture and deeply affect modes of though and discourse& They are not purely normative% since they include views about cosmology and ontology as well as about ethics& Devertheless% world views are entwined with people)s conceptions of their identities% evo,ing deep emotions and loyalties& The world)s great religions provide world views: but so does the scientific rationality that is emblematic of modernity& $deas have their broadest impact on human action% when they ta,e the form of world views& The world)s major religions% for instance% have deeply affected human social life in a variety of ways and across millennia& #M 7imilarly% it has often been argued that new conceptions of sovereignty led% at the Peace of Westphalia in #><;% to a new international order% dominated by independent states& #< 7till% the connections between world views and shifts in material power and interests are comple* and in need of investigation& They do not all run in one direction& 2f the major ideas discussed in this volume% none + neither human rights nor sovereignty not 7talinism + would have made any sense in those premodern societies in which people)s lives were governed by notions of magic or fate& $ndeed% all of the chapters in this boo, ta,e for granted a world view according to which human beings are assumed to be active agents in the construction of their own destinies& or traditionalist or religious fundamentalist societies even today% the individualistic and secular scientific premises of this world view remain intellectually and morally alien& 7ince all of the subjects discussed in this volume have been profoundly affected by modern Western world views% and our authors all share this modernist outloo,% we can say relatively little about the impact of broad world views on politics& 2nly John erejohn and 7tephen ?rasner% writing about events in the seventeenth century% e*plicitly focus on changes that appear to have been affected by the intellectual movement toward individualistic% human1centered thin,ing& Bnderstanding the impact of world views on general politics or foreign policy would re0uire a broader comparative study of cultures% such as that on which Hedley Bull was engaged at the end of his too1brief career& #> 2ur second category of ideas% principled beliefs% consists of normative ideas that specify criteria for distinguishing right from wrong and just from unjust& The views that Eslavery is wrong%F that Eabortion is murder%F and that human beings have the Eright of free speechF are principled beliefs& Principled beliefs are often justified in terms of larger world views% but those world views are fre0uently e*pansive enough to encompass opposing principled beliefs as well& or instance% although many opponents of slavery justified their arguments with references to Christianity% Christianity had tolerated slavery for almost two millennia& Principled beliefs mediate between world views and particular policy conclusions: they translate

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fundamental doctrines into guidance for contemporary human action& 'illions of people have died on behalf of their principled beliefs: many people now alive are willing to do so& The revolutions of #9;9 in 3astern 3urope attest to the continuing vibrancy of principled beliefs in politicsC people ris,ed their lives in mass demonstrations% although material self1interest alone would have led them to be Efree riders&F Changes in principled beliefs% as well as changes in world views% have a profound impact on political action& $n Chapter >% for e*ample% ?athryn 7i,,in, argues that the ,illing% torture and maltreatment of millions of innocent people during World War $$ led both 3uropeans and Americans to believe that human rights should properly be a matter for international agreement and regulation% not shielded from international surveillance by the doctrine of sovereignty& The effects on policy were profound% since new ideas on human rights conditioned the definition of nations) interests& EThe adoption of human rights policies%F she suggests% Erepresented not the neglect of national interest but a fundamental shift in the perception of long1 term national interests&F The ideas in a third category% causal beliefs% are beliefs about cause1effect relationships which derive authority from the shared consensus of recogni-ed elites% whether they be village elders or scientists at elite institutions& 7uch causal beliefs provide guides for individuals on how to achieve their objectives& 7cientific ,nowledge may reveal how to eliminate smallpo*% for instance% or how to slow down the greenhouse effect in the earth)s atmosphere& 7imilarly% the Hungarian and Polish revolutions in the fall of #9;9 showed people in 3ast /ermany and C-echoslova,ia that unarmed mass protests could bring down long1standing repressive governments& Bnder such conditions% the efficacy of individual action depends on support from many other people% and therefore on the e*istence of a set of shared beliefs& Causal beliefs imply strategies for the attainment of goals% themselves valued because of shared principled beliefs% and understandable only within the conte*t of broader world views& Changes in the conceptuali-ation of cause1effect relationships ta,e place more fre0uently and more 0uic,ly than do changes in either world views or principled beliefs& Thus specific policy shifts can often be traced to such changes% particularly when technical ,nowledge is e*panding& The foreign policies of the Bnited 7tates and many other countries with respect to regulation of the production of chlorofluorocarbons 4C Cs6% for e*ample% changed dramatically between #9;< and #99"% largely in response to new scientific evidence about the hole in the atmospheric o-one layer over Antarctica& Policy shifted because scientific models lin,ed o-one loss to cancer and climate change% and attributed much of it to increased levels of C Cs in the atmosphere& #5 John $,enberry)s discussion of the importance of monetary theory in the postwar economic settlement 4Chapter H6 provides another e*ample of how causal ideas +here ideas about the functioning of the economy + influence policy outcomes& 7imilalry% Dina Halpern argues in Chapter M that 7talinist economic ideas% which postulated a radically different set of relationships between mar,et participants% became a guide for economic development in 3astern 3urope& 2ur categori-ation of beliefs is clearest in the abstract: in social life all three aspects of ideas may be lin,ed& .octrines and movements often weave conceptions of

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possibilities and principled and causal ideas together into what may seem to be a seamless web& The Eepistemic communitiesF studied by Peter Haas and other scholars% for e*ample% are constituted by ,nowledge1based e*perts who share both cause1effect conceptions and sets of normative and principled beliefs& #; Devertheless% it is worthwhile for purposes of causal analysis to distinguish ideas that develop or justify value commitments from those that simply provide guidance as to how to achieve preferred objectives& #9 -#e Impact of Ideas on Polic The central issue of this volume concerns causalityC .o ideas have an impact on political outcomes% and if so% under what conditionsW The most egregious error that proponents of the role of ideas have made is to assume a causal connection between the ideas held by policy ma,ers and policy choices& $deas are always present in policy discussions% since they are a condition for reasoned discourse& But if many ideas are available for use% analysts should not assume that some intrinsic property of an idea e*plains its choice by policy ma,ers& Choices of specific ideas may simply reflect the interests of actors& $t is crucial for anyone wor,ing on ideas and policy to recogni-e that the delineation of the e*istence of particular beliefs is no substitute for the establishment of their effects on policy& Advocates of an ideational approach to political analysis must begin by identifying the ideas being described and the policy outcomes or institutional changes to be e*plained& We must also provide evidence about the conditions under which causal connections e*ist between ideas and policy outcomes& $n general% we see ideas in politics playing a role a,in to that enunciated by 'a* Weber early in this centuryC EDot ideas% but material and ideal interests% directly govern men)s conduct& Xet very fre0uently the (world images) that have been created by ideas have% li,e switchmen% determined the trac,s along which action has been pushed by the dynamic of interest&F !" $deas help to order the world& By ordering the world% ideas may shape agendas% which can profoundly shape outcomes& $nsofar as ideas put blinders on people% reducing the number of conceivable alternatives% they serve as invisible switchmen% not only by turning action onto certain trac,s rather than others% as in Weber)s metaphor% but also by obscuring the other trac,s form the agent)s view& !# KNL 5onclusion $deas can be categori-ed as world views% principled beliefs% and causal beliefs& They can have impacts on policy by acting as road maps% helping to cope with the absence of uni0ue e0uilibrium solutions% and becoming embedded in durable institutions& Policy changes can be influenced by ideas both because new ideas emerge and as a result of changes underlying conditions affecting the impact of e*isting ideas& $deas matter% as a result of a system of interacting multiple causes of which they are a part& KNL

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2oldstein* #arBus P6 and #oss* ,odd ?6 -.//70* 1%om"assionate %onser$ati$es or %onser$ati$e %om"assionates3 (S Political Parties and Bilateral Foreign Assistance to Africa*4 in Journal of &evelopment Studies* 5ol6 <8* )o6 >* ""6 8.AA-89/.6
These findings e*plicitly do not comment on either the utility of B7 aid or its impact on development in Africa& We do not consider modalities of aid delivery or implementation systems% which are li,ely to be more tied to developmental outcomes than are overall aid flows& Deither does this article deal at all with the disaggregation of aid% which recognises that not all (aid) is the same& A dollar given to former President 'obutu of \aire is clearly not e*pected to have the same developmental impact as a dollar given to a successful Bgandan education project& Aastly% we have used only one limited pro*y of engagement with Africa% bilateral aid flows% which might not be the best such measure& Donetheless% these findings do demonstrate that total real B7 assistance to Africa has been rising over time& The data clearly show that the amount of aid or the relative importance of Africa is not affected solely by which party occupies the White House& Rather% our results show that the relationship between the President and Congress is what matters: when both are controlled by the same party% aid to Africa is higher% when it is split% aid is lower + both in terms of absolute flows and as a percentage of total aid& Aastly% at least in terms of real B7 aid flows% concerns over possible increased African marginalisation with the end of the Cold War have not materialised&

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2oldman* #arshall -8;:>0* Soviet 'orei!n Aid* )eC MorB: Praeger6

5#apter 11+ 5onclusion (pp. 1GF<201) Although 7oviet economic relations with the less developed countries have varied according to time% place% and politics% certain conclusions may be drawn by posing four major 0uestionsC What has been the Russian purpose in underta,ing economic relations with the less developed countriesW What has the 7oviet Bnion accomplished with its aid and trade programsW What has it failed to doW What lessons can Americans draw from the 7oviet e*perienceW -#e (easons for "o!iet )id and -rade The Russians have had many reasons for underta,ing economic relations with the less developed countries& Their motives are not very different from those of any large country& $n fact% the 7oviet e*perience with the less developed countries of the world differs only in emphasis from that of the Bnited 7tates& This means% therefore% that the motives are mi*ed and not entirely consistent& #& 2ne of the earliest stimuli for 7oviet interest in less developed nations was the desire and need to maintain trade relations& $n some cases% these areas possessed vital raw materials& $n the years following World War $$% Russia relied heavily on the 3ast 3uropean countries for coal% oil% uranium% and other commodities& The technologically more advanced countries% such as C-echoslova,ia and 3ast /ermany% also supplied the 7oviets with machinery& 3ventually% the Russians cultivated trade relations with the non1Communist developing countries as well: even here% trade often preceded aid and diplomatic activity& Through such trade% the Russians were able to obtain rubber% cotton% sugar% cocoa% and coffee& Before long% the Russians had other reasons for promoting trade& By the late #9<")s% the e*port side of trade became almost as important to the Russians and their 3ast 3uropeans allies as the import side& As Communist 3urope passed through the initial agony of industriali-ation% it found that much of its industriali-ed capacity had been overdeveloped in terms of basic heavy industry and unsophisticated consumer goods& After a time% many mar,ets in 3astern 3urope and the B&7&7&R& had become saturated& When trade relations with China were drastically curtailed in #9>"% the problem became especially serious% for China had been a major mar,et for such products& 7ince the goods affected were not readily salable in the more advanced countries of the West% it became necessary to cultivate the mar,ets of developing countries& With few e*ceptions% however% the newly developing areas continued to rely on the West for merchandise and machinery& $n some cases% the 7oviet Bnion and 3ast 3urope were able to penetrate such mar,ets by entering into all1encompassing barter agreements& This approach was successful in the case of countries that

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e*perienced a drop in the price of their primary e*port commodities& $n the absence of such a barter arrangement% it was usually very difficult for Communist countries to ma,e any inroads& About the only other way local businessmen in the developing countries could be weaned from the habit of trading with the West was through the use of credit or the inducement of repayment in soft currency& Hence% for the 7oviet Bnion and its allies% aid became a very important means of displacing Western merchandise from its traditional mar,ets& At the same time% it provided an outlet for e*cess goods produced by Communist 3urope)s industry& $n the words of a senior Polish trade official& EThe West no longer has a monopoly on foreign trade& But to compete% the Communist countries% especially the smaller ones% have to provide the sweetener of credit& Without credit the developing countries would naturally buy from the West& This is important to Poland% since we now have to worry about securing mar,ets for our own domestic industry& 2ur heavy industrial sector is overbuilt and we are now unable to sell all we produce within Poland or even to other Communist countries&F $n #9><1>>% the Russians openly began to revert to the imperialist position that foreign aid should be used to stimulate the flow of raw materials to the 7oviet Bnion& Articles in .opros &2onomi2i of Dovember% #9><% ebruary% #9>>% and April% #9>>% argued that Russian aid should be channeled so that it promoted the flow of tin% copper% -inc% aluminum% oil% rubber% iron ore and cotton to the 7oviet Bnion& !& A second motive for foreign aid has nothing to do with conventional commercial considerations& or some Russians% just as for some Americans% the prime motivation for allocating one)s own resources for the benefit of another country is a humanitarian one& Helping someone poorer that oneself has always appealed to man)s nobler instincts& 'oreover% many Russians believe that the countries in Africa% Asia% and Aatin America are poor today because of their e*ploitation by the capitalistic West& Therefore% even though their own country is relatively poor% the Russians feel they have an obligation as Communists and human beings to facilitate the industriali-ation of these areas& The Russians had much the same feeling about China until the late #9<")s& China% too% had been plundered by the imperialists + including C-arist Russia& As a conse0uence% the Russian made a sincere effort in the early #9<")s to provide economic aid& $n terms of present Russian capabilities% 7oviet aid to China may not appear to have been so generous% but in relation to 7oviet potential at the time it was a major effort and undoubtedly reflected Russian compassion for the poverty of China& H& Perhaps the most important consideration underlying 7oviet actions is the one of political self1interest& $t can be argued that all 7oviet economic relations with the less developed countries are subservient to political calculations + whether or not an action will advance the interests of the B&7&7&R& $t is only when confronted with pressure in the form of unrest% as in 3urope in #9<>% or competition for prestige or influence% as in $ndia% that the Russian will respond with any meaningful help& $n evaluating 7oviet motives% it would be an oversimplification to assert that a particular decision was made solely political% economic% or humanitarian reasons& Certainly behind every action there are mi*ed motives& $t is true% however% that the B&7&7&R&)s relations with its satellites until #9<> were governed by a determination

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to promote 7oviet national interests and to ta,e as much out of 3astern 3urope as possible& All other considerations were secondary& 7talin felt that the cause of world Communism could best be served be reconstructing and strengthening the B&7&7&R& and by maintaining tight control over 3astern 3urope and China& The growth and fortification of the 7oviet bloc in relation to the Bnited 7tates and the DAT2 countries was viewed as an urgent necessity& The best way to assure such a goal was to promote the development of a strong 7oviet state& $n the mid1#9<")s% as the field of 3ast1West contention shifted to the non1 Communist world% the Russians sought to increase their prestige and well1being by ma,ing inroads in areas long under the influence of the Bnited 7tates and its West 3uropean allies& As a challenger of the status 0uo% the Russians had to adopt a much more generous policy than was necessary in 3astern 3urope& Wherever possible% the Russians encouraged anticolonial sentiment and the formation of independent states& $t was anticipated that ultimately these governments would be transformed into Communist regimes + the goal foreseen by Aenin and others who argued that the road to Aondon and Paris lay through Asia and Africa& 7oviet trade and aid could help to produce this desired result& The Russians soon found% however% that it was often much wiser% at least in the short run% to settle for independent by anticolonial governments in the Afro1Asian bloc than for Communist governments& $n the case of the Communist regime in Cuba% the Russians discovered that supporting Castro was very costly& The Russians simply lac,ed the necessary materials and logistical facilities& With a non1 Communist but anticolonial regime% the Russian could provide whatever aid they though appropriate and then watch as the Western countries paid the bul, of the bills but continued to face the wrath of the embittered new nations& $n this way the Russians could have their ca,e without having to assume complete responsibility for training and supplying the coo,s& While gaining national prestige and appreciation for their foreign aid% the Russians could wait contentedly fort the Communist revolution they were confident would come one day + when they would be better able to support it& $t was not too long% however% before it became apparent that furthering Russian national prestige sometimes ran at cross purposes with the long1range goal of spreading international Communism& To the e*tent that 7oviet foreign aid did in fact facilitate the industriali-ation of developing countries% and to the e*tent that these countries became economically viable% a Communist revolution became less li,ely& While the Aswan .am brought immense international prestige for the 7oviet Bnion% there was no satisfactory answer for those who as,ed what% if anything% the millions of rubles spend on the dam had done for the Communist movement in 3gypt& 7uch 0uestions became especially embarrassing when Dasser decided to jail members of the local Communist Party& 'ore than anything else% such actions by aid1receiving countries highlighted the conflict between the national self1interest of the 7oviet government and its commitment to revolution and the spread of Communism& This was especially disturbing to those in the Communist movement who resented the fact that the Russians usually subordinated the international movement to purely national aims& Thus in Aatin America% the Russians e*tended official diplomatic recognition to 3duardo rei)s government in Chile at the same time that idel Castro was calling for a revolt in the country& Castro)s supporters charged that such E7oviet actions in Chile and Bra-il hold bac, the struggle for liberation&F # These activities

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also upset the Chinese% who sei-ed upon such dilemmas to embarrass and attac, the Russians& As the feud between China and the 7oviet Bnion intensified% foreign aid was used for a new political purposeC both countries used it to increase their national prestige at the other)s e*pense& Although both were still an*ious to outperform the DAT2 countries% they were often more concerned about competing with each other& The clima* of this competition occurred prior to the cancellation of the second Bandung Conference in Algeria% which after many earlier postponements was scheduled for June% #9><& A comparison of the aid commitments of both countries for the months preceding this meeting indicates how much li,e a po,er game the foreign aid negotiations had become& 47ee Table V$1 $&6 Dumerous offers of long1term credit were given in the hope that the donor would thereby gain support for either the inclusion or the e*clusion of the Russians at the forthcoming conference& These loans in turn were generally met by counterbids from the other country& $n Cambodia and Algeria% the counterbids were followed by yet a third offer& At this stage% neither the Russians nor the Chinese appeared to be seriously interested in the furtherance of international Communism: behind the ideological camouflage it was essentially a 0uestion of 7oviet national interest versus Chinese national interest& /#at 7as "o!iet )id )ccomplis#edL The purposes of 7oviet aid% then% are comple*% although generally not much different from those of other providers of foreign aid% but what has this foreign economic program accomplishedW Russia)s efforts in 3astern 3urope left those countries in an e*tremely poor condition& 3ven though the Russians tried to redeem themselves after #9<>% it was too late to remedy the basic wounds and fractures that will pain those countries for years to come& $n China and the neutralist world% Russian efforts have been much more constructive& Bndoubtedly% their foreign aid program has won them numerous friends and increased their international prestige& While there is much to be critici-ed% on the whole the Russians have tried to promote economic growth in the non1Communist countries they have aided& Do country in Africa% Asia% or Aatin America is poorer today because of its e*perience with the B&7&7&R& 47ome countries% such as China% Cuba% /uinea% $ndonesia% and /hana% may have been their own worst enemies% but the Russians cannot be blamed for this&6 'ost neutralist countries are considerably better off because of Russian economic help& This pertains especially to those countries where military purchases from the 7oviet Bnion have been at a minimum and where political involvement with the B&7&7&R& have been circumspect& With few e*ceptions% the Russians have stressed basic industrial projects& With 7oviet assistance% new industries have been built at an astonishing rate& At times% e*cessive enthusiasm on all sides has led to the creation of over1ambitious projects% but this should not detract from the basic contributions which have been made& The Russians seem to have a ,nac, for the spectacular& 'uch of the 7oviet success has been due to concentrating on certain ,ey projects% which are generally industrial in nature& These major impact projects not only e*cite the imagination% but result in productive and visible monuments& The wor,manship and administrative efficiency that go into these showpieces are often more impressive than those in the B&7&7&R& itself& 2n occasion% the Russians have also been able to suggest improvements in already projected plans: in the case of the Aswan .am% their suggestions saved

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3gypt considerable domestic and foreign currency& The Russians are also to be commended for training native technicians and turning over to them the operation of projects& $n addition to on1the1job training% the Russians have invited large numbers of foreigners to the B&7&7&R& for training in 7oviet schools& 2n occasion% such policies have bac,fired: native technicians have failed to perform properly: and the Russians have been critici-ed either for poor training or for poor 0uality of e0uipment& Devertheless% their efforts deserve praise& The successful 7oviet projects are also distinguished by the efficiency and fle*ibility of 7oviet administrative procedures& When a project is singled out for priority handling% the full resources of the 7oviet Bnion are put behind it& The Bhilai steel mill was considered to be as important as any steel mill in the 7oviet Bnion% and 7oviet specialists in the field had authority to ma,e decisions without referring to 'oscow& When it is necessary to obtain a decision in the B&7&7&R& about a priority project% the answer is usually fast in coming& $t is in the field of public relations that Russians appear to be at their best& Their preference for impact projects% together with their sense of timing% creates e*citing drama and wins them applause from the recipients% their own people% and even their competitors& Because there was no need to see, the approval of any legislative body for its projects% the 7oviet Bnion was able to announce its willingness to finance the Aswan .am very soon after the Americans withdrew& They reacted the same way after the Bnited 7tates decided against financing the Bo,aro steel mill in $ndia& 7imilarly% as soon as the rench proclaimed they would no longer help /uinea% Russian promises of aid were immediately sent off to Conar,y% just as they were sent to Tunisia when the rench bombed the naval base at Bi-erte& Bntil recently% it was a rarity when an international crises or realignment of power was not followed by a new 7oviet aid agreement& But perhaps the Russians) most notable accomplishment is that through the combined use of political e*pansion and foreign aid they have stimulated the use of economic aid by others& $t was largely because of the fear of Russian e*pansionism in 3urope that the Bnited 7tates introduced the 'arshall Plan for 3uropean reconstruction& Bntil the Russian feelers in Afghanistan and $ndia% American foreign aid to Africa and Asia was at a minimum& or e*ample% annual American promises of aid to $ndia% which were only TM&< million in #9<#% rose to T;5 million in #9<M and to more than T#"" million in #9<9& $n addition% the decision to counter 7oviet aid helped to bring about the creation of numerous international and financial institutions whose sole purpose was to aid economic development& The $nternational Ban, for Reconstruction and .evelopment 4World Ban,6 was joined by the $nternational inance Corporation% the $nternational .evelopment Association% the .evelopment Assistance Committee% and the $nter1American .evelopment Ban,& rom the 7oviet point of view% perhaps the most important contribution of the foreign aid program was that it made neutralism a practical alternative& The very e*istence of the alternative of 7oviet aid provided needed leverage for the numerous countries that obtained their independence in the #9<")s and #9>")s& After the une*pected Russian decision to finance the Aswan .am% the West and the developing countries learned that the 7oviet Bnion was prepared to commit immense 0uantities of resources for countries that were willing to stand up to DAT2 powers& Conse0uently the emergent countries did not have to worry as they once

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did that Western boycotts would ensure submission& $t is entirely possible for e*ample% that Premier 'ohammed 'ossadegh)s attempted nationali-ation of the $ranian oil companies in #9<# might have been successful if it had ta,en place only five years later& As 7oviet support for 3gypt indicates% by #9<> the Russians had decided to support actively just such provocative challenges& /#at "o!iet )id 7as %ot 1een )ble to Do $f 7oviet aid and trade has helped to produce neutralism and has increased the national prestige of the 7oviet Bnion% it has not helped to bring a Communist regime to power& 3ven when the Communists did ta,e over in a developing country% as in Cuba% it was done without 7oviet aid& Although Russians were probably delighted by their success in promoting and winning the support of the neutralist movement% eventually they began to wonder about the imminence of Communism in the rest of the Afro1Asian1Aatin American bloc where 7oviet aid had been applied& As we have seen% this provo,ed some conflict over the ultimate purpose of 7oviet aims% especially when EneutralismF in favor of the B&7&7&R& became EneutralismF for the West& 7imilarly% Russian aid and trade policies have not always been warmly received by fellow Communist states& The list of the openly disenchanted includes Xugoslavia% Albania% China% Dorth ?orea% and Rumania& At one time or another% protest has also come from Hungary% Poland% 3ast /ermany% and even Bulgaria and C-echoslova,ia& As a result% even C'3A% which has some merit as an institution for stimulating foreign trade% is regarded with considerable hostility& Thus% although Russia)s economic policies toward its satellites at one time brought short1run advantages% the long1run effects have brought dissension and economic inefficiency for the bloc as a whole& As we have seen% the Russians% li,e other aid dispensers before them% have not yet discovered how to avoid mista,es in the implementation and administration of their foreign aid and trade programs& The frivolous nature of some projects such as the lu*ury hotels in Burma and /uinea% and the unproductive nature of others% such as the stadiums in /uinea% 'ali% and $ndonesia% have generated complaints about poor 7oviet advice& Ai,e their Western competitors% the Russians have sometimes failed to ma,e ade0uate feasibility studies& 'any of these difficulties are due to the relative ine*perience of the Russians% but they are also due to problems inherent in any underdeveloped country& The Russians are also beginning to reali-e that while their system has the advantage of permitting swift action in priority situations% it also has shortcomings& After all% there can only be so many priority projects& Those projects that are not in the priority category move very slowly% and often run afoul of the 7oviet bureaucracy& The emphasis being placed on the so1called Aiberman reforms indicates how much remains to be done to bring about improved 0uality and efficiency within the B&7&7&R& itself& Bntil such reforms are implemented successfully% 7oviet industrial aid and trade will not be completely satisfactory& The very debate over the reforms helps to focus world attention on 7oviet economic difficulties& 7imilarly% Russia)s inability to solve its own agricultural problems generates a s,epticism with regard to Russia)s agricultural aid programs& Russia)s agricultural problems also embarrass those 7oviet critics who complain that the

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Bnited 7tates stresses agricultural at the e*pense of industrial help& All of this detracts from attempts to ma,e the 7oviet Bnion a model of economic development for the poorer countries of the world& 2ne particular aspect of 7oviet domestic economic policy deserves special mention because of its effect on 7oviet foreign aid& The ,eystone of the 7oviet aid program is its emphasis on industrial help& Xet there seem to be an increasing number of situations where lac, of restraint in applying such a policy has come in for criticism& The Russians have a tendency to build factories on a scale more suited to 7oviet conditions than to conditions in the developing countries& This disregard for scale and the tendency to concentrate on industrial projects have been partly due to the absence of the interest rate in 7oviet calculations on plant si-e and feasibility& The loan fee of !&< per cent that the Russians charge is not the same as the capital charge used to determine the amount of capital 4capital intensity6 in a particular project& The capital or interest charge is used by project designers to decide on the optimum scale of the plant& The more limited the availability of capital% the higher the interest charge will be and the more li,ely it is that the planners will be persuaded to use less capital& $n all li,elihood% the plant will be smaller in si-e and less mechani-ed& $n some cases% if the interest rate is high enough% a change in plans may be necessary and no factory be built at all& The absence of a capital charge signifies that capital is free and that there need be no limit on the amount of capital that is used& This is what leads to e*cessive scale and unprofitable operations& Because American project calculations ta,e into account the capital charge% American factories in Africa and Asia tend to be smaller in si-e& Americans recogni-e that capital is a commodity in short supply& This helps to e*plain why they are more cautious than the Russians in building industrial projects in the less developed countries& 7uch enterprises must not only earn enough revenue to meet current e*penses for inputs li,e labor and raw material% but they must also meet capital e*penses& $t is not true% as the Russian assert% that Americans are reluctant to build factories in the less developed countries because they fear subse0uent competition with their own domestic industry& American investment and factory construction in Western 3urope indicate that the possibility of future competition does not inhibit overseas investment by Americans& $t is just that the ris,s are greater% the supply of capital is smaller% and the changes of profitability are more remote in the Afro1Asian bloc& $ronically% as the Aiberman reforms ta,e hold in the B&7&7&R& and as the Russians being to use capital charges in the economic calculations at home% it is only to be e*pected that a similar calculation will enter into 7oviet foreign aid projects& This in turn should induce a more conservative attitude as to the si-e and economic feasibility of industrial projects financed by the 7oviet Bnion& The increase in interest charges to M per cent on a #9>> loan to Bra-il indicates that this may be happening& The Russians are li,ely to move in this direction not only because of domestic economic reforms but also because they are now harvesting the fruit of past unrestrained policies& 'any of the less developed countries find themselves with serious balance1of1payments problems once their debt repayments to the 7oviet Bnion fall due& As we have discovered% even the more conservative countries of Asia and Africa are having such difficulties& Where the national leaders are profligate spenders andGor dreamers% the chaos is li,ely to be monumental& The Ego1goF

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generation of the revolutionaries + D,rumah% 7u,arno% Ben Bella% 7O,ou TourO% Dasser% and Castro + have generally been unable to sublimate their frenetic energy and the political plotting of the soap bo* to the methodical plodding of the drawing board and accounting ledger& $n addition to a common penchant for such useless endeavors as stadiums% statues% and oversi-ed factories% these firebrands have also obligated their countries to pay for large 0uantities of unproductive military e0uipment: this further complicates their already serious balance of payments& $n 3gypt% /hana% Cuba% /uinea% and $ndonesia% this has led to default on repayments of 7oviet debt or at least to re0uests for debt postponement& As 7oviet aid projects are completed and more and more countries find themselves having to begin to repay their debts% this is bound to become more serious and generate considerable friction between the Russians and those they help& The sale of munitions highlights another problem area in 7oviet e*ternal affairs& The countries of Communist 3urope% especially the 7oviet Bnion and C-echoslova,ia% have become major munitions manufacturers& Partly out of choice and partly out of necessity% they are now important suppliers of arms to the Afro1Asian bloc& $n some cases% the Communists have been forced to sell weapons in order to retain the friendships and to protect the inroads already won& $n other instances% they encourage the sale of arms in order to ,eep their munitions industry producing at full capacity& A curious aspect of the Communist arms business is that the Russians almost never publici-e their sales of weapons to neutral countries& Although they mention the military help and e0uipment they give other Communist countries + Cuba% Iietnam% Poland% and china + there is virtually no indication of the scope of the Russian and C-ech arms traffic to non1Communist areas& As a result% most Russian citi-ens are ignorant of such activities& Presumably they would be as disturbed about the profits of the munitions industries in their own countries as they are about such profits when earned by Western firms& But while the munitions industries in the 7oviet Bnion may do their best to promote the sale of arms% the finance ministry undoubtedly opposes such transactions& The sale of military goods not only complicates the repayment problems of the recipient country% but almost always creates additional unrest in the region& Dow that the Russians are owed over several billion dollars) worth of economic and military debts in various areas around the world% they are discovering for the first time that they have a vested interest in the status 0uo& They found that the governmental changes that too, place in Algeria and $ndonesia in #9>< and in /hana in #9>> were distressing for economic as well as for political reasons& 7imilarly% military or political disturbances in $ndia jeopardi-e the billion1dollar investment the Russians have in that country& As we saw% such considerations help e*plain Russia)s moderating influence in the clashes between $ndia and Pa,istan& Thus the Russians are beset by the same dilemma as other donors of foreign aid& Although they li,e to sell military e0uipment% they reali-e that the political aftermath as well as the financial effect on their nonmilitary loans may be unfortunate& The Russians have not been able to do away with yet another feature of foreign aid and trade which has been sharply critici-edC tying strings to their economic help& The Russians were especially domineering in dictating policy to their satellites& Aid was offered and then withdrawn in Xugoslavia% Albania% and China because these countries refused to accede to 7oviet political demands& $t was subse0uently resumed in Xugoslavia& As the Chinese put it the Pe2ing (e!ie$ of 7eptember%

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#9>M% EAfter receiving aid KAlbaniaL was plundered% its internal affairs interfered in and it was even confronted with subversion&F 2ther countries that have found themselves penali-ed or threatened economically or politically because of some indiscretions include inland% $srael% Cuba% Algeria% /uinea% $ndonesia% /hana% and $ra0& $t would be a futile to determine who pulls the most strings% the Bnited 7tates or the 7oviet Bnion& The fact remains% however% that both countries have interfered when they deemed it to be in their short1run interest& Do country li,es to spend large sums of money for the benefit of another country only to see the recipient refuse to follow advice& Ai,e parents with their adolescent children% the reaction is even stronger when the recipient begins to critici-e or attac, the donor& $t is unrealistic to e*pect that economic support will be maintained under such circumstances& Lessons for t#e :nited "tates With time% 7oviet foreign economic policy has produced e*periences and reactions similar to those of the Bnited 7tates& As their investment in foreign aid increases% it is li,ely that the Russians will become more cautious& Whether they pull string% whether they worry about the repayment of the credits that they have e*tended% whether they are attac,ed for not providing enough industrial help% or whether they are critici-ed for the ineffectiveness of their aid% the Russian find themselves with problems that are all too familiar to Americans& What lessons are there in all of this for the Bnited 7tates and its aid programW The most obvious conclusion is that foreign aid and trade with the developing nations is by its very nature a challenging and often than,less tas,& The returns are slow in coming% and failure and criticism are as much to be e*pected as success and praise& Patience% perhaps% is what is needed more than anything else& Conse0uently% it is encouraging to see that we have no monopoly on impatience& $mpatience% plus dissension among Communist allies and economic troubles at home% led to a moratorium on new aid promises by the Russians in late #9>#& All of #9>! passed without a single major new commitment& This was a complete reversal of the pattern of the preceding years: it also meant the Russians had to watch the formation of an independent Algeria in July #9>!% in silence& $t was not until about fourteen months later% in 7eptember% #9>H% that the Russians decided to offer any major promise of aid and finally announced a loan to Algeria& Then% as we have seen% the competitive battle with the Chinese generated a sharp increase in aid& A second reason for the e*tension of new loans was that the Russians found themselves trapped by what can be called the E0uic,sand effect&F 2nce they have underta,en to support a country li,e 3gypt or $ndia in its program of economic development% it becomes e*tremely difficult to refuse re0uests for supplemental aid& ailure to promise new aid creates the ris, that the political gains from past aid will be lost& Thus as we saw% against the advice of his economic counselors and the 7oviet Presidium% ?hrushchev announced a new loan to the Bnited Arab Republic of T!55 million in 'ay% #9>M& Carried away by the flush of enthusiasm over the completion of the first stage of the Aswan .am% he was just a man who couldn)t say no&

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A third factor e*plaining the resumption of 7oviet aid commitments is the traditional one of sei-ing new opportunities to penetrate new areas& $n the early #9>")s the nations of the C3DT2 pact became restless and disappointed with American support& 7ince most of these countries have common borders with the 7oviet Bnion% the temptation to developed improved economic relations with these areas was too much for the Russians to resist& Thus% for all three reasons% the Russians resumed their aid program until early #9><% when it was cut bac, again because of the growing economic problems at home and an increasing awareness that the means and ends of 7oviet foreign aid were contradictory& Donetheless% whatever 7oviet shortcomings or hesitations% in terms of per dollar e*penditure on foreign aid% the Russians seem to have done better than the Bnited 7tates& $n $ndia% the Bnited 7tates has offered almost T> billion and the Russians only T#1#&< billion: in 3gypt% the respective figures are T# billion and T;!" million& Xet Russian aid has had much more of an impact and is considered to have contributed more to the industriali-ation of both countries& $t is true that this is partially because the Russians are newer at the game and not all of their promises have yet had to meet the test of reality& As their projects are completed% there is certain to be more criticism mi*ed in with the praise& Xet there are some techni0ues the Bnited 7tates would do well to copy from the 7oviet Bnion& A praiseworthy feature of 7oviet aid is its fle*ibility& The B&7& foreign aid program tends to move from one e*treme to another& irst% we stress grants in aid& When that does not bring immediate results% we adopt a loan policy& We should be much more willing to use a little of both& When necessary% the Russian can move very rapidly to implementing their aid program& American procedures are often time1 consuming and cumbersome& Without restricting our fle*ibility% we might profit from preparing a prepac,aged EshellF of prototype aid projects that could be easily utili-ed and put into operation& This might ma,e it possible to reduce the months usually re0uired to produce wor,ing plans for such basic projects as sugar mills% canneries% dairies% and lumbermills& 2f course% it would still be necessary to ma,e adjustments to local conditions% but the e*istence of standardi-ed plans might reduce much of the frustration created by e*cessive delays that often precede the actual construction of American aid projects& Where we are already more fle*ible% we should do more to publici-e the fact& or instance% American aid officials should ma,e an effort to show that American aid is not limited to privately sponsored projects& 2ur aid is divided much more evenly between private and state enterprises then is Russian aid% which tends to be concentrated on government projects& Here we tend to be more fle*ible than the Russian% but few people ,now about it& The Russian could also teach us something about public relations in foreign aid& 7oviet officials and the Russian press go out of their way to draw attention to 7oviet efforts& $t would help in senior American officials% especially the President and the Iice President% would ma,e a point of inspecting or inaugurating American1 sponsored projects on their foreign tours% as 7oviet officials do& 7imilarly% American firms should be encouraged to publici-e their wor, on American1sponsored foreign aid projects& This would help to inform the public about the e*istence of such projects and would also be a way of indicating how foreign aid appropriations benefit American businessmen& After all% this is no more than what American

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corporations presently do after each space shot& They vie with one another to show off their engineering and technical accomplishments& They should do the same about their foreign aid accomplishments& To provide an image for its over1all efforts% the Bnited 7tates should adopt the 7oviet practice of Eflagship projects&F Projects such as the Aswan .am and the Bhilai steel mill focus world1wide attention on 7oviet foreign aid and lend an atmosphere of substance to all their efforts& 2ne of the greater shortcomings of the American aid effort is its diffusion& ew Americans can name one American project& Had the Bnited 7tates underta,en to build the Bo,ara steel mill% it could have served as a symbol of tangible American support& The prestige from such a project would probably flow over to other important by less e*citing America projects% such as agricultural help and educational and technical assistance% where the results are highly useful in the long run but less apparent in the short run& The Bnited 7tates should underta,e one or two such flagship projects and commit itself to the necessary financial credits for more than one year& Although political hand1biting by the recipients may occur in the course of construction% this is something the Bnited 7tates must be prepared to tolerate& These have been insufficient swings in the political pendulum in the last twenty years to indicate that if one waits long enough% a hostile regime will eventually be replaced by a more favorable government& $n the meantime% the aid project can ma,e a basic contribution to economic development: this should redound more to our benefit than to the 7oviet Bnion)s& Americans should also ta,e a somewhat less s,eptical and hostile attitude toward 7oviet aid& Although we should not forget that behind 7oviet aid there are political motives and ambitions just as there are in American aid% we should nevertheless recogni-e that in the long run% a successful aid project that strengthens and stabili-es an economy will help the Bnited 7tates more than the B&7&7&R& While the two may be connected% we should distinguish between subversion% which is destructive% and aid% which is constructive& History so far shows that Communism does not flourish or spread in countries that seem to be solving their economic problems& Aogically% therefore% instead of discouraging 7oviet aid% we should encourage it& 3very project they underta,e is one less we have to bear& There are short1run political ris,s in such a policy% but the long1run effects% both economic and political% seem to be in our favor& 3*periences shows that if the aided country prospers because of 7oviet aid% it is less li,ely become Communist& 2n the other hand% if 7oviet aid is unsuccessful% the Russian are often made to share the blame for the country)s problems and the country is li,ely to turn to the West for support& This has been the case in $ndonesia and /hana& $n countries where the Russians have been e*cluded% for e*ample% /uatemala% Communism often seems to ma,e the greatest inroads& Although the absence of 7oviet aid in such countries is not the main reason why there is a strong Communist movement in the country% it is an interesting parado*& Recogni-ing that 7oviet aid may not always be detrimental to American interests% it is worth noting the emergence of a new and promising phase in the administration of American foreign aid& Aargely at the initiative of sincere and committed aid and foreign service officials from both countries% there are a growing number of cases where the Bnited 7tates and the B&7&7&R& are attempting to coordinate their aid efforts in a particular country& There are immense advantages for all parties concerned in such a trend& Already it is possible to find some such joint efforts& $n

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Afghanistan we saw how American roads end where Russian roads begin& $n /hana% water provided by American projects with irrigate sugar case which is to be processed in a Polish sugar mill& 2ther cooperative efforts may only ta,e the form of a discussion as to what each country plans to do& 3ven this can help to eliminate or reduce duplication and overcapitali-ation& 2n occasion it may even lead to a component1building process whereby one project supplements another& There seems little doubt that while both donors benefit from such an approach% the one who benefits the most is the recipient country& Donetheless it would be unrealistic to assume that American17oviet cooperation in foreign aid will ta,e place on a significant scale& This is not entirely to be regretted& Regardless of the advantages that coordination and cooperation may bring% history still shows that in the long run foreign aid% investment% and trade are most beneficial when rendered as a result of international competition& At best% coordination is most effective in a conte*t of over1all competition& When a developed and powerful country or a group of large countries has a franchise to do as it pleases in a smaller country% the results are usually not entirely salutary from the poorer country)s point of view& This has been true of American operations in Aatin America and 7oviet activities in 3astern 3urope& Accordingly% Russian interest in Aatin America has forced the Bnited 7tates to ta,e a les selfish loo, at Aatin America& 7imilarly% greater American and Western economic interest in 3astern 3urope has caused the 7oviet Bnion to re1e*amine its economic relations in that area& The West could probably bring about further improvement in conditions there if we too, even more interest in 3astern 3urope by offering better trade and credit privileges to the 3ast 3uropean countries which seemed particularly deserving& $n the past the most successful foreign aid projects have resulted where the Bnited 7tates% the 7oviet Bnion% other Western countries% and% now% the Chinese have found themselves engaged in courting the favors of a particular country& or the country whose affections are being sought% this may be all to the good& To the e*tent that it can play off one faction against another% it is possible that it may be able to obtain more foreign aid and political concessions than it would if there were no competition from the other powers& The threat of Communist penetration has given birth to the 'arshall Plan and to the Alliance for Progress% among other project: the promise of neutralism has spar,ed a TM1billion aid program by the 7oviet Bnion to the developing countries: and the li,elihood of a Chinese ta,eover of the #9>< Afro1Asian Conference in Algeria caused the Russians to resume their foreign aid program and increase their loans by over half a billion dollars& The role international foreign aid is gradually changing from what it was in the late #9<")s and early #9>")s& Then acceptance of aid from a particular donor often implied strict adherence to the donor)s particular point of view& With time this has changed& While there is still a danger of economic subversion under the guise of 7oviet aid or trade% more and more% the developing nations seem to have learned how to balance off the various lures of the donor countries without losing their e0uilibrium& As long as the B&7&7&R& continues to invest in various projects overseas and as long as the recipient countries continue to reject Communism% there is growing li,elihood the B&7&7&R& will act as a moderating force in these areas& Conceivably some day the Chinese may react the same way& $n the meantime% the Bnited 7tates should continue to compete and even cooperate with the 7oviet Bnion in the developing countries% both Communist and non1Communist&

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2ounder* !uBmani -8;;70* 1Po"ulation and #iddle-Income Biases in Australia@s Bilateral Aid*4 School of A""lied and International +conomics #assey (ni$ersity* )eC Nealand* Discussion Pa"er )o6 ;768/ = ?uly 8;;76
This paper has considered the economic literature on population and middle1income biases in overseas aid allocations% and has tested these hypotheses for the Australian bilateral aid program for the si* years from #9;>1;5 to #99#19!& $t is argued here that some of the previous empirical studies on the twin biases issue are subject to criticism on the grounds that the models employed are too simple andGor ad #oc& An appropriate way to proceed is to apply the general models of the aid allocation process that are to be found in the aid motivation literature& This approach is applied to data on AustraliaZs bilateral aid program& 'ore specifically% a RD KRecipient DeedL model and a comprehensive model 4incorporating both RD and .$ K.onor $nterestL variables6 on bilateral aid are estimated in a 0uadratic and linear form& $t is also important to estimate the e0uations in various years to determine if the relationships have shifted over time& The empirical results reported in this paper are for the e0uations estimated which have the dependent variable specified as both per capita aid and absolute bilateral aid& The results for the per capita aid e0uations provide no evidence of a middle1 income bias in the allocation of AustraliaZs bilateral aid to recipient countries& $n fact% the econometric results indicate that per capita aid decreases as recipient countriesZ incomes increase% ceteris paribus& However% the relationship is linear% not 0uadratic& With respect to the population bias% or the small country effect% the empirical results of the per capita aid e0uations provide some support for the view that Australian bilateral aid discriminates against more populous countries& The conclusion obtained on the absolute aid e0uations for the middle1income bias are similar to that of per capita aid e0uations& There is no evidence of AustraliaZs aid being allocated to middle1income countries& 2n the issue of the other aid bias% i&e& the population bias% the results indicate a reversal of the conclusion reached from the per capita aid e0uations& The absolute aid e0uations show an aid bias in terms of a Elarge countryF effect&

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2ounder* !uBmani and Sen* Dunal -8;;;0* 1&hat #oti$ates Foreign Aid: A %ase Study of Australia@s Aid to Indonesia*4 in Journal of &evelopin! Areas* 5ol6 99* )o6 9* ""6 9>;=;<6
2verseas aid to many developing countries has become an important source of e*ternal financing that contributes to a substantial part of their /.P& .espite the fact that sustained economic growth in $ndonesia has benefited many% some !5 million people still remain in poverty& AustraliaZs aid program has been directed to poverty alleviation% education% health% rural development% environmental management% and public infrastructure development& 3ven though $ndonesiaZs sustained growth has promoted higher levels of development% the World Ban, estimates that the need for substantial development assistance still remains& The earlier cross1section studies of aid motivation by 'c?inlay and Aittle% and 'ai-els and Dissan,e for /ermany% rance% Japan% the Bnited ?ingdom% and the Bnited 7tates% found that the RD model fails and the .$ model e*plains the aid allocation of these five major donors& These results are different from those of /ounder for AustraliaZs aid% where both these models are accepted% thus necessitating the application of nonnested tests& $t has been argued here that time1 series analysis is more important in answering the 0uestion of aid motivation to individual countries than the cross1sectional evaluation used in previous studies& The use of cross1sectional data conceals the 0uestion of aid motivation by aggregating the specific country characteristics and averaging the impact of aid allocation to all recipient countries& The general conclusion of this study for these two separate models for AustraliaZs aid to $ndonesia is that bot# models fit the data& This necessitates the application of nonnested tests& The nonnested results reported here produced strong or decisive results in support of the RD model& Thus% there is unambiguous support for one motivationC all the nonnested tests reported in the study indicate acceptance of the RD model and re*ection of the .$ model& What do these results meanW The EconventionalF results show that Australia)s aid program to $ndonesia can be said to e*hibit both RD and .$ concerns& 2n the issue of which motive dominates the other% the nonnested tests produce a definite result in terms of accepting the RD model and rejecting the .$ model& Thus Australia)s aid to $ndonesia e*plains the recipient need concerns&

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2rant* !ichard and )iHman* ?an -8;;>0* 1 istorical %hanges in (6S6 and ?a"anese Foreign Aid to the Asia-Pacific !egion*4 in Annals of the Association American Geo!raphers* 5ol6 A>* )o6 8* ""6 9.-786
The foreign1aid regime that emerged after World War $$ was in many ways an integral part of Cold War international relations& By the time the Cold War ended% foreign aid was a widely accepted way for countries to cooperate with one another so as to further economic development and human welfare& $n addition% foreign aid was an established and important instrument for promoting the foreign1policy interests of donor countries& This foreign1policy instrument was susceptible to change% however% after the Cold War came to an end& This study has described the ways in which the B&7& and Japan% the world)s largest donors of foreign aid% have altered their policies toward the countries in the Asia1 Pacific region following the Cold War& The analysis has concentrated on changes both in discourse and in rhetoric 4as evident in policy documents and statements6 and in actual aid disbursements in the Asia1Pacific region& The rhetoric of Japanese aid started to change in the late #9;"s& $n response to critics at home and abroad who insisted that To,yo assume a level of international political responsibility commensurate with its economic role in the world% the Japanese developed for the first time a declaratory policy on foreign aid& $n earlier years% Japan)s foreign1assistance programs were fueled mainly by economic and commercial motivations& The Japanese made relatively little effort to clarify their motives to the public or to couch their foreign1assistance programs in statements of goals and purposes& By the early #99"s% however% the Japanese discourse intensified& An increasing number of policy statements emphasi-ed the importance of a growing foreign1aid budget in order to serve broad principles of international cooperation and development 4including environmental programs and projects for women6 and to reaffirm these principles through criteria that ma,e aid contingent upon the political behavior of recipients& Japan)s aid policies have indeed moved beyond geo1economics: Japan)s warning to China that further nuclear tests might hinder future aid allocations is a case in point& The discourse of American foreign aid underwent important changes as well& The tone of its declaratory policies shifted from Cold War notions of development in order to secure freedom and democracy toward notions of Esustainable

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developmentF and facilitation of democratic transitions in former communist states& EThe opportunity to put into practice what the Cold War often precluded is now upon us& We have entered an era & & & of cooperation and collaborationF 4Wharton Report #99HC>H6& The Clinton administration)s discourse was at least in part characteri-ed by an optimistic ideological commitment to reshaping a global order of cooperation% peace% and development& What was lac,ing in the new discourse was a reoriented foreign1aid policy that too, advantage of the ending of the Cold War by shifting the emphasis of foreign1assistance programs in ways that were commercially beneficial to the B&7& $n terms of actual aid disbursements to the Asia1Pacific region% the B&7& and Japan have responded in opposite ways to the ending of the Cold War& The B&7&% despite efforts to come up with new rationales for aid% has found it difficult to replace Cold War motivations& The only e*ception to this is American aid to the former communist states& Conse0uently% countries once pri-ed for geopolitical interests have witnessed large1scale cutbac,s in American aid after #9;9: nor were these reductions of security aid compensated by other ,inds of aid& Thus while a number of Asia1Pacific countries 4D$Cs6 offer wide opportunities for commercially motivated aid% Washington has not sei-ed these opportunities& Across the region% B&7& aid has fallen to its lowest levels in forty years& To,yo)s response was precisely the opposite& $f% for the B&7&% the ending of the Cold War created an identity crisis and a frantic search for a new geopolitical code% for Japan it opened the door to a great power role in the world and especially in the Asia1Pacific& 'ore than that% the ending of the Cold War actually forced Japan into a role that it had been reluctant to adoptYthe assumption of political leadership& $n contrast to the B&7&% Japan has had the funds that are commensurate with that role& 7ince #9;9% Japanese aid to the Asia1Pacific region has increased rapidly: by #99H it was nine times the level of American aid& The Japanese increased aid to the D$Cs% to countries li,e $ndia and Depal% and to new recipients such as Iietnam& Also during this period% China became Japan)s largest aid recipient in the world& As to the future% there is no evidence that the so1called bursting of Japan)s Ebubble economyF will have any effect on Japanese aid volumes& According to official statements% '2 A over the ne*t five years e*pects to increase aid allocations that contribute to peace% stability% and prosperity in the world 4Xanagitsubo #99;6& oreign1aid policies are a reflection of the foreign policies of the donors& After the Cold War% American foreign policy stumbled into a rationality crisis that preempted a solid replacement for its foreign1aid policy& Aac,ing a convincing purpose for foreign aid% criticism of foreign1assistance programs has intensified and may result in dramatic budget cuts in the coming years& rom the perspective of great power politics% this retreat from aid giving amounts to curtailment of an important foreign policy instrument and surrender of influence around the world& This is especially significant since the Japanese increasingly value foreign aid as a way of obtaining influence and leverage in international affairs& To be sure% it is not self1evident that the B&7& should shape its policies according to Japan)s& But either Japan is wasting its money or the B&7& is wasting its influence in one of the world)s most dynamic regions&

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2riffin* D6 B6 and +nos* ?6 L6 -8;>/0* 1Foreign Assistance: ObHecti$es and %onseIuences*4 in Economic &evelopment and *ultural *han!e* 5ol6 8A* )o6 9* ""6 989-9.>6
The pattern of development is comple* and the effect upon it of foreign assistance is still undetermined% but it is clear that the relationship usually assumed to e*ist between aid and growth is too simple& $n general% foreign assistance has neither accelerated growth nor helped to foster democratic political regimes& $f anything% aid may have retarded development by leading to lower domestic savings% by distorting the composition of investment and thereby raising the capital1output ratio% by frustrating the emergence of an indigenous entrepreneurial class% and by inhibiting institutional reforms& Precisely how widespread and strong are these negative influences still remains to be determined% but the limited evidence available suggests that aid programs% as currently administered% and insofar as they are concerned with economic development% fre0uently are counterproductive& 'any commentators% while ignoring the points we have raised above% have emphasi-ed the growing debt burden of the poor countries% their conse0uent acute balance1of1payments problems% and the severe constraint this imposes on growth& HM 3vidently% this is a major problem of contemporary aid programs which stems directly from the concentration on loans rather than grants& The long1run importance of this problem should not be e*aggerated% however% as it is rather unli,ely that the loans will ever be repaid& Aoans were made in the past% but repayments occupy the future& What happened in the past is history% and what happens in the future is politics + and there is a great difference between politics and history& Had the loans been productive% they would have generated the funds for repayment%H< but since they generally have not been% there is little reason to imagine that there will be a connection between the two& 7ince there was no growth generated% the debtors may feel no obligation was created& The prospect of default can be seen in the statistics on loans and repayments from and to the powerful countriesC according to BDCTA. data% between #9># and #9>< the flow from the strong to the wea, rose from T<&; to T>&> thousand million% while repayments rose from T"&5 to T#&! thousand million& The net flow has leveled off% and was stationary in the last years 4at T<&H thousand million6& $n other words% repayments from the wea, to the strong are becoming so large that they offset the annual increases in assistance from the strong to the wea,&

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As the repayments grow% they become more of a burden to the in1debted countries& $n Aatin America% for e*ample% the servicing of foreign debts absorbed > percent of total e*port earnings in #9<<: in #9>M this had risen to #< percent& This is an average% and individual countries vary considerably& 2ne country% Chile% found a few years ago that it was in the position of having to allocate half of its foreign e*change to debt repayments& $n this case% as in several others + for e*ample% Tur,ey% Bra-il% /hana% where the debts have increased beyond the ability of the country to li0uidate them + it led to the first move of what will probably be many in the game of default% namely% Erephasing&F The second step will be from postponement to avoidance& There are any number of reasons or justifications that can be given for such action: a new regime can disown the debts of its predecessor: a vacillating regime can shift its allegiance from one to the other of the great powers% shifting or dropping the burdens of the past at the same time& When faced with a poor and disloyal debtor% unable to repay and unwilling to repent% there will be little the creditor can do& 43jecting his government usually costs the creditors more% not less&6 Aest one thin, that we delight in the prospect of default% we shall end on a solemn note& Just as assistance has not created obligations% so default will not promote concord& EWhen ingratitude barbs the dart of injury% the wound has double danger in it&F The brea,ing of agreements between the lenders and borrowers% no matter which one instigates the act% will deepen yet further the chasm between the rich and the poor% the strong and the wea,& That the wea, countries should avoid the breach goes against economics: that the strong should absolve them of their burdens goes against politics& Thus aid% ostensibly given in friendship% seems inevitably to lead to enmity&

2riffin* Deith -8;;80* 1Foreign Aid After the %old &ar*4 in &evelopment and *han!e* 5ol6 ..* )o6 <* ""6 :<7=A76
This paper argues that foreign aid programmes originated as part of the ideological confrontation ,nown as the Cold War and that the motives behind aid were always more political than economic& $t is further argued that the economic justifications for foreign aid Y filling (gaps) in capital% technology and s,illsYare suspect and that the economic benefits in terms of long1term development are at best negligible& Turning to the future% foreign aid programmes are bound to change to reflect the new realities of global international relations& Dine specific predictions are made about the future si-e and composition of aid programmes& The outloo, for those who favour aid is not bright% but recent changes in thin,ing about development suggest that more sell1reliant strategies could well be more beneficial to the poor than conventional aid1supported strategies& KNL

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Foreign aid as it is understood today has its origins in the Cold War& $t is largely a product of the ideological confrontation between the B7 and the 7oviet Bnion which dominated international politics for forty1five years between #9M< and #99"& $t began not as a programme to assist the long1term development of impoverished countries but as a programme to facilitate the short1term economic recovery of Western 3urope after the 7econd World War& The political motivation of what was called the 'arshall Plan was to prevent the spread of communism to rance and $taly 4where the communist party was strong6% to stabili-e conditions in West /ermany 4and create an attractive alternative to the socio1economic system imposed in 3ast /ermany6 and to reduce the appeal of socialist policies in the B? 4where the Aabour Party enjoyed considerable popularity6& The 'arshall Plan was followed by President Truman)s Point our programme + named after the fourth point in his inaugural address + which was a technical and economic assistance programme for /reece and Tur,ey% two poor countries bordering on the communist world and thought to be in danger& The third phase was a response to the disintegration of the old 3uropean empires and the proliferation of newly independent countries% first in Asia and later in Africa& reedom from colonial rule led to a contest for the (hearts and minds) of the people throughout what came to be called the Third World& oreign aid was one weapon in this contest% not the only weapon and seldom the most powerful one% but none the less significant a tool of Western diplomacy& # Particularly difficult problems were posed by the collapse of the Japanese 3mpire% for it was in the territories occupied by Japan prior to and during the 7econd World War that the confrontation between the irst World and the 7econd became most heated& After the liberation of China by the communists in #9M9% the anti1communist nationalistic opposition retreated to Taiwan and mounted a political and economic challenge to the mainland& The challenge was supported by large amounts of foreign aid& ?orea was divided into two countries% a communist Dorth and a capitalist 7outh% and in the early #9<"s the ?orean War was fought over the issue of reunification& 7outh ?orea won the war% than,s to massive military support from the West% and then after the war received large amounts of foreign aid& 7imilarly in Iietnam% the country was divided into a communist Dorth and a capitalist 7outh% and again a war was fought over the issue of reunification% with Dorth Iietnam ultimately winning in #95<& Throughout the war% however% 7outh Iietnam received huge amounts of military and economic assistance& $ndeed% the political purposes of foreign aid were perhaps most clearly revealed in Taiwan% 7outh ?orea and 7outh Iietnam& The early foreign aid programmes% however% were not confided to the fringes of the communist world& The Cuban Revolution of the late #9<"s e*tended the Cold War to the Western Hemisphere and posed a challenge to the long1standing hegemony of the B7 in that region& The response was multifaceted and included the diplomatic isolation of Cuba% sponsorship of a military invasion and an economic embargo& Also included in the pac,age was a foreign aid programme for the rest of Aatin America + ?ennedy)s Alliance for Progress + which attempted to use the promise of financial assistance as an incentive to governments of recipient countries to introduce policy reforms&

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Aater foreign aid programmes were not always wholly dominated by B717oviet rivalry but instead reflected narrower regional concerns% as in rench aid to rancophone Africa% British aid to Commonwealth countries and .utch aid to $ndonesia& 'oreover% although foreign aid was born out of political and ideological rivalry% it has always had an economic dimension% namely% an attempt to create a strong% e*panding% global capitalist economy& These 0ualifications are important% but they must not be allowed to obscure the primacy of politics& The origins and objectives of foreign aid cannot be understood outside the global political conte*t& oreign aid is a product of the Cold War% of the division of the globe into irst% 7econd and Third Worlds and of the hostility of the two superpowers& Were it not for the Cold War there would have been no foreign aid programmes worthy of the name% for without the Cold War it would have been impossible to generate the domestic political support in donor countries necessary to sustain foreign assistance for more than four decades& 2ther motives apart from ideological confrontation also played a role% not so much in initiating aid programmes as in sustaining them once the general principle had been accepted& .iplomatic considerations clearly were important% e&g& in mobili-ing support in the /eneral Assembly of the Bnited Dations and% in the case of rance and Britain% in retaining influence in colonial territories after they became independent& Commercial advantage soon became a prominent motiveC securing mar,ets% promoting e*ports% creating a favorable climate for private foreign investment& And of course there were genuine humanitarian motives% e&g& in 7candinavia and one or two other small donor countries& But the conflict between the two superpowers was the sine 9ua non&! .espite the stimulus of the Cold War% foreign aid may already have been running out of steam before the remar,able political developments of #9;9& This is particularly true when seen from the perspective of the recipient countries% as is apparent in Table #& 'easured in real terms% i&e& the nominal value deflated by a world e*port unit value inde*% the average annual amount of official aid from the 23C. countries doubled between #9<"1< and #9<>1>"& $n #9;" prices% the yearly flow of aid rose from B7T;&! billion in the first half of the #9<"s to B7T#>&> billion in the second half& $t increased by another <" per cent in the ne*t half decade 4#9>#1 <6 and then remained more or less constant until the #9;"s% when falling e*port prices pushed up the real value of aid& The flow of aid reached a pea, in #95!% the year before the first oil crisis% and this pea, was not regained until #9;H& 3ven these figures% une*citing as they are% may overstate changes in the real value of aid& A more appropriate deflator might be a unit value series of manufactured e*port goods% since the content of aid flows consists largely of manufactures: and the technical assistance component of aid would surely be subject to a higher deflation factor% reflecting an increase in the salary and other costs of Western advisors% teachers and technical e*perts& $n addition% account should be ta,en of servicing and debt repayment of loans from multilateral aid agencies& 'any borrowers of World Ban, non1$.A funds% for instance% are now receiving very little in net terms& Thus% when viewed properly% real flows of foreign aid to developing countries have not increased all that much since the #9>"s& The Cold War may have provided the fuel for foreign aid programmes% but the fuel was not very powerful&

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Dow that the Cold War is over% two 0uestions are raised& irst% as the ideological divisions begin to blur% as globali-ation proceeds and the three worlds blend into one% what is the outloo, for foreign aid to developing countriesW 7econd% if the end of the Cold War is to be accompanied by a significant reduction in foreign aid to poor countries% will this necessarily damage their development prospectsW We shall begin by e*amining the second 0uestion% for if foreign aid does not in fact promote development% our joy over the end of the Cold War need not be tempered by sadness over the possible demise of foreign aid&

2uess* 2eorge #6 -8;A:0* 1,he Political +conomy of (S Foreign Aid: Past and Present*4 in 2uess* 2eorge* The Politics of 6nited States 'orei!n Aid* ""6 8-78* (D and Australia: %room elm Ltd6
As the B7 struggles for influence in the world power arena% its foreign assistance program follows along as a willing and important appendage& $n a precarious conte*t% characteri-ed increasingly by desperation policy response to coups% counter1coups% terrorism and religious fanaticism% the lines between B7 foreign policy% foreign aid and trade activities become blurred& That foreign aid lac,s autonomy among American public policies is harmful in several ways to B7 interests abroad and to the needs of the developing world& irst% foreign aid may be erroneously credited for foreign policy power successes though development projects fail and underdevelopment may be increasing& 7econd% and more commonly% foreign aid is unjustly blamed for foreign policy failures& The rantings of a ?hadafy are viewed by many as another failed foreign aid attempt% the cut1off of which penali-es the Aibyan people and not their officialdom& Consistent with this% some believe that foreign aid is not critici-ed enough& EWho could be against aid to the less fortunateWF as, Bauer and Xamey 4Thompson% #9;HC ##96& EWhen aid advocates tal, of the disappointing record of aid% they mean not that aid has been ineffective or damaging but that the amounts of aid have been insufficient&F oreign aid consists of five programsC 4#6 3conomic 7upport und 437 6% 4!6 .evelopment Assistance 4.A6% 4H6 ood Aid or PA M;"% 4M6 7ecurity Assistance% and 4<6 multilateral .evelopment Ban,s& These interrelated programs have separate constituencies and are proposed for funding by bureaucratic actors that are% in turn% controlled for efficiency and effectiveness by Congress wor,ing in conjunction with

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them& But these Echec,s and balancesF have produced paralysis instead of health competition& Tas, definition is imprecise and institutional distrust among ,ey actors tend to inhibit the proper functioning of chec,s and balances& urther% that B7 foreign aid is a EmicroprogramF evaluated as a EmacropolicyF creates false e*pectation and the li,elihood of unfair judgment& 2ver the five major phases of foreign aid% the programs have been billed as dramatic macropoliciesC spreading democracy% containing communism% and getting the poor ready for developmental Eta,e offF& Tangled up with foreign policy events and the personal agendas of congressional Ee*pertsF and high1level amateur appointees in B7A$.% it can be stated without great ris, that the bul, of foreign aid programs have been largely EunsuccessfulF 4or successful in a trivial sense6& Perhaps the most successful program was also the shortest and most uncomplicatedC the 'arshall Plan& But since that program% the goals of foreign aid have broadened in almost inverse proportion to useful ,nowledge on the causes of poverty and underdevelopment& As the Efall guyF of foreign policy% the foreign aid program has been blamed by the left for neo1imperialism and by the right for generating e*aggerated e*pectations among the poor which destabili-es political systems& oreign aid is a product of the American political system% a highly bureaucrati-ed networ, of actors that clash over resources and the authority 4or turf6 to influence policy& To the e*tent that we can analy-e foreign aid through the Bureaucratic Politics lens% we may be able to point the way to a more autonomous policy that will be more li,ely to achieve realistic objectives& This boo, see,s to describe the evaluative dilemma of B7 foreign aid as part of foreign policy and to e*plain how and why the program is often ill1designed and poorly e*ecuted& The goal is constructiveC to enhance the capacity of foreign aid to benefit the Third World which indirectly can enhance B7 influence in world affairs& The ma,ing and e*ecution of foreign aid policy has been characteri-ed by intense confusion over both objectives and evaluative criteria since its initiation in the early #9M"s& oreign aid is not really EforeignF policy or a EdomesticF program: yet it is planned% e*ecuted and evaluated as if it were both& Hence% despite its marginal budgetary e*pense in B7 terms% it is nearly always a controversial policy 4'ontgomery% #9;>C 9M6 $n KsicL X #9;<% the Presidential foreign aid re0uest amounted to less than !Q of the budget 4T#<&! billion out of T9!< billion or #&>Q6& $n X #95;% B7 aid amounted to only "&!HQ of /DP or about the same level provided by Austria% Japan% 7wit-erland% or /ermany 4Congressional Budget 2ffice% #9;"C 96& Devertheless% Congressional `uarterly 4#9;<C !>;;6 suggests that foreign aid Eone of the most unpopular issues that Congress faces each year&F 'any have written of B7 foreign aid: many have written it off& But few have provided other than general framewor,s for analysis& Critics of foreign aid tend to provide the more rigorous policy1oriented framewor,s& 7till% they tend to be simplistic% ignoring the real world of interest1driven bureaucratic policy1ma,ing which constrains both the B7 and its recipient countries& $t is suggested that a Bureaucratic Politics model emphasi-ing Erole conflictF% largely over budgetary resources% can be useful in e*plaining past failures and successes as well as providing a more solid foundation for foreign aid reform&

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2uess* 2eorge #6 -8;A:0* 1(S Aid to Latin America*4 in 2uess* 2eorge* The Politics of 6nited States 'orei!n Aid* ""6 899-8>A* (D and Australia: %room elm Ltd6
$n sum% aid to Aatin America is the product of a process that rigidly e*amines the scope of the program according to criteria that favor security of EhardF solutions in crisis conte*ts& The bul, of countries are not e*amined regularly by the process as a whole in other than superficial terms& Reacting to individual country crises or events% Congress proceeds to e*pand the list of statutory re0uirements to which A$. must conform& This satisfies constituents on high1visibility issues such as 3l 7alvador and Haiti& But it tends to inhibit communication between e*ecutive policy1 ma,ers and Congress& Congress thus wea,ens its own role and diminishes the value of foreign aid by refusing to treat economic aid as the primary means to development% rather than as diplomatic leverage& $n Aatin America% the lac, of policy continuity% indicated by repeated and sudden injections of non1 developmental aid via supplemental appropriations% is largely the result of superficial conflict between rule1bound e*ecutive and a Congress which retaliates with more rules to ,eep ostensible control of foreign aid& $t cannot be said that more thorough debate of foreign aid funding to each Aatin American country by both the e*ecutive and Congress% beginning in #9MM% would have eliminated all developmental obstacles and produced functioning political democracies in #9MM% would have eliminated all developmental obstacles and produced functioning political democracies in each case& But it would have helped]

2uess* 2eorge #6 -8;A:0* 1(S Aid to Asia*4 in 2uess* 2eorge* The Politics of 6nited States 'orei!n Aid* ""6 8>;-..8* (D and Australia: %room elm Ltd6
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Realistic conflict in the Philippine aid case increased mutual consensus by B7 actors% eventually including President Regan himself% that 'arcos should fall& According to Apple 4Dew Xor, Times% ebruary !>% #9;>6 EDever before had the B7 pushed so publicly for the removal of a leader of major ally&F Though he notes that Washington eventually conspired to secretly end the regimes of Rhee in 7outh ?orea% the 7hah of $ran% .uvallier in Haiti% 7omo-a in Dicaragua% and .iem of Iietnam% the Philippine case was different because a middle class alternative e*isted 4and still does if A0uino falls6 to 'arcos& The #9;> Philippine aid case suggests that where the roles are clarified by lengthy institutional conflict% communication and trust improve which increases consensus for foreign aid policy1ma,ing& uture B7 provision of aid to the A0uino and subse0uent ilipino governments will occur in an improved EecologyF of policy1 ma,ing& B7 aid to Asia should gain in improved chances of producing more actual security and development& oreign aid economic Esuccess storiesF where political structure have not conformed to B7 Eliberal premisesF are now on notice that the B7 may well support reformist but not revolutionary alternatives& 7outh ?orean President Chun had the ?im opponents jailed for attempting to petition 7outh ?orean voters for a presidential election& Recently% after the demise of 'arcos% he had the ?ims released& The Esecond JapanF may find that the road to To,yo does not pass through 'anila 4Dew Xor, Times% ebruary !>% #9;>6& $n the Philippines% to contrast with earlier B7 aid to Iietnam% Egenuine cooperationF and Econtinuity of purposeF 4'ontgomery% #9>!C #"M6 were attained by bureaucratic role conflict& The lesson% of course% is that B7 institutions should be receptive to the same realistic debate on all recipients before crises occur& As indicated by institutional behavior in $ran and Dicaragua% the B7 ignores most crises until they are irreversible& Where no political necessity e*ists for a hard loo, before a hard choice% foreign aid institutions ma*imi-e their respective turfs% Congress votes authori-ations and appropriations on a superficial uninformed basis% and foreign aid continues its course despite evidence of major shortcomings&

2uess* 2eorge #6 -8;A:0* 1(S Aid to the #iddle +ast*4 in 2uess* 2eorge* The Politics of 6nited States 'orei!n Aid* ""6 ...-.77* (D and Australia: %room elm Ltd6
$n sum% successful technical assistance projects% food aid% balance of payment support% and trade depends not merely on the Eterms of tradeF 4bases for aid6 or

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more B7 ,nowledge and sensitivity to local cultures& The ultimate effectiveness of aid to achieve security% profitability% and development objectives in this region depends on mutual agreement and trust& This mutuality is established not by laws and regulations or obedience to B7 bureaucratic routines% but rather from intense and realistic sparring about the issues over time& or this reason% 3gyptian1B7 relations have evolved to an all1time high% and have been since ?issing17adat trust was achieved in #95M following the 7yrian1$sraeli disengagement accord 4Burns% #9;<C #;#6& Dasser and his successors have been sparring with the B7 over food aid% military aid% refugee issues and the scope and purpose of economic aid projects for over H" years& By contrast% aid to $srael has been based less on realistic conflict than its Especial relationshipF with the B7 and historical sympathy for the Jewish plight& This means that aid provides only marginal leverage and% of course% is not programmed or e*ecuted in the traditional sense by A$.& The B7 has even less1 realistic relationships with the rest of the 'iddle 3ast% in part because of its $sraeli client& This has assured that regional aid policy is the result of intense political rivalries and bureaucratic in1fighting& $ntense conflict can lead to improved role definition% trust and better results 4as in 3gypt6 or maintenance of the status 0uo 4and more $rans6&

2uess* 2eorge #6 -8;A:0* 1%onclusion*4 in 2uess* 2eorge* The Politics of 6nited States 'orei!n Aid* ""6 .7:.>.* (D and Australia: %room elm Ltd6
Introduction $n this final chapter we summari-e what has been said so far% review the major problems with foreign aid policy as revealed through the BRC KBureaucratic Role ConflictL model% and ma,e recommendations for improving both the process and results& oreign aid is planned and funded li,e most B7 domestic policies but it is uni0ue in that it has both a domestic and international component& 7ince foreign aid 4military% food% development6 is the most tangible vehicle of B7 foreign policy% it receives the most blame 4as a perennially unpopular congressional issue6 but little of the praise because its results lac, visibility and attribution& Aac,ing a political base of its own 4most of its clients are abroad: powerful domestic clients of its subproducts distort results6% foreign aid has been moved along by conflicting pressures from all directions% mostly in response to some actor)s 4.2.% 7tate% Presidency% Congress6 perception of military threats or developmental need&

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.ecisions have not generally been informed by realistic field assessments% largely because the institutions ma,ing foreign aid policy are primarily interested in other issues 4.2. + defense: Congress + domestic policy: B7.A + B7 agriculture% etc&6& oreign aid becomes an unstable byproduct of other policies& Dearly H< years ago% political theorist Ierne Aewis 4cited in Ayden and 'iller% #9;!C !>M6 was hopeful that improving the objectivity of budgetary analysis would permit decision1ma,ers to compare relative effectiveness of economic and military aid programs to the achievement of Enational securityF& $n the conte*t of intense budgetary politic,ing by all foreign aid actors% several attempts along the ErationalityF front were made& A$. introduced PPB7 in the early #95"s& The language and routines of program budgeting still permeate A$. decision1ma,ing% contributing to better understanding of input1output relationships and permitting more incisive in0uiries& At a higher level of aggregation% 7tate .epartment developed the $ntegrated oreign Aid Budget Re0uest that included the 7APWR/ process which coordinated the development of re0uests for all foreign aid programs& But 7tate .epartment sets most of the funding ceilings and program proportions in advance& Consensus and trust may have increased among foreign aid actors% but results may not have improved because communication and conflict is still unrealistic + the product of Efro-en pluralismF and immense power differentials among actors& The foreign aid budget is made% then% in true (incrementalF fashion by mi*ed role actors that joc,ey for marginal gains while EguardiansF e*amine the controversial aid issues only% and EadvocatesF rely on Presidential% .2. and Congressional support for budget authority& But% given the mi*ed role conflict% the process tends to e*clude the value of implementation efficiency and effectiveness& 7uch problems can be best resolved by structural adjustments from Congress to give B7A$. greater input and control over results& "ummar and 5onclusion rom World War $$ to the present% the cluster of programs called foreign aid have moved all over the board% emphasi-ing profitability% welfare% and security objectives at different times and places almost without pattern& 7ince the path by which aid can lead to EdevelopmentF is debatably% objective assessment of the results of foreign aid over its < evolutionary historical phases has been difficult& The first phase of B7 aid% Postwar Relief% was unusual in that a fiscally conservative Congress 4fearing gold drainage6 multilaterali-ed B7 aid funding which financed predominantly humanitarian assistance to 3urope& Aid policy was defined by Allied needs to rebuild war1torn economies on which massive political support and consensus e*isted in the B7& 2nly on contemporary defense aid to $srael has the popularity of a foreign aid issue ever pea,ed this high with Congress and the B7 public& rom #9M91#9>"% foreign aid was primarily the vehicle for establishing military alliances against the 7oviets& The twin incentives of military 4stic,6 and economic 4carrot6 aid were used to EcontainF the 7oviets along EfrontiersF established largely in the minds of several B7 presidents& /iven the palpable failure of this simplistic security approach to developing capitalist countries and building true military1trade alliances% the third phase 4#9>#15!6 stressed e*portation of B7 liberal political ideas

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via the Alliance for Progress& The ambivalent application of liberal principles where revolutionary changes actually occurred resulted in return to more traditional uses of aid as a cold war leverage instrument& By #95H% the Alliance and prior cold war aid had been lumped together as the traditional model + top down% capital intensive% with benefits Etric,ling downF to the poor& The #95H Dew .irections effort of the M th phase stressed Ebottom upF development via aid programmed to the poor in smaller projects% e*ecuted often beyond the reach of large donor or recipient bureaucracies in PI2s& /iven the fact that crisis1driven foreign policies governed the overall uses of foreign aid 4evident in 7tate .epartment budgetary ceilings6 in both traditional and Dew .irections periods% the comparative results of specific aid e*penditures have been difficult to isolate and attribute to aid policies& The contemporary Reagan era rhetorically stresses the private sector and PI2s% and views government as a constraint on economic development 4capitalist6 in the Third World& $n practice% aid is still programmed by crisis to countries and regions& Though 37 and 'AP e*penditures remain large% .A projects seem to be decreasing in si-e and focusing more on the profitability and entrepreneurship of both private and public sectors than before& Though profound disagreement e*ists on the results of even a single aid project% it was suggested that general results could be lumped into three categoriesC 4#6 recipient dependency% 4!6 technocratic and comple* products transferred and 4H6 multiple une*pected conse0uences& 2ccasionally aid has not produced recipient dependency but rather% interdependence: nor comple*ity but rather% appropriate scale Euser friendlyF projects% and fewer unintended or une*pected results& 2n the other hand% dependency% comple*ity and une*pected results have occasionally been positive and led to growth and development] A major purpose of this boo, was to e*plain some of these field differences by stressing B7 policy1ma,ing as the major determinant& $n /uatemala% for instance% B7 military aid reinforced B7 ties to unelected military regimes which depended largely on military aid for their legitimacy and continued e*istence& urther% despite enormous amounts of .A to Dicaragua% an unintended conse0uence was that the landless rural labor force was #""Q higher in #955 than in #9<"& The red tape and comple*ity of B7 aid% re0uiring full recipient understanding of the B7 budget process% often produces capital intensive glamor KsicL projects that fragment the local bureaucracies into state enterprises and autonomous institutions& This creates a public sector coordination problem for recipients as B71financed projects push ahead in isolated sectors& Devertheless% aid to Costa Rica% Bra-il and Colombia produced many more successes and fewer instances of dependency% comple*ity or unintended conse0uences& Aid to Haiti even produced the leverage that led to .uvalier)s demise] $n Asia% aid produced dependency and little leverage in Iietnam& But aid to Taiwan and 7outh ?orea was 0uite successful in contributing to economic growth& Aid to the Philippines contributed to 'arcos) downfall as well& $n the 'iddle 3ast% B7 aid often Edelegitimi-edF regimes in $ndia% 3gypt% and Tur,ey% ma,ing it hard for them to govern& The B7 sought dramatic and comple* projects li,e the Aswan High dam% and through aid% sought to spread the effects of B71$sraeli interdependence around other states li,e 7audi Arabia% Jordan% and 3gypt with success in the latter case only& B7 food aid provided leverage and nutritional well1being in 3gypt and encouraged 3gyptian concessions to $srael% contributing to the peace necessary for foreign aid to achieve any ,ind of success&

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The BRC model 4 igure H&#6 was proffered as a conceptual vehicle by which more precise e*planations of these aid results might be advanced& The model suggests that certain goal combinations drive aid in contradictory directions& Aid programs are translated into policy by 4#6 legislative and bureaucratic rules and repertoires which constrain action% and 4!6 role conflict among institutional actors of widespread differences in power& The efficacy of security% profitability% or developmental aid goals depends upon the utility of the operational rules and the degree of rival trust that e*ists between actors& Bnfortunately% the rules have been accumulated according to specific congressional concerns over time 4human rights% A$PAC interests6% contributing to an almost permanent power imbalance where the level of distrust among actors is higher than ever 4B7 versus Aatin America on trade protection and debt repayment: Congress versus President over /1R1H: authori-ations versus appropriations committees where the latter now ma,es legislation: and Congressional earmar,s versus B7A$. needs on the use of aid funds6& oreign aid actor conflict over these ,inds of issues can evolve into realistic conflict and rival trust% with more positive aid results& Conflict tends to be incremental% which is useful in avoiding big errors and assuring continued communication% but costly in e*cluding ,ey values such as implementation& Where properly managed for long1term political considerations% aid can facilitate rival trust and contribute to development& Though more precise research is needed on the interaction of these variables in comparative project perspective% application of the BRC perspective to Aatin American% Asian and 'iddle 3astern instances suggested general verification of the variables and provided a broad e*planation of differences between success and failure& Based on the BRC model% conclusions can be reached and recommendations proffered for 4#6 achieving better aid results% 4!6 clarifying goals appropriate to differing country problems% 4H6 modifying internal and e*ternal operating rules% and 4M6 improving the relationship between institutional actors and policy results& or e*ample% from the regional aid reviews several propositions can be formulated on the results of economic and military aid& irst% we have seen that military aid can be a two1edged sword% increasing or decreasing B7 leverage and recipient regime legitimacy& Pouring military aid into personalistic and authoritarian regimes such as Haiti and the Philippines for vague and doctrinaire security objectives% will provide carte blanche for misappropriation of funds with much greater political than financial 4unprofitability6 costs to the B7& Though increasing military aid to a greater percentage of the local budget% and to the mythical EcenterF of the military should bring leverage% where consensus between B7 actors and recipient politicalGeconomic objectives is initially lac,ing or unclear% the aid becomes a Esun, costF% useful to the recipient and regime critics as a counter1control device against B7 pressures& or instance% decades of military aid to 7omo-a for stability purposes% ignored the need to develop effective opposition to his regime& ailure to direct aid beyond the ruling family or junta creates a political vacuum that is always filled by e*tremists of the left andGor right& urther% EaidF to .uvalier increased his repressive capability& Though many of the .A projects were e*tremely successful by narrow technical criteria% the aid lesson from Haiti is that authoritarian regimes negate these successes& $n Haiti% no amount of successful .A projects could compensate for the terror and overt corruption of

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the regime which locals perceived correctly to be B71financed& Here% the B7 paid twice for Haitian aid + once for .A projects% then for political refugees in 'iami] Conversely% military aid for specific purposes% such as stabili-ing a coalition% on which the recipients can at least agree to disagree clearly and rationally% can stabili-e a political system and prevent e*tremist sniping and blac,mail at centrist programs& A lesson of aid to 3l 7alvador seems to be that properly targeted and monitored% military aid can be effective in achieving EsoftF objectives% despite decades of civil war& Additionally% despite accounting norms% net political results can be positive even if gross aid e*ceeds local financial and institutional absorptive capacity and produces waste and more corruption& The ,ey seems to be prior mutual consensus among B7 actors% and between the B7 and recipient on goals and implementation& 7econd% results can be improved by redefining the role of foreign aid in the foreign policy process& Though total foreign aid amounts to less than !Q of the annual B7 federal budget% its conse0uences are far greater for B7 Enational securityF and global trade objectives& $f a few billion dollars in PA M;" and 37 aid to 3gypt and $srael can contribute to holding the 'iddle 3ast together% this ,eeps the oil flowing and prevents inflation% unemployment and political unrest in the B7 as well& However% aid policy1ma,ing inputs are distorted and tend to interfere with its real responsibilities around the world& While the congressional foreign aid authori-ation process may be enhanced by new leadership% e&g& ascell and Augar on the respective committees% other congressional oddities such as /1R1H remove policy1 ma,ing power from Congress and shift more of it to the President where foreign policy power already e*isted& This increases the disjointed tendency of the foreign aid program to move ahead according to the politics of supplemental appropriations% earmar,s and continuing resolutions% all of which de1emphasi-e debate and analysis& These practices inhibit the development of rival trust among the relevant B7 institutions which could improve foreign aid results& 7uch newsworthy issues as EaidF to the Contras absorb hours of debate% despite the fact this had little to do with foreign aid& Rather% it is an issue of war powers% with management and funding by .2. and C$A% distribution only by B7A$.& Devertheless% the public confuses Reagan hyperbole on aid to the Contras 4li,e the rench resistance: conflict only ! days drive from Te*as border% etc&6 with foreign aid generally& The foreign aid process should be able to defend itself against being used for such transparent purposes& B7 aid was discredited for a time by the 'itrione affair in Bruguay in the late #9>"s% where a C$A operative used B7A$. cover& The foreign aid policy process should be able to debate the issue s0uarely before funding and responsibility follow& Where were the Efreedom1lovingF Contras during 7omo-a)s reignW How did these e*iles% many of whom were officers in 7omo-a)s Dational /uard% support the Chamorro opposition thenW 7ince they were clearly co1opted and did nothing to aid freedom then% why support them now in the cause of creating yet another regime in DicaraguaW 7uch issues need to be debated by foreign aid actors if funds are to be termed EaidF& 2therwise% the support should be classified as .efense or oreign policy% not foreign aid& Thus% aid results could be improved by its formal dissociation from foreignGdefense policy& Third% aid results can be enhanced by increased emphasis on implementation of projects& 7ince projects are often learning e*periences in themselves with many une*pected conse0uences% it would be more useful if A$. were directly responsible for both programming and e*ecution& Currently% the ,nowledge that private

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contractors implement aid with only periodic official oversight tends to wea,en A$. incentives to develop innovative project implementation approaches based on lessons learned& While much has been written on this% little finds its way into institutional routines and repertoires& or e*ample% roles might be reversed with private contractors overseeing and evaluating A$. project implementation& A$. would gain corporate memory and e*perience: contractors could tear into A$. activities with a vengeance that would ultimately enhance results& Both parties would have every incentive to perform: greater trust and a better wor,ing relationship would result& The field results of B7 aid are a product of goals translated by institutional rules and roles& The predominant goal of the foreign aid program has been security% and this definition is largely the product of inordinate .2.% Armed 7ervice Committee and 7tate influence over the scope of the program& .A has its advocates in the processC B7A$. and multilateral agencies% such as 2A7 and World Ban,& 3arly postwar B7 aid to 3urope was both developmental and multilateral& $n a stable world% unsullied by petty tyrants and terrorists% total .A emphasis would be appropriate& The B7 could provide capital grants and technical assistance for projects similar to the B7 2ffice of 3conomic 2pportunity 42326% 3conomic .evelopment Administration 43.A6% and urban redevelopment& 7ecurity problems% of course% have had little to do with the success or failure of federal poverty and development programs% other than where a housing project is overrun with crime& But in the Third World% projects are not implemented in a stable federal system where roles are relatively clear and conflict eventually leads to rival trust 4or program termination before it occurs6& Aid projects in 3l 7alvador% for e*ample% must also contend with left 4 'AD6 and right 4AR3DA6 e*tremists who fear loss of support from successful B7 aid projects& The Eoutside agitatorF premise on communist infiltration is obviously e*aggerated and produces an almost total concern with 3ast1West issues when the substantive issues are local 4Tur,ey versus /reece over Cyprus6& Devertheless% outside agitators seem to ma,e unscheduled appearances to fill B71 created political vacuums in places li,e Dicaragua& Hence% the solution to what become regional security problems% after years of neglect and indifference to developmental issues% has to be something more than disbursement of more .A funds& While this dilemma should not lead to support of additional outside agitators% such as aid to roving bands of e*iles from the last coup% security assistance to the military EcentersF of neighboring countries to build up political centers as in 3l 7alvador% cannot be resonably KsicL opposed& 3ven more important than the appropriate mi* of development1security goals behind aid is the degree of prior mutual consensus between recipient and B7 aid planners& Where the recipient agrees on the purposes of aid% improved results usually follow 4Taiwan% 7outh ?orea% 3gypt and Bra-il6& Whatever form the aid ta,es 437 % PA M;"% '7C% 'AP or .A6% success depends less on the right mi*ture of aid subprograms than on mutual agreement on how the funds should be spent properly& What this suggests is that even abstract EliberalF premises of aid may be appropriate if both recipient and B7 agree to their translation into programs meeting local needs& Aid to Costa Rica% Iene-uela% Colombia for EliberalF political purposes such as electoral democracy wor,ed reasonably well because both parties to the transaction agreed% i&e& aid was not perceived to be a mere 0uid pro 0uo for B7 leverage&

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$n theory the% all aid need not be either .A or military aid to achieve success& 2n the other hand% under current usage of the term% EaidF means all things to all people + it builds clinics% supports Contras% trains teachers% mines ports% and provides arms to petty tyrants& To improve such issue analysis and program mar,etability to the B7 public% foreign aid should be divided into clearer responsibility centers& B7A$. should be responsible for PA M;"1 and .A aid& .2. should be responsible% i&e& pay for% all military aid& 37 funds fall in the gray areas between the two& A$. manages them with 7tate guidance% and many are spent for defense1related purposes& Hence% it may be more appropriate to draw 37 funds from the .2. budget and let A$. manage them for agreed upon purposes& This would leverage e*ecutive policy1ma,ing control away from .2.1C$A12'B technocrats and 7tate senior staffers& With greater authority to influence development of the $ntegrated Re0uest each year% those in A$. who wor, daily on both foreign aid and its political implications would have more voice in policy1 ma,ing& This additional authority would remove some of the incentive to institutionali-e criticism that detracts from program implementation& As noted% A$. receives most of the responsibility and criticism for the total foreign aid program with little effective authority to control its scope or direction& or the late #9;"s% the goals of B7 foreign aid are li,ely to remain the same e*cept that the notion of EprofitabilityF will lead to even greater une*pected political results& $ncreasing evidence that rightist authoritarian regimes have neither more rational economic policies nor greater in B71style political democracy have led to the logistical 0uestionC or what was all the B7 aid used thenW $n Haiti and the Philippines the answer is clearlyC personal profit for the ruling ,leptocracy and oppression of legitimate opposition to the regime& That such uses of foreign aid are both financially and politically unprofitable for the B7 is evident now to even the Reagan Administration& 2ther Republican leaders such as Bndersecretary of Treasury for $nternational Affairs .avid 'ulford% have recently opposed loans to Chile on human rights grounds& The point is that viewed by ,ey policy actors as a high ris, political and financial proposition% aid can achieve liberal developmental ends& To this end% more policy analysis and issue debate is re0uired to avoid incrementally recycling the mista,es of the past& 2ne can e*pect to see increased emphasis in time% resources% and media interest in foreign aid authori-ations and appropriations which can only benefit future aid results& 3ven if initial mutual agreement could be reached between B7 and recipients on the scope% purpose and pace of aid% the current rules by which foreign aid is planned and implemented would continue to constrain effective action& We have seen that e*ternally% foreign aid must deal with /1R1H Eoutlay savingsF -eal and that this penali-es early year% rapid paced outlays li,e military aid or capital projects& To subject an already confused program% promulgated annually from the conflicting pressures of institutional actors with entirely different objectives and grasps on reality% to arbitrary across1the1board cuts for the EabstractF objective of a balanced budget is both inefficient% and nabve& or% in the long run% such EsavingsF are li,ely to contribute to greater deficits as re0uired military e*penditures increase in world trouble spots to put out fires that earlier aid might have remedied by providing leverage and construction of stable political centers& A lesson of 3l 7alvador is that even under te*tboo, conditions% building the center is a costly and long1term commitment&

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7imilarly% Congress tries to ma,e foreign aid policy via continuing resolutions% earmar,s% supplemental% conditions and prohibitions on e*ecutive re0uests& The e*ecutive responds by Ecounter1controlF techni0ues such as reprogramming% transfer% deferral and rescission to ma,e ends meet and preserve managerial fle*ibility& Though the e*ecutive usually EwinsF such bureaucratic wars% they waste time and resources that could be spent on effective implementation& These ,inds of EwargamesF% made even more deadly by resource cutbac,s li,ely to results from /1 R1H% also diminish time available for debate on regions and countries that do not have current EhotspotF status& 3armar,s and other constraints are e*pressions of congressional distrust of the President% learned from such historical crises as Iietnam: transfers and deferrals are e*pressions of e*ecutive distrust for a Congress perceived to be sluggish and ill1 informed on international issues& This tension cannot lead to healthier debate and better policy results until adversary roles and responsibilities are clarified& The arbitrary interventions by Congress then encourage A$. to create a defensive superstructure of rules& 7uch rules stress elaborate programming over innovative implementation and this damages foreign aid results& However% stronger leadership on the authori-ing committees and appropriations subcommittees is already enhancing the role of congressional guardianship in foreign aid& Deeded is a more objective standard for aid disbursement than the political visissitudes of the moment& or e*ample% the appropriations process could be strengthened by use of agreed upon guidelines or a EformulaF for disbursement of aid& 7imon 4Washington Post% June #M% #95<6 argues that foreign aid is disbursed largely on Ewhim or casual conversations of a 7ecretary of 7tate with a foreign aid official&F He suggests that Eno other government program provides as unrestrained an opportunity for e*ecutive e*penditure as does our foreign economic aid&F Bse of a Eneeds basedF formula that also stresses Erestraint on military spendingF and Erespect for civil libertiesF% however% might increase congressional propensity to earmar,& But it could also provide a mutual focus for bureaucratic rivals% reducing fragmentation and distrust& The rules of the game for recipient side have also been discussed briefly& 37 aid% for e*ample% is deposited in recipient central ban,s for withdrawal according to agree1upon purposes& Bsually% as in the case of 'arcos officials using aid funds for his re1election campaign% there is no specific mutual agreement% especially where base rights are the 0uid pro 0uo& Hence% cronies of the regime can spend millions in B7 funds for personal preferences 4often consumer and military goods6 and the B7 usually does not dramatically intercede from fear of neo1imperialist bac,lash& $n the case of Taiwan% B7 foreign aid was placed in a separate e*trabudgetary recipient)s fund& $n contrast with A$. policy in many countries where B7 dollar aid or aid1generated local currency becomes part of the governmental budget% aid to Taiwan was administered outside the budget by semi1autonomous institutions& .uring the #9<#1>< period% Chiang ?ai1she, wanted to increase military e*penditures to recover 'ainland China from the Communists 4a personal agenda6& Through the e*trabudgetary fund mechanism% the B7 was successful in both ,eeping the lid on Taiwanese military e*penditures and preventing fungibility of funds for development purposes 4Jacoby% #9>>C !!#1!!!6& This mechanism prevented substitution of military funds demanded by the powerful military establishments for its EdevelopmentF priorities& The ,ey to effectiveness of B7 aid

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to Taiwan was also the high degree of competence and personal continuity of local oversight institutions + the Council on $nternational 3conomic Cooperation and .evelopment% and the Joint Commission on Rural Reconstruction 4#9>>C <96& Where large amounts of B7 aid ta* the absorptive capacities of small regimes often besieged by a variety of opponents% opportunities for fund diversion are enormous& 7ince this costs the B7 leverage as well as out of poc,et sums% both A$. and Congress should ensure that aid is not disbursed beforeC 4#6 mutual agreement on its uses 4meaning more recipient input into project shape and on the participation of B7 contractors6 and 4!6 agreement on e*trabudgetary funds and oversight commissions are reached& The most serious constraint and the greatest opportunity for improving foreign aid results lies in role redefinition and clarification& Currently% foreign aid policy is formulated by a host of bureaucratic spenders with different primary missions and different sets of assumptions& Though such diversity can be good% differences in institutional power prevent translation of differing premises into a coherent policy product& /uardians such as Congress act significantly during crises but do not e*ercise consistent programmatic oversight& Congressional foreign aid policy1 ma,ing thus lac,s coherence& 2perating in piecemeal fashion% this permits the most powerful actors in the e*ecutive branch to e*ercise primary control& A$. has the least influence on practically every issue% meaning that despite A$.)s elaborate programming and the apparent consensus generated recently by the 7APWR/ process for an $ntegrated Re0uest% final policy is still a product of power politics between .2.1Armed 7ervices Committees1contractor lobbies and softer perspectives e*ercised by wea,er actors such as A$. and 7tate& Agency positions on aid cannot always be predicted& But A$.)s influence is marginal% limited often to siding with the agency li,ely to carry the day in order to reduce e*ternal criticism and ensure future funding 4continuing resolutions6& 7hifting patterns of dominance between the e*ecutive generally and Congress on particular issues leads to many une*pected conse0uences and the establishment of rigid ties with client regimes that can produce trouble later& KNL

2ulhati* !a$i and )allari* !aH -8;AA0* 1!eform of Foreign Aid Policies: ,he Issue of Inter%ountry Allocation in Africa*4 in World &evelopment* 5ol6 8:* )o6 8/* ""6 88:>-88A<6

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The aim of this paper is to assess the inter1country allocation of foreign aid by selected donors to $; recipients in 3astern and 7outhern Africa 437A6& The five country cases discussed in this paper% show that the aid environment has not been supportive of recipients reform efforts during the #9;"s& A comparison is made between $nternational .evelopment Agency 4$.A6 allocation and other donors& Cross1section and time1series regressions demonstrate a variety of considerations influencing bilateral aid& Aastly% in discussing present aid policies and coordination efforts% three options arc analy-ed with respect to future aid policies& $t is suggested that new initiatives by $.A in its allocation criteria and aid coordination efforts can yield some progress&

al"ern* )ina P6 -8;;90* 1%reating Socialist +conomies: Stalinist Political +conomy and the Im"act of Ideas*4 in 2oldstein* ?udith and Deohane* !obert /6 -eds60* Ideas and 'orei!n Policy# +eliefs$ Institutions$ and Political *han!e* ""6 A>-88/* Ithaca* )6M6: %ornell (ni$ersity Press6
As the cases of China and Xugoslavia clearly indicate% 7talin)s ideas e*ercised an independent power to influence the policy choices and institutions of other countries by offering persuasive answers to the most compelling 0uestions they facedC What did socialism meanW How should a social economy be developedW How could the ma,ing and implementation of policy be coordinatedW These 0uestions could be answered in a variety of ways% but 7talinism represented a uni0ue set of ideas that had already been formulated and moreover was associated with success& $t is hardly surprising that neither 'ao nor Tito seems to have contemplated any alternative notion of socialism% at least until Tito found himself forced to do so& The implication of these two cases is that because the other 3ast 3uropean countries faced the same needs and pressures as China and Xugoslavia% they would have been li,ely to adopt 7talinist ideas even if 7talin had granted them a much greater degree of independence than he did&

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The Chinese case suggests that ideas that are accepted as correct need not necessarily e*ert their influence immediatelyC they must first seem relevant to the situation in which one finds oneself& The Chinese initially did not believe that the conditions necessary for socialism e*isted in their country% so their attention first centered on creating those conditions& But because they had accepted a particular idea of socialism% pressures soon built to put it into practice& Primary among those pressures was the need for coordinationC they needed an acceptable% agreed1upon guide to policy and its implementation& This need% as well as enhanced control over society and economy% produced a more rapid adoption of 7talinist political economy than China)s leader had anticipated& And once the 7talinist model was fully institutionali-ed within the body of the economics discipline and the political infrastructure% it proved remar,ably resilient& $t continues to shape Chinese policy to this day& The Xugoslav case demonstrates that although ideas can sometimes be hoo,s% or justifications for policies adopted for reasons of interest% they can also be pursued even when they go against the national interest& Xugoslavia)s relations with the B77R would certainly have been smoother if Tito had been willing% li,e other 3astern 3uropean leaders% to tailor his policies to 7talin)s wishes instead of his theories& The idea of moving toward socialism and acceptance of 7talin)s definition of socialism motivated him far more than 7talin)s policy pronouncements& The Xugoslav case also demonstrates that ideas do not necessarily prevail against all counterincentives: faced with a fairly desperate situation% Xugoslavia eventually rela*ed its hold on 7talinism& acing the same needs for legitimation% information and coordination as the other socialist states% Xugoslavia was forced to embar, upon the difficult and costly path of defining its own version of socialism& The overall conclusion to be drawn from these cases is that% particularly after a revolution% countries sei-e on pree*isting ideas to guide them through times of uncertainty and to allow them to legitimate and coordinate their actions& This solution can often produce a more slavish imitation of another country)s e*perience than might seem merited on ground of pure efficiency& And once the practices and doctrines ta,en from abroad have been institutionali-ed% they may have very long1 lasting effects& .ecades from now the countries of 3astern 3urope may marvel at their willingness in this current period of revolution to adopt so wholeheartedly the ideas and institutions of Western capitalism& But at this time their need for ideas is no less urgent than it was after their socialist revolutions& And the ideas they adopt are li,ely to have e0ually long1lasting effects& 2ne can only hope that fifty years from now their current choices will appear more fortunate than those they made nearly fifty years ago&

ansen* enriB and ,ar"* Finn -.///0* 1Aid +ffecti$eness Dis"uted*4 in Journal of
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International &evelopment* 5ol6 8.* )o6 9* ""6 9>7=9;A6

What can we conclude from this survey of cross1country literature on a long and contentious debate on the macroeconomic effectiveness of foreign aidW 2ther literature surveys hold% in the words of the &conomist 4!> June% #9996% that (countless studies have failed to find a lin, between aid and faster growth)& We have surveyed three generations of empirical wor,C early Harrod1.omar models% reduced form aid1growth models% and new1growth1theory reduced1form models& We find a consistent pattern of results& Aid increases aggregate savings: aid increases investment: and there is a positive relationship between aid and growth in reduced form models& The positive aid1growth lin, is a robust result from all three generations of wor,& As a corollary% using perceived ineffectiveness of aid as an argument against cross1country regressions at large is not substantiated& $mportant information is embedded in the similarities among countries% and cross1country wor, does provide clues to how aid interacts with savings% investment% and growth& The obvious 0uestion is why do other surveys find that the aid1savings evidence is mi*ed and that the evidence in favour of a positive aid1growth lin, is wea, + or non1 e*istentW A few highly influential studies in each generation of wor, have argued the negative& There has been a tendency for negative studies to dominate the debate& 2ur survey covers #H# first1 and second1generation regressions and compares them with third1generation wor, in a common analytical framewor,& We find that in each generation of studies those arguing the negative are clearly in the minority& When all the studies are considered as a group% the positive evidence is convincing& The micro1 macro parado* is non<e'istent& 'icroeconomic studies indicating that aid is beneficial are consistent with the macroeconomic evidence& Third1generation wor, goes beyond earlier empirical studies to address the necessary conditions for 4increased6 aid effectiveness& Burnside and .ollar 4#9956 offer a solution to what has so far appeared as a /ordian ,not% i&e& the percei!ed ineffectiveness of aid at the macro level& They argue that aid is effective% but only in a good policy environment& This intriguing result + which is broadly in line with the (Washington consensus) view of development + is appealing to many& $t suggests how donors and aid recipients can learn from mista,es in the past and improve aid effectiveness in the future in a straightforward manner& Devertheless% the basic Burnside1.ollar result turns out to be sensitive to data and model specification& The significance of the crucial aid1policy interaction term depends on five observations 4an e*tension of the sample by about ! per cent6& $n addition% Burnside and .ollar depart from the other three third1generation studies in that they do not report any regressions with s0uared aid terms in their estimations& They only include the aid1policy interaction term to capture polynomial effects in the aid1growth relationship& This is in contrast with the by now common result in empirical growth modeling% where s0uared terms appear as the rule rather than the e*ception& This issue of specification is critical& The aid s0uared term is statistically significant and robust% while the same cannot be said about the aid1policy interactions term&

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What general policy lessons can be drawn from this e*tensive literature& The &conomist 4#9996 arguesC Rich countries should be much more ruthless about how they allocate their largesse% whether earmar,ed or not& 3mergency relief is one thing& But mainstream aid should be directed onl to countries with sound economic management 4emphasis added6& While the e*treme view that aid only wor,s in an environment of sound policy appears wrong% there is evidence that economic policies have an impact on the marginal productivity of aid& Xet% the world is heterogenous and noisy% and it may well be that many of those countries where aid wor,s the best are% at the same time% among those that need foreign aid the least& $n contrast% countries that are less fortunate in having good policies in place% may need help badly to help bring them on trac,& They may need different forms of aid% but such real1world dilemmas remain unresolved& 7ingle1cause e*planations and mechanistic aid allocation rules are neither robust nor useful guides to policy ma,ers& The third1generation wor, recogni-es that development is a comple* process with interactions between economic and non1economic variables& The past decade has seen enormous changes in the world economic environment and the economic systems in place in many countries& Bsing past performance as an indicator of future performance is especially dubious in this environment% given the e*isting limited understanding of the interplay between aid% macroeconomic policy% and political economy variables& $n sum% the unresolved issue in assessing aid effectiveness is not whether aid wor,s% but how and whether we can ma,e the different ,inds of aid instruments at hand wor, better in varying country circumstances&

ansen* enriB and Finn* ,ar" -.//80* 1Aid and 2roCth !egressions*4 in Journal of &evelopment Economics* 5ol6 :<* ""6 7<>=>/6
Aid effectiveness is li,ely to remain a contentious area of debate& 7ubstantial resources are involved% and the widespread perception that aid has been ineffective in fostering growth at the macro level has led to aid fatigue in many donor countries& $n this paper% we have investigated what modern cross1country growth regressions can tell about the effect of aid on aggregate growth& We find that aid increases the growth rate% and this conclusion is not conditional on the policy inde* established by Burnside and .ollar 4!"""6&

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Bsing a fairly standard growth model capturing non1linear effects between aid and growth% the empirical specification% with most support by data% does not include an aid+policy interaction term& We therefore believe to have substantiated that it is premature to rely on policy inde*es% such as the one proposed by Burnside+.ollar% in the allocation of aid& We also note that empirical conclusions about aid effectiveness% based on cross1 country growth regressions% depend on poorly understood non1linearities and critical methodological choices& As such% lac, of robustness should not come as a surprise& 2n this bac,ground% it might be tempting to discard cross1country growth regressions altogether& Xet% some regularities do seem to e*ist across countries& The focus in this paper has been on whether there is regularity in the impact of aid across countries& This seems to be the case& The diversity of developing countries in their natural endowments and cultural and socioeconomic characteristics is another recurrent theme in cross1country comparisons of aid effectiveness& $n this paper% the effect hereof on the growth impact of aid is captured through the introduction of country specific effects in the regressions& 'oreover% aid allocation issues are ta,en into account by inclusion of aid as an endogenous regressor& $t emerges that these two factors have strong implications for the empirical results& inally% we reconfirm the empirical support for the hypothesis that aid impacts on growth via investment& This effect is shown to be potent% while an alleged negative effect on total factor productivity has only wea, support in the data& The above observations underline that better theoretical e*planations about the aid+ investment+growth processes are re0uired before we can derive satisfactory empirical specifications and formulate useful testable hypotheses&

arris* Stuart -8;A.0* 1Australia@s Interests in ,hird &orld De$elo"ment: ,he Pers"ecti$e of A !esource +K"orter*4 in %assen* !obert* ?olly* !ichard* SeCell* ?ohn* and &ood* !obert -eds60 Rich *ountry Interests and Third
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World &evelopment* ""6 87:8A8* London: %room elm6

Historically% Australia has seen itself threatened by developing countries and has sought the protection of developed countries& $ts cultural lin,s tie Australia to developed countries while its affluence% its advanced economic institutions and its technological base are developed country characteristics& 'oreover% despite its similarity of interests with the Third World on some issues% on others% and as a rich nation% its interests often compete or conflict with those of developing countries& Australia tends to see itself as of the West% even if + no doubt li,e others + with a difference& Xet it has had increasingly to ta,e Third World development more seriously& Policy attitudes probably remain predominantly orthodo* but% from recent public debate% increasingly enlightened& The Harries report% reinforced more strongly by the 7enate report% argued that Australia should distinguish between the interests of the West% which it should support and those of particular members of the West% which it normally should not& Both argued for compromise% for co1operative approaches to Third World views and for ways to satisfy the practical possibilities underlying Third World objectives& This is an improvement on Australia)s previous fre0uent uncritical acceptance of Western attitudes% often leading in rejecting Third World proposals without offering constructive alternatives& Xet% although Australia)s stated political attitudes may now be constructive% responses in practice on economic issues remain unhelpful& Although Australia)s economic and political relations are now more interlin,ed% Australia has a much smaller strategic role as counterweight to the great powers and is increasingly judged in the region by its contribution to the trade and development efforts of Third World countries% even if outside Asia its political attitudes are more important& Xet its renewed interests in Third World development evidenced in policy statements have not reflected themselves in economic terms& 7upport from the Common und was already in place% but aid has not increased& 7ome downwards pressure on industrial tariffs may ultimately eventuate but decisions made in #9;" were discouraging& re0uent entreaties for outward1loo,ing Third World policies have not been paralleled in Australia)s policies nor% with the deterioration in the post1war international co1operative system% and the West)s inward1loo,ing attitudes% do the chances of outward1loo,ing approaches globally seem high& 'oreover% outward1 loo,ing policies alone are insufficient for the Third World& There are disadvantages as well as advantages for developing countries in their lin,s with developed countries: these disadvantages may have to be reduced before positive gains are recogni-ed by developing countries& Arguments for an outward approach which start by largely denying any disadvantages are unli,ely to achieve that& or various reasons% Australia)s position warrants a constructive% moderately reformist% approach less aligned than currently% with the West which% while improving world productive efficiency% would ma,e some concessions to income and power distribution ine0ualities of the Third World& H> irst% the Third World)s case against the e*isting international system has some substance& 7econdly% reduced

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protection would benefit Australia directly and% by international e*ample% indirectly& Thirdly% Australia benefits from accepted rules for international relationships% which developing country support would reinforce& ourthly% it cannot avoid close relations with Third World countries& inally% rational accommodation with the Third World will improve world stability& $f power is shifting to developing countries% orderly negotiated changes might be desirable: even if Third World countries fail to achieve greater power% Australia could be vulnerable in that failure% with its resource abundance% its geography and its immigration and racial policies& The Harries report argues that Australia should support measures mutually beneficial to developed and developing countries ali,e& The debate% however% is largely about what policies benefit mutually the Third World and the West& $f% li,e the Harries report% few imperfections are ac,nowledged in the e*isting system% few changes are mutually beneficial: unsurprisingly% mutuality arguments favor the status 9uo in such circumstances& This is even more so if each issue is decided on its merits as the Harries report proposed for economic issuesC long1term national interests + which the 7enate report emphasi-ed may have to be pursued at the e*pense of short1run interests + will then normally be ignored& 'ost importantly% whether or not there are mutual benefits is ultimately decided by the West& The mutuality argument therefore either simply reaffirms the West)s power or it lac,s policy value since it begs all the important 0uestions& 3ven then% limited moves by Australia in supporting its interest Third World development such as support for the Common und% stimulated surprise and scepticism among Western spo,esmen& $f the West continues to assume that Australia)s interests in Third World development are identical to its own a constructive approach by Australia to the Third World could involve some cost in terms of Western relationships& Australia has therefore a long way to go in clarifying its interests in Third World development& $t is a major step that the debate has at least started&

attori* ,omohisa -.//90* 1,he #oral Politics of Foreign Aid*4 in Review of International Studies* 5ol6 .;* ""6 ..;-.<>6
To briefly summarise this in0uiry into the moral dimension of foreign aid% this article has identified the donations of states to multilateral grant1giving organi-ations as the ethical core of a larger institutionalisation of foreign aid in the postwar era as a collective endeavour of the former colonising states& What in a bilateral face1to1 face relation merely signals and euphemises the material hierarchies of the postwar world is transformed in this process into a virtuous practice% ethically justified as contributing to the peace and prosperity of the community of states& This article has

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further argued that the ,ey organisation behind this institutionali-ation process is not the multilateral grant1giving agencies but the .evelopment Assistance Committee of the 23C.& By setting the standards% monitoring% evaluating% and ran,ing the aid programmes of member states% the .AC has assumed the new role of (moral boo,,eeper)% authenticating and encouraging foreign aid as a virtuous practice& inally% this article has argued that such ethical discourses and forms of public scrutiny and praise have indeed created an incentive% if not to increase% then to conform the practice of foreign aid to more beneficent standards& $t is this institutionalisation process% in short% that constitutes the empirical substance behind President Truman)s original claim that foreign aid is a moral practice% embodying moral vision and intent& There are two implications of this specification of the empirical substance behind the ethical claims for foreign aid& irst% it e*tends the metatheoretical insight of Ale*ander Wendt that states are ontologically real by demonstrating that they are also capable of ethical justification& The ethical discourses and forms of public scrutiny and praise described in this article not only attribute virtue to states but have real effectsC they have encouraged a collective practice where none would have e*isted: and they have disciplined e*isting bilateral practices to higher ethical standards&>< The institutionalisation of foreign aid in the postwar era constitutes% in short% an empirically significant moral dimension of interstate relations& The second implication is that these particular ethical discourses and practices are fostering a very old pattern of moral distinction across material linesC they are helping to legitimise the dominant role that donor states have assumed in the postwar world as an ethically justified desert% over and above the imperatives of power politics or mar,et forces& Ai,e the ci!ic virtue identified with the practice of foreign aid above% this larger process can also be identified with Aristotle% only in this case% not his virtue et#ics but his politics& A closer reading of Aristotle suggests% in fact% that he compromised his ethics of giving in service of his larger political ideal of civic republicanism% or the rule of the virtuous few over the mass& >> Although Aristotle)s encouragement of giving e*tended to all citi-ens% he created two special categories for (great gifts)% arguing in numerous passages that they deserved greater praise& The virtues e*pressed + magnificence% or (great deed)% and magnanimit , or (greatness of soul) + were regarded as superior to the liberalit of ordinary citi-ens&>5 $n short% he strategically embraced (the sweet bait of honor) in the service of his city&>; Though the archaic language of virtue is absent% the public ran,ing and peer review processes of the .AC have similarly set the great givers of the postwar era against one another% establishing the conditions and purposes of a competition for honour in the community of states& Aiberal political theory% of course% has moved substantially beyond civic republicanism in the modern era&>9 $n contemporary interstate relations% it provides the basis both for a political discourse of rights that strongly resists any claim of virtue on the part of the wealthy states and for a substantive political agenda of international ta*ation and other measures that% it is argued% could rectify current ine0ualities and better realise such rights& 5" The arguments in this article imply that the actual practice of foreign aid is fundamentally at odds with this liberal project& This opposition emerges% first% as a basic categorical distinction in the type of resource allocation entailedC whereas a liberal project of rights re0uires some form of centralised apparatus to redistribute resources from the wealthy to the poorer

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states% foreign aid remains a gift% a voluntary gesture of the wealthy states& 5# $t also follows from a further specification of aid practice within the anthropological literature of givingC as an unreciprocated gift% foreign aid wor,s not to mitigate but rather to euphemise the e*isting material hierarchies between the Dorth and the 7outh&5! inally% the opposition between foreign aid and liberal ideals characterises even the most beneficent portion of foreign aid% the multilateral grants of states% where symbolic domination shifts to ethical discourses& As this article has argued at some length% the institutionalisation of foreign aid as collective endeavour of the former colonising states wor,s to confirm the virtue of donors as opposed to the rights of recipients& What the successive specifications of the practice of foreign aid add up to is a fundamental political oppositionC whereas a liberal project of rights entails a real shift in power from the industrialised states% the moral politics of foreign aid legitimises the power they already have&5H By e*tension% this article reveals a fundamental confusion in the ethical justifications for foreign aid in the liberal tradition noted in the introduction& $dentifying foreign aid as an (imperfect obligation) of the wealthy to the poorer states% for e*ample% fails to see that it is the recipient;s obligation + specifically the failure to reciprocate a gift + that operationalises this practice% compelling gestures of gratitude and ac0uiescence in the status 9uo% instead&5M $dentifying the motivation to give foreign aid as a humanitarian (moral vision) fails to see the (moral hierarchy) that can arise when such a practice is institutionalised across material lines&5< inally% identifying the donor1recipient relation as a (moral doctor+ moral patient) relation misses the necessary fiction of moral agency on the part of recipients in a virtue1centric world& 2nly by treating recipients (as if ) they had moral agency can the superior moral agency of donors emerge& 5> $n short% while all of these ethical justifications identify with liberal ideals of rights% humanitarianism% and improvement% the aid practice they justify tends towards the opposite effect% anticipating neither the eventual perfection of donors) obligation into a right% the mitigation of a material hierarchy% nor the remedy of a diseased condition& $n the #99> .AC report% Chair% James H& 'ichel% warned of (deeply entrenched gaps between theory and practice) and (patterns of donor activism and recipient passivity) consistent with the argument $ have just laid out& To (change incentives)% he went on to argue% re0uired substantially more than a new programmatic focus or greater recipient participation in development planning and implementation& $t re0uired self1discipline and hard wor, + yet another virtue ethic that has infused the discourse of foreign aid from the start& As he put itC $f% as partners% we can e*ercise the disciplined will to address the contradictions and to implement the strategy% its vision will come to be seen as a realistic prediction of a better future& $f we do not ma,e the effort% it will become e0ually apparent that the strategy projects no more than a cruel mirage&55

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atzi"anayotou* Panos* #ichael* #ichael S6 -8;;70* 1Foreign Aid and Public 2oods*4 in Journal of &evelopment Economics* 5ol6 <>* )o6 .* ""6 <77=<:>* +lse$ier6
'ost trade theoretic studies that e*amine the terms of trade and welfare effects of international income transfers assume that these transfers are lump1sum distributed to consumers in the recipient country& But% most non1private international aid% especially to A.Cs% finances public consumption goods or public inputs in the recipient country& This paper e*amines the terms of trade and welfare effects of an income transfer when it is used by the recipient country to finance a public consumption good& The paper demonstrates that if 4i6 the imported and public goods are net complements% 4ii6 the consumerZs marginal willingness to pay for the public good e*ceeds its unit cost of production% and 4iii6 the marginal propensity to consume the imported good in the recipient country e*ceeds the marginal propensity to consume the same good in the donor country% then an income transfer improves 4worsens6 the donor 4recipient6 countryZs terms of trade& Bnder conditions 4i6 and 4ii6 a small transfer can raise the welfare of the donor% and can reduce the welfare of the recipient country& Bnder condition 4ii6 a small transfer increases world welfare% in which case it is possible for welfare to increase in both the donor and the recipient countries& 7ince the level of public goods is small in most AC.Zs% it is e*pected that the consumerZs marginal willingness to pay for the public good e*ceeds its unit cost of production% thus when foreign aid is used to finance a public good% it can lead to a welfare improvement not only for the recipient developing country% but also for the donor developed country& This result may be of policy relevance for the% once again% timely issue of international economic aid 4e&g&% foreign aid to Russia and to former 3astern 3uropean Countries6& The present analysis considers the case where the public good is only produced in the recipient 4e&g&% developing6 country% while the donor 4e&g&% developed6 does not produce a public good of its own& The same or 0ualitatively similar parado*ical welfare effects 4e&g&% welfare immiseri-ation for the recipient and welfare improvement for the donor country6 due to an income transfer can arise whenever the recipient country supplies the public good at a suboptimal level using foreign

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aid to finance its production& or e*ample% the same results emerge when the donor country produces its own public good at a fi*ed level independent of the amount of the transfer& `ualitatively similar parado*ical welfare effects can emerge if the donor developed country is producing its own public good at an optimal level 4i&e&% at the level where the consumerZs marginal willingness to pay for the public good e0uals its unit cost of production6% while the recipient country produces a public good at a suboptimal level& $f% however% in the pure theoretical rather than practical case where both countries are capable of financing and producing the public good at its optimal level% and the income transfer is lump1sum distributed in the recipient country% then the transfer is always welfare immiseri-ing for the donor country% welfare improving for the recipient country and does not affect world welfare& ;

e* Fan and ,ang* Muehhua -.//A0* 1Determinants of Official De$elo"ment Assistance in the Post-%old &ar Period*4 in *hinese Journal of International Politics* 5ol6 .* )o6 .* ""6 ./7-..>6
oreign development aid since the end of World War $$ has increased in significance within international relations as a way of developing strategic interests and improving the international environment& oreign aid is an important policy tool for e*panding nations) influence upon international affairs and maintaining local and international economic stability% and has played a special role within China)s foreign relations& Aid from China has grown in the recent years along with its economic development% and the corresponding change in the objectives% functions and manner of Chinese aid have given the country a higher standing within the sphere of worldwide development aid& Research into development aid policies and practices in developed countries is of help to China in establishing a more mature foreign development aid strategy& KNL &mpirical )nal sis 5onclusions The proportion of a country)s gross national income e*pended on foreign development assistance is subject to different factors of influence& 2n the basis of data from the !#1member .evelopment Assistance Committee from #99" to !""<% we used a 0uantitative model to estimate the effects of different factors that

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determine the level of a country)s relative 2.A& This analysis shows direct relationships among 2.A as a proportion of /D$ and a country)s economic position% public social e*penditure as a proportion of /.P and level of economic openness% and an inverse relationship between 2.A and the level of /.P per capita and fiscal revenue& This means that a country)s e*penditure on foreign assistance increases as it becomes more prominent within the global economy% and as the country)s electorate becomes more concerned with the objectives of welfare policies& But it means at the same time that wealthy countries are not necessarily more predisposed towards philanthropy than poor countries% and that countries with large fiscal revenues are not li,ely to provide more assistance than countries with limited fiscal income& An e*tent of empirical support for the e*planations of both the realist theory of international politics and those based on domestic political factors is thus found& This implies that principles guiding foreign development assistance policies since the Cold War have become plurali-ed& As regards interpreting the results of the modelC as /.P per capita increases T#"""% 2.A as a proportion of /D$ decreases "&""H; percentage points% and as a country)s /.P as a proportion of world /.P increases # percentage point% 2.A as a proportion of /D$ increases "&"9> percentage points& As fiscal revenue as a proportion of /.P increases # percentage point% 2.A as a proportion of /D$ decreases "&"#H percentage points: as e*penditures on public welfare as a proportion of /.P increase # percentage point% 2.A as a proportion of /D$ increases "&"## percentage points: as economic openness increases # percentage point% 2.A as a proportion of /D$ increases "&""M< percentage points& Implications for 5#ina oreign development assistance is a main component of China)s strategy for sustainable% peaceful development and a tool that can be used in its economic diplomacy& China must therefore determine an appropriate set of principles and procedures for administering development assistance& The e*perience of developed countries% especially the .AC 'ember 7tates of the 23C.% is valuable in this respect& $t follows from our preliminary analysis of development assistance provided by the .AC states that the ideal level of development assistance any given state provides is determined on the basis of specific domestic conditions& China% as a rapidly developing power whose economy accounts for an ever1larger portion of the overall world economy% and which is relatively open% has a rising international responsibility& $ts e*penditure on foreign development assistance% therefore% should increase accordingly& Proposed objectives such as a harmonious society and a harmonious world should also bring about simultaneous increases in domestic public social e*penditure and overseas development assistance& 7uch is the case because the precondition for a country)s concern about the welfare of people in other nations is that of its concern for the welfare of its own citi-ens& As the Chinese people become more concerned about welfare objectives% China)s political leaders should correspondingly become more concerned about similar matters within the wider international arena& China)s assistance to other countries in recent years has risen steadily& As of the end of !"">% the country had provided assistance to more than #"" countries%

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regions and organi-ations% and assisted aid recipients in appro*imately !""" different projects& China has provided more than #"" development loans on preferential terms to more than >" countries% and large1scale assistance in the form of goods and food to more than ##" countries& $t also provided technical and managerial training to more than !H""" people in over #"" countries& The Chinese government has moreover signed debt forgiveness agreements with M> countries in Asia% Africa% Aatin America and the 7outh Pacific% thereby erasing a portion of what they owe China&!> But ta,ing into consideration China)s level of openness to the rest of the world and its rate of economic e*pansion% the international environment might degrade during the process of China)s economic rise& This being the case% it is imperative that China increase its level of foreign development aid& irst% China should consider streamlining its foreign assistance& At present% the forms of assistance China provides includeC donations% interest1free loans% development loans at preferential interest rates% preferential e*port credit to purchasers of its goods and funds for the support of joint ventures& As many types of aid are provided% its administration is disorgani-ed and conse0uently difficult& /enerally spea,ing% China lac,s a systematic programme with respect to foreign development assistance& This article recommends that the various channels of foreign development assistance be streamlined% that the former classification scheme be dropped% and that a new scheme comprising two types of aidC monetary aid and assistance loans% be implemented% preferential rates for the latter computed according to international standards& 7econd% foreign development aid objectives should be set at each stage of China)s economic development& As China continues to open up to the world and its economic position to improve% it may be anticipated that its 2.A will increase& The government% therefore% may ma,e specific plans to increase 2.A in proportion to its growing gross national income& Third% as development assistance is influenced by fiscal income as a proportion of /.P and public social e*penditure as a proportion of /.P% development aid should not be blindly e*panded: increases should be conditional upon national fiscal revenue and public social e*penditure&

eadey* DereB -.//70* 'orei!n Aid and 'orei!n Policy# =ow &onors 6ndermine the Effectiveness of 3verseas &evelopment Assistance* %+PA &orBing Pa"er Series )o6
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/7E.//7* Australia: School of +conomics* (ni$ersity of Oueensland6

This paper has presented evidence which supports the hypothesis that donors) political motivations 1 and not just recipient1side conditions such as good macroeconomic policies 1 also have a significant and plausible impact on the effectiveness of foreign aid& We first showed that previous studies have generally not used appropriate econometric methods% the two ,ey elements of which are an improved measure of foreign aid which roughly gauges Eaid intended to promote growthF% and a dynamic growth specification which simultaneously renders aid e*ogenous 4without relying on untested assumptions regarding the e0ual effectiveness of strategic and non1strategic aid6 and identifies a plausible dynamic relationship between the timing of aid inflows and the eventual returns to those flows& We then considered one of the easiest and% in policy terms% the most important means by which one can decompose aggregate aid flows into strategic and non1strategic 4or less strategic6 influences% the multilateral1bilateral division& As e*pected% multilateral aid flows are not well e*plained by strategic aid variables% whereas bilateral flows are% such that the latter constitutes a reasonable pro*y for aid flows that are relatively strategic in orientation& Testing multilateral and bilateral flows produced the predicted result that the multilateral aid produces growth effects roughly twice the si-e of bilateral flows& 'oreover% the construction of motivational indices and their interaction with both aggregate and bilateral aid flows also suggests that a great deal of the variation in aid outcomes is e*plained by political strategic factors& $n fact% these results show that bilateral aid can be 0uite effective when it is not politically motivated% while multilateral aid tends to be more effective on average& $n this final section we address some possible objections to these findings& The most important of these is that the cross1country growth regression is a highly flawed means of testing the effects of a wide range of potential determinants of growth& Testing the effects of foreign aid on growth is arguably an especially ha-ardous e*erciseC aid is li,ely to be endogenous% it is difficult to measure accurately% and% most importantly of all% it presumably affects growth through several 0uite distinctive transmission mechanisms 4Hudson and 'osley !""#: /omanee% /irma et al& !""!6C investment and consumption levels% macroeconomic outcomes and policies% and institutions% to name the most important& We are entirely in agreement with assessment& $n our view% growth regressions cannot be used to ma,e statements such as Eaid has been a successF& Their strength% of course% is their ability to control for so many other determinants of growth so that researchers can ma,e statements such as Econtrolling for initial incomes% policies% geography% and institutions% aid has had a positive effect on growth when it has not been used as a mere instrument of geopoliticsF& But this strength is also a wea,nessC another way to interpret these results is to conclude that Eaid has increased growth net of its effects on other determinants of growthF% especially policies and institutions& $t is

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very difficult to loo, around the world and find countries which have e*perienced aid1induced EmiraclesF% and li,ewise easy to find aid dependent EdisastersF& But whether this is because aid does indeed worsen policies andGor institutions% however% is by no means clear& Whether or not aid improves or deteriorates governance% for e*ample% has been shown to depend on which instruments one uses 4Harms and Aut- !""M6& 'oreover% when we update ?nac,)s 4!""#6 regressions of governance change against aid% we find that lagging aid reverses ?nac,)s result 4see Appendi* B6& With regard to aid)s effects on policies% there is further ambiguity& While there is little doubt that conditionalities have often failed and% even when they have wor,ed% have wor,ed e*tremely sluggishly% the last twenty years also appears to have been a period of unprecedented reform& $t therefore seems difficult to reconcile statements by .ollar and colleagues 4Burnside and .ollar !""": Collier and .ollar !""!6 that EAid has not systematically affected & & & policies during the #95"19H periodF with statements by Rodri, 4!""H6 that Ecountries such as 'e*ico% Argentina% Bra-il% Colombia% Bolivia% and Peru did more liberali-ation% deregulation and privati-ation in the course of a few years than 3ast Asian countries have done in four decadesF& $t seems hard to believe that donors + the Washington institutions in particular 1 did not play any role in influencing these regimes& 'oreover% several of the most stubborn African reformers + 3thiopia% 'adagascar% 'alawi% ?enya% Tan-ania + were finally relenting to World Ban, pressure at almost precisely at the time of Burnside and .ollar)s initial publications& 2ur view is that whether one regards aid as a success or a failure very much depends on what one e*pects aid to achieve& $f institutions are primal% is it reasonable to e*pect aid to be an engine of growthW Probably not& $f institutions are rigid and bad institutions are especially difficult to brea, down under the best of circumstances% is it reasonably to e*pect aid and aid donors to substantially improve themW At best% only very slowly& Aid operates in a 7econd 4or Third or ourth6 Best universe& And while the effectiveness of aid flows can doubtlessly be improved along a number of dimensions% it is unrealistic to e*pect aid to easily produce the deep institutional changes necessary for growth& oreign aid is essentially a pro*imate determinant of growth% but the evidence here suggests that% measured against a more realistic institutionalist yardstic,% it is a reasonably effective one% especially when its motivations are% in a developmental sense% relatively pure& 'oreover% donors can ma,e aid substantially more effective simply by reducing the strategic biases of their aid allocations&

eadey* DereB -.//A0* 12eo"olitics and the +ffect of Foreign Aid on +conomic 2roCth: 8;>/-.//8*4 in Journal
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of International &evelopment* 5ol6 ./* )o6 .* ""6 8:8-8A/6

While improving the techni0ues used to test aid effectiveness generally shows that aggregate aid is more effective than was previously thought 4by some% at least6% these improvements also indicate that multilateral aid has typically been more effective than bilateral aid in promoting growth& 'oreover% a potent e*planation of bilateral aid)s ineffectiveness over the last H decades is an apparent Cold War effect& $n this section $ address some possible objections to these conclusions% before touching on the methodological and policy1related implications of the results& $n draft versions of this paper% some readers were sceptical of the idea that multilateral aid is really less strategic than bilateral aid% pointing% for e*ample% to a plethora of recent results which show that B7 national interests seem to influence the allocation of $' funds% World Ban, aid and in one paper% even Asian .evelopment Ban, aid&H" The typical approach in these studies is to first e*plain the aid allocations of the $' % The World Ban, or the A.B in terms of purely developmental variables% and then test whether indicators of B7 strategic motivations are significant% ceteris paribus& But whilst the general conclusion that such strategic variables are significant does indeed suggest that multilateral aid is not truly apolitical% the vast majority of World Ban, aid flows are e*plained by developmental factors 4the $' is a relatively small aid donor% accounting for just ! per cent of total aid flows6& $n fact% the bilateral aid allocations which share the closest similarity to World Ban, aid are those of the (good) but small donors% such as .enmar, and the Detherlands& H# 7o what these studies report are (t1value results) 4rather than (R1s0uared results)6 H! which do not materially influence the conclusion that World Ban, aid as a whole is much less geopolitically motivated than the aid allocations of the larger bilateral donors& 2n a more methodological front% this study has raised some interesting issues in the empirics used in aid effectiveness studies& $n particular% $ conjectured that improving the techni0ues in aid1growth regressions can significantly alter results% and 7ection ! provided some evidence that this is the case& 3asterly et al& 4!""H6 have already revealed that the significant and positive coefficient on Burnside and .ollar)s aid1 policy interaction term disappears with the updating of Burnside and .ollar)s sample& But in a sense my results are more powerful% since $ show that even if Burnside and .ollar had only changed their specification in one dimension 4lagging aid6 then they ought to have concluded that aid does typically have large unconditional marginal effects on growth& $n addition% a recent $' wor,ing paper 4Rajan and 7ubramanian% !""<6 uses purely geopolitical factors to instrument for foreign aid& 7ince the results reported here suggest that geopolitical aid may be less effective than developmental aid% Rajan and 7ubramanian)s estimate of geopolitical aid is li,ely to give a more pessimistic appraisal of aid effectiveness relative to other approaches in the literature&HH 7ee 'urray 4!"">6 for a discussion of instrumentation problems associated with heterogeneity in second stage effects& Another contributing factor to the more pessimistic results of earlier studiesYsuch as Burnside and .ollar and Boone 4#99>6Yis that their timeframes almost entirely

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encapsulated the Cold War era% when bilateral aid appears to have been ineffective& 3ssentially% then% we have the ironic result that these writers were very vocally concluding that aid was ineffective at precisely the time when the main culprit in this conclusionY bilateral aidYwas just starting to have a si-eable positive impact on growth rates&HM Devertheless% the results reported in this paper are not in entire disagreement with the main thrust of Burnside and .ollar)s wor,% which also emphasises geopolitical biases as the principal reason for the inefficient allocation of bilateral aid& The argument in this paper is somewhat broader in scope% and not necessarily confined to the allocative inefficiencies associated with geopolitics% but both lines of reasoning emphasise the importance of the aid allocation literature& H< By at least partially elucidating the geopolitical motivations of donors% this literature can draw attention to the efficiency implications of politically biased aid allocations as well as their ethical implications& .onors should not deceive themselves with the assumption that aid flows intended to purchase geopolitical objectives will also achieve substantial developmental outcomes% mutatis mutandis& The evidence presented here suggests that assumptions such as these have been very costly in the past&

eron* ,ony -.//A0* 1Aid for ,rade: ,oCards a )eC De$elo"ment Assistance Paradigm for Small States34* IPEG Papers in Glo"al Political Economy* )o6 9>6
This paper has sought to s,etch out a preliminary assessment of Aid for Trade% placing a particular emphasis on the special circumstances on small states& To the e*tent that Aid for Trade is concerned with compensating preference1dependent countries for the loss of income due to preference erosion% it has argued that small states are particularly worthy of attention due to their high dependence on international trade in general and preferential trade in particular& 2n the other hand% estimates of the welfare losses associated with preference erosion remain disputed + as is the 0uestion of the overall importance of compensating preference1 dependent countries vis1c1vis other development priorities in the ..A& $n an important sense% much may depend on whether Aid for Trade in respect of the ..A is conceived of in instrumental terms + that is% an attempt to (buy) support for ambitious ' D tariffs cuts + or more as a genuine attempt to integrate the world)s poorest countries into the world economy& $ronically% it may actually serve the

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interests of small states better if the former is the case% since the fear of the loss of preference margins is seen as one of the main obstacles in the way of securing a meaningful round of tariff reductions 4 rancois et. al !""<6& The other un,nown factors which feed into the above centre on how much money Aid for Trade will ultimately be worth and what the overall significance of its inclusion inside of the ..A will turn out to be& rom this perspective% we might conclude that% at this stage at least% that the overall significance of Aid for Trade is as uncertain as the outcome of the .oha Round as a whole&

Hertholm* Peter and &hite* oCard -.///0* 1Foreign Aid in istoric Pers"ecti$e: BacBground and ,rends*4 in ,ar"* Finn -ed60* 'orei!n Aid and &evelopment# essons earnt and &irections for the 'uture* ""6 A/-8/.* London and )eC MorB: !outledge6
Historically% foreign aid has served a multitude of objectives& or some of the smaller donors% the allocation and 0uality of aid flows have been largely% but not wholly% shaped by a concern for the development needs of the recipient community& By contrast% the foreign aid of several of the large donors has been firmly established as a foreign and commercial policy tool% designed to achieve a range of political% strategic% economic% but also genuinely humanitarian objectives& This assertion is born by observing the historical origins of foreign aid and is supported by the empirical literature on aid allocation& $ndeed% it seems that donor self1interest has been an enduring feature of donor1recipient relations since the #9<"s% a relationship that has otherwise been characteri-ed by many changes in terms of volume% composition% types and objectives of aid flows& Xet% while this particular characteristic of aid flows may well have impaired the effectiveness of aid% by nature% there is no automatic contradiction between donor and recipient objectives& Perhaps the most important of recent changes in the aid picture is the clear reversal after #99! of the historic upward trend in aid volumes& This may not be a big problem when declining aid flows are compensated by higher private flows% as has

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happened in several developing countries& Xet it may be a considerable problem in low1income countries without access to private capital and which continue to rely heavily on aid for financial resources& Clearly% the underlying premises of donor1 recipient co1operation are very different when aid resources become more limited rather than more abundant% especially when debt service is still a factor of significance& $ndeed% this is one of the rationales behind writing this boo,% and many of the themes touched upon in this chapter will be pursued in later chapters&

oadley* ?6 Ste"hen* -8;A/0* 1Small States as Aid Donors*4 in International 3r!ani7ation* 5ol6 9<* )o6 8* ""6 8.8-8<>6
This brief deployment of data around propositions on small state donors) foreign aid behavior lends credence to the presumption that small states do indeed behave differently from large states& The data confirm that small states give aid to a narrower range of recipients but give aid more generously: that small states channel more of their aid through multilateral agencies and give more of their bilateral aid to the poorest countries: and that small states conform more closely to international targets on aid volume and ease of terms& There is also evidence to suggest that small states avoid giving aid to the enemies of their large allies% with many e*ceptions% and that small states tend to give aid in a manner less directly self1interested% politically or economically% and more oriented towards recipient need& And it is confirmed that the decision to place Canada in the category of small state donors was a correct one% for Canada is found to fit the small donor aid performance averages far better than the large donor averages& We end with a note of cautionC si-e itself does not determine a state)s behavior directly: it is merely a 0uality which must be ta,en into account by decision1ma,ers along with many other 0ualities and conditions of the international environment& There is no attempt in this essay to elevate si-e to the status of a causal variable% for to do so would be misplaced concreteness& Rather% the attempt here has been to demonstrate that si-e% measured by population% stands as a useful surrogate for a number of 0ualities of a state which structure the perceptions and policies of international actors in consistent ways and that it is especially useful in 0uantitative and comparative studies of patterns of policy outcomes such as aid allocations&

ooB* Ste$en &6 -8;;70* 1%ha"ter >: ,he %om"arati$e

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!ecord*4 in ooB* Ste$en &6* .ational Interest and 'orei!n Aid* Boulder* ""6 8<9-8:7* %olo6: Lynne !ienner6
As the previous four chapters have demonstrated% the rench% Japanese% 7wedish and B7 governments have transferred large amounts of foreign aid to developing countries in pursuit of widely varying objectives throughout the post1World War $$ period& The historical and political settings of their development aid programs have been reviewed in detail% along with their relationships to the donor)s broader foreign policies& The direction and assigned functions of each donor)s aid flows were also e*amined along with their performance in relation to the 2.A regime)s 0ualitative standards& This chapter contrasts the performances of these donors from a variety of perspectivesC in the contrast of the three potential foreign1policy interests outlined in previous chapters: in terms of the relationship between the 0uantity and 0uality of aid flows: from the standpoint of state behavior within an international regime: and from systemic and domestic levels of analysis& 3ach perspective provides distinct insights into the foreign1aid policies of these donors: collectively% they strengthen our understanding of the intimate relationship between national interest and foreign aid& Donor Interests and ,D) Patterns+ ) "ummar The basic needs of impoverished peoples ostensibly represent the basis of contemporary development assistance% as reflected in the proclamations of donor states and multilateral aid organi-ations& These aid providers most often emphasi-e the narrowing of economic disparities between the world)s rich and poor% the alleviation of short1term suffering within A.Cs% and the benefits derived from long1 term economic% social% and political development& Within the 2.A regimes% aid flows have been commonly characteri-ed as a moral obligation of the world)s wealthy toward the less fortunate& As previously observed% in an attempt to codify these humanitarian objectives% the .evelopment Assistance Committee of the 23C. has established a series of 0ualitative standards for aid flows& These standards involve minimum proportions of 2.A flows relative to donor /DP% the appropriate recipients of aid% the mode of aid delivery% and the terms upon which aid is e*tended& Although the 23C. members have not always embraced these standards and have often acted upon their own conceptions of aid 0uality% the 2.A norms continue to reflect widespread presumptions about the humanitarian basis of development aid& Among the four donor states under study% the 7wedish government most closely adhered to these 0ualitative standards during the #9;"s& 'ore so than the other three donors% 7weden distributed aid to the poorest recipients and on the terms

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most favorable to them 4often e*clusively in the terms of grants6& The statistical analyses revealed a consistent emphasis on humanitarian interests in 7wedish 2.A disbursements& rance)s 2.A flows% which were concentrated among its former colonies and overseas territories% were also found to be related to the social welfare conditions of its recipients& $n the case of Japan% no significant relationship between 2.A flows and social1welfare conditions within recipient states was found& The Bnited 7tates) aid program also lac,ed such a relationship when all recipients were considered: when the two primary recipients 4$srael and 3gypt6 were eliminated from the analysis% B&7& 2.A flows were found to be statistically related to humanitarian interests during five of the final si* years of the decade& $n challenging the 23C.)s 0ualitative standards% leaders of major donor states often advanced alternative conceptions of recipient humanitarian interests& The emphases of their 2.A programs + including regional economic development related to bilateral trade and military support in support of geopolitical goals + were seen as compatible with the long1term human needs of A.Cs& $n the Japanese case% for e*ample% leaders argued that their own robust economic growth served as a model and as a catalyst for development within neighboring A.Cs% who thus improved their living standards more effectively and more enduringly than they would have through the receipt of economic aid based e*clusively on their social welfare needs& And in the case of the Bnited 7tates% the protection of allies and many A.Cs from communist infiltration was e*pressed in humanitarian terms: the preservation of political freedoms was viewed as a moral underta,ing comparable to that of promoting socioeconomic welfare in the Third World& Deither of these conceptions of humanitarian interest maintained by most other donor states or by the 2.A regime in general% which continued to emphasi-e more immediate responses to basic human needs as the essential imperative of development aid& The preceding discussion relates directly to the lin,ages between 2.A flows and donor economic interests& 7ignificant empirical relationships between the two e*isted in the case of Japan and% to a lesser degree% in that of rance: both countries) 2.A flows were disproportionately directed toward recipients with which they maintained close bilateral trade ties& As Japanese leaders ac,nowledged% not only did domestic economic growth stimulate that of neighboring countries% but the process of sustained regional growth served Japan)s own long1term economic interests as well& rance similarly integrated its aid and trade relationships as part of an effort to enhance its own economic interests through the growth of the regional economy in francophone Africa and among its overseas territories& The trading networ,s were more important to A.C economies than to that of rance% but collectively they provided crucial sources of raw materials and destinations for finished products and investment capital& Do such relationships were evident in the cases of 7weden or the Bnited 7tates& 'ore so than other donors 7wedish officials framed aid policy in the conte*t of transnational economic redistribution and of reducing long1standing material ine0ualities between the affluent Dorth and the impoverished 7outh& This focus could be readily observed in the concentration of 7wedish 2.A among a small number of Third World recipients + most of them in sub17aharan Africa and many of them among the poorest developing countries + with little economic connection to 7toc,holm&# B&7& leaders% meanwhile% emphasi-ed mar,et1driven growth strategies as the best means for A.Cs to achieve prosperity and close the gap between Dorth

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and 7outh& 'any influential observers of B&7& 2.A 4e&g&% 3berstadt% #9;;6% reflecting the conventional wisdom of government officials% believed B&7& technical assistance should primarily be directed not toward addressing basic needs in the poorest A.Cs% but instead toward encouraging leaders of A.Cs to stimulate private enterprise and attract foreign investment& As Baldwin 4#9;<C H!M6 observed% American policy ma,ers have repeatedly gone to great lengths to emphasi-e that economic development is primarily a matter of domestic effort and that e*ternal assistance can merely supplement such efforts& Both e*plicitly and implicitly American policy has reflected the belief that development must come from within and cannot be imposed from outside& The relationship between donor states) economic interests and 2.A may be illuminated further by considering aid flows in the conte*t of the economic systems maintained by recipient countries& ! $n Africa% the region with the largest number of recipients and the only one in which all four aid donors maintained e*tensive bilateral 2.A ties% rance% Japan% and the Bnited 7tates directed more than 5" percent of their 2.A flows to states with capitalist economies% whereas ;" percent of 7wedish aid was transferred to states with 'ar*ist or socialist economies 4see Table 5&#6& Although B&7& aid flows were not statistically related to trade ties with recipients% the Bnited 7tates distributed the highest percentages of 2.A 4;; percent6 among the four donors to capitalist states in Africa& This fact suggests that economic interests may be e*pressed in various ways by donor states& $n addition% it demonstrates the tendency of donors to direct aid flows to recipient countries with economic systems similar to their own&H The relationship between development aid and donor states) security interests has been rendered increasingly ambiguous given the shifting bases of security in an era of Eeconomic statecraft&F This study relied on the traditional conception of security interests% which were related to recipients) levels of militari-ation on a relative and absolute level& $ts underlying assumption has been that selective economic support to militari-ed A.Cs serves indirectly to project the security interests of aid donors& 'ost significant in this respect was the consistent correspondence between the flow of B&7& 2.A and both absolute and relative indicators of recipient militari-ation& This relationship was principally a by1product of the concentration of B&7& assistance to 3gypt and $srael& The security emphasis% consistent with the nation)s broader approach to foreign policy as one of the two Cold War superpowers% was magnified by the transfer of B&7& military assistance to many of the same A.Cs that received annual infusions of B&7& 2.A& $n none of the other cases were security interests significantly related to bilateral 2.A transfers& rance)s security agreements with most of its aid recipients in francophone Africa allowed for rench assistance in times of crisis but otherwise discouraged militari-ation within the region& Japanese militari-ation was proscribed by the country)s B&7&1imposed constitution% and its military security was assured by its bilateral defense treaty with the Bnited 7tates% factors that were reflected in the absence of security considerations in its 2.A policies& inally% the 7wedish government based its national security on neutrality and the pursuit of pacific resolution of international conflicts: military considerations were e*plicitly omitted

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from 7wedish 2.A calculations and were not evident in aid patterns during the #9;"s& Ai,e 7wedish leaders% those in rance and Japan distanced traditional security objectives from their 2.A calculations but ac,nowledged that their aid relationships enhanced their own security% more broadly defined& All three of these donors characteri-ed themselves during the #9;"s as EbridgesF between the Cold War superpowers and portrayed the economic and social development of their selected aid recipients as a means to reduce the latters) dependence on either superpower& Through the development of A.Cs% these donors presumed% their own security would be enhanced& As one of the superpowers% however% the Bnited 7tates subsumed its aid flows within a broader security orientation& $t conceptions of national security was most congruent with traditional standards of military preparedness% both at home and within its allies% and these norms were reflected in the flow of B&7& aid% both military and economic% to supportive A.Cs throughout the world& ,D) Performance+ 0uantit .ersus 0ualit As noted above% 2.A programs are generally evaluated on the basis two criteriaC first% the 0uantitative or aggregate volume of aid outlays: and% second% their 0ualitative characteristics as defined by the .evelopment Assistance Committee& To many analysts of foreign aid% per capita aid flows% their proportion to donor /DP% and the adherence of donors to other 0ualitative standards serve as better reflections of commitment of donors to Third World development than do the absolute sums of aid transferred overseas& $t is for this reason that the B&7& aid program% although the largest in absolute terms throughout the Cold War% was regularly critici-ed for its 0ualitative shortcomings& An inverse relationship between 0uantity of aid flows and their 0uality was evident in the allocations of rance% Japan% 7weden and the Bnited 7tates during the #9;"s and for all members of the 23C. during the final year of the analysis 4see Table 5&!6& The major donors of 2.A on an absolute level% particularly the Bnited 7tates and Japan% ran,ed among the sources of lowest10uality aid& Concurrently% those transferring lesser net amounts% such as the Detherlands% Dorway and 7weden% were among the leaders in terms of 0uality& These negative relationships were strongest when the top ten 2.A donors were considered: the correlations were negative and significant in all four cases% particularly vis1c1vis aid to eh poorest A.Cs& When all eighteen members of the .AC were included the relationship between 2.A flows and the top two categories of aid 0uality were positive but insignificant% whereas the relationship between aid and the final two categories was negative and of moderate significance& These patterns demonstrate that the tension between 2.A 0uantity and 0uality e*tends beyond the four categories reviewed in this study and represents a general tendency among aid donors& The discrepancy has propelled an ongoing debate within the 2.A regime regarding appropriate standards of conduct in this issue areaC .onors of relatively small volumes of aid routinely critici-e major donors% namely the Bnited 7tates and Japan% for contributing less on a proportionate or per capita basis than they seemingly can afford and for violating the norms of aid 0uality as articulated by the .AC& 'ajor donors% conversely% emphasi-e their large aggregate volumes% dismiss certain .AC

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0ualitative standards as invalid% and point to their leadership in stimulating regional and global economic growth% providing for the military security of overseas allies% and so forth& The debate% often conducted in public forums% continued through the #9;"s and into the #99"s as donor states large and small struggled with sluggish domestic growth rates% growing domestic demands for fiscal austerity% and ongoing pressure from A.Cs for continued or growing amounts of development assistance& $n absolute terms% the Bnited 7tates consistently operated the largest .2A program during the post1World War $$ period: its preponderant role in global foreign aid is magnified when B7 military assistance is ta,en into account& This pattern continued throughout the two decades between #95" and #99"% during which annual B&7& 2.A flows averaged about T;&< billion 4see igure 5&#6& The volume of Japanese 2.A increased threefold during the same twenty1year period% from about TH billion to more than T9 billion& Japanese 2.A% which was not accompanied by military assistance% ultimately reached and e*ceeded B&7& levels% although its higher levels were in part a reflection of a stronger yen during the #9;"s& rance and 7weden reported similar growth rates% but their aggregate flows were far smaller than those of the other two donors& or the .AC as a whole% inflation1adjust aid outlays grew from T!<&< billion in #95"1#95# to TM5&> billion two decades later% an overall increase of nearly 9" percent& This 0uantitative increase coincided with the e*pansion both of bilateral and multilateral sources of 2.A and of aid recipients& M Among 0ualitative indicators of 2.A performance% the 2.AG/DP ratio is most widely considered to be indicative of a donor state)s commitment to Third World social welfare and economic development& At the #9>; BDCTA. meeting% members of the .AC pledged to dispense at least "&5 percent of their /DPs in the form of 2.A& This became the accepted benchmar, of aid 0uality& 7weden% the first country to reach and e*ceed this level% fre0uently transferred a full # percent of its /DP in economic assistance: it government was unable to maintain these levels in the early #99"s% however% amid continuing economic austerity and growing dissensions over the direction and terms of aid flows& $n the rench case% ongoing disputes over whether its overseas territories should be considered 2.A recipients were closely related to its performance in this category of aid 0uality& 3*cluding these recipients% rench 2.A averaged about "&<< percent of rench /DP: if they were included% the average approached "&; percent throughout the #9;"s& $n the same time span% the high absolute levels of 2.A from the Bnited 7tates and Japan contrasted with their relatively low levels of proportionate aid flows& Although the share of national product allowed to 2.A rose marginally in the Japanese case% it fell in that of the Bnited 7tates% reflecting a long1 range pattern that continued into the mid1#99"s 4see igure 5&!6& 7imilarly% Japan and the Bnited 7tates contributed less 2.A on a per capita basis than rance or 7weden 4see igure 5&H6& Per capita outlays rose during the #9;"s in every case e*cept that of the Bnited 7tates during the decade& The greatest proportionate increases were reported by 7weden% whose per capita flows jumped from about T#<" to T!"<% and by rance% whose per capita flows grew from T9; to T#H< in #9;9 dollars& Japanese per capita 2.A flows increased slightly from T<" to T5M during the decade% where as B&7& flows declined slightly from TM" to TH5& As previously observed% per capita 2.A was one of the few categories in which aid 0uality generally improved during the #9;"s& Among the eighteen .AC members%

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per capita aid flows increased in twelve cases% with the greatest proportional increase reported by inland% which tripled per capita flows% from TMH to T#MH& .ecreases were reported by Australia% Belgium% Dew \ealand% and the Bnited ?ingdom% along with the Bnited 7tates& Another closely watched indicator of 2.A 0uality was the degree to which resources were offered in the form of grants rather than concessional loans& 'embers of the contemporary 2.A regime collectively increased the relative grant element during the #9;"s% responding to the emergent norm that A.C recipients should not ta,e on reciprocal burdens in e*change for 2.A& 7weden% for e*ample% adhered to its standard of nearly #"" percent grants% and rench and B&7& leaders gradually increased their grant proportions 4to ;< and 99 percent% respectively6& Japan% however% maintained relatively greater levels of concessional loans in the name of recipient Ediscipline&F But even in this case% the grant level grew considerably during the decade& igure 5&M further illustrates the effort by the 7wedish government to conduct a high10uality 2.A program& The share of 7wedish 2.A directed to AA.Cs% which measured HH percent of outlays in #99"% respectively% was nearly twice in the #9;9 rench and Japanese levels 4#; percent6 and nearly three times the B&7& level 4#H percent6& Among the two major donors% the concentration of Japan)s flows to newly industriali-ed countries along the Pacific Rim limited its contribution to AA.Cs% and the disproportionate share of B&7& 2.A directed to 3gypt and $srael had a similar effect& 2verall% .AC members reduced their relative disbursements of 2.A to the poorest subset of recipients from !< to !! percent during the #9;"s&Their performance in this regard reflected the general decrease in aid 0uality over the decade& These patterns have been reviewed collectively to illustrate the wide variations in aid behavior among these donors& urther% they have reinforced the inverse relationship between the 0uantity and 0uality of aid flows% the latter of which is monitored by the 2.A regime in several categories& " stemic Dimensions of ,D) 1e#a!ior The inverse relationship between 2.A 0uantity and 0uality% which reflects the broader variation in the absolute scale of donor economies% suggests that systemic factors are closely related to their behavior in this area of foreign policy& 'ore broadly% it calls attention to the general importance of systemic factors in influencing state actions& $n contrast to unit1level factors 4incorporating both societal and governmental characteristics6% systemic e*planations Eaccount for state behavior on the basis of attributes of the system as a wholeF 4?eohane% #9;MaC !<6& 7uch e*planations are not intended to deny the importance of such unit1level factors% nor do they presume a narrowly deterministic relationship between systemic factors and state behavior& $nstead% they suggest that analysis of foreign policy should begin with a loo, at the broader milieu of state action and its impact on the calculations of foreign policy& As opposed to deterministic models% en!ironmental possibilism 47prout and 7prout% #9>9C MM6 Epostulates some set of limits that affect the outcomes of any attempted course of action&F

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Analysts of international relations have long argued that the distribution of state resources is a salient determinant of military stability within the international system& They have disagreed as to whether a bipolar 4Walt-% #9>M6 or a multipolar 4.eutsch and 7inger% #9>M6 distribution of power is more war1prone% but they have shared the underlying presumption that Eoutside1inF interpretations are instructive in the study of world politics& By contrast% the systemic sources of states) foreign economic policies% in areas that include the transfer of foreign aid% have received less attention& As in the case of security issues% however% economic policies are not created in a vacuum: they reflect the relative capabilities and more general roles of each state in the international system& $n this view% Ethe foreign economic policy of individual country is affected both by the international economic structure N and by the state)s position within itF 4Aa,e% #9;HC <!H1<!M6& < The importance of systemic factors in influencing the volume and direction of donor aid flows begs the larger 0uestion of what systemic roles have been played by individual aid donors and how their roles have been reflected in foreign1policy behavior in general and aid policy in particular& Among early analysts of systemic roles and foreign policy% ?& J& Holsti provided a typology of roles that may be usefully applied to this important dimension of world politics 4see Table 5&H6& Holsti 4#95"C H"56 defined the role concept as an Eanalytical tool for e*plaining certain ranges or patterns of foreign policy decisions and actions&F These systemic roles% as apprehended by political leaders and translated into political action% shape the long1 term objectives of nation1states and must be considered in any comprehensive effort to understand comparative foreign1policy behavior 4see Wal,er% #9;5: and Wish% #9;56& Appling Holsti)s typology to the four donor states during the #9;"s% the behavior of rance was most characteristic of a systemic Eactive independent%F which is prone to Eemphasi-e at once independence% self1determination% possible mediation functions% and active programs to e*tend diplomatic and commercial relations to diverse areas of the worldF 4Holsti% #95"C !>!6& A consistent relationship was evident between this systemic role and rance)s overall approach toward foreign affairs as well as its actions in transferring 2.A& rench leaders) pursuit of autonomy in foreign affairs% their identification of rench interests with those of their francophone neighbors% and their active involvement in international organi-ations reinforced this aspect of rance)s systemic role& $n the area of 2.A% rance e*tended concessional financing as part of an orchestrated effort to serve as a bridge between Dorth and 7outh and between 3ast and West and to enhance its regional influence and prestige& 'eanwhile% Japan)s foreign1policy performance was most characteristic of a Eregional1subsystem collaborator%F which deliberately eschews a global role and underta,es Ecommitments to cooperative efforts with other states to build wider communitiesF 4Holsti% #95"C !><6& As noted earlier% after World War $$ Japanese military rearmament was precluded under its constitution% which limited its defense spending to # percent of /DP% and its territorial security has been protected ever since through its bilateral treaty with the Bnited 7tates& Japan)s narrow focus on tightening economic relations with the Pacific Rim% e*tending beyond 2.A policy to trade and private investment% was consistent with this systemic role& Regional integration was complicated by Japan)s previous imperial ambitions in 3ast Asia% but it remained an e*plicit goal of Japan)s leadership into the #99"s and found

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e*pression in the interrelationships between Japanese 2.A flows% trade ties% and patterns of overseas private investment& 7weden)s disavowal of political and security alignments% its preference for pacific means of conflict resolution% and its promotion of li,e1minded A.Cs e*emplified the behavior of a systemic EmediatorF 4Holsti% #95"C !<<6& 7uch a state characteristically ventures to create and Einterposition into bloc conflictsF and provides a forum for negotiated settlements and integration& 7wedish leaders often emphasi-ed both the constraints and opportunities posed by their country)s role as a small power in the midst of stronger states& $n this respect% Prime 'inister Palme often referred to the Esmall1state doctrineF that guided 7wedish foreign policy& This effort entailed support for other small powers% particularly those sharing 7weden)s social and political values% along with the application of those instruments of foreign policy that most Ee0uali-edF the influence of statesC international organi-ations% international law% and% if concentrated toward a few ,ey recipients 4Eprogram countriesF6% development assistance& $ts neutralist foreign policy entailed a defensive military capability and the avoidance of formal alliances& To 7undelius 4#99"C #!!6% these strategies e*ploited the natural advantages of a Ecommitted neutralFC By ,eeping a distance from both sides% the 7wede indicates a commitment to impartiality in any political conflict between these sets of values& Through such reasoning% the neutral position can be justified in positive terms& $t provides a foundation for a uni0ue and valuable mediating role between two alien antagonists& -#is stand is identified $it# a !ital s stemic function and is t#us transformed from a strateg of political necessit to a moral imperati!e & $n such a perspective a neutral democracy is clearly not morally compromised& 2n the contrary% it represents reason and a concern for the overriding interests of the international community 4emphasis added6& The Bnited 7tates% by contrast% assumed the role of Ebloc leaderF throughout this period% described by Holsti 4#95"C !<<6 as one based on ideology% systemic predominance% active resistance to perceived e*ternal threats% and the maintenance of Ebloc cohesion&F The B&7& preoccupation with military security% which was evident in its patterns of military and economic assistance% was typical of a great power% which attempts to establish and retain global influence in the face of perceived threats from other great powers& These role profiles call attention to the importance of each state)s broader role within the international system in shaping its foreign policies& $n all four cases% the documented patterns of 2.A behavior were consistent with the e*pectations of Holsti)s analysis& The consideration of systemic roles as a source of foreign1policy behavior focuses on the relative attributes of each state and their impact on shaping policy& The 0uestion may be probed a step further by e*amining the relationship between a state)s absolute resource base and its behavior in distributing 2.A& As noted previously% states that provided the most 2.A were less li,ely to adhere to .AC standards of aid 0uality: of additional interest is whether the wealthiest states% as measured by /DP% varied in their 0ualitative 2.A behavior in a similar manner& The evidence from the year #9;91#99" suggests that they do& When the ten largest 23C. economies are ran,ed for their performance in four areas of aid 0uality% the negative ran,1order correlations range from 1&H! to 1&5!&

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This pattern is also evident when all eighteen members of the .AC are considered% although the negative correlations are wea,er in each case 4see Table 5&M6& Collectively% these patterns demonstrate the relationship between the si-e of a donor state)s economy% a ,ey aspect of its systemic role% and its behavior in providing assistance to A.Cs& These findings are consistent with those advanced by Ruggie% who found that the amount of economic resources available to aid donors was inversely proportionate to the e*tent to which they provided aid through multilateral channels& Thus% Ethe condition of possessing a certain level of national resources seems to be related to a state)s propensity to organi-e the performance of a tas, internationallyF 4Ruggie% #95!C ;;H6& This relationship has profound implications for the future volume% direction% and 0uality of aid flows under the rapidly shifting systemic conditions of the #99"s& 2bservers of aid policy may wish to consider the emerging roles of states% based on both relative and absolute standards% in attempting to understand current aid strategies or anticipate future plans& Donor 1e#a!ior /it#in t#e ,D) (egime Though systemic factors have most often been related to the international system)s propensity for armed conflict and to the behavior of states in matters of war and peace% they have increasingly been applied to other aspects of state behavior in economic affairs& ?indleberger 4#95H6 and /ilpin 4#95<6% among others% have developed and refined the theory of hegemonic stability% which argues that the preservation of a liberal international economic order is facilitated by the presence of a preponderant economic power& $n this view% the absence of a global hegemon during the period between the world wars contributed to widening economic warfare and the collapse of many industriali-ed economies& Conversely% post1World War $$ B&7& preponderance in both economic and security areas presumably sustained global economic stability& Current debates over hegemonic stability concern the prospects for a viable monetary and trading system in the absence of a hegemon& The relative decline of the Bnited 7tates 4whose share of global /DP fell from about <" percent in #9M< to about !! percent in #99M6 and the concurrent ascension of Japan% D$Cs% and members of the 3uropean Bnion since the #95"s have provided the impetus for these debates& $t is widely presumed that many of the economic regimes that emerged as part of the liberal international economic order 4A$326 immediately after World War $$ were manifestations of B&7& hegemony& Contrary to the e*pectations of hegemonic1 stability theorists% the erosion of B&7& hegemony has not been accompanied by the brea,down of most transnational economic regimes& 'any middle1income states continue to violate principles of the A$32% Efree1ridingF under the economic and security protection of the Bnited 7tates% yet the postwar order has remained largely intact& Recent evidence for this cohesion was the conclusion in early #99M% of the Bruguay Round of /ATT tal,s% at which the delegate agreed on many measures to further coordinate and liberali-e their macroeconomic policies and to institutionali-e global trade within the World Trade 2rgani-ation& > To ?eohane 4#9;MaC !#<6 and others% the persistence of many regimes is due to the endurance of the norms% principles% and procedures that were established under conditions of hegemonic influenceC E$nternational regimes perform functions demanded by states having

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shared interests: when the regimes already e*ist% they can be maintained even after the original conditions for their creation have disappeared&F The foundations of the 2.A regime were established during the pea, of B&7& hegemony and reflected developmental principles of /ATT% the World Ban,% and the $nternational 'onetary und& Although the current institutional framewor, did not ta,e shape until after the process of decoloni-ation had largely concluded in the early #9>"s 4see Chapter !6% when the decline of the relative B&7& position was well under way% the developmental models conceived in the #9M"s and #9<"s were largely adopted by the 23C. and its .evelopment Assistance Committee& Ai,e other transnational regimes% that which coordinated 2.A reflected the prerogatives of its most powerful members% including those providing the greatest aggregate volumes of aid& .AC members agreed upon the collective interests and broad objectives to be served by the 2.A regime + to ease the suffering of the world)s poor and to promote mar,et1oriented economic growth + but their self1interests were accommodated and were evident in both their bilateral and multilateral% aid flows& $n addition to being reflected in the deliberations of state leaders and their proclamations of shared interests and collective actions% international regime behavior may further be demonstrated by the coordinated activity of states in areas not immediately apparent& $n distributing development assistance% for e*ample% donor states concentrated aid flows along geographical lines: they identified Third World recipients of particular salience to their own national interests and distributed a disproportionate share of aid flows to them& Recalling that the Bnited 7tates% Japan% and rance represented the three top donors of 2.A during the #9;"s% their geographical concentrations effectively amounted to a division of labor in global 2.A flows 4see Appendi* !6& rance served annually as the primary source of aid to A.Cs in francophone Africa: Japan played that role for its Pacific Rim neighbors 4and increasingly to 3ast Africa and 7outh America6: and the Bnited 7tates provided most concessional resources to Central American recipients and those in the eastern 'editerranean% particularly 3gypt and $srael 4and to a far lesser degree 2man and Cyprus6&5 7hifts in geographical 2.A concentration reflected broader changes in donors) foreign policies during the decade% particularly in recent years as the Cold War ended and the international system e*perienced a fundamental transformation&; .onor states coordinated the volume and direction of 2.A flows in many other respects& .uring the height of the Cold War% for e*ample% the B&7& government urged Japan to supplement its own economic support for many Pacific states that were considered strategically important in the face of perceived internal challenges& EJapan)s foreign aid has become inseparably incorporated into the world strategy of the Bnited 7tates%F argued 7hinsu,e 4#9;!C H!6& Prominent e*amples of Japanese aid initiatives that were at least partially driven by Cold War concerns included aid to $ndonesia following the departure of Achem 7u,arno 4#9>>6% to Thailand during the Iietnam War 4#9>;6% and to the Philippines at the pea, of the erdinand 'arcos dictatorship 4#9>96& B&7& pressure on Japanese aid policies was widely ac,nowledged& As A,ira 4#9;<C #M#6 put is% EJapan is responding to American wishes in its allocation of 2.A& And in this sense the Japanese motivation in giving foreign aid lac,s the basic humanism that animates most international aid organi-ations&F

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The empirical patterns outlined above are largely consistent with theoretical e*pectations of regime behavior under conditions of hegemony& 7pecifically% the security orientation of B&7& economic and military aid reflected the country)s preponderant role in providing for the security of its allies throughout the Cold War& The patterns of rench and Japanese 2.A flows% which were statistically related to their own economic interests% were consistent with the anticipated behavior of smaller states% which% in the area of trade policy% were given to Efree1ridingF within the A$32& This patterned crossnational behavior was consistent with that e*pected of an international economic regime% in which persistent competition among states is regulated and coordinated policy behavior ensures each participant some benefit& The global 2.A division of labor thus adds empirical evidence of regime behavior in foreign assistance% a fact that is of particular merit given the limited number of international economic regimes available for study& urther% the coordination of 2.A flows with broader aspects of donor foreign policies reflected the cohesion of the 2.A regime in its first three decades& 9 Domestic "ources of ,D) 1e#a!ior Although the emphasis in this discussion has been on the influence of systemic factors in shaping donor 2.A policies% these policies must not be considered in isolation& $n each case% internal social values strongly influenced donor approaches to foreign aid and foreign policy in general% and the institutional mechanisms by which aid policies were implemented also e*erted a powerful impact& 7ystemic conte*t may be a useful starting point in cross1national analysis% but a comprehensive understanding of state behavior re0uires an additional assessment of the role of unit1level characteristics that bridge the gap between systemic conte*t and observable behavior& A review of these domestic factors strengthens our understanding of donor states) behavior 4see Table 5&<6& $n the Bnited 7tates% the broad scope of its foreign1aid program led to the creation of a comple* bureaucracy% giving domestic politics a prevalent role in the shaping of B&7& aid policy& Within B7A$.% administrators often clashed over the objectives of specific bilateral aid programs and the general strategy of achieving B&7& national interests through bilateral and multilateral aid& These debates were e*acerbated by the concurrent flows of B&7& military assistance% coordinated by the .epartment of .efense% to many of the same A.Cs receiving 2.A& The arena for domestic politics further involved Congress% whose Epower of the purseF provided it with strong leverage in directing the flow of foreign assistance& Congress% of course% was far from a unitary actor in this regard: its members reflected the interests of their disparate district and state constituents and advanced the prerogatives of a wide array of committees and subcommittees& The continuity in many bilateral aid programs even spanned successive presidential administrations pursuing widely varying foreign policies% reflecting the strong roles of Congress and the aid bureaucracy% which collectively served to mitigate the fundamental shifts in aid strategy proposed by the White House& The prevalence of domestic politics in the B&7& 2.A program was in large part a by1 product of the absence of public support for foreign assistance& 2verseas aid was consistently among the least popular federal programs% and it was far less popular in the Bnited 7tates than in the other three countries under review in this study& This fact was reflected in the relatively small amounts of per capita B&7& 2.A% the

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relatively small percentage of B&7& /DP devoted to 2.A% and the low level of B&7& aid 0uality as defined by .AC& Xet B&7& aid transfers% both economic and military continued to grow through the period in absolute terms% and collectively they represented the largest flows of foreign aid by any single donor& The impetus for B&7& aid% therefore% must be found outside the realm of public opinion + and inside the institutional framewor, of the federal government& As demonstrated in the statistical analysis% the aid programs were largely related to B&7& security interests throughout the Cold War% serving as e*tension of the overall effort by the Bnited 7tates to maintain its leadership role as Ebloc leader&F When they did appeal to the general public for support% influential political leaders justified aid programs on the basis of their contribution to the broader effort of containing communism and preserving B&7& influence in overseas regions of Evital interest&F The large volume of B&7& 2.A transferred to 3gypt and $srael% which served many domestic constituencies as well as B&7& interest in 'iddle 3ast stability% reflected this security orientation + one that was relatively distinct from Cold War concerns& The large Japanese 2.A program was also driven by domestic politics but under very different circumstances& $n contrast to their B&7& counterparts% neither the chief e*ecutive nor the legislative branch of the Japanese government played a stronger role in formulating and e*ecuting aid policy& $nstead% aid policy was largely driven by decentrali-ed government ministries% many of which pursued parochial foreign1 policy interests& As 2rr noted% EThere e*ists a greater degree of delegation of authority by the KJapaneseL legislative branch to the administrative branch& Career government officials play a larger role in ma,ing foreign policy than do their counterparts in the Bnited 7tatesF 4#99"C ##1#!6& This facet of Japanese politics helps to e*plain why successive prime ministers) fre0uent pledges to diversify the direction of Japanese aid flows and increase its .AC1defined 0uality were largely unfulfilled& Though the general public widely supported Japanese 2.A% its influence over the volume and direction of aid flows was relatively modest& $nstead% its general assent provided a mandate for the rapid growth of the aid program% whose specific applications were determined within government ministries& These bodies% particularly the 'inistry of $nternational Trade and $ndustry% comprised both political leaders and powerful economic actors& $n this environment% the economic basis of Japanese postwar national interests found e*pression in bilateral aid pac,ages to A.Cs that maintained strong economic relations with To,yo in other areas% including foreign investment and the e*pansion of multinational corporations& Japanese officials ac,nowledged the role of 2.A flows in tightening their broader economic lin,s to regional A.Cs along the Pacific Rim and in furthering their own economy% which was viewed as an engine of regional growth& $n this respect% they differed with 23C. standards of aid 0uality and emphasi-ed the successful application of Japanese 2.A in promoting the ascension of many aid recipients from A.C status to that of D$Cs& .uring the postwar period% rench presidents and the general public held widely varying ideological orientations and advocated disparate national objectives% reflecting the country)s conflictive political culture& This discord e*isted to a lesser degree in the area of foreign policy% however: a general consensus e*isted on

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rance)s role within the Efront ran,F of major powers and% more specifically% on the continuing concentration of rench influence within the developing regions formerly under its colonial control& rench presidents% who maintained broad authority over foreign policy under the political system designed by de /aulle% shared these objectives and ensured the continuities in rench foreign policy% including the distribution of development assistance& The rench legislature% though formally empowered to approve the president)s specific policy initiatives% generally deferred to the chief e*ecutive as the EguarantorF of rench national interests& $n this respect% rance)s cultural tradition served as a strong and consistent impetus for its relations with developing countries% which in turn served as a primary vehicle of the country)s overseas ambitions& As Cerny put is% E rench policy was always dominated by a cultural element which put cultural values N before a search for either economic wealth or pure military powerF 4#9;"C 5<6& $n aid policy% rench leaders declared their mission ci!ilisatrice in maintain close relations with former African colonies that were connected to Paris through monetary integration% trade ties% and ongoing 2.A transfers& The rench government also maintained close security relationships with many of these states% but its influence was generally limited to providing material and logistical support in times of crisis& The 7wedish aid program was also sustained by high levels of public support% which% in contrast to the rench case% e*tended to other aspects of 7wedish public policy% both foreign and domestic& The country)s consensus political culture was based upon widespread and enduring social values& $n domestic policy% these involved the promotion of socioeconomic e0uality and the observance of social democratic principles: in foreign policy% they entailed the pursuit of geopolitical neutrality and active support for peaceful conflict resolution among great powers& As in the rench case% the 7wedish government endeavored to use foreign1aid relationships to project these societal values% identifying and rewarding A.Cs that emulated the 7wedish system of social democracy& $n many cases% 7weden supported regimes that were emerging from wars of national liberation + such as Cuba% Iietnam% Angola% and Dicaragua + and that had established socialist or 'ar*ist systems& 7wedish leaders hoped their Ethird wayF of economic and political development would provide an alternative to the dependence of these A.Cs on either of the Cold War superpowers& /iven the strong societal consensus that endured in 7weden through two world wars and within the bipolar system of the late twentieth century% the e*ecutive and legislative branches played a relatively modest role in affecting 7wedish foreign policy in general and aid policy in particular& The country)s aid strategy epitomi-ed the EDordic model%F founded upon e*plicitly humanitarian interests% support for AA.Cs% the transfer of funds e*clusively in the form of grants% and relatively high per capita aid and 2.AG/DP ratios& The distinctive aspects of 7wedish 2.A policy were modified in the late #9;"s% however% in response to domestic economic strains and growing preferences for greater ErealismF in advancing 7wedish economic interests through foreign1aid flows& These modifications were reflected in the presence of economic interests in 7wedish 2.A during the final three years of the decade& But the 0ualitative aspects of 7wedish aid% and the overall thrust of 7weden)s foreign policy and approach to Dorth17outh relations% were largely retained&

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The relation of domestic politics to the development and pursuit of national interest is comple* and% in most cases% ambiguous& As the American ederalists 4'adison% #9H; K#5;5LC <>6 ac,nowledged% domestic politics are invariably divisive based on the presence of contending economic factionsC Ea landed interest% a manufacturing interest% a mercantile interest% a moneyed interest% with many lesser interests% grow up of necessity in civili-ed nations&F $n other respects% domestic divisions are sustained along religious% linguistic% or ethnic lines& When these divisions become predominant and overwhelm the ability of central governments to reconcile them% states fall prey to civil war and disintegration& 'ore often% and in the case of the four countries under study% a sense of holistic identity and purpose transcends parochial concerns% thus providing the basis of national interest that is e*pressed in foreign policy& $n all of these ways% the national interests and foreign1aid policies of these donor states were influenced by societal values and government practices& .espite their many internal differences and systemic roles% these states were influential in creating and maintaining the 2.A regime for more than three decades& Their continuing involvement in transferring 2.A in the #99"s + a period in which their relationships with many A.Cs were shaped by the end of the Cold War and in which economic strains placed limits on their involvement in foreign affairs + presages the endurance of the regime well into the future& Challenges to the 2.A regime continue to be e*pressed by its members% and long1 standing disputes over aid 0uality and other issues remain unresolved& These tensions will be e*plored in the final chapter% along with the future prospects of development aid& $n addition% emerging conceptions of national interest will be e*amined as world politics moves further away from the Cold War and toward an uncertain new millennium&

ooB* Ste$en &6 -8;;:0* 1%ha"ter 8<: Foreign Aid and the Illogic of %ollecti$e Action*4 in ooBs* Ste$en &6 -ed60* 'orei!n Aid Toward the %illennium* Boulder* ""6 ..>.9>* %O: Lynne !ienner Publishers6
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According to a well1,nown African aphorism% EWhen elephants fight% the grass suffers&F These words were often used to describe the Cold War)s pernicious effects on A.Cs in Africa% Aatin America% and 7outh Asia% many of which served as surrogate battlegrounds during the nearly half century of superpower competition& $n the late #99"s% a corollary has gained widespread currencyC EWhen elephants ma,e love% the grass suffers e0ually&F 7uch is the ironic fate of many impoverished states that escaped from the shadow of the Bnited 7tates and 7oviet Bnion only to find themselves as financially distressed as ever in the mid1#99"s& Ambitious plans to implement the BD)s program for sustainable development have been scaled bac, in the face of cutbac,s in many aid budgets& The bul, of remaining aid flows has been concentrated among strategic allies of the Bnited 7tates% trading partners of Japan% former colonies of rance and /reat Britain% heavily indebted middle1income countries% and transition states in the former 7oviet bloc& or the inhabitants of the world)s poorest areas% still suffering from acute malnutrition% overcrowding% and political repression% hegemonic meddling by the major powers has been replaced in many instances by indifference and neglect& The crest in worldwide aid flows too, many by surprise% as the euphoria surrounding the Cold War)s demise gave way to a new era of fiscal austerity and economic competition in the industriali-ed world& Without influential domestic constituencies to promote aid on a humanitarian basis% and in the absence of the geopolitical rationales that had driven B&7& and 7oviet aid flows for decades% many long1standing aid programs were reduced or eliminated outright& Those that survived were often those that most benefited the donor countries + either directly% through the tying of aid funds to domestic purchases% or indirectly% through the securing of e*port mar,ets% sources of raw materials% or destinations for overseas investments& As they became more selective in their aid relationships% donors imposed increasingly stringent conditions upon recipients regarding their use of the aid funds& The contributions to this volume have e*amined the many pieces of the foreign1aid pu--le and have shed new light on the trends in aid flows between the Cold War and the new millennium& They have described these trends in the conte*t of the volatile and rapidly changing international climate of the #99"s% which has witnessed tenuous political and economic transitions in 3astern 3urope% the resurgence of many regional conflicts% tightening economic integration% and a wave of democrati-ation that has swept across much of the developing world& 'ilitary assistance has given way to development aid in the post1Cold War era% although arms transfers on mar,et terms have accelerated in many conflict1prone regions& Thus% the emphasis of this anthology has been on the shifting logic of development1 aid programs and their application to the broader policy goals of both rich and poor states& Along the way% these contributors have illuminated the many ways in which developmental problems and solutions are uni0ue to each areas KsicL of study& This was the intended purpose of their collective effort + to move beyond a generali-ed treatment of international development and to e*amine its comple*ities in a wide variety of discrete functional and regional conte*ts&

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Xet readers of this volume may have noticed commonalities across the chapters% both in terms of the problems facing donors and recipients and in the solutions embraced to resolve them& Thus% without minimi-ing the distinctive aspects of the individual contributions% we may profitably e*plore some consistent themes and lessons& -$o<Le!el 4ames in Donor "tates Among the recurring themes found in Part ! of this volume is the coe*istence of both domestic and systemic pressures that pulled policyma,ers and aid administrators in often contradictory directions during the post1Cold War period& To Putnam 4#9;;6% such Etwo1level gamesF often constrain the ability of policyma,ers to pursue optimal solutions based upon objective evaluations of e*isting problems and goals& $n the case of foreign aid% our contributors observed a pattern by which both donor and recipient governments% having enunciated clear policy goals% were constrained by multiple and fre0uently competing domestic actors& These included heads of state% legislative bodies% aid bureaucracies% foreign ministries% nongovernmental organi-ations% and elites from the business sector% who e*erted greater leverage in an era of geoeconomics& The foreign1aid regime became more diffused% involving the 23C.% $' % World Ban,% Bnited Dations% 3uropean Bnion% and a networ, of regional development ban,s% each of which brought discrete institutional biases to the table& As a result% the proclaimed ends and the e*ecuted means of foreign aid were increasingly disconnected% resulting in compromises that undercut the efficacy of aid strategies& Ai,e other aspects of B&7& foreign relations% B&7& policy toward the Third World has lac,ed a common orienting principle in the post1Cold War era% shifting spasmodically across regions and issue areas in an ad hoc manner 4see 7panier and Hoo,% #99<6& President Clinton)s initial embrace of BD1sponsored sustainable1 development efforts was almost entirely suspended after the #99M congressional elections% and B&7& support for multilateral development efforts decreased considerably in their aftermath& The new Republican majority in Congress opted instead for unilateral solutions% symboli-ed in #99< by a T!>! billion defense budget for fiscal year #99> that was T#! billion more than the Pentagon re0uested& And a presidential campaign that dominated national attention was largely silent on foreign policy& 'ore generally% the e*ecutive1legislative impasse within the B&7& government% which forced the repeated closing of the federal government in #99<% prevented a redefinition of B&7& Egrand strategyF in the post1Cold War era& /iven his domestic preoccupations% Clinton largely abandoned his earlier attempt to redefine B&7& policy based upon the enlargement of democratic rule& As a result% many aspects of B&7& foreign policy + including foreign aid + were placed on automatic pilot% with little innovation or central coordination& The Bnited 7tate% though the world)s wealthiest and most powerful state by virtually any measure% was unable to e*ploit its advantages and to lead the effort to address global problems in the wa,e of the Cold War& 7ecretary of 7tate Warren Christopher)s April #99> proclamation that the global environment had become a vital ingredient of B&7& national security conse0uently fell on deaf ears% overshadowed by presidential politics&

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.uring the early #99"s the Japanese government faced its own protracted internal crisis% which overshadowed its e*panding involvement in international development efforts& This political and economic crisis left Japan)s inefficient system of disbursing economic aid largely intact& As a result% Japan continued to lag behind other major donors in closely watched 0ualitative aspects of foreign aid% as proclaimed reforms were undercut by domestic infighting& 'ore broadly% Japan)s domestic difficulties hindered its ability to e*ploit its stature as an economic superpower and to play a stronger role in the Bnited Dations and other multilateral fore& As described in Chapter >% Western 3uropean donors fell victim to the cross1 pressures of national and transnational concerns& As the Cold War receded into history% a wide range of domestic priorities emerged% and these in turn elicited a revival of ethnic and nationalist tensions& The 3uropean Bnion e*panded its membership and pursued a Common oreign and 7ecurity Policy as part of the #99! 'aastricht Treaty but persistent strains at the state level limited the prospects for collaboration in important policy areas& And the 3B)s failure to ta,e concerted or coherent action in response to the spreading Bal,an crisis revealed fundamental shortcomings in its plan for foreign1policy integration& Dordic donors% meanwhile% abandoned their recipient1oriented approach to international development in the name of both domestic austerity and regional coalescence with the 3B& 'eanwhile% 2P3C was never able to reconcile the clashing interests of its member states with the proclaimed collective objectives of the cartel& Within these states a small number of political elites embar,ed upon lavish domestic projects in the name of moderni-ation% but by the mid1#99"s the living conditions in most 2P3C nations had improved only marginally from their levels of the early #95"s% when 2P3C e*ploded onto the international scene& The tangible contributions of 2P3C donors to international development fell below e*pectations from the outset% and the prolonged the slump in oil prices eliminated their prospects to play a meaningful role Dorth17outh relations& .omestic politics also plays a critical role within recipient governments% of course% as many chapters of this volume have illustrated& Converting aid into effective development relies on credible administration within A.Cs along with ade0uate means to implement aid1funded programs& re0uently during the Cold War% however% neither condition pertained: the mere presence of bilateral aid from either of the great powers was seen as sufficient to serve its geopolitical% ideological% or neocolonial interest within recipient states& Thus aid was often transferred to autocratic A.Cs whose leaders e*ploited the funds for personal gain or used them for cosmetic projects that did little to alleviate poverty or stimulate long1term development& By contrast% in the less ideologically charged climate of the post1Cold War period% with democratic governments established in a growing number of A.Cs% conditions are more favorable for the effective implementation of development projects funded through foreign aid& Ta,en together% these essays illustrate the precarious role of foreign aid as an instrument of statecraft% which to some degree is understandable given the relative youth of the global aid regime& 'ost bilateral aid programs will be less than forty years old at the turn of the century% and the organi-ed and well1documented aid behavior of 23C. states is a product of the #95"s& The cross1national malaise may also be understandable given the habitually slow adaptation of national

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governments to fundamental systemic changes& oreign1aid donors initiated most aid programs in the conte*t of the superpower rivalry and in the midst of a decoloni-ation process that tripled the number of nation1states and introduced the pernicious term EThird World&F 'any recipients% meanwhile% became accustomed to annual infusions of concessional funding from several sources and were not prepared when the rationales for them came under scrutiny after the Cold War& $ndustriali-ed states outside of Japan% so long accustomed to utili-ing foreign aid to pursue narrow Cold War goals or to sustain postcolonial ties% have only in the #99"s turned to transnational concerns of sustainable development& Although their leaders were loath to admit it% these donor governments faced a continuing uphill battle to claim legitimacy for large1scale aid efforts only indirectly and ephemerally connected to their perceived national interests& The problems outlined in the 3arth 7ummit)s concluding manifesto% )genda 21% were arguably salient at the global level but difficult to prioriti-e domestically in the conte*t of more tangible and short1 term concerns& /iven that all twenty1one members of the 23C.)s .evelopment Assistance Committee were representative democracies with multiple channels of access% the subordination of abstract transnational initiatives to diffused subnational priorities was a logical outcome& $n this respect the level of support for sustainable development that remained after strategic allies% trading partners% domestic interest groups% and debt1ridden D$Cs were accommodated is somewhat surprising& 'embers of the 23C. 4#99<aC 5H6 remained optimistic that the leveling off of aid flows recorded in the early and mid1#99"s was Ea bout of wea,ness% rather than an incipient collapse&F 'ost donors and international development agencies were encouraged by the proliferations of private financial flows to A.Cs% even though such flows were largely restricted to states already liberated form the most desperate living conditions& uture prospects for aid depended upon the performance of the remaining recipients in utili-ing the more limited funds they received& But% as always% their performance was dependent upon wealth states) political and economic conditions and their willingness to e*pend their public resources in the form of foreign aid& The development1aid regime appears to have attained a sufficiently broad base within the international political economy to withstand their period of uncertainty& Aeaders of industriali-ed countries have found common cause with the 23C.% $' % and other multilateral conduits of aid and have clearly recogni-ed the growing dangers of rapid population growth in A.Cs% mounting foreign debt% the e*haustion of finite natural resources% and the unrest and regional conflict that so often springs from socioeconomic distress& 2f greater relevance for the longevity of the aid regime% developed nations have apprehended the benefits they can reali-e when A.Cs become viable actors in the global economy& All of these motivations have assured the e*tension of foreign aid well into the new millennium% although coherent collective action to preserve the global commons is still a long way off& Prospects for )ID (ecipients The contributors to Part H of this volume considered the e*perience of aid recipients% and their essays demonstrated the variability of foreign aid processes and outcomes across regional boundaries& Recipients of foreign aid must fre0uently

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align their political% economic% and security interests with those of wealthy aid donors% a practice that preceded the Cold War and will remain a mainstay of the aid regime far into the future& Thus% aid1recipient behavior must be viewed% in part% as refracting the policy preferences of donor governments and multilateral development agencies& or many A.Cs struggling in the wa,e of the Cold War% the conditionalities of development aid effectively structure their government and business sectors& 7tandards of good governance must be met through tangible e*penditures on police% court% and electoral systems: recipient transparency re0uires the presence of a si-able and professionally trained civil service: and liberal macroeconomic policies reward and encourage private investors% often from overseas% along with a commercial class that transforms indigenous cultures and mores& $n the past% these same A.Cs had to pass ideological litmus tests to receive foreign aid& The substantive contours of aid conditionalities have changed in the post1Cold War period& But the aid relationship)s basic asymmetry% which transcends temporal and spatial boundaries and reflects more basic material ine0ualities% is the central reality for the developing states reviewed in this volume& Recipients in 3astern 3urope have utili-ed massive infusions of Western aid largely for purposes of reindustriali-ation + to rebuild factories% electrical utilities% communications networ,s% and other infrastructure that had become decrepit under 7oviet control& Private investments were not far behind in Poland% Hungary% and the C-ech Republic% and these nations) progress toward integrating with the world economy has been considerable& By contrast% leaders in Bulgaria% Romania% 7lova,ia% and other transition states have had a difficult time attracting both public and private capital% and across the former 7oviet Bnion the obstacles to economic and political reform remain daunting& A massive T#" billion $' loan to Boris Xeltsin)s tottering regime in 'oscow was seen as giving him a chance to stay in power and save his reform efforts from collapse& $n 7outh Asia% home to the largest segment of the world)s population and its largest networ,s of foreign aid% A.Cs have fragmented along numerous regional% ethnic% religious% and economic fault lines& The 'iddle 3ast remains a primary recipient of B&7& military and economic assistance: the $ndian subcontinent attracts development aid from most major donors: and A.Cs along the Pacific Rim have become accustomed to complementary aid and trade ties to Japan& Private investment% however% has been largely limited to 3ast Asia% where Japan and the Asian Tigers have become role models of state1driven% e*port1led industriali-ation& /iven the continuing strategic interests of major donors + 0uite apart from the degree of human need in 7outh Asia + the concentration of global aid flows to this region is li,ely to continue& The peoples of sub17aharan Africa% the most distressed region of the developing world% face a much more uncertain future& Both the Cold War and decoloni-ation rationales that once guided many bilateral aid programs have dissolved% and private investors have been conspicuously absent& Aeaders in sub17aharan Africa have watched as the Bnited 7tates has closed several missions% reduced funding levels% and redirected aid resources to 3astern 3urope and the former 7oviet Bnion& The Japanese government failed to play a significant role in the region% further limiting the availability of development assistance& As we found% however% the traditional

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involvement of rance and /reat Britain + former colonial rulers in sub17aharan Africa + and of 7candinavian donors has provided some relief& But in an era when public aid is increasingly predicated upon private investment with tangible short1 term returns% sub17aharan Africa well li,ely be further isolated within the international system in general and the developing world in particular& $n Aatin America% living conditions have improved in many areas% and democratically elected governments have assumed power in virtually every state& But high levels of foreign debt continue to soa, up foreign aid% removing capital from more productive uses that might improve living conditions in these largely impoverished states& As always% the foreign1policy priorities of the Bnited 7tates have dominated the process: most recently% the drug war rendered Bolivia its primary Aatin American recipient in the early #99"s& The Japanese government has in some cases compensated for B&7& aid cutbac,s across 7outh America% where To,yo discovered fertile territory for corporate e*pansion and commercial lending& $n general% the terms of aid transfers to Aatin America have improved in the post1Cold War era% now the era of the anticommunist dictator is behind us& $n general% we have witnessed a parado*ical pattern among recipients of foreign assistance in the post1Cold War period& oreign aid has increasingly been directed toward more affluent A.Cs and middle1income countries that already have established a record of economic growth% internal political stability% and pacific relations with their neighbors& 2n the one hand% this is an encouraging trend that promises to hasten the economic ascension of these middle1income states& 2n the other hand% in a stagnant or contracting global aid networ,% less support is available to those in greatest need& or these and other reasons% the economic polari-ation of the developing world is li,ely to widen% as is the gap between rich and poor% abetted both by the growing role of private capital transfers and by the tightening lin,ages between private capital and foreign aid& $n the short and medium terms this pattern li,ely will sustain the aid regime% which since its inception has been based upon the convergence of donor and recipient interests& $n the long run% however% the worsening plight of marginali-ed societies will demand international attention& As their needs continue to be neglected because of the domestic constraints of donors and the new paradigm of development thought reviewed through this volume% the human costs of this neglect will escalate& This problem will only be resolved after the incentives for collaboration have improved or the costs of ignoring transnational problems have become prohibitive& -#e De!elopment Parado' 'ost foreign1aid programs today encourage recipients to build foundations for mar,et1driven% e*port1led industrial e*pansion& $t is a*iomatic that rapid industriali-ation and urbani-ation provide the best hope for curbing global population growth% which has emerged as the most urgent problem facing human,ind& But what are the costs of this strategyW The world)s population% which reached # billion in #;""% doubled to ! billion in just #!< years and to M billion by #95>& $t is generally assumed that today)s world population of <&5 billion will reach ## billion by !#""" before stabili-ing at this level or turning downward 4Bnited Dations% #99"6& Dearly all of this growth will occur in the developing world% more specifically in the most impoverished societies% where

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fertility rates are the highest& The population of Africa% for e*ample% is e*pected to more than double from its current ><" million% reaching #&> billion by !"!<% whereas the populations of the Bnited 7tates and Western 3urope are e*pected to grow at a much smaller rate& As ?ennedy 4#99HC M>6 correctly observed% EThe issue of global demographic imbalances between richer and poorer societies forms the bac,drop to all the other important forces for change that are ta,ing place&F The lin,age between industriali-ation and improved living standards + higher life e*pectancies% personal incomes% and literacy rates + is also a*iomatic& The causal chain then e*tends from economic structure to regime type% following ?antian and 7chumpeterian assumptions about the democratic correlates of advanced industrial economies and their reliance upon stable% representative governments& inally% the model holds that these societies will be necessarily pacific toward one another% induced to cooperation by mutual self1interest and pluralistic governments& This is the basic logic of contemporary development thought% which has assumed widespread currency in the absence of the Cold War)s geopolitical pressures and ideological polari-ation& Althogh fundamental differences remain over the scope of state action in furthering economic growth and distributing resources to its citi-ens% this model pervades the development manifestos of the Bnited Dations% World Ban,% $' % and 23C.% providing a blueprint for developing countries hoping to attract concessional funding as well as private investment& This model% an outgrowth of demographic1transition theories that project a stabili-ing world population in the mid1twenty1first century% is unarguably supported by empirical evidence% although birth and death rates have varied widely even among states at similar levels of development 4?egley and Witt,opf% #99<C H"#1 H"<6& 'ore fundamentally% it raises ve*ing environmental issues which have yet to be resolved& $ shall refer to this as the Edevelopment parado*&F The development parado* centers upon the ecological conse0uences of rapid industriali-ationC accelerating habitat destruction% air and water pollution% and s,yroc,eting rates of consumption& $t is inevitable that in the short run greater ecological decay will be the correlate of accelerated industriali-ation& $f megacities such as 'e*ico City% 7do Paulo% and Ja,arta are reproduced throughout the developing world% their inhabitants will find the benefits of population control to be overshadowed by the costs of ecological contamination& urther% the environmental damage they face will be felt far beyond their borders& The environmental maladies noted above% of course% all characteri-ed B&7& industrial e*pansion in the early decades of the twentieth century& With just M percent of the world)s population in the mid1#99"s% the Bnited 7tates accounted for appro*imately !< percent of annual world oil consumption 4Wald% #99"6& As other states e*perience their own industrial revolution in the ne*t millennium% they li,ely will replicate the B&7& penchant for national consumption on a global scale& The Chinese government announced in #99M that among its major economic priorities in the second half of the decade would be the e*pansion of the PRC)s automotive industry& Dot only would the PRC produce more vehicles for e*port% in ,eeping with the Japanese mold% but government plans also called for developing the vast interior of China and e*tending the networ, of modern highways across the

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country& As a result the PRC% whose densely crowded population of #&! billion has largely retained traditional modes of transportation and agriculture to the benefit of the country)s ecological balance% will li,ely witness an ominous e*plosion of oil consumption and emissions% accentuated by the planned e*pansion of coal1fired power plants& 2ther heavily populated A.Cs have announced similar plans for moderni-ation and li,ely will repeat China)s reliance on coal1burning electrical utilities& 2ne need not proclaim that the s,y is falling to recogni-e the precarious nature of the environment and to demonstrate how disruptive these ,ey demographic and ecological trends are for its ongoing stability& The human race has shown an impressive ability both to overwhelm its natural environment and to adapt to the fundamental changes in economic conditions% societal customs% and modes of governance that ensue& The central 0uestion is not so much when the world)s population will pea, but how the corresponding increases in fuel consumption% habitat and wildlife destruction% and air and water pollution can be held in chec,& or development to be truly sustainable% it must not only utili-e privati-ation and good governance + both of which are essential components + but also ma,e provision for limiting to*ic industrial emissions% preserving sufficient natural habitat% building ade0uate water1 treatment facilities% and re0uiring the use of fuel1efficient vehicles& A related development parado*% unfortunately% calls this effort into 0uestion& 7imply put% environmental restraint violates the logic of collective action 42lson% #95#6& Political and economic leaders today face neither incentives nor the penalties sufficient to prevent from ignoring those aspects of sustainable development whose short1term costs outweigh their potential long1term benefits& $mmediate concerns 4such as preventing the demise of reform in Russia6 do indeed warrant the attention they have received% but as a result less pressing but e0ually vital concerns go unaddressed& The demise of most military1aid programs is one of the most welcome developments of the post1Cold War era% although continued large1scale transfers of weaponry on mar,et terms are just as problematic as concessional military aid& $t will be a colossal folly if the demise of the 7oviet arms industry and the post1Cold War rela*ation of global tensions does not lead to demilitari-ation in many poor regions and a tragedy if A.Cs are compelled to follow the B&7& lead and consider military e*ports a viable source of national income& But that is the probable outcome of current trends% and a natural conse0uence of free riding by the world)s most affluent states& The growing amalgamation of foreign aid and private investments has lessened the influence of the BD and% to a lesser e*tent% the 23C. in many development debates and e*panded that of the World Ban,% $' % and regional development ban,s& Though they rhetorically embrace the BD)s call for sustainable development% the latter agents of foreign aid have been more preoccupied with global economic emergences such as the 'e*ican peso crisis and the precarious reform effort in Russia& 7uch cases have demonstrated both the fragility of the global economy and the potential for isolated economic crises to overwhelm the concessional funding sources& $n an era of belt1tightening within many governments and of bac,lash

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against foreign aid% they have magnified the diversification of aid from long1term ecological priorities to short1term economic ones& This may ultimately represent the least EsustainableF aspect of the contemporary foreign1aid regime& .espite these obstacles and the growing deficiencies of many aid policies% development assistance will continue to play a crucial role in the international political economy% as demonstrated by the numerous and diverse ways in which it has been applied to global relations since World War $$& $t has served as a most malleable policy instrument + in the sheer 0uantity of aid% the selection of aid recipients% the functions of aid1funded projects% and the terms upon which grants and concessional loads are disbursed& As noted throughout this volume% foreign aid has contributed greatly to the improvement of living conditions in many distressed parts of the world: there are many success stories of international development& $n the #9;"s and #99"s aid programs have paid for many of the crucial costs of democrati-ation + supervising and certifying elections% creating effective and just police forces% and establishing court systems that consistently enforce constitutional protections& The failure of BD1sponsored peace,eeping missions in 7omalia and Bosnia% furthermore% must not obscure successful efforts in 7outheast Asia% Central America% and southwest Africa& or all of these reasons% foreign aid remains a vital issue in world politics at the end of the second millennium& $t has proven itself to be a force for constructive change% even while serving as an agent for the perceived self1interests of wealthy states& As the contributors to this volume have argued% the central and intractable tension between these two opposing forces will li,ely shape international development long into the future&

ooB* Ste$en &6 -8;;A0 1PBuilding Democracy@ through Foreign Aid: ,he Limitations of (nited States Political %onditionalities* 8;;.-;:* in &emocrati7ation* 5ol6 7* )o6 9* ""6 87:-A/6
The B7 government is not alone in facing such daunting obstacles to the promotion of political reforms in developing countries through foreign aid& To varying degrees and for various reasons% (aid fatigue) afflicted other industriali-ed countries in the mid1#99"s% many of which joined the Bnited 7tates in reducing annual aid

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appropriations&>< As in the B7 case% aid programmes associated with every aspect of sustainable development clashed with domestic interests and other foreign1policy objectives pursued by these donors% particularly those relating to fiscal austerity% trade% and foreign investment& $n addition% the limits of e*ternally imposed pressure for internal reform% both political and economic% became increasingly evident as donors e*posed their conditionality programmes to the test of practical e*perience&>> or the Bnited 7tates% however% it may be argued that the obstacles are most acute and the lessons are most sobering& As the leading source of foreign aid during the cold war% the Bnited 7tates assumed a prominent position within the development regime even as its aid flows consistently ran,ed at the bottom of the regime)s 0ualitative ran,ings& The intimate relationship between B7 strategic self1interests and its aid programme was apparent to other donors and recipients ali,e% leaving a legacy of distrust that endured long after the 7oviet Bnion)s demise& $n this regard% B7 behaviour during the cold war made the prospects for (building democracy) even more difficult& $n e0uating democrati-ation with anti1communism% and in ma,ing dubious distinctions between authoritarian 4pro1B7 states which were acceptable and eligible for aid6 and totalitarian 4revolutionary andGor pro17oviet regimes deemed unacceptable and not eligible for aid6 regimes% B7 leaders fueled the ideological polari-ation% the entrenchment of antidemocratic forces% and the corruption of civil societies in many developing countries that have constrained long1term reform& urther% these lapses in policy contributed greatly to the widespread cynicism toward foreign aid that led to the sharp cutbac,s in the #99"s& $f the cold war e*perience leads to even further reductions in B7 aid% the wrong lesson will have been learned& 3*pectations regarding the utility of aid in inducing political reform must be modest% and all donors must be more self1conscious in attempting to (e*port) their own distinctive models of political and economic development& 7till% properly designed aid programmes serve vital functions in alleviating poverty within developing countries% reducing ecological decay% stemming population growth% and paving the way for private investment and economic growth + all of which foster democratic governance more effectively than the imposition of political conditionalities& urthermore% it is clear that the problems facing the developing world in these areas have both immediate and long1term conse0uences for industriali-ed nations& Thus if development in the world)s poorest areas is to be truly sustainable% so should be the financial assistance provided by the world)s most prosperous governments% including the Bnited 7tates& The B7 government has by no means played a superfluous role in advancing global democratic reform through (economic statecraft)& >5 As noted previously% carefully applied sanctions achieved their stated goals while electoral assistance facilitated historic democratic transitions in such diverse settings as 7outh Africa% Dicaragua% and Russia& The e*clusion of aid to repressive regimes in China% Cuba% 'yanmar% and \aire was also consistent with the policy% as was the growing empowerment of non1state actors as conduits of aid& Devertheless% the e*perience reviewed above serves as a reminder that the Bnited 7tates% li,e all countries% pursues at once a vast range of objectives in foreign affairs% many of which serve differing and often competing constituencies at home and abroad& $n such a setting% the lin,age between principles and practice is tenuous and contradictions between transnational ideals and national self1interest are inescapable&

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ooB* Ste$en &6 -.//A0* 1Foreign Aid in %om"arati$e Pers"ecti$e: !egime Dynamics and Donor Interest*4 in Picard* Louis A6* 2roelsema* !obert and Buss* ,erry F6 -eds60* 'orei!n Aid and 'orei!n Policy# essons for the .e>t =alf *entury* ""6 A:-8/7* )eC MorB: #6 +6 Shar"e* Inc6
As this chapter has argued% sharp rises in foreign aid spending in recent years have not resolved the long1standing debates about the utility of aid in eradicating e*treme poverty or stimulating long1term economic growth& $n the view of advocates% aid reflects the generosity% compassion% and best intentions of governments and their people& 2thers defend aid on utilitarian grounds& They argue that aid serves national self1interests by securing allies% promoting stable and democratic governments% fostering e*port mar,ets% and subsidi-ing domestic farmers and manufacturers through the tying of aid& Critics charge that aid flows are wasted on bloated bureaucracies% reward corrupt dictators% and serve as an agent of Dorthern hegemony& To many proponents of aid% governments can better advance development by encouraging private investment rather than providing assistance& 7uch aid debates% and the comple* and subtle intermingling of national prerogatives and regime norms% will remain part of the landscape of Dorth17outh economic relations throughout the new century& .espite pledges to achieve the 'illennium .evelopment /oals by !"#<% aid donors face severe limitations in their ability to secure a larger share for development aid in their national economies and budgets& This continuing uncertainty reflects the status of foreign aid as an Eimpure public goodF 4Bobrow and Boyer !""<6& $n presuming a lin, between improved living standards% reduced population growth% and environmentally sustainable development% on the one hand% and a more stable and collectively beneficial international system% other the other KsicL% foreign aid conforms to the standard of public goods& Aid flows are Eimpure%F however% because they are selective in terms of recipients and in the mi* of benefits for the donor as

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well as for the recipient& 7tated another way% global development is a classic collective1action problem that rewards free riding and virtually assures the attainment of suboptimal outcomes 4see 2strom et al& !""#6& The development aid regime is unli,ely to achieve its goals under these conditions& The collective resources of aid donors will continue to produce disappointing results so long as aid flows remain fragmented among myriad sources + bilateral and multilateral% public and private& 3ven within many donor governments% including the Bnited 7tates% the presence of multiple and often competing aid agencies discourages the adoption of coherent development strategies% let alone the effective use of aid transfers by recipients& Pledges to harmoni-e aid objectives and coordinate the direction and terms of aid transfers remain rhetorical% and they are li,ely to remain so given the chronic and deeply entrenched intrusion of donor self1 interests in aid calculations& Donetheless% the increased attention paid to 2.A since !""" provides a basis for optimism that the aid regime can overcome its inherent limitations& 7uccess stories can be found in aid)s role in enhancing food supplies in southern Asia during the #9>"s% in stimulating economic growth in 7outh ?orea and other 3ast Asian states during the #95"s and #9;"s% and in propelling political and economic reforms in 3astern 3urope after the collapse of the 7oviet bloc& Progress has been made toward debt relief and in the fight against H$IGA$.7 in Africa& Wealthy states too, unprecedented steps forward in adopting specific targets for poverty reduction at the 'illennium 7ummit of !""" and in agreeing upon a unified development strategy at the !""! 'onterrey conference& These efforts reflect a recognition that continued distress in the developing world threatens global prosperity and security& The challenge in the years to come will be to convert this consensus into sustained development cooperation% and the occasional sacrifice of short1term national interests on behalf of enduring transnational concerns&

o"Bins* !aymond F6 -.///0* 1Political +conomy of Foreign Aid*4 in ,ar"* Finn -ed60 -.///0* 'orei!n Aid and &evelopment# essons earnt and &irections for the 'uture* ""6 <.9-<<;*

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London and !outledge6

)eC

MorB:

The three targets discussed aboveC 4i6 state strengthening% 4ii6 mar,et management and 4iii6 poverty and emergency safety net guarantees all relate to diffuse goalsC global goods and economic justice& There is no simple design for aid1use in pursuing these targets% as earlier chapters made clear& Aid channels and modalities to impact these are necessarily conte*t dependent% including emergency aid to protect human capital& What does appear true is that such aid may be more intrusive of sovereignty than previous aid& 7trengthening states appeals broadly to popular concern about threat from the international sphere& Reilly 4#9996 found that international terrorism% for e*ample% seen as out control in wea, states% was the most fre0uently cited threat to the Bnited 7tates according to the American public& 7upport for using aid to improve mar,ets can be found among development ban,s% private international financial and corporate institutions% and their government allies in ministries of finance% trade% commerce and legislative bodies& 7upport for the twin aid goals + sustainable reduction of poverty and emergency responses + involves helping the most vulnerable and comes from the coalitions generally& $t is the poorest after all% who are most endangered by disasters 4natural or man1made6& 7upport for long1term poverty reduction through institutions such as the /rameen Ban, is popular with the same groupsC D/2s% political parties and foundations concerned about global ine0uities& These coalitions support emergency humanitarian relief and are fre0uently the most effective advocates of poverty1oriented aid& 3ven though emergency aid is critici-ed as a (Band1Aid)% unsustainable% and even counter to long1term goals% it is supported by the same humanitarian sentiments that put poverty at the top of the aid policy agenda& 5onclusions+ Future 5onditions .evelopment + economic% social% and sustainable + without effective state is impossible& 4World Ban, #995aC #;6 A major condition for sustainability of future aid is a belief in its efficacy& 7uch a belief rests on seeing improvements lin,ed to aid& And this% in turn% is affected by what donors and recipients want improved& Comple* social processes shape aid use% including the administrative management of donors and the policies and state machinery of recipients& As noted throughout this volume% state institutions ma,e a big difference in development& Adelman emphasi-ed that (a government with substantial autonomy% capacity and credibility is re0uired for successful long1term economic growth&) 4Chapter !6& Dorth 4#99"6 shares this view% asserting that institution of formal rules% informal norms and enforcement probabilities determine economic growth& He finds a pressing need to understand how third world and 3ast 3uropean polities operate in order to promote development though informal constraints& The focus on institutions in this volume pushes future aid toward attention to informal rules that affect states% mar,ets and vulnerabilities of the poor&

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'any aid receiving candidates are anarchical states& $n Africa and the post1 communist world% terms such as patrimonial% shadow% rent1see,ing% semi1sovereign% mafia1li,e and corrupt have been used to characteri-e the policy& These two areas have been the major foci for aid in the #99"s& 'ost of the <"1odd wars of this decade are internal and occur in these two areas& Thus the basic capacity of states to deliver security is problematic& As noted in Chapter #5% aid can play a vital role in rescuing peoples from the damage of conflict& $t can also assist state formation% helping build administrative structure and analytical or steering capacity& The vital role these play in development processes has been stressed in earlier chapters 4e&g& Chapter !6& Aid to these countries% aimed at state reform% may re0uire unconventional development assistance pac,ages% state strengthening would focus on core functionsC legitimate force to uphold order% ta* collection to finance public goods% technical assistance to enhance military and ta* collections s,ills and controls to limit corruption% encourage civic norms and e*pand accountability& These and other governance elements need deepening& Withholding aid has been the major tool for political conditionality& This does not wor, very well because of pressures to release funds already earmar,ed& /iven this problem% and the desire to aid wea, states% on goal of aid must be to ac,nowledge ends that ma*imi-e its relation to political performance and minimi-e the ability of predatory officials to hijac, it for private purposes& or both rich and poor countries% state failure promises to be the greatest threat in coming decades& 2penness and sound economic policies are largely irrelevant in situations where capital flight dominates private mar,et financial calculations& or states to (own) a set of policies% including use of aid% there must be first a state structure& Aid to provide a transition from anarchy must precede aid for a transition to a stable development path& rom the states of the former 7oviet Bnion to the collapsed governments in Africa% there is a growing vacuum of political order + a vacuum that aid underta,ings are challenged to fill& Aid for political construction re0uires delicate balancing in which the trade1off between conditionality and ownership is ac,nowledged& This dilemma is still to be resolved% yet it must be% so that countries with the greatest needs% often ones most troubled by political upheavals% will not continue to be the ones least able to absorb aid efficiently& Resolutions of the dilemma relate to the three targets for aid discussed earlier& To the e*tent these targets grow among donor motivations% they will point directly to behavioral obstacles for aid effectiveness% such as corrupt or merely under1s,illed human capital& This theme is easier to observe than address& A major future tas, for research on aid effectiveness is to e*plain how recipient governments can reali-e stronger capacity as well as some authentic (ownership) of their wor, as a result of aid& Reducing failures of political institutions in recipients re0uires prescriptions with greater specificity& We need to ,now how aid can effect real improvements in politics& This chapter has loo,ed at changing donor motivations and as,ed what can and should shape future aid& With decay in recipient country institutions a problem% with a rise in support for global goods% such as environmental protection% and with donors enjoying increased scope to demand concessions from aid recipients% targeting aid to save failing political institutions commands and deserves broad support&

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out* &il -.//>0* The Politics of Aid Selectivity# Good Governance *riteria in World +an)$ 6S and &utch &evelopment Assistance* London: !outledge6
With the ending of the political dichotomy in world politics around #99"% the good governance principle came to occupy an important position in judgements about political regimes in developing countries& /ood governance became an important objective in the policies of many aid1giving Western countries and the main international financial institutions% such as the World Ban,& $ncreasingly% however% good governance and mar,et1oriented economic reform came to be subsumed under one heading% leading to what has been called a post1Washington Consensus& This boo, describes in detail the policies of aid selectivity adopted by the World Ban,% the Detherlands and the Bnited 7tates since the end of the #99"s& The main assumptions underlying the policies% as well as the ,ey decisions related to the selection of developing countries% are analysed and critically evaluated& A comparison is made between policy ma,ing in these three cases and different approaches to selectivity in the Bnited ?ingdom& The boo, brings out the conflicts that may e*ist between foreign assistance agendas and the desire of governments in developing countries to set priorities for their national development policies& -#e Politics of )id "electi!it is the first e*tended analysis of selectivity policies of important bilateral and multilateral aid donors and combines a policyanalytical with a 0uantitative1empirical approach& The boo, is relevant to students of various sub1 fields of development studies and policy analysis% among other areas% and also has international appeal to researchers and policy1ma,ers wor,ing in the area of foreign assistance& Kboo, summaryL

untington* Samuel P6 -8;>/>80* 1Foreign Aid for &hat and for &hom* Part 8*4 in 'orei!n

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Policy* )o6 8 -&inter 8;>/->80* ""6 8:8-A;6

B&7& assistance to the economic development of poor countries has suffered from the tendencies of its supporters to divorce economic development from over1all B7 foreign policy objectives and% more generally% to ma,e the case for B&7& economic development assistance in terms of the needs of the poor countries rather than in terms of the interests of the Bnited 7tates& 3conomic development assistance has been underfunded in part because it has been oversold& $n this essay% we have attempted to escape from the rhetoric and sentimentality which has so often been adduced on behalf of foreign aid and instead to ta,e a cold% hard loo, at the interest of the B&7& in the economic development of poor countries& Three general conclusions seem to flow from this discussionC #& As the wealthiest country in the world% the Bnited 7tates has a moral obligation to help alleviate the sufferings of poor people in poor countries& !& The Bnited 7tates has some real but not overriding interest% primarily economic and long1term% in the economic development of poor countries generally: it also has some derived political interest in not disappointing the e*pectations of other governments that it ought to be interested in the economic development of poor countries& H& The Bnited 7tates has special interests in the economic development of individual countries which are of particular concern to the B&7& usually for noneconomic reasons and the promotion of whose development is an integral part of over1all B&7& foreign policy towards those countries& Rarely% however% is the economic development of a country the primary interest which the Bnited 7tates has in that country& $n most countries% economic assistance probably helps economic development% but the relationship between levels and types of aid% on the one hand% and economic growth% on the other% is by no means clear& There may also be other policies% particularly in the areas of trade and encouragement of private investment% by which rich governments can e0ually promote economic development of poor countries& inally but most importantly% the governments of poor countries have good reasons to prefer less aid rather than more aid& rom this% one can conclude that the B&7& ought to maintain at least three different types of economic assistance programsC humanitarian and related programs aimed primarily at alleviating immediate evils to poor peoples) general economic assistance grants channeled through the World Ban, and other multilateral agencies to assist in the over1all economic development of the Third World: and bilateral programs which are an integral part of B&7& foreign policy toward countries where the B&7& has special political% economic or security interests&

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untington* Samuel P6 -8;>80* 1Foreign Aid for &hat and for &hom* Part .*4 in 'orei!n Policy* )o6 . -S"ring 8;>80* ""6 88<-89<6
3*cept for those who oppose all forms of Eforeign aidF no matter what purpose it serves% little reason e*ists to tal, about foreign aid as an end in itself& The discussion of policy should be in terms of% first% the desirability and importance of the goals which may be served by foreign aid% and% then% the relative effectiveness of aid as against other means for achieving those goals& /iven the multifarious purposes to which aid may contribute% a Eforeign aid actF and a Eforeign aid agencyF are clearly anachronisms& Current aid programs need to be disaggregated in terms of their purposes and new programs inaugurated to reflect emerging B&7& interests in global maintenance& By focusing on these purposes% the supporters of foreign aid would shift the focus of attention from a means which has politically negative connotations to ends which are more li,ely to have positive appeal& $n addition% they would transform the effort to develop a EconstituencyF for foreign aid 4which is the e0uivalent of developing a constituency for EsubsidiesF6 into more meaningful and successful efforts to develop special constituencies for the particular purposes which foreign aid may serve& The net result of this disaggregation could be more or less foreign aid than there has been in the recent past% but happily no one would ,now for sure which it was& ocusing on the ends of aid should thus clarify both purpose and understanding& Above and beyond this% however% there is the possibility that foreign aid even as a means may be in the process of becoming less meaningful& oreign aid% as it is commonly conceived and practiced% was a product of the emergence of the Western state system in the si*teenth and seventeenth centuries& $t has normally meant military% economic% or political assistance from one government to another one& $n many areas of policy% however% the distinction between foreign and domestic programs has already become blurred& Private organi-ations% international bodies% and EdomesticF agencies of different governments blithely pursue their objectives across international boundaries& As these transnational operations e*pand% the identification of Eaid flowsF themselves becomes increasingly difficult% and trying to pinpoint the net benefits and costs of any particular transaction to national territories practically impossible& When an American1based multinational corporation uses profits from a plant it has previously constructed in Bra-il to build a new one in Peru% who is contributing to the development of whomW When one government lends to another at less1than1commercial interest rates so that the borrower can buy capital goods from the lending governmentZs country% how much of the loan is aid% how much of it is an e*port subsidy% and how much of it just a

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straight business dealW 7uch 0uestions are becoming more and more fre0uent and more and more difficult to answer& As such relationships become increasingly comple* and diversified% the entire concept of foreign aid could itself become anomalous and irrelevant&

Imbeau* Louis-#arie -8;AA0* 1Aid and Ideology*4 in European Journal of Political Research* 5ol6 8:* )o6 8* ""6 9.A6
The substantive purpose of this paper was to find an e*planation for the variation in aid allocations among donors& A collective bounded rationality model was developed in order to include in the e*planation ideological factors and environmental factors as well& The empirical estimations have confirmed that the model as a whole e*plained up to 9>Q of the variance in aid as a percentage of /DP& The substantive results are summari-ed in Table 5& As far as the relationship between ideology and aid policy is concerned% the findings reported here constitute a strong confirmation of the importance of ideological factors in e*plaining variations in aid allocations as a percentage of /DP& .ata reported in Table 5 suggest that ideology better e*plains le!els of aid than changes in aid allocations& Actually% ideology is the best e*planation of aid giving in a model including the $nstrumental and Humanitarian e*planations& This is consistently true for all four estimations& The idea that ideology is related to public policy is well documented in the empirical 0uantitative literature& $ndeed% one of the political factors most often related to public policy is ideological orientation of government through the use of measures of party ideology& $t has been shown% for instance% that ideology was significantly related to variations in welfare e*penditures 4Cameron #95;: Castles and 'c?inlay #959% Hic,s and 7wan, #9;M6% in fiscal and monetary policies of 23C. countries 4Cameron #9;M% Hibbs #955% Hic,s #9;M6% in public e*penditures among American states 4Dice #9;!6 as well as among Canadian provinces 4Aachapelle #9;>6& The idea that ideology influenced aid policy has also been documented& Bet- and ?reile 4#9;!C 996% for e*ample% wrote that (free mar,et ideology provides the prism through which /erman interests are perceived)& or Holm 4#9;!C 5H6% (the development of .anish society is seen as a result of solidarity% state control and intervention to prevent too large differences to develop within the .anish society& $n relation to the Third World% the same type of intervention and solidarity is advocated by .anish governments)& $n the same vein% 'c?inlay and Daraine 4#9;!C

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M56 argue that (in general% right1wing parties & & & are more prone to spill1over into neomercantilism: left wing parties under the stronger influence of state capitalism and an e*tensive commitment to social welfare & & & can even spill1over into the interventionist stance urged by the D$32 demands)& $n all these cases% ideology is put into relation with levels of aid% not changes& $deology is an organi-ed set of values and goals about the development of a society& These values and goals structure or colour policy choices over the long run& 3ach society% to a certain e*tent% has its own way of translating into policy choices its ideological structure& $f the ideological orientation of governments changes sensibly over time 4with changes in party control over e*ecutives6% the ideological orientation of electorates is less prone to change 4though changes can still be observed6% as is the ideological orientation of the public service as a whole 4if only because of the relative stability of public &service officers6& Therefore% on the whole% ideology is more or less constant within a polity 4at least when we consider short !"1year periods6& Because of this% the effect of ideology is more li,ely to appear in a cross1national design than in a cross1sectional one& 2f course% the effect of ideology might vary from one policy type to another and from one policy instrument to another& The redistributive dimension of development aid as well as the implicit solidarity it supposes in international economic relations ma,e this type of public policy an area where Aeft1Right ideological differences may be e*pected to have an effect& The findings reported here constitute a confirmation of this proposition and they are consistent with the growing body of comparable findings documenting the relation between ideology and policy& $deology% li,e attitudes and values% is part of what has been called (political subjectivity) 4Brown #9;"6 and is to be related with (objective) factors in assessing its relation to aid 1 giving behaviour& $t has been shown 4$mbeau #9;#6% through a computer simulation% that the relationship between objective and subjective factors on the one hand and foreign policy behavior on the other hand% must be assessed simultaneously if one wants to get a reliable picture of foreign policy decision1ma,ing& With this in mind% it would seem that% before engaging more in empirical research on this 0uestion% the ideology1policy relation should be given attention at the theoretical and the methodological levels% answering 0uestions li,eC how does ideology influence policy choices% one type of policy instrument or another% one type of policy area or anotherW: how should we measure the ideological orientation of policy actorsW: are party1based measures satisfyingW: are any indicators of policy choices more efficient in e*pressing the effect of ideologyW This paper is a contribution to this general 0uery&

Imbeau* Louis-#arie -8;A;0* &onor Aid ( The &eterminants of &evelopment Allocations to Third World *ountries# A
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*omparative Analysis* MorB: Peter Lang6

)eC

IrCin* LeCis 26 -.///0* 1Dancing the Foreign Aid A""ro"riations Dance: !ecurring ,hemes in the #odern %ongresses*4 in Pu"lic +ud!etin! ? 'inance* 5ol6 ./* )o6 .* ""6 9/-<A6
These findings emerged from the comparison of the two cases and from the comments of the legislators and other ,ey actors interviewed as part of this researchC (1) -#e foreign aid appropriations process is a routinel c#oreograp#ed public and pri!ate dance. $n both of the cases% the foreign aid process was mar,ed by an elaborate public and private dance between the administration% the respective chamber leadership% and the committee and subcommittee leadership& The president and his e*ecutive agency administrators would articulate their policy goals% in the process setting the legislative agenda that served as the basic blueprint for the eventual public policy& The bul, of the presidential program% aside from the specified funding levels which would inevitably be reduced as part of the dance% would then remain as good as intact% despite the loud and often bitter rhetoric that followed& While the administration got 9< percent of what it wanted in proposing the foreign aid legislation% the oreign 2perations Appropriations 7ubcommittee leadership would sei-e and define the terms of the political debate& $n the foreign aid appropriations process% li,e most legislative initiatives% this management of the terms of debate meant that the legislators would generally be able to decide upon the Ehot buttonF top1tier political issues that would drive the negotiations between chambers and the administration& $n the end% the administration would generally get the level of funding it really sought% though that figure would be considerably less than the target publicly stated at the outset& $n sum% there was no evidence of significant change in the relationship between the president and the Congress in this issue area% in spite of persuasive arguments to the contrary in the literature&

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(2) -#e foreign aid appropriation legislation remains a natural =soapbo'> issue. oreign aid receives a disproportionate amount of attention given that it routinely involves less than ! percent of the federal budget& $n part% this is true because foreign aid has no natural congressional constituency in a macro sense% and thus foreign aid is an easy target for the average legislator see,ing to ma,e a splash bac, home with Efiscally conservativeF remar,s& urthermore% in an election year% it is difficult for any member to vote his or her conscience on this issue because any challenger can ma,e the charge that the incumbent is Eta,ing care of foreigners before ta,ing care of us&F Reali-ing this inherent difficulty in cultivating support% the administration and proponents of foreign aid within the Congress have adapted to this constraint by constructing the legislative votes such that any member can go home and claim to have voted to reduce foreign aid& (C) "uccess in t#e foreign aid appropriations process, li2e ot#er legislati!e initiati!es, comes onl t#roug# t#e deliberate construction of an ad hoc issue coalition. 2tto Passman)s ad #oc issue coalition was based within his oreign 2perations Appropriations 7ubcommittee% in which he was able to get every member% regardless of policy predisposition or party affiliation% to stand in public support of the compromise crafted within the subcommittee& .avid 2bey% on the other hand% constructed his ad #oc issue coalition around the ran,ing minority member on the subcommittee% Robert Aivingston 4R1AA6% as well as administration officials who were willing to wor, hard to inform the members and solicit support throughout passage& Both leaders crossed party lines to forge bipartisan coalitions that were able to deliver success% though the lesson here is broader than just the efficacy of bipartisanship& 7trategic management of the issue is necessary to deliver the legislation% and the commonly offered partisan interpretations of a bill)s success or failure are usually shallow at best& Again% these cases offered no evidence of major changes in the elements of legislative success in the two periods& urthermore% while the majority of respondents from the early #9>"s were 0uic, to give credit to their parties for electoral assistance% none discussed the parties in terms of serious legislative voting commitments& Willful agents% rationally pursuing self1determined and sometimes personal goals were much in evidence in both periods of the study% and the issue coalitions of actors are not described accurately by party or interest group simplifications% even in the early #9>"s& An important aspect of this analysis is that the parties could not deliver on policy changes by themselves& (H) 8ember<to<member contact and a roug# consensus among t#e leaders#ip remain t#e most critical elements of legislati!e success. $t was clear from my study of the pursuit of legislative success in the foreign aid appropriation process in both the early #9>"s and #99"s that there was and is no substitute for consensus1 building as an ingredient of success& While both chamber and e*ecutive branch leadership could stymie a measure when so inclined% their powers were often EnegativeF in nature and neither could deliver legislation alone& 7uccess came only after subject matter e*perts at the committee and subcommittee levels had done the heavy lifting of building support for a measure one legislator at a time& While there is no routine recipe for legislative success in the foreign aid policy area% foreign aid proponents have settled on a variety of time1tested means and recorded dance steps that they believe will lead directly to that success&

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(F) -#e met#ods of legislator<to<legislator persuasion #a!e remained constant o!er time and include arm<t$isting, bartering, personal appeals, public polic logic, and public ser!ice appeals. $n both periods% the respondents and the bac,ground research gave evidence of all five of these techni0ues of persuasion& Aegislators were not afraid to use leverage at their disposal% and both proponents and opponents of a particular measure were li,ely to offer something in return for fellow1member support of their position on the issue& Additionally% members see,ing support for an issue position would routinely as, their colleagues for personal favors% and it was common for proponents of a position to couch their re0uests in the language of public service& Aastly% despite a clear increase in issue comple*ity from the #9>"s to the #99"s in the realm of the foreign aid program% the leaders on both sides of the issue still did their homewor,% rationally determining advantages and disadvantages of the policy positions& The techni0ues used to garner member support have essentially remained constant since the #9>"s and probably before& Ai,ewise% legislators) personal reputation% perceived integrity% interpersonal s,ills% personal relationships% and legislative initiative factor heavily into the prospects for success% contrary to recent perceptions& (3) 8embers alone deal in t#e first<tier issues, and t#e staffs deal $it# t#e increased issue and procedural comple'it . The number of committee staffers on the Appropriations Committee increased from <9 to !!5 over the period from #9>! to #99H& A commonality between the two periods is the fact that staff members were not generally authori-ed to deal in what the members describe as Efirst1tier issues%F or politically charged or higher1profile issues of controversy& The ,ey party or chamber staff negotiators were given guidance from the chairmen as to what topics were permitted& Heightened issue and procedural comple*ity has played out primarily within the greatly increased staff on the committees& 3ssentially% the politics of the process have remained the same for the members% while the institution adapted to increased comple*ity through the e*panded staff& $t is also noteworthy that while the staffers in each case had important negotiating and coordinating roles at various junctures of the process% the member respondents did not list the staff actions as a significant cause for concern in the pursuit of legislative success& (7) From t#e legislati!e actors; perspecti!e, t#e underl ing continuities t#at define t#e legislati!e process are more important to t#e process t#an t#e documented c#anges. The evidence from the case histories and the respondents) perspectives confirmed that while the often1documented changes in the legislative process matter% the participants view the underlying continuities of the process over the years as most important to the reali-ation of legislative success& The portraits of the process that emerge are remar,ably similar between the periods& (G) -#e actors !ie$ people, rat#er t#an procedure, as t#e most important determinant of success or failure. inally% it was clear from the respondents as well as the other case evidence that it was the ,ey legislative actors who determined success and failure in legislative outcomes& While the names and political agendas of the principal actors change over the years% the form and functions of the foreign aid appropriations process have remained similar over time% with the actors playing out their respective self1selected parts in the drama& $n an age of 0uantification and ready 0ualification% we should not lose sight of the EpersonalF aspects of the legislative process&

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Isenman* Paul -8;>:0* 1Biases in Aid Allocation Against Poorer and Large %ountries*4 in World &evelopment* 5ol6 <* )o6 A* ""6 :98=:<86
We have seen that aid allocations from a variety of donors and for a variety of time periods% samples and definitions of aid show surprisingly consistent biases against poorer and larger recipients& While much of the cause of these biases is political per se, there are a surprising number of non1political factors which appear to contribute substantially to the biases& rom the perspective of those who feel that a poor person living in a larger country is no less worthy of assistance than a poor person in a smaller country and that poorer countries should receive more rather than less aid% it would be desirable if the (development community) were more conscious of these biases and their causes% and of what might be done to mitigate% if not eliminate them&#; $n this connection% the recent emphasis on countries ('ost 7eriously Affected) by the oil situation and on the 4terms as well as volume for the6 (Aeast .eveloped) countries is fairly encouraging for prospects for further initiatives of this type& $t should be noted that mitigation or elimination of these biases does not re0uire that other% otherwise desirable criteria be dropped& or e*ample% a medium1term shortage of foreign e*change% ta,ing account of increased needs from accelerated growth% should be a necessary condition for concessional foreign resource transfers& .onors should still be 0uite concerned about the 0uality of projects% but should consciously bias their own project development activities to favour the lower1 income countries which have serious human resource and institutional constraints on project development& 7imilarly% donors could ta,e account of (self1help) or (performance) 4although it should be recalled that the measure of self1help used in this study turned out not to be significant in e*plaining past allocations6& 7uch self1 help ratings would% of course% be 0uite different from conventional past ratings which focused almost entirely on factors relating to /DP growth per se, and would include commitment to% and steps to meet% the needs of the poor& There is a danger% though% of inadvertently reintroducing the middle1income bias& or e*ample% given the five criteria used to measure performance in Cline and 7argen 4#95<6 + savings% inflation% e*ports% ta*es% and capital1output ratio + it is not surprising that the four countries in their #91country sample which would have their aid increased as a result of good performance were Taiwan% ?orea% $ran and 'alaysia% in that order& This inadvertent apparent middle1income bias occurs in an article which% otherwise% comes out strongly against the middle1income and country1si-e biases& 7imilarly% some of the poverty1focused criteria which have recently been suggested to measure performance% such as infant mortality

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4uncorrected for level of development6% would also strengthen the middle1income bias: many such (social indicators) are highly correlated with per capita income% and would in effect allocate aid as a reward for past performance% to those who need it the least& While the 0uantitative anlaysis here has been on the basis of .AC assistance% it follows from the behavioural arguments for the middle1income bias and from the trade1related behavioural argument for the country1si-e bias% that the distribution of non1aid economic benefits% as from trade preference or commodity agreements% are li,ely to suffer from these biases even more than aid allocations do: if sufficient care is not ta,en by rich and poor countries% measures underta,en as a part of the (Dew $nternational 3conomic 2rder) may leave poorer and larger countries relatively worse off& The analysis here is also li,ely to be relevant to allocations made by 2P3C donors& While oil1e*porting nations obviously have their own political uses of aid% one can hope that with the advantage of being (late1comers) they can avoid at least some of the more inadvertent biases of past allocations& or e*ample% some among the new donors may have an understandable preference for financing (ban,able) projects but limited project1development staffs% which would thus introduce a bias toward the middle1income countries best able to generate a large volume of ban,able projects& $n conclusion% there is a need now for development economists and others with an interest in the ways in which the rich nations can assist the poor to focus specifically on the desirable inter1country allocation of such assistance and the political and practical issues of the transition to the allocation desired&

?ohansson* Pernilla -./880* 12rants to )eedy %ountries3 A Study of Aid %om"osition betCeen 8;>7 and .//7*4 in &evelopment Policy Review* 5ol6 .;* )o6 .* ""6 8A7-./;6
The grant component of bilateral aid has increased considerably over the last decades% reaching 95Q in !""<& Although bilateral donors in general provide aid in the form of grants% the grant ratio varies greatly across recipient countries& Recipient need e*plains this variation of aid composition to a certain e*tent% as poorer countries appear to receive a higher grant component of aid between #95<

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and !""<& However% the study indebtedness e*plains the variation&

finds

no

evidence

that

recipient1country

The latter finding is surprising as the recent grant1versus1loan debate focuses on debt sustainability in recipient countries& While the debt1sustainability problems in developing countries have called for the initiation of wide debt1relief programmes% this study fails to provide evidence that the allocation of the bilateral grant+loan mi* has been tailored to avoid future debt problems& $n addition% the recent debate focuses on the shift from loans to grants for multilateral organisations such as the $nternational .evelopment Association of the World Ban, 4see% for e*ample% the 'elt-er Commission report6& This study shows% however% the importance of focusing not only on increasing grants but also on the allocation of the grant+loan mi*& Recipient need in terms of income level is nevertheless a significant determinant of the grant component of aid& Poorer countries receive a higher grant component in all three periods& This finding is in line with the suggestion of Radelet 4!""<6 who argues that the income level of recipient countries should be the crucial factor in determining the allocation of the grant+loan mi*% as it avoids perverse incentives and provides a simple allocation rule& Although a significant determinant% the analysis shows that the effect of recipient1country income level is 0uite limited& At most% a decrease in /.P per capita of #"Q increases the grant component of aid by about one percentage point& $n all% the results suggest that the recent grant1versus1loan debate should focus not only on a total increase in the grant component of aid but also on the actual allocation of the grant+loan mi* to recipient countries& By allocating a higher share of grants to already indebted countries and a higher share of loans to countries able to absorb loans% donors could scale up development assistance and at the same time probably reduce future debt problems in recipient countries& The policy recommendation is thus not to scale up grants on a general level% but for donors to be more selective in allocating grants and loans with respect to recipient needs and characteristics&

?olly* %urtis #6 and 2adbois* #6 A6 -8;A;0* 1Foreign Aid as a Promotional Strategy*4 in The Review of +lac) Political Economy* 5ol6 8A* )o6 8* ""6 7;-><* )eC MorB: S"ringer6
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The study has shown that the commercial and economic interests of aid can be modelled if trade is e*pressed as a function of aid& An advertisement model can then be used to e*amine the response function& $f such an approach is adhered to% and donors are more open about their real motives for aid1giving% more information will be made available for long1term distribution planning& Aong1term plans will result in a constant flow of e*ternal aid investment in recipient countries and thus will have a greater effect on both donor and recipient countries& The results of the study showed that aid flows and per capita income of the recipient countries have positive effects on trade flows& Hence% it is in the self1 interest of the donor country to stimulate economic growth in the developing economies% and therefore% contribute to a healthy international trade mar,et& Another conclusion from the study was that the aid donors studied have been efficiently allocating their aid budgets to the recipient countries% and that donors will be willing to increase allocations only if they see that it is to their best interest& The use of an advertisement model in measuring the economic and commercial interest of aid shows promise&

Dang* SeonHou -.//>0* 1Agree to !eform3 ,he Political +conomy of %onditionality 5ariation in International #onetary Fund Lending* 8;A98;;>*4 in European Journal of Political Research* 5ol6 <:* ""6 :A7->./6
$' conditionality has been critici-ed for its infle*ibility and insensitivity& However% a close loo, at conditionality agreements reveals that conditions attached to loans from the $' have varied 0ualitatively and 0uantitatively& This study attempted to e*plain the thus1far1overloo,ed variation in $' conditionality& Bnderstanding conditions attached to $' loans is important because it paves the way to assessing not only the appropriateness of $' programs for addressing economic problems in borrowing countries% but also compliance with the programs& With this study% the whole spectrum of $' conditionality is covered% from borrowing countries) decisions to participate in $' programs to the outcomes of those programs&

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This study used a political economic framewor, to e*amine the variation in $' conditionality& Although the $' has its official economic rules to determine conditionality% its institutional arrangements steer it away from those rules& The five countries that fund most $' operations e*ert influence to determine $' conditionality outside the official rules in order to advance their strategic interests !is<M<!is developing countries and% as a result% $' conditionality comes to vary across programs& Thus% between #9;H and #995% such influence from the five countries made $' conditionality easier for borrowing countries that showed national attributes important to the five countries than those that did not& The five countries and borrowing countries have a common interest in promoting goals with $' conditionality beyond economic reform% and this is why% despite the poor compliance and disappointing results% conditionality agreements do not disappear% but continue to be contracted even today& These findings have significant implications for how to improve $' conditionality& Critics have ascribed the disappointing results of $' conditionality only to the $' )s economic model from which specific conditions are shaped% and they have recommended that the $' modify its economic model for successful structural adjustment& However% we now ,now that the political economic influences were as responsible as the economic model for the failed structural adjustment in developing countries& Aoaded with a necessity for compromise from the complementary strategic interests between the five countries and borrowing countries% conditions were not properly formed to address economic problems in developing countries& The seeds of failure were planted by the political economic process of $' conditionality as well& Therefore% the solution is (let the $' do what it does best with autonomy)& $mproving $' conditionality should incorporate chances for the $' to design macroeconomic reforms that truly address economic problems in developing countries& To do so% the $' has to enhance its institutional capacity to counter internal and e*ternal factors that will pervert its program design& However% there should be no illusion that this can be e*peditiously achieved&

DQrre* Bo and S$ensson* Bengt -8;A;0* 1,he Determinants of SCedish Aid Policy*4 in StoBBe* Ola$ -ed60* Western %iddle Powers and Glo"al Poverty# The &eterminants of the Aid Policies of *anada$ &enmar)$
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the .etherlands$ .orway and Sweden* ""6 .98-.><* (""sala* SCeden: ,he Scandina$ian Institute of African Studies6
$n this part of the paper% we shall sum up the topics treated in the foregoing pages with special reference to the attitudes of the political parties& urther on% we shall try to identify the forces underlying these attitudes and finally we shall give our conclusions regarding the alleged trend described as a change from the (traditional 7wedish system of development assistance) towards the (general 23C. model)& $t is fairly easy to describe the policies of the political parties& $t is far more difficult to discuss and analy-e the determinants of these policies& Do research has been underta,en on these 0uestions& What we shall say here is based to a large e*tent on our own e*perience and judgments& irst% the volume of development co1operation& Among the political parties% the 'oderate 4Conservative6 Party has proposed at least a temporary abandonment of the one per cent target& This position is logical% bearing in mind that the party is the only Parliamentary group advocating a substantial reduction of ta*es and conse0uently in the role of the public sector in the economy& Ta,ing into account the fact that the 'oderates also argue in favor of increased defense spending% almost no other public1sector activity can% in their view% be spared reduced spending if budgetary e0uilibrium is to be reached and maintained& $n 'oderate Party thin,ing% foreign borrowing plays an important role in the bac, ground to such proposals& 7ince the oil crisis% 7weden has resorted to foreign borrowing and% so the argument goes% it is irrational and almost immoral to finance development aid with borrowed money& Bearing in mind the e*istence of unused carry1overs in the aid appropriations% the 'oderate Party argument goes on% a decrease of the share of development assistance in the /DP would have limited% if any material conse0uences& The 'oderates have had only a limited and temporary success in obtaining a reduction of the share of development assistance in the /DP& 2n one occasion% a Parliamentary majority consisting of 'oderates and 7ocial .emocrats succeeded in decreasing the share of development aid% but only temporarily& Iiolent opposition from the Aiberals% the Centre Party and the Communists and + probably more importantly + from groups within the 7ocial .emocratic Party forced the government to return to the one per cent target& The one per cent target has been considered to be a first stage& $f and when economic conditions allow% the appropriations should be increased over and above that target& However% only the Aiberals and the Communists are now tal,ing about a two per cent target% though they do not mention a timetable for its attainment&

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$t seems reasonable to assume that there will also be in future a strong majority in Parliament in favor of maintaining the one per cent target& Whether there will be a majority for a higher target in the foreseeable future is very doubtful& Dow the 0uality of the development co1operation programme& To those who favor a lessening of the aid burden on the 7wedish economy% an increased share of 7wedish1oriented allocation is a measure to be considered% bearing in mind the near impossibility of abandoning the one per cent target& Aogically% the 'oderates have advocated increased tying and also a ,ind of tying of local1cost1financing& 7uch financing means in practice that convertible 7wedish ,ronor are placed at the disposal of the recipient country% which uses the corresponding sum in its own% non1 convertible currency& Thus% the recipient country will receive convertible currency% which can be used for purchases in countries other than the donor country& This problem% however% has not been of major importance in the debate% as the other parties accept local1cost1financing as an efficient means in the aid programme& The 7ocial .emocrats have been very responsive when in government to demands for aid which will produce increasing return flows to 7wedish industry& This attitude can largely be e*plained by the Party)s giving priority to creating employment and by the strong connections between the Party and the blue1collar trade unions& $t would be tempting to e*plain the 'oderate Party)s attitude as a result of the Party)s lin,s with industry& Do doubt such lin,s e*ist% but to attribute the Party)s policies to them only would be over1simplistic& As an e*ample% the 'oderates have critici-ed the alleged concentration of the aid programme on so1called 7ocialist countries% in spite of the fact that the return flows from such countries are comparatively high& A special case in point is the development co1operation with Iietnam% in which the Party advocates an immediate cessation of the aid programme because of the Iietnamese military presence in ?ampuchea and% as they see it% the Iietnamese /overnment)s lac, of respect for human rights& 2ne of the biggest projects supported by 7weden is the Iinh Phu pulp and paper mill in Iietnam% which is being built in close co1operation with 7wedish industry& The immediate abandonment of that project would result in the loss of a good showpiece in the region for 7wedish industry and% worse% in the probably failure of the project% with possibly negative conse0uences for 7weden)s industrial reputation in the region& The introduction of balance1of1payments support among the instruments of the aid programmes has also been greeted with much s,epticism by all the non17ocialist parties% in spite of the fact that the support has hitherto been largely tied to procurements in 7weden& Another important 0uality aspect has been the country1programming system& The system undoubtedly decreases the fle*ibility of the donor country% preventing it from easily switching aid funds from one country to another at short notice& All the non17ocialist parties have argued that donor fle*ibility should be increased and conse0uently that the country1programming system should be considerably modified or in practice abandoned& Aately% however% at least the Aiberal Party seems to have accepted the system% which has already been slightly modified without changing its main characteristics&

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/enerally spea,ing% among the parties represented in Parliament% the Aiberal and the Communist Parties have the best records with regard to the (purity) and the (recipient fle*ibility) of aid& The Centre Party has normally adapted itself to the Aiberals) views& At the other e*treme is the 'oderate Party& The 7ocial .emocratic Party has a rather mi*ed record& $t was only with some hesitation that the 7ocial .emocrats accepted a fi*ed timetable for the attainment of the one per cent target& They have been very ready to listen to demands to increase the share of 7wedish1 oriented appropriations& With regard to the country1programming system% the Party has successfully defended (recipient fle*ibility) ad coherent planning against their critics& Against this bac,ground% it may seem rather astonishing that the non17ocialist governments between #95> and #9;H did not substantially change the aid policy& The e*planation is that during the whole period the Aiberal Party was in command of development1aid 0uestions& Another essential e*planation is that development co1 operation is not a very important item in 'oderate Party policy% other aspects having a much higher priority% for e*ample% the level and design of the ta* system and the national defense& The 'oderates thus seem to be able to accept the maintenance of both the 0uantity and the 0uality of aid% provided that they can have an influence on other matters which are of greater importance to them& $n this conte*t% it is worth mentioning that the A.Cs play a comparatively modest role as regards the 7wedish economy& 7weden is greatly dependent on foreign trade + about H" per cent of 7weden)s /DP is e*ported& The recipients of aid through 7$.A have almost e*clusively been chosen from among the poorest A.Cs% which + with the e*ception of $ndia + are not very important in the world)s foreign trade& Conse0uently% the actual (return flow) of about M" per cent of total 2.A is probably very satisfactory from the point of view of e*port industry& A substantially higher rate of return flows would only be possible if the aid programme was considerably restructured with less regard for the recipients) own needs& 7uch a restructuring is not li,ely to occur at any foreseeable political juncture& What must be considered more important from the point of view of industry is the absolute and relative growth of 7wedish1oriented appropriations& $ndustrial and trade1unionist pressure groups will probably try to influence the 'oderate and 7ocial .emocratic Parties to maintain the present level of return flows and also to increase the share of 7wedish1oriented appropriations& Another aspect mentioned in international discussions is the so1call in1effect tying% meaning that the donor tries to influence the use of non1tied aid in favor of industry in the donor country& As regards the 7wedish attitude in this respect% it seems li,ely that a recipient who wishes to use 7wedish funds for purchases outside 7weden% in cases in which 7wedish industry is normally competitive and interested% must have rather strong arguments for doing so& The importance of 7wedish1oriented appropriations% as regards the attitudes of different actors% is also illustrated by the fact that discussions on projects and recipients are practically limited to aid through 7$.A& B$T7 and 7W3. BD. seem to be protected bodies in this respect& $n principle% this is rather astonishing% as it has been underlined that the guiding principles of 7wedish development aid are e0ually valid for all types of aid% that is not only aid through 7$.A and 7AR3C but also aid channeled through B$T7 and 7W3. BD.&

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The 7wedish administrative system and tradition normally afford vast spheres of action to the central government agencies& Bearing in mind the composition of their boards% it is obvious that a director1general + normally the president of the board + has a potentially powerful political base at his disposal% which can be used to e*ert considerable influence on political decisions& Being responsible for the day1to1day operations of the agency% the director1general can choose the ways in which proposals will be presented to the board& The system thus provides ample opportunities too for the bureaucracy to influence political decisions& $t should also be mentioned that a director1general may be a person with a distinguished career in the civil service but also wholly or partly a politician& $n this conte*t% it is interesting to note that the government has reserved for itself a comparatively strong position on the boards of the institutions responsible for the use of (7wedish1oriented appropriations)% that is B$T7 and 7W3. BD.% and also seems prepared to envisage measures which will enable it to control better the management of the central agencies& There is no reliable information available with regard to the role of the bureaucracy in this conte*t& 3*perience seems to show% however% that the influence of the bureaucracy is limited or virtually nil when it comes to very important political 0uestions% such as the choice of recipient countries& There are indications that the bureaucracy has played some part in such issues as the 0uality and 0uantity of the total aid appropriations& $t is obvious that no political party can successfully operate without regard to public opinion within or outside the party)s constituency& 7wedish public opinion over the years has had and still has a positive attitude to development co1operation and the #9;> opinion poll shows an increase in this positive attitude& $t may seem surprising that the desire to cut the appropriation to development assistance is less than the willingness to decrease defense spending& $t is also interesting to observe that environmental deterioration is the first concern e*pressed by participants in the opinion poll% followed by poverty and starvation in the world& Concern about unemployment ris,s has increased considerably in comparison with the #9;< poll& This has evidently not negatively influenced the willingness to give development aid& urthermore% positive attitude towards the effectiveness of aid showed a mar,ed increase in #9;>& $t is difficult to determine whether these positive changes in public opinion represent a lasting trend or whether something has happened to influence it temporarily& $t might well be argued that media reporting on% for e*ample% the drought catastrophes in Africa and conspicuous relief activities% such as Band Aid% have had a spill1over effect on development aid as such% including government aid& $t is 0uite clear% however% that young people% women% older age1groups% members of religious organi-ations and other D/2s for an aid constituency sufficiently large to prevent serious 0ualitative and 0uantitative decreases in the aid programmes& /roups who in principle would be prepared to argue in favor of such changes probably find themselves in a reasonably satisfactory position% bearing in mind the political situation& The aid constituency has a considerable influence within the Aiberal Party% the 7ocial .emocratic Party% the Centre Party and probably also the Communist Party& The small Christian .emocratic Party is also heavily influenced by such groups%

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while the 'oderate Party seems to be more influenced by groups which are not particularly interested in development aid or have accepted the present structure and volume of development assistance as a fact of political life& The /overnment)s information policy has greatly increased the opportunities for pro1aid D/2s to argue their case& Two1thirds of the 7$.A appropriation for information on developing countries and development aid is given to D/2s to be used as they see fit& `uestions may also be raised regarding the relationship between development of aid policies and that of public opinion on aid& The trend towards an increasing use of aid appropriations for 7weden1oriented programmes has no doubt shoc,ed many of the most fervent adherents of development co1operation in its pure form& 2n the other hand% 7weden1oriented activities% including not only those mentioned above but also other forms of e*change% no doubt contributed to opening up Third World countries to new groups of 7wedes& $n it January #9;5 bill on development co1operation concerning the programme for the fiscal year #9;5G;;% the government% under the heading of (mutually beneficial aid)% refers to the changes which have ta,en place since the mid1seventies in the following termsC Within the aid programme new instruments have been added implying an increased emphasis on e*tended economic% technical and scientific co1 operation and personal contacts& N This also contributes to a growing understanding of the needs of developing countries and the often difficult conditions of development as well as to an improved awareness of the ,now1 how and the resources that 7weden is able to provide& This helps% together with the engagement of D/2s in aid activities% to maintain and strengthen the will to give aid in 7weden& Has there in reality been a drift of 7wedish development co1operation from the (traditional 7wedish system) towards the (general 23C. model)W This 0uestion has more to do with the 0uality of the aid programmes& An answer to the 0uestion must ta,e into account the fact that the (general 23C. model) has also changed over the years& There is also a greater willingness among donors other than 7candinavians to ma,e long1term commitments% sometimes on longer terms than% for e*ample% 7weden is willing to do& A good e*ample is the 3uropean Community& A greater willingness to provide non1project assistance and sometimes also assistance with local costs may be discernible& $t would be interesting to analy-e to what e*tent the discussions within the .AC have influenced donors in these respects& This being said% it is our conclusion that 7wedish development assistance has drifted towards the (general 23C. model) during the period dealt with in this paper& Devertheless% the aid constituency in 7weden has been comparatively successful in defending genuine development co1operation& There is still a (7wedish model)% and this model is being shared and sometimes bettered by some other donors&

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Degley* %harles &6 and ooB* Ste$en &6 -8;;80* 1(S Foreign Aid and () 5oting: Did !eaganJs LinBage Strategy Buy Deference or Defiance34 in International Studies Quarterly* 5ol6 97* )o6 9* ""6 .;7-98.* BlacBCell Publishing6
The conclusions% drawn from our various statistical analyses of the data% point collectively to the absence of an empirical association between aid and voting coincidence before and after enactment of the #9;> lin,age strategy& The consistency of the findings across these various treatments is much too great to be attributed to chance& $n conjunction with the B&7& governmentZs legislatively mandated accounting that showed that the voting agreement of B&7& aid recipients declined after the lin,age strategy was implemented% the statistical results of the evaluation identify a policy that failed& Why did the #9;> lin,age strategy fail to produce the effects it soughtW We will advance several complementary interpretations& But first a caveat is in order& 2n the surface it might appear that the lin,age strategy is not amenable to evaluation because the Reagan administration never fully e*ercised its discretionary authority granted by Congress and thus did not follow through with its threat to lin, aid allocations tightly to recipients) diplomatic conduct& But that lac, of attention to implementation does not render the policy initiative none*istent% nor policy evaluation moot& The declared initiative comprised a prominent policy& $ndeed% the B&7& government spent considerable energy and resources promoting its intentions to punish defiant states and reward deferential ones in the hope that its actions would induce support within the Bnited Dations& This threat was representative of what may be classified a tangible Eforeign policy underta,ingF 4Rosenau% #9;"C> #6& Accordingly% we can safely assume that the targeted state leaders too, seriously a policy pronouncement that was stated so vociferously and repeatedly% even if they could not estimate the threatZs credibility& Conse0uently% a policy proclamation of this sort% embedded in public law% is not a random act: it is a bold one whose conse0uences virtually cry out for analysis& $f words mean anything in diplomatic discourse + as assuredly they do + then the impact 4or lac, thereof6 of these verbal communications re0uires analysis if the study of interstate relations is to advance& The lin,age strategy is a paragon of a

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formal diplomatic effort to e*ercise influence through a series of pronouncements that attempted to e*tract political deference through economic threats& Hence the case is relevant to and holds implications for a wide spectrum of theoretical 0uestions concerning foreign policy compliance% sanctions% economic statecraft% and bargaining& or in this case we have an unusual e*ample of government officials who e*plicitly enunciated a problem% identified the solution they sought to remedy this problem% postulated the results that initiative was e*pected to produce% and identified the criteria by which the success of the initiative was to be assessed 4as calculated by the governmentZs own measures6& What followed as a result of the effort tells us much about the practice of statecraft in the contemporary system and the limits of the systemZs wealthiest power& The results clearly illustrate that the solution to the problem was inade0uate to reverse the unfavorable conditions in the Bnited Dations that so concerned the Reagan administration& $t is therefore pertinent to as, why& irst% our findings add evidence to the discourse on economic sanctions% which posits that such pressures% whether threatened or imposed% are li,ely to confront stiff resistance from target states& The resilience of aid recipients clearly demonstrates that their policies were driven more powerfully by interests other than by the economic threat of a hegemon& 3ven though the bilateral relationship between donor and recipients was highly asymmetrical% the limits to the e*ercise of influence by a dominant state over wea, states were revealed& This conforms to other evidence 4for e*ample% see 7inger% #95!% and 'en,haus and ?egley% #9;;6 that subordinate states often do not act compliantly toward core states on which they are economically dependent& The pattern illustrated + that poorer states respond with indifference toward economic threats + is also consistent with most previous research on sanctions& As Hufbauer and 7chott with 3lliott 4#9;HC5>6 found from their 5"1year survey of sanction Eepisodes%F EAt most% there is a wea, correlation between economic deprivation and political willingness to change & & & The economic impact of sanctions may be pronounced & & & but other factors in the situational conte*t almost always overshadow the impact of sanctions in determining the political outcome&F The history of international economic sanctions and reprisals attests to the unusual conditions in which they have proven effective 4Wallensteen% #9>;: .aoudi and .ajani% #9;;6& 7uch measures have rarely succeeded% even under favorable circumstances: under conditions of aid and trade dependence% political compliance rarely emerges + these ties fail to bind 4see Roeder% #9;<6& Auspicious conditions clearly were not present in #9;> when the B&7& undertoo, its effort to e*tract compliance with its economic leverage& And the setting + the Bnited Dations + was an inhospitable environment of cross1cutting alignments in which to overcome the inertia of voting practices& #> The inability of the policy to achieve its intended goals may also be attributable in part to the assumptions the Reagan administration embraced about the motives of aid recipients and the incentives to which they would respond& American officials appeared to operate from the assumption that countries in need of foreign assistance would sacrifice their interests and freedom of choice to avert economic sanctions& That belief may have been unwarranted 4see Richardson and ?egley%

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#9;"6 in that it overloo,ed the probability that Third World countries would not interpret aid as re0uiring political concessions& This conclusion is reinforced by the evidence showing that the countries responding most deferentially after #9;5 were the states least in need of assistance: this suggests that recipients acted primarily in terms of their strategic interests rather than their economic needs& 'oreover% many recipients not only loo, as,ance at the e0uation of gifts for deference but regard the lin,age as e*ploitative 4?rasner% #9;<6& $nstead of viewing foreign aid as a benevolent form of global welfare% some observers assail it as a seductive means for the powerful to coopt the powerless& Past studies are rife with denunciations of )id as Imperialism 4Hayter% #95#6 that is Napping t#e -#ird /orld 4Ainear% #9;<6& $nitiatives such as AmericaZs aid1for1support lin,age strategy are often cited as evidence that e*traordinary costs are attached to foreign aid transfers& 2verloo,ed% perhaps% were realistic assessments of 7o$ Foreign Polic Decisions are 8ade in t#e -#ird /orld 4?orany% #9;>6 + a subject that this study recommends e*ploring& As Harsanyi 4#9>!6 has shown% to predict the successful e*ercise of influence% it is important to consider both the costs to a dominant country of e*tracting foreign policy compliance and the costs to the dependent country of defying the other)s attempt at coercion& or many recipients of B&7& assistance% the costs of deference to a powerful donor presumably e*ceeded the benefits& The B&7& government was e0ually constrained by its own economic limitations& Because net levels of B&7& foreign aid declined even before the threats and the lin,age strategy were enunciated 4as large budget and trade deficits mounted6% the EcarrotF of foreign aid that B&7& leaders dangled before aid recipients was insufficient to be ta,en seriously: it is unli,ely that many recipients perceived meaningful rewards to be available& A Ereverse political effectF 4Renwic,% #9;#C;>6 could have been operative that undermined B&7& credibility while emboldening recalcitrant aid recipients& $n this political climate% the B&7& aid program was increasingly dominated by major recipients representing its established security interests&#5 This restricted the fle*ibility of the entire program and reduced the salience of nonmilitary criteria in funding decisions which% while providing further ammunition to critics of foreign aid% illustrated the subservience of foreign assistance to geostrategic considerations& $t is also evident that a cohesive plan of action was not implemented by the Bnited 7tates to pressure recipient states for the cooperation that was sought& 7uch an effort re0uires not only heated rhetoric on the floor of the /eneral Assembly but concerted interagency coordination e*tending to the embassy and bureau levels& That institutional coordination was not forthcoming% for reasons well e*plained by the Ebureaucratic politicsF paradigm as it applies to the ma,ing of American foreign policy 4see Hilsman% #99"6& $nstead% largely due to their role and mission% B&7& diplomats at the Bnited Dations 0uic,ly shifted to other aspects of behavior within that multilateral forum&#; They did not receive support from other agencies responsible for the implementation of American foreign policy% including the White House itself& $n his legislatively mandated report on the #9;; session 4which featured an all1time low aggregate coincidence rate of #<&M percent6% B&D& Ambassador Iernon Walters sought to defuse criticism with his praise of what he

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termed Ea productive sessionF by arguing% EThe statistics do not tell the complete story& We need to loo, beyond themF 4B&7& .epartment of 7tate% #9;9C#1M6& $nstead of the aggregate record% Ambassador Walters e*plained that increased improvement in E,ey votesF was more salient to the Bnited 7tates% #9 as was an effort to resolve issues by consensus and to silence anti1American Ename1callingF on the floor of the /eneral Assembly& At issue was whether this was a diplomatic way of departing from an ineffective strategy without ta,ing the embarrassing step of ac,nowledging that the original lin,age strategy had been jettisoned& $n the apparent absence of ongoing B&7& efforts toward pursuing an aid1for1 agreement lin,age% and given the limited economic resources available to bac, the strategy% the aid program was consistently driven more by bureaucratic momentum and security considerations than by case1by1case evaluations of recipients) diplomatic conduct& This clear pattern should caution current and future policyma,ers against presuming that the entrenched political dynamics governing the distribution of American foreign aid can be easily modified through an effort to ma,e such ancillary concerns as recipientsZ voting behavior in the Bnited Dations a primary consideration& or subse0uent research% this pattern also adds empirical evidence to support the thesis that bureaucratic momentum powerfully drives B&7& budget policy and that other factors are often more potent than economic threats in influencing the degree to which B&7& policy positions receive support from the recipients of American foreign assistance& 'ore generally% the inability of the Reagan administration to sustain interest in and effectively carry out its strategy suggests the need for more penetrating empirical and theoretical analysis of the obstacles to a democracyZs conduct of foreign affairs& Do account of the allocation of American foreign aid programs and its conse0uences can be complete without attention to the domestic and institutional influences on changes in that relationship& James Barber 4#959CH596 underscored this when he advised that Esanctions cannot be isolated from other international and domestic issues& They may clash with other interests% or be given a lower priority than other goals of the imposing states&F The subse0uent attempt by the B&7& government to lin, B&D& support and foreign aid apparently overloo,ed this principle: as a conse0uence% the threats intrinsic to the bargaining strategy lac,ed credibility& The Reagan administration)s effort failed ultimately because it applied the American foreign aid program to uses for which it was never designed& To e*ercise influence% aid allocations must consider the interests% values% and perceptions of those whom the Bnited 7tates wishes to influence& $t is neither realistic nor consistent with realpoliti2 logic to e*pect others to conform to pressures by adopting policies that run counter to their national interests&

Dilby* %hristo"her -.//;0* 1,he Political +conomy of

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%onditionality: An +m"irical Analysis of &orld BanB Loan Disbursements*4 in Journal of &evelopment Economics* 5ol6 A;* ""6 78-:86
This paper presents indirect evidence that pressure from the B&7& has undermined World Ban, imposition of structural adjustment conditionality& or countries not friendly with the B&7& 4countries that do not ma,e concessions to the B&7& position in important BD votes6% there does appear to be a significant degree of enforcement& When these countries have active World Ban, structural adjustment loans% poor macroeconomic policy is associated with lower disbursements and the effect can be substantial& or countries that are friendly with the B&7&% there is little evidence of enforced conditionality& or this second group% there is no substantial lin, between macroeconomic policy and disbursements& This pattern reoccurs in a range of specifications% across geographic regions% and over different time periods and is robust to a number of estimation methods& $n contrast% no similar pattern is found when 7AAs are not active% again indicating that the pattern is driven by selective imposition of structural adjustment conditionality& These results highlight donor pressure as an important alternate e*planation for the failure of conditionality% one that merits more attention from researchers and reformers& This issue has been e*plored empirically in the conte*t of the $' 47tone% !""!% !""M: Ireeland% !""<6 but not previously for the World Ban,& Why does it matter what is the cause of conditionality slippageW 3fforts to reform structural adjustment have focused increasingly on selectivity to change bureaucratic incentives% reduce problems of information and commitment% and promote ownership of programs 4largely through the PR7P process6& These reforms may have significant merit but do not address the issue of donor pressure that can% as before% undermine borrower incentives and World Ban, credibility& 2ther more fundamental reforms that aim to reduce donor influence + changes in World Ban, governance% ending the tradition of allowing the B&7& to select the World Ban, president% developing alternative sources or methods of funding + also need to be e*plored& /arnering sufficient donor support for such fundamental reforms is not straightforward but may be aided by more research to better understand the impact of international politics on World Ban, programs and the costs associated with resulting distortions& .o case studies and other direct evidence 4e&g&% new data sources that give World Ban, disbursements and tranche release conditions by loan6 support the indirect evidence presented hereW .oes international politics also influence which countries get World Ban, 7AAs and the tightness of the conditions spelled out in loan agreementsW Are eventual outcomes worse in cases where

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conditionality was not enforcedW The literature on the $' these 0uestions and may provide important guidance&

has e*plored many of

Bltimately% donors li,e the B&7& have many bilateral instruments they can use to pursue foreign policy objectives& These include bilateral economic aid% military aid and trade policy& Part of the calculus they engage in when deciding how to reward friends 4or punish enemies6 is to compare the costs of delivering rewards directly via bilateral instruments with the costs of e*erting pressure on $ $s li,e the World Ban,& $f donors can be convinced that the cost of using $ $s is too high because of deleterious effects on the uni0ue functions of those institutions% then fundamental reforms may be possible&

Dilby* %hristo"her -.//:0* 1Donor Influence in #ultilateral De$elo"ment BanBs: ,he %ase of the Asian De$elo"ment BanB*4 in The Review of International 3r!ani7ations* 5ol6 8* )o6 .* ""6 8>9-8;76
This paper e*amines the influence of Japan and the Bnited 7tates over the geographic distribution of Asian .evelopment Ban, lending& Bsing panel data from #9>; to !""! for less developed Asian countries% a two part model points to significant donor influence& The e*clusion of China and $ndia 45<Q of the region)s population6 from A.B lending prior to the mid1#9;"s and their restricted level of borrowing thereafter overshadows other% positive humanitarian dimensions of A.B lending& 3ven setting aside the cases of China and $ndia% donor trade interests and pro*ies for geopolitical interests appear to play a larger role than do humanitarian factors& The two part model includes a selection e0uation and an allocation e0uation& The selection e0uation e*amines the probability that a country will receive funds 4eligibility6& The allocation e0uation e*amines the level of funding among countries that did receive A.B funds& $n line with humanitarian principles% the selection e0uation indicates that poorer and 4especially more recently6 democratic countries are more li,ely to receive A.B funds& However% more populous countries are less li,ely to receive A.B funds and% ceteris paribus% eligibility for A.B funding does not mirror the distribution of bilateral aid from a group of small donors ,nown for their relatively humanitarian aid programs& Japanese trading partners and countries

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favored by Japanese bilateral aid are more li,ely to receive A.B funds% suggesting Japanese influence& The lin, between B&7& variables and selection is more comple*C countries favored by B&7& bilateral aid are more li,ely to receive A.B funds but countries with strong B&7& trade ties are less li,ely to receive A.B funds& 2verall% the estimated effects of Japanese and B&7& interest variables are larger than the estimated effects of humanitarian variables in the selection of countries to receive A.B funds& Conditional on being selected to receive A.B funds% a country)s level of funding increases with its populationYup to a point& Holding other characteristics constant% funding increases with population e*cept for the largest countries 4notably Bangladesh and $ndonesia before #9;5 and China and $ndia since then6 which generally receive dramatically less in comparison to their populations& 2f the countries receiving funds% poorer countries receive more% ceteris paribus& $n the allocation e0uation% democracy appears to have played a role earlier in the sample period& However% as with the selection e0uation% after controlling for other factors% the level of A.B funding does not mirror the distribution of bilateral aid from a group of small donors ,nown for their relatively humanitarian aid programs& $n contrast% World Ban, loan allocation does% both within Asia and globally& .onor interest variables% particularly those intended to reflect geopolitics% are significant in the allocation e0uation primarily in the latter half of the sample period& .uring that period% higher Japanese bilateral aid and higher B&7& bilateral aid are both associated with more A.B funding% with the lin, three times larger for Japanese bilateral aid& Ioting alignment with Japan in the BD is associated with less A.B funding in the first half of the estimation period and with more A.B funding in the second half% the latter result driven by China and $ndia& 2verall% the evidence suggests that both Japan and the B&7& have systematic influence over the distribution of A.B funds& Whether e*amining selection or allocation% discrimination against China 4attributed to B&7& Cold War politics6 and $ndia 4driven by Japanese concerns6 overshadows other potentially humanitarian aspects of A.B lending& $n a similar study of the World Ban,% lec, and ?ilby 4!"">6 find that the single largest factor is population with more funds going to larger countries& The influence of B&7& interests is roughly on par with that of humanitarian factors other than population& The A.B case differs in that humanitarian considerations play a less apparent role& $n this sense% donor interests more heavily influence the allocation of resources in the A.B than in the World Ban,&

Dilby* %hristo"her Dreher* AKel -.//;0* 1,he Im"act of Aid on 2roCth !e$isited: Do Donor #oti$es #atter34* in Economic
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etters* 5ol6 8/>* )o6 9* ""6 99A-9</6

Research on foreign aid identifies aid allocated both based on recipient need 4RD6 and donor interests 4.$6& ollowing Boone 4#99<6% most aid effectiveness studies capitali-e on this by using political instruments to identify the impact of aid on growth 4Burnside and .ollar% !""": Rajan and 7ubramanian% !"";6& However% interpreting estimation results as the general impact of aid on growth re0uires the strong homogeneity assumption that donor motives do not influence aid effectiveness& 2nly a handful of studies consider the impact of donor behavior on aid effectiveness in detail 4Bobba and Powell% !""5: Headey% !"";: Bearce and Tirone% !""9: 'inoiu and Reddy% !"#"6& $n this paper% we call this homogeneity assumption into 0uestion by developing an aid allocation model in which recipient government policy choices lin, donor motives to the impact of aid& We test the assumption by including an estimate of need1based aid in a crosscountry time1series growth regression& The test rejects the homogeneity assumption% suggesting a more cautious interpretation of past research results& KNL 7tarting with a model of aid allocation% policy choice and growth% we illustrate how donor motives can influence the effectiveness of aid% undermining the homogeneity assumption implicit in the geopolitical instrumentation strategy used in many aid and growth regressions& We also test and reject this assumption empirically& This complicates interpretation of results in much of the aid effectiveness literature and poses a dilemma about how to deal with potential endogeneity&

Dim* Soo Meon and !ussett* Bruce -8;;:0* 1,he )eC Politics of 5oting Alignments in the (nited )ations 2eneral Assembly*4 in International 3r!ani7ation* 5ol6 7/* )o6 <* ""6 :.;-:7.6
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We have addressed several 0uestions regarding the voting patterns of the BD /eneral AssemblyC What are the underlying issue1dimensions reflected in the resolutions put to roll1call voteW How do member states align themselves with respect to these dimensionsW How can we characteri-e those states% and what implications do the characteri-ations have for political processes in the BDW 2ur analysis focused primarily on three post1cold war sessions of the /eneral Assembly% but we were also able to compare those voting patterns with patterns characteristic of earlier years& With the end of the cold war% voting patterns in the /eneral Assembly reflect the erosion of the 3ast1West division that had dominated many BD activities& Aeft behind as major foci are many issues relating to the self1determination of coloni-ed peoples and% to a lesser e*tent% 0uestions of political rights within states& .uring the cold war era% when many EnonalignedF states voted regularly with the 7oviet bloc% the modal point of the /eneral Assembly often was found in the southeast 0uadrant& $t is now somewhat to the southwest& our of the five permanent members of the 7ecurity Council% however% are toward the northwest% suggesting their current ability to hold that body on a very different course from the /eneral Assembly& The Dorth17outh split now characteri-es voting positions as much as the 3ast1West split once did& The importance of Dorth17outh issues is not new% but during the cold war years it tended to be conflated with and be overshadowed by 3ast1West issues as a source of division& #5 The resurgence of Dorth17outh voting renews and strengthens a long1standing alignment% one now li,ely to dominate the BD for a substantial period in its future& Ioting alignments are li,ely to be shaped by state preferences along developmental lines% and views of self1determination and economic development will reflect the continuing great differences between rich and poor nations&

Dolbe* ?im -.//90* 1Lessons and )eC Directions for Foreign Assistance*4 in Washin!ton Quarterly6 5ol6 .:* )o6.* ""6 8A;-8;A6
Foreign )ssistance+ ,ne Leg of a -#ree<Legged "tool With those four lessons Klearned in development assistanceL in mind KnamelyC #& $t is not the 0uantity of foreign assistance that is integral to successful development& !& $t)s all about economic growth& H& /ood governance matters& M& We need to remain focused&L% we should evaluate carefully what we thin, the role of our

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development assistance should be& But before addressing that 0uestion% it is important to articulate how B&7& foreign assistance is an integral component of our overall foreign and national security policy& $ often relate our total foreign assistance Ythe entire foreign operations billYas one leg of a three1legged stool providing a sturdy B&7& foreign policy& 3ach leg is essential for the stool to carry the weight of the policies projected and coming together at the top& 2ne leg is that of our diplomatic corps and intelligence services: another relates to national defense and security strategy: and the third has% as its core% our foreign assistance& 2ur foreign assistance in a macro sense plays multiple roles within our foreign policy process& At its first level% the foreign assistance leg can be used as a vital tool to ease the suffering of people around the world& At a more nuanced level% it can enhance health% education% and national infrastructure& $n light of security challenges to the Bnited 7tates% we can also lin, the foreign assistance leg of the stool to the national security leg by using it in the form of oreign 'ilitary inancing& 2f even more importance% it can and should nurture the structures of capitalism and the rule of law% ma,ing it possible for the poor to participate in mar,et economies and for poor countries to participate in the global economy& $ believe this is the role we should want development assistance to play& $f e*perience shows that successful development is driven by a country)s ability to access and use all its available resources for economic growthYparticularly those that relate to integration in the global economyYthen we must strategically align development assistance to that end& 2ur development assistance should serve as a catalyst to help countries prepare for greater participation in the global economy& /#ere Do /e 4o from 7ereL $t is time to move beyond the debate on the 0uantity of foreign assistance to a focus on economic growth and helping countries ma*imi-e the benefits of participating in the global economy& We must be sure that our e*pectations and definition of success are aligned with our development e*perience& All too often% advocates for development assistance argue that success is only a matter of additional resources& 3*perience tells us otherwise& .ecades of development e*perience have demonstrated that resource transfersYwithout the environment of an effective political economyYwill generate poor results& 2ur policy development and our advocacy must place an emphasis on those policies that will generate successYnot simply the addition of more resources& The Bnited 7tates must generate a development policy that is more holistic in outloo,& Two pillars must be elevated in importance& irst% B&7& policy must recogni-e trade and foreign direct investment as development tools& 7econd% economic growth must become its own objective and be strongly integrated into the fabric of our development programs& This is particularly true for many African countries where H$IGA$.7 is actually projected to reduce /.P growth rates% ma,ing the situation of responding to the pandemic even more challenging& Historically% we have focused e*clusively on increases in foreign assistance and debt relief as the chief drivers of development& $ would argue that giving developing countries access to the mar,ets of the Bnited 7tates% 3urope% and Japan creates a

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self1reliant path while aid is a donor1development path& or instance% if sub17aharan Africa had an additional # percent of international mar,ets in the form of e*ports% the region would have T>" billion more in resources derived from revenue earned through international trade&#! 2ur domestic discussion on development must consider the potential cost of failure in the new round of trade tal,s that were launched in .oha% `atar% in Dovember !""# or of failure in negotiations for B&7& free1trade agreements 4 TAs6 with Central America or the countries of southern Africa& The World Ban, has calculated that a successful round of global trade negotiations% coupled with related mar,et reforms% could add a whopping T!&; trillion to global income by !"#<Ymuch of it in developing countries&#H ?nowing that we have a tendency to as, developing countries to accomplish all of our bilateral objectives at the same time% it is imperative that we remain focused& That should result from a reflection on our need to brea, out of the trap of Edo1 everything development&F These messages of trade and focus are not ones that weYand many in the development or advocacy communitiesYare accustomed to hearing& $n fact% some do not wish to hear it& We have become so devoted to the assistance programs or causes we each represent& 'oreover% if we are serious about development% we have to be serious about trade& As a representative of 2*fam $nternational has said% however% the Eplaying field is not level&F #M $t slopes downhill from developed countries& As the Bush administration continues to wor, on the 'illennium Challenge Account 4'CA6% $ would offer these suggestions& $t should consider offering 'CA recipient countries special consideration for e*pedited bilateral trade preferences 4such as those offered in conjunction with the African /rowth and 2pportunity Act or the Andean Trade Preferences Act6 or the option of negotiating an TA with the Bnited 7tates& The administration should offer developing countries the prospect of ownership of their development strategies with B&7& assistance& $n e*change for ownership% developing countries should be willing to accept the fact that 'CA resources may be withdrawn if criteria for eligibility are not maintained or results not achieved& The 'CA should aim to build and reinforce the governmental capacity of recipient countries to manage their own development& $n establishing the 'CA% we must minimi-e the administrative bureaucracy and bureaucratic re0uirements in assistance delivery& 2nce countries 0ualify% the 'CA should complement current assistance efforts but% most importantly% generate a focus on economic growth and self1sufficiency& inally% the administration should aim to ma,e sure development and economic opportunity is e*tended to those currently outside the formal economy& By this% $ mean that the rule of law% property rights% and the ideas of Hernando .e7oto should be incorporated into our programs as a development goal& #< The promise of capitalism as a tool for economic development and poverty reduction can never fully be achieved as long as large populations have no sta,e in the capitalist mode of development&

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$n conclusion% $ firmly believe that we are going to have to thin, outside the bo* in our development1assistance programs& The reality is that what we have tried in the past has not wor,ed& We must learn from our prior e*periences% and in light of the challenges we face% we must be open to new ideas and tools that will help us prioriti-e our efforts when helping countries achieve broad1based economic growth and integration into the global economy&

Dorany* Bahgat -8;A:0* 1%oming of Age Against 2lobal Odds: ,he ,hird &orld and Its %ollecti$e Decision-#aBing*4 in Dorany* Bahgat -ed0* =ow 'orei!n Policy &ecisions are %ade in the Third World* ""6 89A* Boulder: &est$ieC Press Inc6
$ntegrative tendencies among Third World member nations form the basis of both the Third World)s emergence and its collective decision1ma,ing& Concerning the latter issue% three characteristics should be emphasi-edC #& The Third World)s self1assertion and the manifestation of its collective identity have come of age as a function% above all% of the common position of its countries in the global hierarchy& Do longer formally integrated into colonial empires% these countries are vulnerable% suffer from an acute sense of threat% face serious economic problems% and feel that the EsystemF is somehow rigged against them& !& Dotwithstanding the presence of common characteristics and interests with the Third World% the analyst should avoid any overhomogeni-ation 4i&e&% glossing over of differences6 among its different countries and clusters& Although Third Worldism is e0uated with DA'% the groping toward e*pression of collective identity at the global level has had a multigroup involvement from the very beginning& These groups can be general 4Bandung6 or specific 4/1556% ideological 4radical versus moderates6 or geographical 4African% Aatin American6&

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H& To ,eep these groups together% the Third World + while becoming increasingly institutionali-ed + has emphasi-ed consensus building in its collective decision1ma,ing processes&

Dorany* Bahgat -8;A:0* 1Foreign Policy Decision#aBing ,heory and the ,hird &orld*4 in Dorany* Bahgat -ed0* =ow 'orei!n Policy &ecisions are %ade in the Third World* ""6 9;-:/* Boulder: &est$ieC Press Inc6
To counter the serious deficiencies plaguing the established model% analysts of Third World foreign policy decision1ma,ing must turn to other schools of social analysis for inspiration& They must also be fran,ly innovative and attempt to adapt available framewor,s to ma*imi-e potential payoffs& Thus% if the analyst is not to be da--led by the psychological filter% the approach emphasi-ed in this boo, can be used& $t calls attention to the significance of the operational environment 4i&e&% the Ereal lifeF or objective factors as distinct from subjective ones6% especially those factors characteristic of developing counties& $t seems that the best way out of the present conceptual cul1de1sac is to turn to the field of decision1ma,ing activity itself and see what the data say& Through a dialectical process of interaction between e*isting theory and rigorous empirical research we can advance both& With the passage of time% it is hoped% data1based generali-ations will be numerous and cumulative enough to achieve a more credible theory of foreign policy decisions in the Third World&

Dorbe* LaCrence -.//A0* 1Foreign Aid and Security: A !eneCed Debate34* in Picard*
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Louis A6* 2roelsema* !obert and Buss* ,erry F6 -eds60* 'orei!n Aid and 'orei!n Policy# essons for the .e>t =alf *entury* ""6 .>-9A* )eC MorB: #6 +6 Shar"e* Inc6
To prevail in the war on terrorism% the Bnited 7tates must remember that aid is a national security issue& As former 7ecretary of 7tate Colin Powell noted% Ethe Bnited 7tates cannot win the war on terrorism unless it confronts the social and political roots of poverty%F and to win this war it needs poor countries as well as rich ones to support the values it champions and to believe that they too can climb out of poverty and achieve economic and political freedom 4Radelet !""<% >6& But they need help to do it% and the assistance the Bnited 7tates currently provides is not enough&

DuziemBo* Ilyana and &erBer* +ric -.//:0* 1 oC #uch is a Seat on the Security %ouncil &orth3 Foreign Aid and Bribery at the (nited )ations*4 in Journal of Political Economy* 5ol6 88<* )o6 7* ""6 ;/7-;9/6
Thus far% we have argued that nonpermanent members of the B&D& 7ecurity Council receive e*tra foreign aid from the Bnited 7tates and the Bnited Dations% especially during years in which the attention focused on the council is greatest& 2ur results suggest that council membership itself% and not simply some omitted variable% drives the aid increases& 2n average% the typical developing country serving on the council can anticipate an additional T#> million from the Bnited 7tates and T#

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million from the Bnited Dations& .uring important years% these numbers rise to TM< million from the Bnited 7tates and T; million from the Bnited Dations& inally% the B&D& finding may actually be further evidence of B&7& influenceC BD$C3 % an organi-ation over which the Bnited 7tates has historically had great control% seems to be driving the increase in B&D& aid& $deally% a study of vote buying in the Bnited Dations would test for the ability of 7ecurity Council aid to influence actual voting& Bnfortunately% this is difficult for two reasons& irst% we cannot observe the counterfactualC how the country would have voted in the absence of vote1buying activity& 7econd% votes themselves are strategic& Agenda setters typically ,now% before putting a resolution up for a vote% the preferences of each member& Perhaps this is why most 7ecurity Council resolutions are passed unanimously and why failed resolutions are rare: recall that the !""H resolution to authori-e the invasion of $ra0 never actually came to a vote& As a result of these identification problems% we believe that actual outlays of aid are the most trustworthy way to measure the presence of vote buying in the 7ecurity Council& By providing e*tra aid to nonpermanent members of the council% especially during years in which council votes are especially important% agenda setters have implicitly revealed their faith in the 7ecurity Council)s relevance in world affairs&

Lai* Brian -.//90* 1+Kamining the 2oals of (6S6 Foreign Assistance in the Post-%old &ar Period* 8;;8-8;;:*4 in Journal of Peace Research* 5ol6 </* )o6 8* ""6 8/9-8.A6
This study has resulted in two broad conclusions& irst% the method used to measure economic variables and to address the associated problem of autocorrelation inherent in these types of data has a large effect on the results that are li,ely to be produced& Previous studies suffer from both of these problems& irst% these studies do not deal with the large variance in economic indicators that can s,ew the results of statistical analysis& This study improves upon this design by using the logged values of these variables& 7econd% many studies use inappropriate methods to control for time% such as the inclusion of yearly dummy variables& This article addresses this problem by using a more appropriate and original research design% as well as more sophisticated methods to deal with autocorrelation& 7econd% this article has developed some interesting findings in regard to the goals of B7 foreign aid policy& irst% security considerations play just as important a role% if not more so% in who gets aid in the

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post1Cold War period as in the Cold War period& $n all the empirical tests% security factors were significant in determining who got aid in the post1Cold War period% while they generally were not significant in the Cold War period& This demonstrates that when threats to B7 security change% the B7A similarly changes its foreign policy to match the new threats& Also% the conundrum found in other articles that the B7A aids democracies and abusers of human rights appears to be driven by the methodological problems discussed above& This study found that for new aid recipients in the post1Cold War period% the B7A provides more aid to states that respect the human rights of its citi-ens& However% the B7A in the post1Cold War period also provides more initial aid to non1democracies& This result is li,ely to be due to the analysis of first1time aid receivers in the post1Cold War period&

Lancaster* %arol -.///0* 1!edesigning Foreign Aid*4 in 'orei!n Affairs* 5ol6 >;* )o6 7* ""6 ><-AA6
$n sum% foreign aid will continue to be an essential foreign policy tool to promote B&7& interests and values abroad& $ts major purposes will include peacema,ing% addressing transnational issues and other challenges arising from globali-ation% providing humanitarian relief% and promoting Ehumane concernsF abroad& The first two purposes relate primarily to B&7& interests: the second two reflect B&7& values& 7upport for development and democracy abroad will not disappear% but they will not be among the major priorities for foreign aid spending in the decades to come&

Lancaster* %arol -.//>a0* 1%ha"ter A: %onclusions and %onHectures*4 in Lancaster* %arol* 'orei!n Aid# &iplomacy$ &evelopment$ &omestic Politics* ""6 .8.-..:* %hicago:

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,he (ni$ersity Press6

of

%hicago

This boo, has addressed the 0uestion EWhy aidWF $t has attac,ed the 0uestion at two levels + one describes the multiple and evolving purposes of aid giving over the past half1century or so: the other digs into the political forces within five aid1giving countries that have shaped those purposes& $t is the tas, of this final chapter to pull together the answers provided by the history of aid and five case studies& $t will do two additional things in this chapterC draw out the policy implications of my conclusions and% finally% peer into the future of foreign aid& )id;s ,rigins and &!olution oreign aid began as one thing and became another& $t began as a realist response to the deepening Cold War between 3ast and West& While continuing to be deployed in the service of national interests% aid eventually created the basis for a new norm in relations between states + that better1off states had an obligation to provide aid to less1well1off states to better the human conditions of the latter& That norm did not e*ist in the middle of the twentieth century& $t was widely accepted and unchallenged by the end of the century& or those of a theoretical bent% foreign aid must be understood through the lenses of both realism and constructivism& Do one theory can ade0uately e*plain this twentieth century innovation in relations between states& Aoo,ing bac,% there is a political logic to the evolution of aid)s purposes& Aid 4apart from aid for relief6 began in the Bnited 7tates in #9M5 as a response to an e*ternal threat + it was a temporary e*pedient to bolster the economies of /reece and Tur,ey in the face of communist pressures& Without those pressures and the broader threat to security in 7outhwest Asia and the 'iddle 3ast and later in Western 3urope% the Bnited 7tates would an aid program then and% given the fiscal conservatism and isolationist tendencies in Washington% might not have begun one at all& Aater% as the Cold War spread to the developing world% the B7 government put pressure on governments of Western 3urope% Canada% and Japan to create their own aid programs& These pressures played an important role + though not the only role + in persuading governments in Western 3urope and Japan to establish or e*pand their own aid programs and to create government aid agencies to manage them in the #9>"s& 'ost of these governments also had nation interest reasons and% in some cases 4li,e .enmar,6% domestic pressures for creating aid programs + managing decoloni-ation% gaining access to strategic raw materials and e*port mar,ets% reintegrating with the world community of states& The Bnited 7tates was pushing on an open door& By the #95"s% aid had become a common element in relations between rich and poor countries& And during that decade and the one that followed% aid for development became increasingly prominent among aid)s multiple purposes& or e*ample% the portion of aid given to the least developed countries more than doubled between #95" and the mid1#9;"s% the terms of aid giving softened significantly% and the uses of aid shifted from funding economic infrastructure to

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social services and the more challenging problems of institutional and policy change& urther% during the #99"s and early years of the new century% aid1giving governments signed agreements to limit the commercial uses of aid% reducing the prominence of that purpose in aid1giving& What led to the increase in priority for aid)s development purposeW A ,ey factor was the establishment within most donor countries of a political constituency for development aid& This constituency e*isted both inside and outside governments& 2utside government% D/2s supporting aid grew in numbers and influence in most major aid1giving countries% at times acting in an informal alliance with government aid agencies& $nside government% aid agencies were set up% e*panded their budgets and their staffs% strengthened their professional capacities% and increased their Edevelopment educationF programs with their own publics& The importance of constituencies for development aid inside and outside government in influencing aid)s purposes is underlined by the e*perience of those countries + Japan and rance + where such constituencies were wea, or lac,ed access and where% as a result% the development purpose of aid was the wea,est& Aid giving governments also had pressures on them from outside their countries to elevate the amount of their aid and its development orientation& 7ome of these pressures came from other governments& 'any emanated from a group of international development aid agencies% including the .evelopment Assistance Committee of the 23C.% the World Ban,% the regional development ban,s% and the many BD agencies and organi-ations involved with aid issues 4the BD .evelopment Program% the ood and Agriculture 2rgani-ation% other BD speciali-ed agencies% the 3conomic and 7ocial council% and even the BD /eneral Assembly6% which% through a variety of means pressed rich governments to increase the amount and 0uality of their development assistance& 3*ternal pressures appear to have been most effective where they resonated with internal constituencies for development aid 4e&g&% in the Dordic countries66 or% over the longer run% when they stimulated changes in those constituencies 4e&g&% urging the creation and strengthening of D/2s% as in Japan6& But at a minimum% they succeeded in ,eeping development aid on the international agenda of all aid1giving governments and before the public and elites in those countries& 3*ternal events% such as the two major famines in Africa in the #95"s and #9;"s% raised the visibility in aid1giving countries of human suffering abroad + including problems of hunger as well as starvation and the role of aid in addressing those problems& They led both to an e*pansion of the constituency for development aid 4that is% by stimulating the establishment of D/2s% which advocates for development aid6 and to strengthening the norm among publics and elites that governments had a responsibility to respond to human suffering abroad& 4Humanitarian relief was highly motivating for the public in aid1giving countries% but humanitarian crises also often led into increased support for development aid + at least for several years in the aftermath of such crises + to deal with the underlying problems of human suffering&6 The H$IGA$.7 pandemic appears to have had a similar effect by the beginning of the new century& Thus% over a period of a half century% publics and elites in rich countries came to accept the appropriateness and even the obligation of governments of rich countries to provide aid to governments and peoples in less1well1off ones& .evelopment1oriented D/2s and international organi-ations helped not only to promote an aid1for1development norm but sought to hold governments to account

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in fulfilling it& This does not mean that aid was not used for other purposes + such as Cold War containment% fighting terrorism% fortifying spheres of influence% or e*panding mar,ets for e*ports& These other purposes% tied to national security or economic interests% remained important and even essential to sustain high volumes of aid during the period of this study& But the development purpose of aid was no longer challenged as inappropriate% and% indeed% governments were increasingly forced to justify nondevelopment uses of their aid& $n the wa,e of the end of the Cold War in the #99"s% foreign aid fell in many donor countries% and the proportion of aid provided the poorest countries also fell% while the purposes for which aid was provided e*panded to include promoting democracy% supporting economic and social transitions% addressing global issues% and mitigating conflict& The termination of the Cold War made foreign aid vulnerable to cuts in some counties% but two other factors played even more prominent roles in the drop in aid levelsC economic and budgetary problems in donor countries and deepening doubts about the effectiveness of aid in spurring development% especially in sub17aharan Africa& The decrease in aid in the #99"s energi-ed the constituency for development aid in many aid1giving countries to campaign for an increase in aid levels and a greater focus on development& Bndoubtedly in part because of these efforts% public support in 3urope and the Bnited 7tates for helping people in poor countries began to increase at the end of the twentieth and the beginning of the twenty1first centuries% as polls in the Bnited 7tates and 3uropean countries show& # $n the late #99"s and early years of the twenty1first century% governments in a number of aid1giving counties sough to reorgani-e their assistance to align it more closely with .AC development aid standards& These changes may have been hastened by the tragic events of 7eptember ##% !""#% and other terrorist attac,s in 3urope and elsewhere% which called the world)s attention to problems of poverty% despair% and conflict in poor countries% but plans for aid increases and aid reforms preceded the terrorist attac,s& 7omething more fundamental was at wor, + an embedded aid1for1development norm% supported by a growing domestic constituency& However% e*perience also suggests that an aid1for1development norm is not unconditional + it assumes that such aid is relatively effective and that economic conditions in aid1giving countries are sufficiently buoyant so that aid abroad is not seen as ta,ing badly needed assistance away from people in distress at home& Within this broad historical pattern% each of this boo,)s country case studies shows significant differences in the domestic political forces affecting the purposes of their aid + above all in the ideas and institutions shaping those purposes& Findings from 5ountr 5ase "tudies $t is often thought that the main purpose of B7 aid is diplomatic + for most of the period of this study% fighting the Cold War& That impression is mista,en on two counts& $mportant among the diplomatic purposes of B7 aid has been peace1 ma,ing% primarily in the 'iddle 3ast& But more basically% roughly half of total B7 aid has been used for development and associated purposes& What has% in fact% mar,ed B7 aid is its continuing dualism + the mi* of diplomatic and development purposes& 2ne reason for the dualism is found in the ideas shaping that aid% specifically the

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debate in the Bnited 7tates between libertarians% or classical liberals% on the political right% who argue that the role of the state in the economy should be limited and that foreign aid is an inappropriate or ineffective use of public resources% and the EhumanitariansF on the political left% who argue that the Bnited 7tates should% as one of the richest countries% use its public resources generously to help the poor abroad& These arguments on the rightness of aid + not nearly so evident in other aid1giving countries + have been amplified by the adversarial nature of the B7 political system& They go a long way in e*plaining why aid has been so controversial in the Bnited 7tates% why support for foreign aid among the B7 public has been consistently lower than in any other major aid1giving country% and why% to garner enough support for annual aid appropriations% both diplomatic purposes 4to gain the support or ac0uiescence of the conservative right or influential foreign affinity lobbies% especially that supporting the state of $srael6 and development purposes 4to obtain the support of the humanitarian left6 have been essential& What will be interesting to watch in the future of B7 aid is whether the growing support of aid for humanitarian and development purposes from the Christian right will bring about a fundamental shift in the domestic politics and% ultimately% strengthen the development purpose of B7 foreign aid& Japanese aid is often regarded as motivated primarily by commercial purposes + as a vehicle for e*panding Japan)s e*ports& Commercial interests were important in the first two decades of Japanese aid1giving% but even then they were nested in broader diplomatic purposes of the Japanese government& What was missing in Japan)s aid was a major development focus% even after commercial purposes declined& Why was this soW Because Japanese traditions% in contrast to much of the West% put a low priority on public charity 4families were supposed to ta,e care of their needy6% and the emphasis on a strong state and family left little room for civil society and% by implication% the nongovernmental organi-ations that populate the political landscape of aid1giving in the Bnited 7tates and 3urope& As a result% the values and political constituencies sustaining public resources for development in other countries were wea, in Japan 4though over time and with international pressures% this began to change6& The thing to watch in the future of Japanese aid is whether an emerging constituency for development outside government will eventually prove influential enough to strengthen the development focus of Japan)s aid% overcoming% or forcing reform in% the fragmented organi-ation of Japanese aid within government& rance presents yet another combination of domestic political factors affecting its aid& rench aid is often interpreted as primarily driven by colonial policies of maintaining a sphere of predominant influence% primarily in sub17aharan Africa& This is true as far as it goes& But why did rance choose to use its aid for so long in this way% even in the face of rising domestic criticisms that its aid was being wasted or helping corrupt dictators stay in powerW 'uch of the answer has to do with widely shared ideas about rance)s rightful role in world politics% together with a highly centrali-ed and not very transparent government 4the Dational Assembly had little involvement in or even ,nowledge of the details of rench aid% and development1 oriented D/2s had little access to government decision1ma,ing6 with an internal organi-ation% reinforced by informal private networ,s% that privileged the use of rench aid for diplomatic purposes& This system is beginning to brea, down with the passing of the /aullist generation of politicians in Paris and the criticisms of younger political elites not tied to FranOafri9ue& Whether reforms in the organi-ation of

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rench aid + highly fragmented li,e that of Japan + will lead to a more coherent% accountable% development1oriented program of aid is still in 0uestion and is the ,ey thing to watch for in the future& /erman aid shows a trend of diminishing diplomatic and commercial influences and an increasing concentration of responsibilities for aid policies in its 'inistry of .evelopment& 7et up as a result of coalition politics #9>#% the ministry was initially a shell with few responsibilities for aid& But over time% its e*istence provided a political logic for successive ministers to argue successfully for greater control over /erman aid& That aid decreased dramatically during the economic stresses of the #99"s + especially the costs of absorbing 3ast /ermany + but it rebounded at the beginning of the new century% supported by a si-able and active D/2 constituency for development aid and an activist minister of development who was also vice chairman of the 7ocial .emocratic Party + the leading party in the government coalition& /ermany is committed to a substantial increase in its aid in coming years& The thing to watch is whether aid is of sufficient priority to the government for it to fulfill this commitment& .enmar, offers yet another contrast in the domestic politics of aid& $ts embrace of social democratic ideas that the rich should assist the poor and that government was an appropriate vehicle for that assistance at home translated relatively easily to acceptance of development aid abroad& $ts parliamentary system based on proportional representation reinforced the prominence of development aid as successive governments had to bargain with small political parties + some of which put development aid at the top of their political priorities + to create governing coalitions that raised the amount and development orientation of .enmar,)s aid& The government)s need to create an ade0uate Eresource baseF 4i&e&% domestic constituency6 for aid led it to allocate a significant portion of its aid initially to promote .anish commercial interests abroad% but this use was gradually limited over time as development criteria increasingly governed the allocation and use of this aid& .enmar, illustrates yet other interesting aspect of the domestic politics of aid& That country)s growing bac,lash against immigration and heavy government ta*es led to the election in !""# of a center1right coalition that reframed foreign aid + portraying it not as an e*tension of social democratic values abroad but as an e*penditure abroad that traded off against needed health e*penditures at home& The new government cut .anish aid by #" percent% dropping that country to second place in relative generosity& But the government did not attempt to cut .anish aid further% possibly because such a move would have collided with considerable domestic resistance& Public support for aid% although declining after the election in !""# 4reflecting the reframing of aid in terms of domestic norms and preferences6% was still strong& The thing to watch in .enmar, is the e*tent to which the reelected center1right government will try to reorient .anish aid toward reducing the number of immigrants in the country and ,eeping others at home& Two elements in .anish identity appear in conflict when it comes to .enmar,)s aidC its long tradition of caring for the poor at home and abroad versus guarding an ethnically and culturally homogenous country that seems to many .anes to be threatened by a si-able number of immigrants and refugees from very different cultures and countries& /iven the sensitivities in many 3uropean countries to si-able immigrant populations

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within their borders% .enmar, may show us one of the future faces of aid in that part of the world& Furt#er Insig#ts from t#e 5onceptual Frame$or2 The conceptual framewor, of this study + including ideas% institutions% interests% and organi-ation + was intended to provide a basis for analy-ing the politics of aid in five countries& But the framewor, itself invites us to consider more general insights regarding the domestic politics of aid1giving& irst% norms are important in shaping and sustaining aid1giving& But how aid is framed in terms of those norms is also important& The impact of norms and framing is evident in a number of my cases + especially in the Bnited 7tates% where prominent members of the Christian right% previously s,eptical about foreign aid% have begun to reframe certain ,inds of aid as EChristian duty&F 4This view of aid has long been held by Christian .emocratic parties in 3urope but not so prominently in the Bnited 7tates% perhaps because of the prevalence there of classical liberal views on the political right% which in general strongly favor a minimal role of government in society and oppose public welfare programs&6 What has led to this reframing of aid in the Bnited 7tatesW $t seems li,ely that the emergence of a more educated% activist% and internationalist Christian right% led by elements of the evangelical community 4which has increasing numbers of missionaries in developing countries6% together with the rapid growth of local evangelical movement in Aatin America and sub17aharan African KsicL% have fed this trend% both through learning and the e*perience of poverty and deprivation abroad& The support for increased aid from the evangelicals and the Christian right facilitated passage through the B7 Congress of significant increases in B7 aid proposed by the Bush administration 4though this was not the only factor supporting the increase in B7 aid6& The case of .enmar, provides another illustration of the power of the way aid is framed + in this case% by center1right parties lin,ing it directly to the contentious issues of immigration% high ta*es% and inade0uate e*penditures on domestic health services& 7upport for aid in .enmar, fell when the center1right parties made these lin,s in their electoral campaign% preparing the ground for a cut in .anish aid when the center1right too, power in !""#& Both of these cases illustrate that aid can be framed and reframed in terms of number of domestic norms% and effective framing can have significant and immediate conse0uences for the amount and orientation of foreign aid and% over time% for the purposes of aid& The case of .enmar, also suggests% however% that there may be limits% based on widely shared societal values e*tended over a considerable period% on how much change in aid levels and possibly aid)s purposes can be implemented through reframing& The center1right coalition refrained from cutting aid below the initial #" percent% anticipating significant resistance to further cuts from the public and the .anish aid lobby& The case studies confirm the argument% suggested at the beginning of the boo,% that the structure of governments% combined with electoral rules% can influence the purpose of aid& The need to create governing coalitions led to enhanced aid for development as a price of coalition building and maintenance% affecting the organi-ation of aid in /ermany and the amount of aid and aid)s purposes in .enmar, up to !""#&! This dynamic does not wor, in the winner1ta,e1all presidential system of the Bnited 7tates% which discourages the formation of small

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political parties favoring niche issues 4even though there might well be an ade0uate constituency base for such parties in the Bnited 7tates if electoral rules were based on proportional representation and the system were a parliamentary vote6& The case of .enmar, illustrates the proposition that informed and engaged legislatures can affect aid)s purposes& The ol,eting often debated aid issues and was long a vehicle for education and consensus1building among political elites and the public on .anish development aid& The opposite case is found in rance and Japan% where the legislatures played no role in aid + they were mostly uninformed and seldom debated aid issues% leaving aid policies and decisions opa0ue and not subject to public scrutiny or influence& Where legislatures do not hold the e*ecutive branch to account% the public may strongly support aid% but it may be little informed about the actual uses of aid and have little impact on them& The public and political elites can also turn sharply against aid when scandals erupt involving the use of aid for commercial or political purposes% as they have in the less transparent aid systems of Japan and rance& The importance of a constituency for development aid and its degree of access to government is well confirmed by my cases& Where the constituency is wea, or lac,ing in access + as in Japan and rance% respectively + the development purposes of aid were wea,& Where that constituency was strong and well connected to government decision1ma,ers% as in the case of .enmar,% aid)s development purposes were much more prominent& However% the cases of the Bnited 7tates and .enmar, suggest an amendment to this proposition& A constituency with access to government may ensure that aid)s development purpose is prominent% but it is not usually ade0uate to ensure that development is aid)s onl purpose& $n both countries% other interests influence the purposes of aid + in .enmar,% commercial interests% and in the Bnited 7tates% diplomatic ones& And these other interests proved essential to carrying si-able budgets forward year after year in these political systems& ifth% the case studies also demonstrate a relationship between the way a government organi-es its aid and the priority of development in aid)s purposes& .evelopment has gradually become a more prominent purpose in /erman aid as the 'inistry of .evelopment has increasingly gained responsibilities over /ermany)s aid programs& The fragmented aid organi-ations in rance and Japan have contributed to the wea, development purpose in those government)s aid programs% and the stic,iness of these systems has impeded efforts to elevate that purpose through government reorgani-ation& The bureaucratic location of aid also matters% though the relationship between location and aid)s development purposes is not as simple or straightforward as aid practitioners have often assumed& 2ne would e*pect that a ministerial level development aid agency would carry more influence in government than a subcabinet1level aid agency& The case of /ermany% compared to that of the Bnited 7tates% would seem to validate this prediction& But the case of .enmar, + where aid has been fully merged into the 'inistry of oreign Affairs + suggests a caveat& The development purpose of .anish aid has not been overwhelmed by .enmar,)s diplomatic policies% because those policies regarding developing countries are consistent with furthering development& $n contrast% for the Bnited 7tates% in a position of world leadership% diplomatic goals 4e&g&% peace1ma,ing in the 'iddle

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3ast% containing communism% fighting terrorism6 have a high priority in the mission of the .epartment of 7tate and can collide with development purposes when aid is needed to reward regimes% even corrupt and incompetent ones% which support B7 policies& The potential inconsistency between development and diplomatic goals was at the heart of the conflict on the issue of merging B7A$. into the .epartment of 7tate in the #99"s and remains alive at the time of this writing& 2ne further lesson on aid organi-ation is suggested from the case studies& 3ven though aid systems are difficult to reform where such reforms involve major changes in government bureaucracies% change can occur through the creation of entirely new agencies + as in the case of the 'illennium Challenge Corporation in the Bnited 7tates& This approach avoids costly confrontations with e*isting agencies and the interests they represent but has the downside of further fragmenting the overall organi-ation of aid& A final comment needs to be made about the interaction of domestic and international factors in shaping aid)s purposes& $f domestic political forces are so important in influencing foreign aid% why has there been an obvious convergence in the purposes of aid over the past decade and a half among different aid1giving governmentsW Part of the answer is that e*ternal pressures% sustained over time% can change the fundamental determinants of aid)s purposes& Prolonged e*ternal pressures on governments of rich countries to provide more and better aid for development have affected the way publics% and particularly political elites within aid1giving governments% thin, about what purposes of aid should be and how their government measures up& They have% as in the case of Japan% encouraged governments to support the establishment and strengthening of development1 oriented D/2s that% in turn% become lobbies for aid for development& 3*ternal pressures have put development issues on the political agendas in many aid1giving countries over a period of time% helping to inform their publics on aid1giving and development needs abroad& $n some cases% where governments have claimed a major world role in development aid + as in Japan% rance% and .enmar, + criticisms from abroad have provo,ed criticisms at home and have eventually motivated governments to bring their policies more into alignment with international norms for development aid& 'any of the factors leading to a convergence in aid)s purposes in the #99"s and early years of the twenty1first century relates to events within aid1giving countries rather than e*ternal pressure or eventsC the passing of a generation in rance that cleared the way for new approaches to aid1giving: the beginning of greater accountability in Japanese political institutions: the resistance to immigration in .enmar,: the rise of the evangelicals in B7 political life& $nternational events% trends% and pressures are important sources of change% but they often wor, through domestic political forces% and those forces also produce change% independent of what is going on beyond their borders& Implications for Polic $t was not the purpose of this boo, to generate policy recommendations& But there are two implications of this study that stand out as obvious% compelling% and little addressed by policy1ma,ers& EAid effectivenessF has almost always been defined as Edevelopmental effectiveness%F and assessments of aid)s impact on growth have

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often found aid to be ineffective& Xet one of the lessons from this study is that aid)s purposes have always been mi*ed% related in significant part to the domestic political forces influencing the amount% allocation% and use of aid& And it seems li,ely that% despite an aid1for1development norm% aid)s purposes will continue to be mi*ed in the future& $t is% therefore% irrational and potentially highly misleading to evaluate all aid according to only one of its purposes& What has long been missing is an effort to identify in detail and evaluate those other purposes of aid and to apply development criteria only to that aid that is primarily directed at development purposes&H Roughly half of B7 bilateral aid might fall into the category of Eaid primarily for nondevelopment purposesF + much of it tied to diplomatic purposes of various ,inds + which should be evaluated as to whether it achieved those purposes& or e*ample% was B7 aid for peace1ma,ing in the 'iddle 3ast effective in helping to further peace between $srael and its neighborsW To what e*tent was aid successful in resisting the e*pansion of communism in 3urope in the #9M"s and #9<"s and Central America in the #9;"sW How effective has rench aid been in fortifying a sphere of influence in AfricaW To my ,nowledge% there has been no effort on the part of any aid donor at any time to provide a rigorous evaluation of its aid programs for purposes other than development& This lac, of a comprehensive effort to evaluate aid effectiveness in terms of its various purposes is not just a problem of bureaucratic untidiness& $t is highly relevant to the future of development aid& The increases in aid during the early years of the twenty1first century have been justified in part on the promise that aid will be more effective in the future than it has been in the past% based on greater selectivity of recipients% better EownershipF on the part of recipients% and improved aid management through an emphasis on results& Xet aid is still provided for mi*ed purposes& $f evaluations of aid)s impact in the future continue to apply development criteria indiscriminately to all aid rather than distinguish among aid)s different purposes and if future evaluations find that aid)s impact on development is still disappointing% there could well be an unjustified bac,lash against aid in general among the public and political elites in aid1giving countries& $t is important to ta,e the full range of aid)s purposes into account in ma,ing our evaluations% and we are not there yet& A second policy implication involves aid effectiveness& All the donor governments in this study have committed themselves to increase their aid for development substantially throughout the remainder of the first decade of the twenty1first century& $f they should see, to fulfill that commitment 4which is not guaranteed6% most of them lac, the organi-ational capacity to manage dramatic increases in aid& The fragmented systems of the Bnited 7tates% Japan% rance% and even /ermany will ma,e policy coordination within aid1giving governments% the design and implementation of greatly e*panded development1aid programs and projects% and their monitoring and evaluation very challenging& Xet major increases in aid will have to be allocated and disbursed 0uic,ly: large and growing pipelines will lead legislatures to go slowly on approving increases in aid% as the B7 Congress has done with the 'illennium Challenge Account& But moving large amounts of aid 0uic,ly% especially in fragmented donor aid systems% ris,s using it poorly% compelling donor governments to transfer the bul, of it to the governments of poor countries 4rather than using D/2s and other intermediaries% for e*ample% for small% community1based activities6% which themselves lac, the capacity to use aid well and the systems to ensure it is used for the purposes intended& $f rapidly rising amounts of aid are

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wasted or fuel corruption in recipient countries% public support for aid in donor countries could erode and lead to a drop in aid in the future& 2rgani-ation + and capacity + matters more than ever% both among donor and recipient governments&

Lancaster* %arol -.//Aa0* Geor!e +ush2s 'orei!n Aid# Transformation or *haos@* Baltimore: BrooBings Institution Press6
Introduction (pp. 1<D) 2ver the past seven years% the Bush administration has launched a transformation of B&7& foreign aid& Do time since the administration of President John & ?enney has seen more changes in the volume of aid% in aid)s purposes and policies% in its organi-ation% and in its overall status in B&7& foreign policy& $f EtransformationF in politics is ta,en to mean fundamentally changing e*isting systems% President Bush has initiated one& But the notion of EtransformationF also implies radical change in pursuit of a broad new vision& 7uch a vision has been absent from the numerous changes in aid implemented by the Bush administration% leaving an aid system + already in considerable disarray + in chaos& However% the policy and organi-ational chaos characteri-ing B&7& aid offers the ne*t administration an important and compelling opportunity to reshape B&7& economic assistance while engaging the emerging world of the twenty1first century& # The view that B&7& aid in !""; is badly in need of policy and organi-ational reform is reflected in the veritable bli--ard of boo,s% study commission statements% and congressional reports on aid published in recent years% especially in !""5 4see bo* #1#6& These efforts share a number of common concerns though the specifics of their policy recommendations are 0uite different& These reports and studies reflect the e*traordinary interest combined with considerable dis0uiet about foreign aid in the foreign policy and development communities& They mostly e*amine foreign aid from a particular policy perspective + for e*ample% its relation to security or broader foreign policy issues or fragile states& This study adds to the aid discussion by e*amining B&7& economic assistance as a whole% analy-ing in detail the array of recent reforms and the difficult issues they raise% and placing these changes and the manner of their implementation in a historical and political conte*t& $t agrees with many of the reports and commission that a major reform in B&7& foreign aid is urgently re0uired% including elevating

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EdevelopmentF in B&7& foreign policy in reality as well as in rhetoric& $t considers the creation of a .epartment for .evelopment has much to recommend it& But is also recogni-es that a .epartment for .evelopment is controversial% especially in the foreign policy community% and could be politically costly and time consuming to plan and implement for a new administration& $t thus offers a EPlan BF that would improve the e*isting system but imply fewer political costs for a new administration% which will inherit a large number of urgent and difficult problems% domestic and foreign% that it will have to confront once in office& &lements of a -ransformation+ 5#anges in :.". Foreign )id oreign aid is an instrument of B&7& foreign policy and sometimes of B&7& domestic policy& $t is used to pursue a variety of national purposes% including providing humanitarian relief% furthering diplomatic goals% promoting development and democracy abroad% addressing global issues% supporting economic and political transitions% e*panding e*port mar,ets% preventing and mitigating conflict% and strengthening the wea, states& 2f all of these% promoting diplomacy and development have long been the most prominent purposes of B&7& aid% reflecting B&7& interests and values abroad and sustaining an often uneasy coalition of domestic support for aid1giving from the political right and left within the Bnited 7tates& $t is worth considering what $ mean here by EdiplomacyF and EdevelopmentF as purposes of B&7& economic assistance& 7trictly spea,ing% diplomac includes the tools and tactics used to shape relations between countries& $n this study% $ shall ta,e the liberty of using the term somewhat differently + to refer to the issues in B&7& relations with other countries that relate to B&7& national interests 4primarily security and political interests6 and B&7& leadership abroad& The specific diplomatic goals for which B&7& economic assistance has been used include containing the spread of communism% promoting peace 4for e*ample% in the 'iddle 3ast and the Bal,ans6 and fighting the global war on terror& $n addressing these issues% B&7& aid has been used to strengthen friendly governments and their economies% to reward desirable behavior 4for e*ample% the provision of base rights% vote in the Bnited Dations% support of B&7& policies generally6 and to secure the B&7& presence% access% and influence worldwide& $ shall use de!elopment to refer to rising levels of per capita income and reductions in poverty with all the comple* changes% including improved health and education% robust political institutions% high levels of savings% investment and trade% and other social% political% and economic changes that are both causes and conse0uences of development& ! Aid for development has been used to e*pand the capacity of developing country governments to manage their economies 4for e*ample% through technical assistance and training6% to increase assets supportive of development 4for e*ample% through funding increased infrastructure% health% education% credit% agricultural support6% and to act as an incentive for governments to adopt economic and political reforms regarded as essential to foster investment% growth% and poverty reduction& $n the #99"s% with the end of the cold war% the value of aid as an instrument of diplomacy diminished% and with growing doubts about its effectiveness in furthering development 4especially in Africa6% the importance of aid and of promoting development abroad declined% along with the volume of that aid&

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President Bush dramatically reversed both of these trends& $n his two major statements on the national security strategy of the Bnited 7tates% he dedicated one or more sections to development% signally that it is in the first tier of B&7& foreign policy priorities% along with defense and diplomacy& H This is the first time for many decades that a B&7& president has declared that promoting development abroad is a ,ey priority in B&7& foreign policy& And the major instrument of that policy was inevitably foreign aid&M ollowing these statements% the !olume of B&7& aid has grown dramatically during the Bush administration + faster than at any time since the 'arshall Plan& $n current dollars% B&7& aid was higher in !""< 4and slightly down in !"">% the last year for which data are available% see figures #1#% #1!6 than at any time in B&7& history% even deducting the monies for reconstruction in $ra0 and Afghanistan and aid to Pa,istan 4figure #1H6&< 4The light bars + series ! in figure #1H + represent aid to Pa,istan% $ra0 and Afghanistan&6 The increase has lifted the Bnited 7tates out of the bottom place on the list of governments providing aid as a percentage of /ross Dational $ncome 4/D$6 + a position it occupied for many years& 4However% it is still only one rung from the bottom&6> The purposes governing B&7& aid also changed during the Bush administration& Aid for diplomatic purposes now includes fighting the global war on terror& 5 And there has been a dramatic increase in aid for global health% especially fighting H$IGA$.7 + a use of aid that is aimed at addressing a global issue but has great relevance for development in poor countries as well& Changes in aid in the Bush administration have involved the way the B&7& government organi-es itself to manage its aid& An entirely new aid agency has been established + the 'illennium Challenge Corporation 4'CC6& There has been an integration of planning and budgeting by the B&7& Agency for $nternational .evelopment 4B7A$.6 and the .epartment of 7tate& The President)s 3mergency Program for A$.7 Relief 4P3P AR6 + a new aid program to fight H$IGA$.7 + is up and running& And the .epartment of .efense 4.o.6 has become increasingly prominent in providing economic assistance% with every sign that that prominences will continue to grow& Two new approaches to delivering aid have been implemented& 2ne% led by the 'CC% involves performance1based aid + providing relatively large amounts of aid to countries that are deemed Egood performersF to spur their economic growth& And to ensure ownership of aid1funded activities% the recipients must ta,e an active role in deciding how the aid is to be spent& A second approach% led by P3P AR% involves applying very large amounts of aid 4TH" billion for the coming five years6 to tac,le a single major problemC the scourge of H$IGA$.7& Aid monies have been used to address a variety of functional or global problems in the past% but never has the amount of aid allocated to P3P AR been used against a single world problem in the space of a relatively short period of time& 3ach of these changes in B&7& aid giving has much to recommend it& 3levating the promotion of development abroad is a priority in B&7& foreign policy reflects the realities of the twenty1first century in which massive disparities in wealth and

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opportunity in a rapidly integrating world can generate serious threats to B&7& interests abroad and the well1being of Americans at home& Addressing the problems of poverty abroad as a priority of B&7& foreign policy also reflects the values and views of many Americans that they% being among the most blessed and wealthy of peoples in human history% should act to help bring those blessings to the ! billion of the world)s population living in severe deprivation& urther% giving development a central place in foreign policy strengthens B&7& leadership in the world combining Esoft powerF + the ability to attract and persuade others to do what you want 4often through demonstrating that you have their interests at heart as well as yours6 + with Ehard powerF + threats% sometimes involving the use of force% to compel compliance from others& And e*panding the volume of B&7& aid dramatically brings it to a level more consistent with international needs% with the B&7& role as the world)s sole superpower% and with the ability of the Bnited 7tates to provide international economic assistance& With regard to the aid policy and programmatic initiatives of the Bush administration% the approach of the 'CC to aid giving + preferring those countries whose governments performed well in promoting democracy and development + has been welcomed with its promise of more effective aid in support of more rapid development& The large increase in B&7& aid to fight H$IGA$.7 + one of the worst plagues to afflict humanity for many centuries + has been very well received by groups and individuals from all points on the political spectrum& The 7tate .epartment1B7A$. integration of aid budget and policy planning was seen by many as a useful reform that would enhance the coherence of B&7& aid giving and align it more closely with B&7& foreign policy& The rise of .o. as an aid1giving agency and% in particular% the creation of A R$C2' 4a new military command for Africa6 have been regarded as innovations justified by the problems of fighting terrorism generally as well as the difficulties of managing community relations during B&7& military occupations& At the same time% a number of these changes have raised serious concerns& The 'CC has been e*traordinarily slow in disbursing the si-eable amount of funding appropriated to it% raising 0uestions about the efficacy of this new model of performance and ownership1based aid giving& There is some evidence that large amounts of funding for H$IGA$.7 have begun to have negative effects of other efforts to address health conditions abroad and may simply be too large for recipients to absorb 0uic,ly and effectively& 'ore basically% the massive increase in aid for H$IGA$.7 s,ews overall B&7& bilateral aid away from development% which re0uires addressing many obstacles impeding economic progress in poor countries% including limited health care& The integration of B7A$. and .epartment of 7tate planning and budgeting has sowed confusion and discontent in both agencies and raises fear in the development community that aid programs will eventually focus more on short1term diplomatic goals% and not the longer1term development mission of B7A$.& The increasing engagement of the .o. in aid giving adds yet another big player to a cluttered landscape aid organi-ations in the B&7& government% a player with% as yet% no professional capacity to manage aid for stabili-ation and development and that can give the impression of a militari-ation of B&7& foreign aid& inally% in addition to the substance of the changes% there has been considerable controversy about the ideas behind some of them 4such as the Efailing statesF

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paradigm6% their organi-ational implications% and the manner in which some of them have been implemented& This boo, offers a stoc,ta,ing and analysis of B&7& foreign aid as it has changed since !""" and offers recommendations for its future& $t e*amines the principal changes in four chaptersC first% it describes the individual changes themselves% including their origins% their promise% and their potential problems: second% it analy-es several major policy issues raised by the changes: third% it e*amines the organi-ational issues raised by the reforms and the problems in the implementation% including changes management in the public sector: fourth% the boo, concludes with a loo, at the evolving conte*t of aid giving in the twenty1first century and recommends a set of changes in B&7& aid to meet the opportunities and challenges of the new world of aid giving& The message of this study is simpleC first% foreign aid is an essential instrument of B&7& foreign policy% broadly defined% and will remain so for the foreseeable future: second% initiatives over the past seven years have produced both a transformation and chaos in an aid system that was already in disarray and ripe for change& The ne*t administration must address the challenge and opportunity of ,eeping what is valuable in these changes% discarding what is not wor,ing% and melding these initiatives into a coherent vision of the role of foreign aid and B&7& foreign policy& $n short% it has the chance to complete a transformation of B&7& aid&

Lancaster* %arol -.//Ab0* 1Foreign Aid in the ,CentyFirst %entury: &hat Pur"oses34* in Picard* Louis A6* 2roelsema* !obert and Buss* ,erry F6 -eds60* 'orei!n Aid and 'orei!n Policy# essons for the .e>t =alf *entury* ""6 9;-7/* )eC MorB: #6 +6 Shar"e* Inc6
.evelopment aid is alive and well and resurgent& .evelopment appears set to be the major purpose of aid in the future& But not all the signs point in the same direction% suggesting that major domestic economic problems% international crises involving terrorism or political conflicts among states% major global issues li,e the

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spread of infectious disease 4e&g&% avian flu6% or other incidents and trends can draw off aid to address these purposes& The international norm that rich countries should help poor countries to emerge from poverty appears well established and influential in supporting development aid& But other needs can and will influence aid)s purposes in the future& And should the current increases in aid for development fail to ma,e a visible impact on growth and poverty in poor countries% especially in Africa% in coming years% aid for development could again be challenged in the future&

La$ergne* !Fal P6 -8;A;0* 1Determinants of %anadian Aid Policy*4 in StoBBe* Ola$ -ed60* Western %iddle Powers and Glo"al Poverty# The &eterminants of the Aid Policies of *anada$ &enmar)$ the .etherlands$ .orway and Sweden* ""6 99-;/* (""sala* SCeden: ,he Scandina$ian Institute of African Studies6
What% then% of the (determinants) of Canadian aid policyW What can we say% in particular% about the true objectives of the aid program as described aboveW Consider first the commercial dimension& 2ne may as, what the aid program would resemble if it were% as some have suggested% designed primarily to satisfy commercial objectives& This is not a difficult 0uestion to answer since a Canadian program of that sort does in fact e*ist in the guise of the 3*port .evelopment Corporation 43.C6& An aid program which was primarily commercial in focus would behave essentially li,e the 3.C% e*cept that it would concentrate its attention on Third World countries& $t would provide mostly loans: and any grants or soft loans which were provided would be (mi*ed) with loans at commercial rates in order to ma*imi-e the sales impact of the aid& That aid would

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be directed e*clusively through commercially1oriented channels and it would probably be directed mainly to the dynamic mar,ets of higher1income and higher1 growth A.Cs& The Agency would maintain close lin,s with the e*port community% and it would be responsive mainly to initiatives identified by that community% with special attention to possibilities for long1term mar,et penetration& $t should be more than obvious from the previous section that the Canadian aid program is nothing of the sort& Canadian aid is provided on the softest terms% and mi*ed credits account even in recent years for only H per cent of Canadian 2.A& Aess than half of Canadian aid is provided through channels capable of generating very much at all in the way of commercial benefits for CanadaC MH&5 per cent through the government1to1government channel% !&> per cent through Petro1 Canada $nternational and #&9 per cent through the $ndustrial Cooperation program in #9;M& And it goes predominantly to the poorest and slowest1growing Third World countries& The Agency is as a rule responsive not to Canadian business initiatives but to re0uests received from recipient countries and it operates 0uite independently on a day1to1day basis from the .epartment of $nternational Trade& $t should be obvious that the primary motivation of Canadian aid policy is not a commercial one& Commercial interests do intrude upon the aid program% however& The main instrument for this is aid tying% and over half of Canadian 2.A remains tied even today& 7upport for Canadian commercial interests is also provided through the $ndustrial Cooperation% through the use of mi*ed credit arrangements and through occasional political intervention in support of favored projects or in contract allocations& C$.A documents ma,e it clear that commercial considerations are a criterion in the choice of recipient countries% although that influence is not% as we have seen% statistically apparent& 2ne can nonetheless identify several recipient countries whose choice has probably been influenced to some e*tent by commercial considerations& At the ris, of error in the absence of detailed case studies% one could probably include here Algeria% $ndonesia% $vory Coast% \aire% Cameroon and perhaps a number of others whose needs are for large infrastructure projects of interest to Canadian business& Procurement tying is by far the principal instrument of e*port promotion associated with the aid program% and it is this policy above all which has influenced academic thin,ing about the nature of Canadian aid& As the Dorth17outh $nstitute points out% Critic of aid programmes point to tying probably more than to any other factor as an e*ample of the self1interestedness of (donors)% and for many it has become a cause of deep cynicism about aid in general 4Dorth17outh $nstitute% #955% p& #!<6& Tying is indeed difficult to understand in rational terms& As many observers have pointed out% it provides little real benefit to the Canadian economy% while imposing substantial costs on the ability of Canadian aid to deliver cost1effective development assistance 43conomic Council of Canada% #95;: Aavergne% forth&: Dorth17outh $nstitute% #955% p& #!>: Treasury Board% #95>: Triantis: and Wyse% p& #1 #!6& Bnable to understand aid tying in terms of the stated objectives of the aid program% critics have thus tended to 0uestion the integrity of those objectives themselves&

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But governments are not necessarily rational% and governments do not necessarily believe the critics on such matters as aid1tying& Canadian politicians are subjected to a barrage of conflicting and biased sources of information on such matters% and they are 0uite capable% li,e individuals% of believing what they want to believe& Canadian politicians are naturally predisposed to believe that more than one objective can be satisfied at once + hence the concept of (mutual) benefits and never that of (conflicting) benefits& 7uch an approach is also the easiest one to maintain politically% and there is substantial advantage in pretending that everyone)s objectives for the aid program can be satisfied simultaneously& 2ne of the remar,able facts about tying in Canada is that very little effort has been made by the government to assess its costs& Those costs are conveniently ignored% and the issue is rarely addressed even in project documents within the Agency& Tying can also be understood as the aid program)s sop to influential business interests and to others% in and out of the government% who would otherwise not support the aid program& The role of tying in this regard is to achieve a degree of consensus on the aid program as a whole& 2ther ways of achieving such consensus could no doubt be found% but they would re0uire more leadership on the issue than the government has been willing to provide in recent years& An important 0uestion is whether the Canadian aid program has in fact become more commercially oriented over time& There is evidence that it has% but any statement in this regard must be a 0ualified one& Policyma,ers have become more actively conscious of commercial objectives% and they have sought out new ways of effectively satisfying these objectives in recent years by the use of mi*ed credits and the $ndustrial Cooperation program: but the trends in other respects are more ambiguous& Aid to multilateral agencies has declined as a share of 2.A relative to the pea, which was reached in #95>% but it remains much higher than in the #9>"s and early #95"s% and it would be higher yet if the $.A replenishment negotiations had been more successful& At the same time% increasing recourse has also been made to such development institutions as the D/2s and $.RC% and the share of 2.A being allocated through more (commercial) channels such as government1to1 government aid% Petro1Canada $nternational and $ndustrial Cooperation actually declined slightly from <<&; per cent to M;&! per cent between #95< and #9;M& Turning to the allocation of aid among countries% one does find that the share going to higher income A.Cs has increased% but this is a long1term trend associated with the reduction of aid to $ndia% and the trend does not seem to have accelerated in recent years& At the same time% the share of aid going to the poorest developing countries has also tended to increase% as has the share going to low growth countries other than $ndia& The suggestion that Canadian aid has become increasingly commerciali-ed must be interpreted in relative terms& $t is certainly more commerciali-ed today than one would have believed after reading the #95< "trateg which promised that government1to1government aid was to be partially untied and which paid almost no attention to Canadian commercial interests& 2ne KsicL the other hand% commercial objectives do not appear to be all that much more (primary) than before in the actual practice of Canadian aid policy& There appears to be a feeling that any new efforts in a commercial direction should not be achieved at the e*pense of what Canada is already doing in the way of development& The abandonment of the Trade

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and .evelopment facility in response to cutbac,s in the growth targets for aid was a clear manifestation of this policy approach& The political dimension of Canadian aid is more difficult to assess than the commercial one& Canadian aid is without doubt an arm of Canadian foreign policy% and this is hardly surprising in view of the fact that for many recipient countries the aid lin, is by far the most important aspect of their relationship with Canada& But aid can be political without being self1interested% and even self1interest may be interpreted in terms of fostering (harmonious and fruitful relationships between nations) 4C$.A% "trateg % p& #56& $n neither case need a political orientation be inconsistent with a generous and humanitarian aid policy& Canadian political interests #a!e of course influenced Canadian aid policy in some respects& They help to e*plain the neat division of aid between francophone and Anglophone Africa and the e*traordinary dispersal of Canadian aid to #!< recipient countries between #9;" and #9;M& They also help to e*plain the (responsive) approach to project selection and design& And they help to e*plain the territorial conflicts between C$.A and 3*ternal Affairs with regard to representation in the field& Xet Canada does not use its aid in a heavy1handed way as (leverage) to obtain favors from recipient countries% and most observers suggest that there are few political gains to be gotten from foreign aid anyway% particularly for small donors 4Bird% #9;#: Ayon and Tare0% p& ***i*: Wyse% pp& #91!!6& The limited importance of self1serving foreign policy objectives in Canadian aid is suggested also by the decreasing use which is being made of government1to1government aid as opposed to other channels and by the concentration of aid on low1income and low1growth recipients who are unli,ely to have much to offer Canada in terms of any 9uid pro 9uo arrangements& 7uch countries may at best be able to offer their votes in the Bnited Dations on issues which are of importance to Canada% but any donor trading for BD votes would do best to concentrate its aid among a large number of small countries& 7tatistical analyses have not been able to uncover any significant Canadian bias in favor of small countries& These observations% combined with those made earlier about the limited commercial orientation of the aid program% suggest that Canadian aid objectives are% as the rhetoric suggests% primarily developmental and humanitarian in orientation& The willingness of Canadians to contribute as a nation to the alleviation of world poverty is not so difficult to understand& $n a world where the role of the state in redressing income ine0ualities has assumed a*iomatic legitimacy + barely dented by Thatcherism and Reaganomics + it re0uires little imagination to e*tend the same concept beyond the borders of the nation1state& Willingness to do so is limited by two factorsC the reduced sense of community which e*ists between people of distant places% and the wea,ness of institutional mechanisms for ensuring that all members of the world community share e0ually the burden of redistribution& With modern telecommunications and air transport continuing to ma,e the world a smaller place% the sense of community which e*ists between Canadians and the poor of the Third World has no doubt increased in recent decades and can be e*pected to continue increasing in the future&

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Too much can be made of the importance of Canadian humanitarian sentiment regarding the Third World& The amount contributed by Canadians to the Third World on a voluntary basis is niggling when computed on a per capita basisC B7. <&H" per Canadian in #9;H]!5 The amount redistributed through the government is more substantial% amounting to B7. <5&M# per capita% but it is little by comparison to the amount redistributed internally to support the poor in Canada& The latter was in the order of B7. #%>!! per capita in #9;H& !; 7uch discrepancies can be e*plained in large part by the public good nature of income redistribution% !9 and the availability or non1availability of appropriate institutions to supply such a good& $ncome redistribution at the national level is a national public good 4to some e*tent even a municipal or provincial oneH" for which collective action can be mobili-ed through e*isting government institutions& The benefits of foreign aid are mostly international in scope% however% and at this level there are no institutions comparable in power and authority to domestic governments& The public good dimension of world poverty reduction e*plains why Canadian behavior in the aid field is not normally determined independently but rather through negotiation with other donor countries& 7uch negotiations and the resulting international agreements are% after all% the only available mechanism for securing international cooperation in such matter& As a middle power% Canada has a particular interest in see,ing and supporting international solutions to world problems& $t is too small to have much impact on such problems when acting alone% yet large enough to have an impact when spea,ing or acting in support of international measures& Canada has in fact tended to ta,e internationally1set targets seriously% though certainly not as seriously as many would li,e& Although paying lip service to BD targets as a long1run objective% the government did not establish a timetable for meeting the "&5 per cent target until the early #9;"s& 7ince then% the timetable has been repeatedly reneged upon% and the 2.AG/DP ratio has not risen at anything li,e the promised rate& 7ome limited progress #as been made in the direction of the BD target% however% and it can be argued that Canada)s 2.A would have grown more slowly% if at all% as a function of /DP in the absence of this target& By committing itself to meeting the BD target% the Canadian government has been better placed to resist pressure to cut bac, on the growth of foreign aid in times of sluggish economic growth and acute budget deficits& Canadian aid to multilateral agencies has also been influenced by commitments made in collaboration with other donors& The discussion of $.A1> and $.A15 in the third section of this chapter showed that Canada% along with other donor countries% has given substantial importance to traditional burden1sharing arrangements in the area of multilateral finance% to the point where this was allowed substantially to erode Canadian contributions to $.A in the #9;"s& A third area of international agreement which may be mentioned is that concerning aid to the least developed countries 4AA.Cs6& This category was established by the Bnited Dations in #95# in a resolution as,ing that special measures be ta,en to assist these countries% and the matter was studied by the .AC in #95!& The increased attention thus being brought to AA.Cs seems to have had a strong impact on Canadian aid to this group of countries% which shot up dramatically in #95# and

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continued to increase through the #95"s& 2ver H9 per cent of Canada)s bilateral aid now goes to this group of countries 4see igure ##6& 2ne dimension of international negotiations which appears not to have had much effect on Canadian practices relates to the tying of bilateral aid& The possibility of donors untying aid on a reciprocal multilateral basis was the subject of difficult negotiations in the .AC in the early and mid1#95"s% but Canada was among the most hard1line of countries resisting untying agreements 4Dorth17outh $nstitute% #955% p& #!>6& Canada has not applied a #95M 'emorandum of Bnderstanding by the 'ajority of .AC members to untie bilateral development loans in favor of procurement in developing countries& As noted above% only Austria performs worse than Canada on the percentage of its aid which remains tied& The reasons behind Canada)s tying policy have already been discussed& That Canada should be more reluctant to untie than other donors is possibly e*plained by the particular wea,ness of Canadian manufacturing in Third World mar,ets& Canadian officials are particularly touchy on the subject of aid tying& The feeling seems to be that Canada is justified to use aid as a form of subsidy for infant manufactured1e*port industries% and that Canada cannot% as an underdog% afford to let aid contracts fall to its competitors& 2verall% however% the concept of foreign aid as an international public good seems to have substantial e*planatory power% both for understanding the limited nature of Canada)s contribution to reducing world poverty% and for appreciating the importance of international efforts to coordinate donor country policies& $t is evident that Canadian aid policy has in fact been influenced by these efforts&

Lebo$ic* ?ames 6 -8;AA0* 1)ational Interests and (6S6 Foreign Aid: ,he %arter and !eagan Mears*4 in Journal of Peace Research* 5ol6 .7* )o6 .* ""6 887-97* Sage Publications* Ltd6
The analysis has contributed to an understanding of foreign assistance allocations& .onor interests are shown to account for the largest portion of assistance allocations even while the means and ends of foreign policy are shown to varyC The interests that guide policy change with time as do the instruments by which they are pursued&

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The analysis also permits specific insights into the factors behind B7 allocationsC irst% and perhaps foremost% political1military considerations are shown to have predominated in the foreign assistance policy of both the Carter and Reagan Administrations& 'ilitary inducements were the primary determinants of B7 aid in the Carter years% and country alignment was most important in the Reagan period& But economic interests play a significant role in B7 assistance policy% and they appear critical to B7 relations with the least1developed countries& $n these countries% foreign aid may be aimed at fostering mar,et e*pansion% resource ac0uisition% and economic penetration& Human needs played a secondary role in both Administrations& This is shown in the more limited capacity of human needs variables to e*plain foreign assistance% and in the limited circumstances under which these e*planatory variables are important& The B7 has been most sensitive to the development needs of countries that are aligned with the B7% and even the Carter Administration apparently denied aid most consistently to rights violators that were not aligned with the B7& Though human needs e*plain some of ReaganZs assistance allocations% the evidence is that the allocations involved followed from Carter Administration policy& $n all% then% it can be said that a clear hierarchy among B7 foreign policy goals e*ists in the area of foreign assistance& 7econd% this study has demonstrated the importance of disaggregating foreign assistance for analysis& 'ista,en inferences follow from the combination of unrelated programs or the ad #oc partitioning of complementary ones& A distinction between military and economic assistance was appropriate in the Carter years% but it was unsound in the Reagan years where economic and military assistance programs appeared to substitute for one another& 'oreover% economic and military assistance should not be thought to be% respectively% intrinsically (development) or (security) assistance& Just as the B7 does not measure its security only in military terms% it does not provide for its security solely in these terms& $n sum% this study belies the analytical separation of political and military interests from development policies% and economic from military assistance& inally% this study has addressed the 0uestion of whether B7 foreign policy is primarily mar,ed by continuity or change& Bnfortunately% the answer evo,es the notion of a cup that can be viewed as either half full or half empty& A great portion of Reagan policy can be e*plained by that of Carter% and even though aid amounts and recipients changed% some of the same interests prevailed in both Administrations& Changes between these Administrations are un0uestionably apparent% but they can be considered to be largely changes in emphasis rather than in ,ind& The Carter and Reagan Administrations differed dramatically in their rhetoric and professed concerns% and the composition of the Congress changed as well& But the results of this analysis could be ta,en to suggest that policy resides less in the elected leadership than within the forces impinging on it& .espite claims that the B7 foreign policy consensus has bro,en down and the widespread 0uestioning of the efficacy of foreign aid and the objectives it serves% policy continues to rest on the assumption that the B7 has important global responsibilities and faces serious international threats to its vital interests& or this reason% B7 assistance policy may be surprisingly impervious to change&

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Lebo$ic* ?ames 6 -.//70* 1Donor Positioning: De$elo"ment Assistance from the (6S6* ?a"an* France* 2ermany* and Britain*4 in Political Research Quarterly* 5ol6 7A* )o6 8* ""6 88;-8.:6
$n this study% $ show that traditional models fail to account for a theoretically important% windfall profit that countries receive from their primary donors and that a conse0uence of neglecting this Ebonus effectF is that models understate important 4indirect6 effects of donor interests on aid& Bsing a Hec,man treatment model% $ assess bilateral aid distributed to #"# countries% between #95" and #99M% by the B&7&% Japan% rance% /ermany% and the Bnited ?ingdom% the 23C.)s five largest bilateral aid donors& These five analyses assume that% for a prospective aid recipient% a donor ma,es two interrelated decisionsC 4#6 how much aid to give that country and 4!6 how to position itself relative to other donors 4i&e&% whether or not to be the primary donor6& The findings support realist and neo1liberal arguments about the sources of donor aid policy& KNL The evidence from the analysis is that the neglect of positional considerations renders traditional models incomplete& $ndirect effects of primary donor relationships lin,ed to donor interests e*ert substantial upward pressure on the foreign aid budgets of the B&7&% Japan% rance% and Britain in the #95"19M period& Primary donor relationships were pursued by the B&7& to serve its Cold War priorities and security interests% by Japan to serve its trade interests% political concerns% and Asia1based strategy% by rance to serve its trade interests% by Britain to serve its political and security interests% and by rance and Britain to support their former colonies& $n conse0uence% these donors acted as if giving aid in large 0uantities to priority countries was not enough% as if influence rested in preponderance& Although the evidence is less compelling that donor self1interest translated into net benefits for countries for which /ermany was the primary donor% the reason lies% in all li,elihood% in historical realities and Cold War1era preoccupations that left /ermany less concerned with maintaining a visible global presence& 7upporting realist arguments% donors established themselves as primary donors within priority countries to capitali-e on the prestige and symbolic benefits that come from being the largest contributor& But this apparent division of labor offers even stronger support for neo1liberal argumentsC donors remained the largest contributor for countries in which those donors immediate economic% political% and security interests were not obviously at sta,e& Whether or not donors desire

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primacy for its own sa,e% they may stand by their primary commitments and e*pect others to do the same& $n that sense% the findings also provide reason to probe the normative origins of state interest and not just settle for studying its effects&

Lebo$ic* ?ames 6 and 5oeten* +riB -.//;0* 1,he %ost of Shame: International Organizations and Foreign Aid in the Punishing of uman !ights 5iolators*4 in Journal of Peace Research* 5ol6 <:* )o6 8* ""6 >;-;>6
The statistical analysis provides strong evidence that BDCHR resolutions that condemn a country for poor human rights performance are correlated with large reductions in World Ban, and multilateral loan commitments% but have no impact on bilateral aid allocations& $nstead% bilateral aid responds mildly to short1term changes in levels of civil rights& These findings have a number of interesting implications for the broader literature in international relations& irst% they shed light on whether public shaming votes in international organi-ations actually (matter)& This issue was addressed heretofore with the circumstantial evidence that countries would not e*ert energy in shaming% and defending against it% if such actions carried no weight& A more convincing case is built around the practical conse0uences of these sanctioning votes% as they affect donor allocation patterns& We account for this finding% in theoretical terms% by arguing that public votes communicate information about actual norms violations and political preferences within the international community& This information can be useful to other $2s% such as the World Ban,% that ma,e conse0uential decisions under constraints imposed by the preferences of their political principals& 7econd% the findings contribute to the large literature on material conse0uences that governments e*perience for failing to live up to human rights standards& This literature has focused mostly on bilateral aid or trade relationships and has reduced the role of $2s% at least by implication% to persuading or sociali-ing donors to design their aid policies around the human rights practices of potential recipients& We argue that governments often do not have the incentives to punish norm violators bilaterally% even if these governments would prefer% in the abstract% to punish rights

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abuses& This gives governments incentives to delegate the enforcement of human rights norms to multilateral institutions% such as the World Ban, + this is an important point% because prior research suggests that states might soften their abusive practices with the right foreign incentives% for e*ample% preferential trade agreements 4Hafner1Burton% !""<6&H# Third% these insights contribute to the literature that as,s why governments choose to delegate aid allocation to multilateral institutions& 'ilner 4!"">6 argues that governments do so because their domestic publics will otherwise doubt that aid has a non1political character& Rodri, 4#99>6 argues that% compared to individual donors% multilateral aid institutions can more credibly demand policy concessions from aid recipients& We provide an additional reasonC multilateralism allows states to overcome a collaboration dilemma + based in the competitiveness of strategic1 based aid allocations + that prevents states from deferring to normative principles when allocating aid& 2ur findings are interesting% too% because the World Ban, is not generally believed to engage in human rights norms enforcement& Although the World Ban, is under considerable pressure from D/2s and governments to ta,e human rights and other socialGpolitical factors into consideration when ma,ing policy% project% and programmatic decisions% and has adjusted its staff and priorities accordingly% it must also defer to the preferences of its principals& BD resolutions denouncing the human rights performance of an individual government provide a strong signal that project applications by that government can and should be evaluated with admonition& These signals are li,ely less important for the commission)s actions per se than what they represent + a glimpse or culmination of a larger political process through which countries are marginali-ed in international politics& By the time the BDCHR acts decisively against alleged violators% they could be well along in the process of global shaming& Dotable% for instance% is that the commission contended with some cases 4e&g& $srael6 because they were symbolic cases and acted% then% in response to world opinion as much as to reinforce that opinion& Regardless% the implication remains that% in an important sense% multilateral institutions bolstered their interventions by ensuring that they had ade0uate international political support and% thus% that the World Ban, acted as a selective enforcer of international human rights norms&

LensinB* !obert and &hite* oCard -.///0* 1Aid Allocation* Po$erty !eduction and the Assessing Aid !e"ort*4 in Journal of International
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&evelopment* 5ol6 8.* )o6 9* ""6 9;;=<8.6

The )ssessing )id report% drawing on wor, by Collier and .ollar% argued that to prioriti-e poverty reduction aid should be reallocated to countries with large numbers of poor and which have good policies& We entirely endorse the notion that aid could be better targeted to poverty reduction by removing the factors that distort the aid programme% in aid allocation as well as project selection and design& However% we would argue strongly against donors adopting the Collier1.ollar model as an aid allocation rule& 2n theoretical grounds the model fails to appreciate that growth is only one channel through which aid can affect poverty& 2n those grounds alone the importance of the policy environment% whilst not irrelevant% is wea,ened& But the argument that (aid wor,s better when policies are right) is also seen to be empirically flawed% so that the relationship between aid% policies% growth and poverty reduction becomes rather more ambiguous& The notion that selectivity should be applied% and so the poor abandoned in those countries who have the misfortune to live under bad governments% no longer follows once the aid plus policies e0uals growth formula is bro,en& This is perhaps just as well as there should be wider recognition that there is not agreement about what are the (right policies) for either growth or poverty reduction% and that the same set of policies may not be appropriate in all times and all places& $n general )ssessing )id gives wea, guidance to policy ma,ers on how to improve the poverty impact of their aid& The discussion of aid allocation is no e*ception&

LisBa* 2eorge -8;:/0* The .ew Statecraft# 'orei!n Aid in American 'orei!n Policy* %hicago: (ni$ersity of %hicago Press6 Loescher* 2il ?6 and )ichols* Bruce -8;A;0* 1Introduction*4
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in Loescher* 2il ?6 and )ichols* Bruce -eds0* The %oral .ation# =umanitarianism and 6S 'orei!n Policy Today* ""6 8-:* )otre Dame: (ni$ersity of )otre Dame Press6
$n the editorial pages of the %e$ Por2 -imes in #9;< 7ydney 7chanberg wrote that the Bnited 7tates was a Emoral nation&F He claimed that B&7& leaders often appeared lost in Egeopolitical balancing actsF and seemed to lose Ethe memory of the great strength that is derived from being a (moral nation)&F A stri,ing e*ample of this national conscience is the sense of guilt many American felt when boatloads of Jewish refugees were refused in the #9H"s% or Haitians were turned bac, in the #9;"s& 7chanberg insisted that Ethe humanitarian tradition in the Bnited 7tates as not a myth%F and that many Americans wanted its ideals reflected in government policy& Humanitarian activities and tenets form an integral part of America)s dominant ideologies and moral traditions& While these values compete with self1interest and realpoliti,% their importance to many citi-ens) sense of legitimacy and purpose in foreign policy is such that no definition of the nation)s long1term interests which wholly e*cludes these values is li,ely to be ade0uate& Thus% Americans fre0uently call upon their political leaders to demonstrate solicitude for the misfortune of outsiders and to contribute materially to the amelioration of natural and other disasters which occur in distant nations& Annually tens of thousands of Americans may be found outside the country)s borders wor,ing for nongovernmental bodies and performing various acts of mercy traditionally described as humanitarian& $n many cases these private bodies wor, un0uestionably alongside B&7& government agencies& Xet in Central America% the Horn of Africa% and in many other places% private agencies and their employees are increasingly forced to ta,e sides% choosing whether to target humanitarian efforts with or against governmentally sponsored goals& The dimension of humanitarian assistance addressed in this volume% humanitarian relief% may be broadly defined as the provision of assistance to victims of natural or political disasters& $ts e*ponents% both in government and in nongovernmental bodies% have traditionally aspired to elevate the needs of the victims over limitations imposed by short1term political concerns& Xet humanitarianism in action + whether in efforts to assist displaced persons following World War $$% airlifts of food to Biafra in the late #9>"s% or famine relief to 3thiopia in the #9;"s + has involved a combination of moral good and politically useful objectives& ar from representing a

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purely moralistic approach to the world% humanitarianism has been pragmatically incorporated into aspects of B&7& foreign policy& rom the beginning of modern humanitarian efforts in the late nineteenth century% it has been a constant struggle to inject principles into politics& While there have been mar,ed American successes% beginning with aid to Cuban victims of the 7panish1 American War and famine relief in the 7oviet union in the #9!"s% the presumption of the complementarity of privately sponsored humanitarianism and government objectives in foreign policy has always been present& As long as we judge America to be a Emoral nation%F this complementarity ma,es sense& $n the late #9M"s and #9<"s% for instance% the national assent to anticommunism in foreign policy support the belief that aiding refugees from 3astern 3urope was a humanitarian tas, the Bnited 7tates and its citi-ens should shoulder& Aiding these refugees provided both symbolic and instrumental gains for American foreign policy during the cold war& Consensus was much less evident when the refugee population consisted of Palestinians% Chileans fleeing Pinochet% Haitian boat people leaving .uvalier regimes% or 7alvadorians fleeing war and repression& This boo, constitutes a study of humanitarianism as a significant component of American foreign policy& $t e*amines current relations between nongovernmental organi-ations and the B&7& government in overseas operations and illustrates some of the difficulty of reconciling principles and politics in the administration of B&7& humanitarian policy& The topics covered in this boo, are among the most pressing foreign policy issues facing the Bnited 7tates in the #9;"s and beyond& The authors include academics% journalists% human rights specialists and activists% former government officials% and leaders and representatives of voluntary agencies% nongovernmental organi-ations% and foundations& The first section of this boo, concentrates on the moral and political philosophy of humanitarianism and its relationship to the conduct of B&7& foreign policy& 7idney H& 7chanberg% the journalist whose wartime e*perience in Cambodia in the #95"s were depicted in the film -#e Iilling Fields% describes with simple elo0uence the importance of humanitarian traditions in B&7& foreign policy& However% 7chanberg)s plea for foreign policy grounded in moral traditions raises fundamental 0uestions of political philosophy and strategy& Henry 7hue% an ethicist at Cornell% and Roger '& 7mith% a political scientist at Xale% ta,e sharply divergent perspectives on how best to answer these 0uestions& Both 7hue and 7mith agree that nations% particularly the Bnited 7tates% define themselves by their ideals& Both find that an emphasis on national interests at the e*pense of broad ideals of humanitarianism is unacceptable& They disagree% however% on whether to base humanitarian action on communitarian% national% or universalist principles& 7hue describes humanitarian activity as wor, that Emust be done&F This is true% he argues% because the nation interest of the Bnited 7tates cannot be defined without reference to moral principles& $n his ordering of such principles% an absolute and fundamental commitment to justice is essential% and priority is given to cosmopolitan or universal principles over national aspirations and ideas& While 7hue ac,nowledges that constraints and conflicts are inevitable in the pursuit of ideals% their importance in the lives of individual victims of political or natural disasters is

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obvious& urther% 7hue notes Ethe usefulness of a good reputationF that accrues to the Bnited 7tates through its involvement in such efforts& Through a strong commitment to humanitarian goals% the Bnited 7tates goes beyond being a Emoral nation%F and helps to establish universal standards of humanitarianism& 7mith% on the other hand% places more emphasis on morality rooted in communal and national aspirations and ideals rather than in cosmopolitan or universal ideals which 7hue and others assume to be morally superior& 7mith argues that the world is made up of individual nation1states which do not treat humanitarianism as moral truth above the fray of politics but as a political perspective which needs to ta,e into account national actors with a diverse range of interests and beliefs& He believes that the Bnited 7tates would do better to begin with a sense of what America values% with its moral aims and purposes% and to see how these moral re0uirements could best be furthered in the world as we find it today& 7mith distinguishes between the universal views held by humanitarian agencies and the national views of B&7& policyma,ers& Because of their different perspectives and values% B&7& government officials and private humanitarian agencies almost inevitably will clash& Perhaps the most stri,ing difference between the two involves action that EB&7& officials see as buttressing political forces hostile to liberty&F Thus% for e*ample% permission to send private humanitarian assistance% including school supplies to schoolchildren in Cambodia% was denied by the B&7& 7tate .epartment in the early #9;"s because such aid constituted help to a government hostile to B&7& interests& Devertheless% 7mith argues that these contrasting perspectives can be Etruly usefulF and that the B&7& government and the private agencies can serve Eto correct the characteristic blind spots of the otherF and to engage in more Eopen1 minded critical dialogue with each other&F $n the second section of the boo,% two chapters e*amine the political and legal factors which must be addressed in loo,ing at B&7& humanitarian policy today& .avid P& orsythe% a political scientist at the Bniversity of Debras,a: and Peter 'acalister1 7mith% a jurist at the 'a* Plan, $nstitute in Heidelberg% offer analyses of these two related topics& orsythe loo,s at the evolution of American institutions% private and governmental% given over to international humanitarian action and places them in the conte*t of an evolving international system for delivery of assistance& As his analysis indicates% while enormous progress has been made in the last forty years% institutional and political factors at times overwhelm the best efforts to sustain humanitarian standards 'acalister17mith e*amines the evolution of international humanitarian law in the twentieth century& While offering a fran, appraisal of the limits of humanitarian law% he remains cautiously optimistic that humanitarian principles in international law will continue to achieve incremental growth& $n the third section of the boo,% several authors e*amine refugees% the closely related topics of asylym and sanctuary in the Bnited 7tates% and the role of private humanitarian organi-ations in pressing human right claims with B&7& and regional officials& .oris 'eissner% former acting director of the $mmigration and Daturali-ation 7ervice% and 'ichael 'cConnel% an activist with the Chicago Religious Tas, orce on Central America% e*amine the issues of asylum and sanctuary for Central Americans who have sought refuge in the B&7& and e*plore how we might evaluate these issues in the conte*t of B&7& and international law% morality% and church1state tensions& ew recent events in the humanitarian realm have erupted with such force on the American domestic scene as has the sanctuary movement&

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or many Americans% this issue more than any other has captured the confrontation between humanitarian ideas and politics& /il Aoescher% a political scientist at Dotre .ame and the co1editor of this boo,% addresses the issue of refugee policy in Central America% e*amining in detail the situation of refugees in 'e*ico% Honduras% and Costa Rica and the various actors% their interests% and the ways in which they are affected by geopolitics% ideology% and ethnic politics& He analy-es the attitude of the Bnited 7tates and its impact on refugee policy% the role of the Bnited Dations High Commissioner for Refugees% and the problems faced by voluntary agencies in their struggle to preserve humanitarian EspaceF for their activities& A closely related chapter by Aowell W& Aive-ey of the Woodrow Wilson 7chool of Public and $nternational Affairs at Princeton e*amines the role of nongovernmental human1rights organi-ations and the conduct of American foreign policy in Central America in the #9;"s& Aive-ey discerns a growing rift between those organi-ations that emphasi-e the political and cultural rights associated with American views of freedom and those that press for more e*pansive views of human rights that focus on the Etangible welfareF of individuals and groups in need& This latter group views the convergence of governmental and private ends in humanitarian assistance as increasingly unli,ely& $n the Horn of Africa% famine and refugee problems have intertwined in recent years to create one of the most comple* scenes of human need anywhere in the world& 3ach of the chapters in the final section of the boo, address the actual mechanics of how assistance is organi-ed& As Henry 7hue points out in his earlier chapter% Aawrence A& Pe-ullo and Jason W& Clay offer strongly contrasting views of the 3thiopian famine& 7tarting with different premises% they reach different conclusions& Pe-ullo% formerly a career 7tate .epartment officer and now e*ecutive director of Catholic Relief 7ervices% accepts the view that the famine is largely natural% and that accommodations to the 3thiopian regime% however distasteful% were necessary in order to provide any assistance at all& Clay% an anthropologist at Cultural 7urvival% a Cambridge 'assachusetts% research and advocacy organi-ation% believes that private humanitarians% in their rush to capitali-e on public sympathy for hungry 3thiopians% failed to understand the overwhelmingly political nature of the famine% the uses made of food supplies% and the meaning of the forced resettlement of untold thousands in the midst of 3thiopia)s civil war& rederic, C& Cuny% a disaster relief specialist who heads the .allas1based consulting firm $DT3RT3CT% points to many of the hidden political dimensions at wor, in famine relief operations& 7adly% many of these same forces seem to be repeating themselves in the Horn of Africa in early #9;; as this introduction is being written& inally% Bruce Dichols% co1editor of the boo, and director of studies at the Carnegie Council on 3thics and $nternational Affairs% turns to a uni0ue operation designed to surreptitiously move !<%""" 3thiopian Jews% or alasha% to $srael& When the private sector efforts of Americans and some $sraeli officials bro,e down in eastern 7udan in #9;<% the B&7& government was obliged to provide millions of dollars in covert aid to move endangered refugees and resettle them in $srael& The alasha operation% li,e many other B&7& refugee relief and resettlement activities% points directly to the importance of prior foreign policy commitments and communal 4versus international6 norms in setting humanitarian policy&

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Lumsdaine* Da$id 6 -8;;90* 1%ha"ter One: Do #oral #ater in International Politics3*4 in Lumsdaine* Da$id 6* %oral Aision in International Politics# The 'orei!n Aid Re!ime 14;4( 1494* ""6 9-.;* Princeton* )?: Princeton (ni$ersity Press6
Realism has long contended that international politics is profoundly and inherently conflictual& The bases for this claim vary from aggressive human nature to the character of the state or of the international system& $ have argued 4#6 that human nature is highly varied% and can produce destructive% merely self1interested% or principled and altruistic deeds% and 4!6 that the international system does not re0uire prudent states to concentrate so e*clusively on their own needs that no one can ta,e care of the system% or of wea,er neighbors& 7ystemic forces do not entail any one way of coping% but permit a range of state behavior and various types of international systems& The ambiguities which give states significant choices suggest that philosophical and ideological differences can shape how states behave& Principles and values systematically affect the world system% and wa*ing and waning ethical concerns and changes in domestic political systems can significantly alter the overall character of international politics& This opens up several distinct lines of investigation and hypothesis testing% about domestic influence% international norms% and the inherent meanings of various international practices& 3ach of these hypotheses involves denying that the processes of international politics are discontinuous from the social and moral character of personal life and civil society& 'oral factors can alter the tenor of international life% not only in peripheral ways% but by changing the character of the system& Cooperation stems not just from incentives but from underlying attitudes and values& $nsofar as cooperation is simply ma,ing mutually advantageous 4pareto1 improving6 deals% there is nothing particularly fine about itC it may tend toward or away from peace or the restraint of oppression or concern for the needy& Cooperation is valuable where it involves an ethic of wor,ing together to promote essential and humanly beneficial change& Bnderstanding cooperation narrowly conceived of as cooperation among national egoists is not alternative but complementary to moral factors% because practices of cooperation once begun have

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an inherent logic that may lead states in self1interested cooperative arrangements toward broader cooperative values& But for just these reasons it is important to start developing analytic conceptions of cooperation that show their relationship to the moral bases of society& The forty1year history of foreign aid shows how many concepts discussed in this chapter wor,ed out in practice& .ifferences in domestic political principles% among leader and publics% best e*plain systematic differences between the aid programs of different states and the reasons that aid got started& The role of international society was at wor,% both in the dialogue between less developed countries and aid donors and in the sense of appropriate behavior that constrained the donors as members of the 23C.& That practices once underta,en had their own momentum% and grew and changed influenced by the meanings that constituted them as practices% may be seen both in the developments that prepared the way for aid and in the evolution of foreign aid practices& 7trong humanitarian convictions shaped this large% novel% and important aspect of international economic relations& oreign aid is a paradigm case of the influence of crucial moral principles because of its universal scope% and assistance form well1off nations to any need% its focus on poverty% and its empowerment of the wea,est groups and states in the international system& or the boo, as a whole argues what chapter ! presents in summaryC foreign aid cannot be e*plained on the basis of the economic and political interests of the donor countries alone% and any satisfactory e*planation must give a central place to the influence of humanitarian and egalitarian convictions upon aid donors&

Lumsdaine* Da$id 6 -8;;90* 1%ha"ter ,Co: &hy &as ,here Any Foreign Aid at All*4 in Lumsdaine* Da$id 6* %oral Aision in International Politics# The 'orei!n Aid Re!ime 14;4( 1494* ""6 9/-:;* Princeton* )?: Princeton (ni$ersity Press6
oreign aid was the largest financial flow to the Third World consistently through the postwar period% and was greater than all other flows combined% e*cept in the period roughly from #95H1#9;<& The sudden appearance of aid form nearly a score of

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developed democracies in the fifties% and their steady commitment to aid since% cannot be e*plained by the individual or collective economic and political interests of the donor states% though these interests did sometimes influence aid& 3vidence about aid spending% about which countries had the strongest aid programs% about public support for aid% about the origins of aid% and about ongoing changes in aid suggests instead that the real bases of support lay in humanitarian and egalitarian concern in the donor countries& 7uch concern was usually combined with and internationalism which held that the only secure basis for world peace and prosperity in the long run lay in providing all states with a chance to ma,e progress toward a better life: but this ,ind of internationalism tended to be held only by those who were committed to the welfare of poor countries for other reasons% and was generally opposed to the use of aid to support narrow national interests& As just discussed% the practice of foreign aid from about #9M9 to the present also accords with the more general arguments developed in chapter # about the ways in which moral factors can influence international politics& There was regular influence of domestic concerns with poverty upon international aid efforts& A sense of world citi-enship led individuals to support assistance to the Third World% and perceptions of international society led developed country governments to pay attention to international norms and standards% to the ,ind of identity they wanted to develop% to the opinion of other developed states% and to the complaints of Third World countries&

Lundborg* Per -8;;A0* 1Foreign Aid and International Su""ort as a 2ift +Kchange*4 in Economics and Politics* 5ol6 8/* )o6 .* ""6 8.>-8<8* OKford: BlacBCell Publishers6
$n this study the basis for non1altruistic granting of aid is derived from rivalry between two donors& We specified a gift e*change model to e*plain the interaction between donors) aid and the political support they obtain from the recipients& According to the gift e*change hypothesis the relative political support for the B7 is positively affected by B7 and negatively affected by 7oviet aid& The hypothesis also implies that B7 aid rises as a result of increased political support for the B7 and that 7oviet aid falls& Another theoretical result is that aid receivers) absolute income level is a determinant of the aid shares& .rawing on a study by .udley and 'ontmar0uette 4#95>6% we also included a complementary model for altruistic

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granting of aid suggesting that per capita incomes is an important determinant of aid& As suggested by the gift e*change model% the aid shares were shown to affect political support in the e*pected 0ualitative manner& The results suggest that the postwar increase in 7oviet aid shares and the fall in B7 aid shares since the si*ties contributed to the fall in relative support for the B7 as shown in igure #& The regression also indicated that political support affects the aid shares in the way suggested by the gift e*change hypothesis& 7imultaneity between aid and support was hence show to prevail& The gift e*change model also predicted that the recipients) income level has a negative impact on the aid share since it is more e*pensive to buy political support from countries with high income levels than from those of low levels& This prediction% however% has not received support in the regression analysis: while the estimates are of the e*pected sign they are not significant& Also the altruistic model is given empirical support as per capita incomes yield negative and significant estimates for B7 and for B77R aid shares& The results suggest that the fall of the 7oviet Bnion and the termination of the cold war should lead to a decline in foreign aid from both the B7 and the nations in the former 7oviet Bnion& As no incentives remain to use aid to e*tract political support% such a reduction should be e*pected& This does not necessarily mean that the world)s poorest will be negatively affected: as show% there are evidence of altruism in both donors) foreign aid& urthermore% it might be that the aid grants motivated by foreign political considerations are transferred into altruistically motivation donations& $t also seems reasonable that aid provided for foreign policy objectives is inefficient and that the remaining aid may be better utili-ed in the recipient countries& inally% it should be remembered that our regressions are based on a game involving repeated one1shot games& We discussed in section H the realism of this assumption& 7ince more realistic alternatives% that would allow the history of the game since the last change of government to affect the outcomes% would ma,e the model intractable% it is hard to assess the implications for the estimates if the one1 shot game assumption is violated&

Lundsgaarde* +riB* Breunig* %hristian and PraBash* Aseem -.//>0* 1,rade 5ersus Aid: Donor 2enerosity in an +ra of 2lobalization*4 in Policy
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Sciences* 5ol6 </* )o6 .* ""6 87>-8>;6

This paper has e*amined the issue of instrument choice faced by developed countries to support development in poor countries& Because developing countries face capital scarcity and capital is often viewed as a sine 0ua non for development% rich countries can promote economic development via resource transfers& Prior research has identified foreign aid as an instrument for redistributing resources internationally& $t has not placed the issue of aid in the larger conte*t of the politics of instrument choice& .rawing on the (trade versus aid) debate% this paper argues that varying levels of donor generosity can only be understood when increased imports from developing countries to donor countries are ta,en into account& 2ur analyses confirm that rising levels of 23C. imports from developing countries are associated with reductions in 23C. government)s foreign aid allocations& Thus% ,ey 23C. policyma,ers% with an eye towards their domestic constituencies% are reducing aid budgets and justifying this by pointing to increased imports from developing countries& While prior research has emphasi-ed the importance of social spending in influencing foreign aid budgets% our analysis does not support this argument& We also do not find support for the partisanship variables that previous research has tended to emphasi-e& However% we do find evidence that domestic economic conditions in the donor country% and unemployment levels in particular% influence foreign aid budgets& Thus% only some aspects of the domestic political conte*t are important in shaping aid decisions& The (trade% not aid) debate has been around for nearly as long as the foreign aid regime itself% and has figured prominently in foreign aid discussions in the Bnited 7tates at least since the 3isenhower administration& However% the promotion of trade openness on the international development agenda in the past two decades has increased its prominence& 2ur paper suggests that the (trade% not aid) argument has had a significant policy impact in donor countriesC increased imports from developing countries have displaced foreign aid& This trend has several policy implications& $f increased mar,et access leads rich countries to reduce foreign aid% then developing country governments may have fewer options to e*plore alternative developmental paths& 'oreover% citi-ens within developing countries may not benefit e0ually from the type of development that trade promotes% since benefits would li,ely be concentrated in the outwardly oriented sectors of the economy& Reduced aid may accentuate global ine0ualities% especially if certain developing countries do not have the resources or s,ills valued in global mar,ets 47tiglit- !""!6& inally% reductions in foreign aid may also wea,en rich countries) leverage to promote democracy and human rights in the developing world& While trade sanctions represent one alternative means of achieving this objective% research suggests that although sanctions may serve an important symbolic purpose% their efficacy in producing changes in state behavior is limited 4Aindsay #9;>6& As the WT2)s .oha 'inisterial .eclaration demonstrates% the argument that international trade is an essential means of promoting economic growth and

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poverty alleviation in the developing world occupies a prominent place on the multilateral trade agenda& $f international trade has become the ,ey instrument to foster development 4T!!"" billion in 23C.1developing country trade versus T<" billion in aid in !"""6% then international development scholars need to closely scrutini-e the rules influencing the division of gains from trade% not only between the Dorth and the 7outh% but also within the 7outh& Although the WT2 is the ,ey multilateral trade regime% a slew of regional and bilateral trade agreements are also affecting the volume and directionality of trade& 7uch trade agreements should be carefully e*amined not only in terms of gains and losses for the signatories% but also in terms of how they create trade for and divert trade from non1signatories 4.e 'elo and Panagriya #99!6& Because geography may privilege some developing countries regarding trade with 23C. countries 4.unning #9;#6% the (geographically challenged) countries may face difficult structural constraints in gaining access to international trading networ,s through no fault of their own& 2ne way to address these structural disadvantages could be to include a (side agreement) on foreign aid in regional and bilateral trade agreements& $n sum% international trade and international development scholars need to closely e*amine this comple* issue& $n addition to paying increased attention to the distribution of gains from trade in the developing world% this analysis suggests that it is essential that future research e*amine the way that geographical patterns of aid allocations have changed within the conte*t of overall aid reductions& The developing countries that benefit from increased trade with the developed world and those that are hurt by aid cutbac,s may not overlap& Thus strong e*port performance among other developing states may further reinforce the disadvantages facing the most aid dependent states by reducing the level of official assistance offered by donors& Just as geography or the absence of efficient economic institutions limit the ability of some countries to reap the advantages of increased international trade% some states are at a fundamental economic disadvantage due to a lac, of political control within their territory& The recent (War on Terror) has drawn attention to failed states 4 u,uyama !""M6 and to how poverty facilitates the recruitment of terrorists 4Posen !""#G!6& Because failed states cannot guarantee property rights% they are unli,ely to successfully participate in international economic e*changes& Trade as an instrument for development will not have traction for such countries% while foreign aid may still enable donor countries to support programs that counter poverty& An e*cessive reliance on trade as an instrument for economic development may thus have important implications for international security in addition to its conse0uences in the realm of international economics&

#acalister-Smith* Peter -8;A;0* 1 umanitarian Action and International LaC*4 in Loescher* 2il ?6 and )ichols* Bruce -eds60*
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""6 ;8-88;* The %oral .ation# =umanitarianism and 6S 'orei!n Policy Today* )otre Dame: (ni$ersity of )otre Dame Press6
Aegal rights and duties with regard to humanitarian action already e*ist in certain restricted circumstances% in particular under the terms of e*isting international instruments applicable in armed conflict and in the important area of rescue at sea& However% e*tending such rights and duties to humanitarian actions in situations of greatest need is a difficult tas, which remains to be achieved& The problem for the development of humanitarian law is that it should be based on objective criteria of human need% but must also ta,e account of the practical political re0uirements of donor and recipient states& Although the pressure of urgent circumstances alone is often found to be the motivating force behind developments at the operational level% only comparatively slow change or progress may be e*pected with regard to the assumption by states of binding or general responsibilities& Thus% several of the important BD speciali-ed agencies and subsidiary organs involved in humanitarian action have undergone considerable change over the course of time% but this has tended to come about mostly through interpretation and usage rather than through formal amendments& unctional responsibilities have not been transformed into legal duties& The problem of international legal measures relating to humanitarian action appears to arise at several levels& 2ne important level concerns technical arrangements to e*pedite assistance: the concern here is with measures which facilitate the efficient delivery of relief consignments% the movement and functioning of relief personnel% and arrangements in connection with communications& A further level of legal interest relates to the principles of humanitarian action% which are still neither universally nor uniformly recogni-ed: nevertheless% developments in humanitarian activities underta,en by states bilaterally% by governmental and nongovernmental organi-ations and by private individuals all contribute to establishing standards of responsibility for disaster victims% and they provide some norms for the conduct and evaluation of humanitarian operations& A third tas, is to relate e*isting legal and operational approaches in the field of humanitarian action to contemporary understanding of the role and purposes of international law and thereby to indicate the scope for development of both humanitarian law and action& $n essence% this means how to establish a broad field of humanitarian law relevant to all who may re0uire international assistance& There is considerable merit in the legal approach based on relatively detailed technical rules% because progress depends ultimately on the success of practical

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measures& At the same time% a framewor, of principles relating to humanitarian action would usefully supplement technical measure% if such principles could be both reasonably comprehensive and widely acceptable& 'ore broadly% it could be appropriate to re1e*amine the foundations for international humanitarian cooperation% in particular those contained in Article #4H6 of the BD Charter which are no longer ade0uate to meet the current need for humanitarian action& These foundations should be developed and reinforced so as to allow them to serve as a basis for legal% organi-ational% and functional progress% all interdependent prere0uisites of an improved humanitarian order& The importance of firm foundations for humanitarian policy as well as guiding principles for action% and in addition the necessary technical measures% should all be emphasi-ed more than ever in a period of greatly increased humanitarian needs& $n see,ing progress in the humanitarian field% it has become clear that the attempt to e*tend and improve humanitarian action themselves also involves + however slightly + an attempt to change the whole humanitarian order% or the conte*t in which humanitarian problems and response interact& At the same time it may be perceived that some fundamental constraints seem to operate% which hinder such change or prevent it from being too rapid& 7ince at least the time of the Aeague of Dations% international law and organi-ation have manifested a greatly increased attention to the situation of the individual% and individuals have increasingly become the beneficiaries of international acts& However% these developments have not led to recognition of a commensurate transformation in the international legal position of the individual& 7tates and the doctrine of state sovereignty remain cornerstones of international law% although in reality individuals are both the creators and ultimate addresses of all law% national and international& People continue to be subordinated to the power% and law% of the states& $nternational law in turn continues to give primary emphasis to the interests of states rather than to individual human values& The field of human rights highlights an underlying problem which to some e*tent is symptomatic of the whole international order& The problem stems from a fundamental contradiction in this field% namely% that human rights law and its accompanying mechanisms are the creations of states% yet have the supposed purpose of protecting the citi-en from abuses perpetrated by those same entities& This contradiction or dichotomy between the interests of the state and those of people goes a long way toward e*plaining the gap which e*ists between law and practice in many different fields of international relations% especially where human welfare is concerned& Accompanying this underlying problem it may be observed that many humanitarian actions% li,e most if not all governmental humanitarian organi-ations% are designed only to alleviate symptoms and not to tac,le basic causes& The practical response to humanitarian emergencies at the national and international levels is still of a fragmentary nature% and the global humanitarian system has only barely evolved beyond a mere series of ad hoc reactions& The Bnited Dations was supposed to be the center for coordinating the speciali-ed agencies and subsidiary organs% but most of them presently retain considerable autonomy& There is even much competition in humanitarian matters& Whatever

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future developments ta,e place in the field of humanitarian action% it therefore seems certain that the need to improve the coordination mechanisms at the national and international levels will remain for the foreseeable future& Xet while the need for coordination within the international humanitarian system is generally accepted% it has proved e*tremely difficult in practice to define coordination more closely% and to agree on necessary measures& Probably no one would deny being in favor of coordination of humanitarian action in principle% but the real problems arise in practice in determining who shall coordinate and who shall be coordinated& While it is only gradually becoming clear what steps are re0uired or li,ely to be acceptable to confront increasing humanitarian problems% at least it is fully apparent that increased international cooperation is necessary in order to e*tend and improve the effectiveness of humanitarian actions& /reatly increased international cooperation is also re0uired in many other fields if serious economic and ecological problems are to be averted% not to mention the dangers of military conflict& The 0uestion therefore arises whether such cooperation can realistically be e*pected to materiali-e in the humanitarian sphere in the foreseeable future& The best answers seem to be that global humanitarian problems should be perceived as a challenge which has the potential of drawing the world closer together rather than further dividing it& This answer leaves plenty of scope for the development of individual action% particularly by the private person and by nongovernmental organi-ations& 2n the other hand% the fact that the world is organi-ed on the basis of e*clusive states% upholders of the doctrine of sovereignty% suggests that changes + if any + in the international humanitarian order are still most li,ely to come about primarily through state actions& 3ven in traditional international law% resting heavily on the foundation of reciprocity% elements of common interest already blend with those of self1interest% albeit only a slight degree& Herein lies a ,ernel for development% however% for self1interest can ultimately be seen to lie first of all in protecting common interests& Thus% the search should continue to find new bases for cooperation% while see,ing to ma*imi-e the potential of humanitarian policy to serve this end& Perhaps the following idea deserves to be more generally recogni-ed and e*pressedC ta2ing ne$ steps in cooperati!e international action to tac2le #umanitarian problems can in turn engender $ider international effects of a beneficial nature. There is much room for further progress based on awareness that the development of international humanitarian law% organi-ation% and action is a reciprocating and self1reinforcing process which see,s to fulfill the purpose of bringing definite humanitarian benefits to individual people& The aim must be to see, for ways to ensure that the principle of humanity prevails + in a time of greatly increased needs but also of greatly increased means for responding& With this in mind% the present challenge is to draw practical lessons from the many e*isting te*ts and approaches% which are still insufficiently systematic% and to apply those lessons so as to achieve a closer wor,ing relationship between functional and legal aspects of humanitarian policy&

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#acdonald* !yan and oddinott* ?ohn -.//<0* 1Determinants of %anadian Bilateral Aid Allocations: umanitarian* %ommercial or Political34 in *anadian Journal of Economics* 5ol69>* )o6 .* "".;<-98.* BlacBCell Publishing6
$n this paper we have e*amined the determinants of the allocation of Canadian bilateral aid over the period #9;M1!"""& We draw on models of donor behaviour that allow us to incorporate consideration of humanitarian% commercial and political considerations& When we consider the entire period% we find that allocations are moderately altruistic or humanitarian in the sense that the parameter on aversion to ine0uality is greater than unity% though we note that it is not significantly different from unity& 'ore aid is provided to countries with good human rights& Canadian aid to Commonwealth and rancophonie countries is effectively independent of per capita country income levels% whereas for countries that are not members of either organi-ation% aid falls as country income rises& Countries that import goods from Canada receive greater levels of aid& These findings are consistent with 7picerZs 4#9>>6 and 'orrisonZs 4#99;6 depictions of Canadian bilateral aid being a reflection of a (trinity of mi*ed motives&) However% the relative importance of these motives changes over time& As Canadian bilateral aid flows fell throughout the #99"s% motives for aid would appear to have become increasingly self1interested in that using aid to help the poorest countries% particularly those in sub17aharan Africa% declined% while commercial motives became more dominant& $n 7eptember !""! the Canadian government introduced its most recent policy statement on aid% 5anada 8a2ing a Difference in t#e /orld 4Canadian $nternational .evelopment Agency 4C$.A6 !""H6& $t indicates that C$.A will select a limited number of countries for an (enhanced) partnership arrangement& 7elected countries will be those e*hibiting low per capita incomes and committed to good governance and the rule of law: they will receive a greater share of incremental resources going to C$.A& $t will be interesting to see whether this indeed reverses the pattern of the last ten years&

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#ason* +dCard S6 -8;:<0* 'orei!n Aid and 'orei!n Policy* )eC MorB: ar"er6
5onclusion (pp. 107<112) A discussion of the relation of foreign aid to foreign policy necessarily assumes that foreign aid programs are shaped to a substantial e*tent with the interests of the aid1dispensing countries in mind& $ have seen no reason to doubt the validity of that assumption& There is% however% a considerable variety of interests influencing the amounts% the terms% and the form of aid within the aid1giving countries and among them& .omestic economic concerns% the promotion of foreign trade% and security interests vie for priority with a humanitarian desire for the well1being of others& $n the Bnited 7tates this variety is suggested byte he names of the agencies that% in one form or another% participate in foreign aidC the Agency for $nternational .evelopment% the Peace Corps% the ood for Peace Program% the 3*port1$mport Ban,% to mention only the principal participants& The changes over time in the title of the principal B&7& foreign assistance agency also suggest shifting purposes and% perhaps% a certain ambiguity of purpose& The 3conomic Cooperation Administration 43&C&A&6 gave way to the 'utual 7ecurity Administration 4'&7&A&6 which% in turn% was followed by the $nternational Cooperation Administration 4$&C&A&6 and% now% by the Agency for $nternational .evelopment 4A$.6& There is a strong current of feeling in Washington that the initials of the present agency% A$.% give un unfortunate and misleading interpretation of its real purpose: there is some disposition to return to a former name% 'utual 7ecurity Administration& Certainly the debates in Congress would indicate that mutual security is and should be the prime concern of our foreign assistance program& 'ilitary assistance% a substantial part of defense support% and of e*penditures from the contingency fund are obviously directed to security objectives& $t is less clear what interests of the Bnited 7tates are served by economic development assistance& $f such assistance is to be assessed in terms of its contribution to mutual security% it becomes necessary to form a judgment% first% on the e*tent to which e*ternal aid can% in fact% advance the economic development of less developed countries: and% second% on the 0uestion of what changes in political structure and behavior can be e*pected to accompany the process of economic development& Although the evidence is far from ade0uate% it is easier to arrive at a sensible judgment on the first 0uestion that on the second& 2f a number of less developed countries to which aid flows in 0uantity% it can be said that access to foreign e*change is the limiting factor to economic growth& 7ome of these have already reached a stage of self1supporting development% and others are not far from attaining it& When% however% e*ternal assistance is only one of the conditions necessary for sustained growth% assessment of the contribution becomes more difficult& There also intrudes the bothersome 0uestion of the e*tent to which the leverage of aid can and should be used to bring about changes in domestic policies considered to be propitious to economic development& 7till% in the thirty1some less

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developed countries to which the bul, of B&7& economic aid is directed% it can be said with some confidence that the prospects of development are substantially improved by the availability of foreign assistance& $t does not follow from this that the less developed world is rapidly approaching a condition in which growth can be sustained without e*ternal assistance& $n fact% it seems probable that in many counties to which we are heavily committed% a continuation of the growth rates of the recent past will re0uire substantially more rather than less e*ternal assistance& Those to whom this is a distasteful% and even alarming% prospect would do well% however% to reflect on the difference between the nominal si-e of the aid burden now shouldered by developed countries and the real sacrifice it represents& When all the terms% limitations% and conditions surrounding the flow of aid are ta,en into account% the T> billion a year estimate of the total outflow of public funds from the advanced to less developed countries shrin,s to a grant e0uivalent of perhaps T!&< billion& This can hardly be considered a monumental sacrifice& $f economic development assistance can and does in fact contribute to the emergence of a world in which it is somewhat easier for the developed countries in general% and the Bnited 7tates in particular% to live% it appears to be at small cost& This% of course% is the crucial 0uestion that confronts any analysis of the relation of foreign aid to foreign policy& What can economic development% assuming it can be assisted by foreign aid% be e*pected to bring about in the area of political development and foreign policy in the aid1receiving countriesW $s there in fact a social process called political development that can be described objectively and% if so% how is it related to economic growthW 3conomists% it is true% cannot tell us much about the origins or causes of economic development% nor can they attribute with conviction indubitable welfare conse0uences to economic growth& But they can offer a fair description of the economic development process in terms of a set of arrangements producing an increasing flow of consistently related inputs that over time will result in greater outputs of goods and services& And these inputs and outputs allow at least rough measurement& .iscussions of political development% on the other hand% customarily stress two significant strands of the process that do not appear to be necessarily related& 2ne is concerned with an increasingly ability of the organs of government to order human behavior to serve whatever goals the holders of political power choose to have served& $f economic development is an important goal% ability of the government to govern is both a necessary condition and a conse0uence of economic growth& When /eneral Ayub came to power in Pa,istan in #9<;% the direction of the activities of the citi-enry was substantially increased% and the prospects of economic development commensurately improved& The second strand emphasi-ed in discussion of political development is concerned with a broadening of public participation in the process of decision1ma,ing& Citi-ens whose voice is heard only in local affairs may over time come to be consulted in affairs of state& A government in which political power has rested in the hands of an elite may in the course of development enlarge the si-e of the group whose views are considered& This development may or may not lead toward parliamentary democracy& A single party system that% as in 'e*ico% provides for consultation of a

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wide spectrum of opinion made be deemed to be more politically advanced than a system closely controlled by a small group& While there is some connection between the ability of a government to govern and the admission of the citi-enry to consultation% the connection is obviously very comple*& 7ome degree of consent of the governed is necessary to any effective ordering of human activities though there have been and are apparently efficient regimes relying heavily on force and terror& 2n the other hand% e*amples are not lac,ing of regime in which a broadening participation of citi-ens in the process of government has been accompanied by a notable decline in the efficiency of government& $f foreign aid is to be used as an instrument of foreign policy and if the promotion of economic development is not an end in itself% what ,ind of political development in the aid1receiving country is sought to be achievedW 7hould assistance be denied to dictatorial regimes and be made available only to those governments capable of establishing their democratic bona fidesW What if democratic countries show themselves incapable of putting into practice the domestic policies essential to economic development and without which economic assistance is wastedW Reflection on these considerations in Aatin America and elsewhere leads one to the opinion% $ thin,% that doctrinaire views on the direction and use of foreign aid are unli,ely to be effective& Bnder certain circumstances we may have to sacrifice a desire to promote a wider participation of the governed in order to preserve a modicum of effective government& 2n the other hand it is clearly useless to try to support governments who assert their anticommunism but lac, the effective support of their citi-ens& eee The manuscript of this small volume was completed early in Dovember #9>H& Between that date and the present writing% late January #9>M% a number of things have happened to the A$. program& These include the Congressional vote on appropriations for fiscal year #9>M and the submission of the administration)s budget re0uest for fiscal #9><: the establishment of the $nter1American Committee on the Alliance for Progress: the appointment by President Johnson of a 7pecial Assistant who is concurrently Assistant 7ecretary of 7tate for $nter1American Affairs and B&7& Coordinator of the Alliance for Progress: and within the administration a serious reconsideration of the organi-ation of the Agency for $nternational .evelopment& Congress% eight months after the beginning of hearings and si* months after the beginning of the fiscal year% voted A$. appropriations of TH billion for fiscal year #9>M& This compares with TH&9 billion appropriated in the previous year and with TM%<!< million re0uested by President ?ennedy& 2f the appropriation% T! billion represent economic assistance and T# billion% military assistance& Together with carryovers and recoveries from the previous year it ma,es possible an economic assistance program for fiscal year #9>M of T!%M5H million& or fiscal year #9>< the President has re0uested T# billion for military assistance and T!%H9! million for economic aid& Together with e*pected carryovers and recoveries this would provide programs for fiscal #9>< of about the same magnitude as for #9>M& What effect the reduction in si-e of the B&7& aid program will have on the contributions of other

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.&A&C& countries is problematic% but is seems certain that the persuasiveness of American arguments for an increase will% to say the least% be somewhat blunted& At the meetings of the $nter1American 3conomic and 7ocial Council in Dovember #9>H% it was voted to establish an $nter1American Committee on the Alliance for Progress& This Committee will consist of si* members% of which one will be a permanent B&7& representative and five will be representatives on a rotating basis of Aatin American countries& The Committee is intended to have an interloc,ing relationship with the Committee of Dine and will be served by the 7ecretariat of the 3conomic 7ection of the 2&A&7& This action represents at least a beginning of an attempt to EAatini-eF the Alliance for Progress& The President has also attempted to unify more effectively the B&7& contributions to the Alliance by appointing as his 7pecial Assistant a joint Co1ordinator for the Alliance for Progress and Assistant 7ecretary of 7tate for $nter1American Affairs& $n its report on the aid program for #9>M the 7enate Committee of oreign Relations suggested a thorough1going re1e*amination of the organi-ation of A$. before the submission of budget re0uests for fiscal year #9><& $n response to this suggestion the President appointed a mainly governmental committee under the chairmanship of the Bnder17ecretary of 7tate to e*amine the affairs of this much reorgani-ed agency& After rejecting on the one hand a suggestion that the Agency be merged into the .epartment of 7tate and% on the other hand% that it be bro,en into a number of parts 4on the theory apparently that Congress would not be able to see the woods for the trees6% the committee and President Johnson have settled for a further tightening up of the e*isting organi-ation& Plus Oa c#ange, plus c;est la mQme c#ose + as indeed it must if A$. is to continue to be an effective agency for economic development& $t is% perhaps% time to recogni-e that B&7& foreign policy has serious responsibilities in the less developed world and that no amount of administrative sleight1of1hand or political hocus1pocus is li,ely to conjure them away&

#aizels* A6 and )issanBe* #6 D6 -8;A<0* 1#oti$ations for Aid to De$elo"ing %ountries*4 in World &evelopment* 5ol6 8.* )o6 ;* ""6 A>;-;//6
An analysis of the allocation of aid by recipient countries from the principal bilateral donors% and from multilateral aid agencies% was made by cross1country multiple regressions for two periods% #9>915" and #95;1;"% using alternative recipient need and donor interest models& The results generally confirm earlier studies that bilateral aid allocations are made largely 4for some donors6 or solely 4for others6 in

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support of donors) perceived foreign economic% political and security interests& By contrast% aid flows from multilateral sources% as would be e*pected% are allocated essentially on recipient need criteria& 2ver the decade up to #9;"% there was a substantial shift in the composition of total aid flows from .AC member countries% away from donor interest aid towards recipient need aid& There was% indeed% an absolute increase in the real value of the latter& The rise in recipient need aid resulted from a shift towards this type of aid within certain bilateral aid budgets% and from a shift from bilateral to multilateral sources& However% these shifts in aid motivation over the decade of the #95"s appear already to have been reversed& Two major policy changes have become apparent since the late #95"s& irst% there has been a cut in real terms in contributions from .AC member countries to multilateral aid agencies& According to the last .AC annual report% the turning point came in #95515;% (growth in real terms from #95#1 5! to that pea, was as high as #M percent: since then it has been negative)& HM The stagnation in BD.P funding% and the difficulties about the replenishment of $.A% are both pointers to the reduced priority now being given by major donors to multilateral aid channels& 7econd% some of the major donors + particularly the Bnited 7tates + have been using bilateral aid more openly as an instrument of foreign policy& The <"Q cut% announced in .ecember #9;H% in Bnited 7tates economic aid to \imbabwe as a result of that country)s abstention in the BD 7ecurity Council vote on the shooting down of a ?orean airliner% H< is only one recent e*ample of this trend& 2ther donors% including Britain% have been tying their aid allocations much more closely to e*port orders&H> Bnless these more recent trends are reversed% the relative balance of aid motivation seems virtually certain to shift heavily away from recipient need considerations in the remainder of the present decade&

#c2illi$ray* #arB and OczBoCsBi* +dCard -8;;80* 1#odeling the Allocation of Australian Bilateral Aid: A ,Co Part Sam"le Selection A""roach*4 in Economic

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Record* 5ol6 :>* )o6 .* ""6 8<>7.6

$n this paper we have modelled Australia)s bilateral aid eligibilityGamount decision1 ma,ing processes during the period #9;" to #9;>& We have employed econometric techni0ues which are clearly applicable to these processes% yet untapped in the aid literature& These methods allow for the possible dependence of decisions% and e*plicitly recogni-e that the amount of potential aid is nonnegative& These applications should find future applications to the eligibilityGamount decisions of other aid donors& We hypothesi-ed that Australia pursues a range of objectives% humanitarian% commercial% political and strategic% and that the pursuit of these objectives systematically effects the manner in which aid is allocated among potential recipients& 2ur results generally offer support for these hypotheses& A notable result was% in some years% evidence of a bias toward lowly populated countries in determining eligibility for aid% together with a bias against lowly populated eligible countries in other years& The former seems to indicate that Australia has sought to ma*imi-e returns from aid by avoiding allocating aid to those countries in which the effort re0uired to promote development is large&

#c2illi$ray* #arB and OczBoCsBi* +dCard -8;;.0* 1A ,Co Part Sam"le Selection #odel of British Bilateral Aid Allocation*4 in Applied Economics* 5ol6 .<* )o6 8.* ""6 8988-8;6
The allocation of British bilateral foreign aid among developing countries is simultaneously modelled% focusing on allocations during the period #9;"1;5& Two aid allocation decisions are analysed using a variant of the Aee1'addala econometric model& The first decision concerns the determination of developing country eligibility for aid% while the second concerns the amount of aid eligible countries are allocated& /iven the implied two1part decision1ma,ing process% sample selection techni0ues are employed& $t is hypothesi-ed that British bilateral aid eligibility and amount decisions are based on BritainZs humanitarian% commercial and political interests in developing countries& Results obtained indicate that these

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decisions are generally consistent with each of these interests% especially those relating to the political importance of Commonwealth members&

#c2illi$ray* #arB and &hite* oCard -8;;90* 1+K"lanatory Studies of Aid Allocation Among De$elo"ing %ountries: a %ritical Sur$ey*4 Institute of Social Studies &orBing Pa"er )o6 8<A* ,he ague: Institute of Social Studies6
2fficial aid transfers from developed to developing countries have remained an important feature of international economic and political relations since the late #9M"s& This is emphasi-ed by the level of net concessional aid provided by 23C. .evelopment Assistance Committee 4.AC6 member countries& 2ver the period #9;! to #99# alone% the value of this aid in #99" prices and e*change rates amounts to just under <"" billion B7 dollars 423C.% #99!6& Dot surprisingly% these transfers have attracted a degree of attention in development literature& 7ince the #9>"s% this literature has included 0uantitative investigation of the allocation of aid among developing countries% either from the viewpoint of subjectively evaluating or attempting to e*plain these allocations& The latter turns to indentifying the determinants of inter1recipient aid allocation& We label these wor,s as Edescriptive studiesF and Ee*planatory studiesF respectively& $n this paper% we survey the e*planatory studies& A critical survey of the descriptive studies may be found in White and 'c/illivray 4#99!6& 2ur emphasis is on methodology and the robustness of results emanating from these studies& After providing an overview of this literature% we divide studies into si* groups% which may be labeled as recipient needGdonor interest% hybrid% bias% developmental% administrativeGincremental and limited dependent variable studies of allocation& The basis for classification is the statistical models applied by these studies& We conclude with suggestions for further modeling of aid allocation% paying special attention to what we consider as the attributes of a EgoodF model of inter1recipient aid allocation& KNL We conclude by considering possible direction for future research based on what we consider to be appropriate attributes for an aid allocation model& 2ur focus is on the

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estimated model% hence this involves considerations of both theoretical and statistical issues& The most fundamental re0uirement% in our opinion% is that the model be an appro*imation of the operational nature of aid determination& $ndeed% this is central to our criticisms of the literature& An aid allocation is not the outcome of% say% the e0uilibrating forces of the economy& Dor is it some abstract construction% or a phenomenon determined by the laws of physics& 2ur thesis is that an aid allocation is the outcome of a bureaucratic decision ma,ing process% which is subject to both bureaucratic criteria and the economic% political and other relations between the donor and recipient& Aid allocations are subject to all the sorts of pressures and constraints to which other e*penditures are subject& These involve weighing1up and trading off competing objectives% information time lags and uncertainty% ensuring that funds are fully committed and so on& ailure to consider precisely what it is that one is attempting to model will almost certainly ensure that the outcome of this attempt is at best capricious% or at worst% misleading& Against this bac,ground% when modeling aid allocation one shouldC 1 endeavour to use the actual decision variable as the dependent variable% not the outcome of this decision 4in our view this should be absolute 2.A commitments for data from #9>96: attempt to provide a sufficiently comprehensive model specification% in particular avoiding estimating separate recipient need and donor interest models% or narrowly specified biases models: pay attention to the issues of eligibility and amount decisions and specify the model accordingly 4for e*ample% if a good case can be made separate decisions% a two1part sample selection model should be used6: recogni-e the distinction between describing 4evaluating6 and e*plaining aid allocation 4given the use of regression techni0ues% there is absolutely no guarantee that both can be simultaneously achieved6: give consideration to informational time lags: consider whether aid allocations are simultaneously determined% both across donor aid programs 4as may be the case if donor)s current aid decisions are coordinated6 and within donor programs 4as will be the case if current aid allocations are financed from a common pool of funds6: consider whether recipients have input into aid allocation decisions and then formulate the model accordingly: e*plore the sorts of administrative factors li,ely to impinge on the decision ma,ing processes: give consideration to the limited dependent variable and non1random sample selection issues% both of which invalidate 2A7: and% conduct appropriate diagnostic tests&

1 1

1 1 1 1

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We ac,nowledge that it may often be difficult to fully implement and satisfy each of these pointsC applied research of this nature invariably involves compromises& This is not% however% an e*cuse to avoid addressing the issues and continue to crudely estimate carelessly formulated regression e0uations& Bnfortunately% this has all too fre0uently been the case in the aid allocation literature&

#c2illi$ray* #arB and #orrissey* Oli$er -8;;A0* 1Aid and ,rade !elationshi"s in +ast Asia*4 in World Economy* 5ol6 .8* )o6 >* ""6 ;A8-;;7* BlacBCell Publishing Ltd6
The literature on aid policy% and especially on donor motives for aid% abounds with assertions regarding actual 4but unproven6 and potential reasons as to why aid and trade flows between donors and specific recipients may be lin,ed& This alone validates our attempt to assess the empirical basis for such assertions& The arguments were set out in 7ection !% which identified three alternative cases of the aid1trade relationship& We then presented some evidence on the nature of these relations among Pacific1Rim donors and Asian recipients& Testing for causality using time series data is an advance on loo,ing at descriptive statistics and the results of aid allocation studies% but should be seen as no more than an initial attempt to validate the aid1trade relationship& The available evidence suggests that there is indeed a relationship between aid and trade% but that the specific nature of this relationship can vary between donor1recipient pairs& There is a notable concentration of Australian aid on Pacific $slands% which are close economic partners% and dynamic Asian economies 4where the allocation of aid may reflect trade potential rather than development needs6& Japan% a major donor and trading partner on a global scale% also concentrates its aid on the more dynamic Asian economies% supporting the argument that Japanese aid flows are more related to economic cooperation than to a needs1based development cooperation& The evidence that aid flows within the region reflect or follow trade flows is plausible& 2ne implication of this is that aid and trade flows within the region have played a role in sustaining% if not actually promoting% the economic dynamism within the region& Another implication is that the tendency of aid to (follow) trade may imply that aid is attracted away from more deserving 4in terms of needs6 poor countries% both in and outside the region% towards countries with a stronger economic performance 4and hence larger mar,ets for trade6& Because of the importance of trade lin,s% it may be the case that much aid goes to countries that need it least&

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This may have been a benefit to the dynamic economies of 3ast Asia% but at a cost to less dynamic developing countries throughout the world&

#c2illi$ray* #arB -.//90* 1Aid +ffecti$eness and Selecti$ity: Integrating #ulti"le ObHecti$es into Aid Allocation*4 6nited .ations WI&ER &iscussion Paper .o, 800:B516
This paper surveys recent research on aid and growth& $t also provides an overview of research on inter1recipient aid allocation& The overall focus of the paper is on the relevance of these issues for poverty1efficient aid% defined as a pattern of inter1 recipient aid allocation which ma*imises poverty reduction& $t identifies a range of poverty reducing criteria on which aid allocation or selectivity might be based% calling for a broader selectivity framewor,& The paper argues that this framewor, should be built on a recognition that the effectiveness of aid in increasing growth% and by implication in reducing poverty% is contingent on a range of factors in addition to the 0uality of recipient country policy regimes& These factors include political stability% democracy% post conflict reconstruction% and economic vulnerability&

#c2illi$ray* #arB -.//<0* 1Descri"ti$e and Prescri"ti$e Analyses of Aid Allocation: A""roaches* Issues and %onseIuences*4 in International Review of

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Economics and 'inance* 5ol6 89* )o6 9* ""6 .>7-.;.* +lse$ier6

This article surveyed two related strands of literature on the allocation of development aid among recipient countries& The first strand consists of those studies see,ing to describe or evaluate the allocation of aid against normative criteria& The second strand comprises those that see, to prescribe the interrecipient allocation of aid by deriving the amounts of aid each country should receive% also based on normative criteria& A specific objective of the article was to compare the allocations of different prescriptive approaches% not only among each other but also with actual aid allocations& This e*ercise revealed some interesting results& Without e*ception% actually implementing these approaches would see tremendous changes in the way aid is allocated% with some countries receiving much more aid than they actually do and others receiving far less& $t should be emphasi-ed that the prescriptive literature is still a very young% emerging one: that% to date% only a handful of studies have been conducted emphasi-es this& The usefulness of these studies can be gauged by their impact on actual donor behavior% hopefully resulting in more developmentally oriented% and less politically oriented% patterns of aid allocation& urther wor, is re0uired if this outcome is to be observed& A useful start to this wor, involves addressing inter alia the criticisms outlined in this study& These criticisms include a possibly e*cessive reliance on growth as a determinant of poverty reduction% ambiguities over the relevance of recipient policy regimes for aid effectiveness% and possible disincentive effects of allocating aid based on need alone& 'ore generally% there remains unresolved the difficult normative issue of whether poor countries necessarily deserve more aid than others even if they themselves have done little to enhance the welfare of their citi-ens&

#cDinlay* !obert D6 -8;>A0* 1,he 2erman Aid !elationshi": A ,est of the !eci"ient )eed and the Donor Interest #odels of the Distribution of 2erman Bilateral Aid* 8;:8-8;>/*4 in European Journal of Political
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Research* 5ol6 :* )o69* ""6 .97.7>6

The major premise of this paper is that an identification of the criteria of aid allocation is of interest specifically to e*plain the distribution of aid and more generally to indicate the nature and role of aid& The variety of criteria which potentially can e*plain the distribution of aid can be organi-ed in terms of the perspectives of recipient need or donor interest& $f the distribution of aid is accurately portrayed by recipient need criteria% then the interpretation of aid in terms of economic assistance is valid% whereas if the donor interest criteria are accurate% then the foreign policy interpretation is more appropriate& The fit of the recipient need model against the annual distribution of /erman aid over the period #9>#15" is inade0uate& $t is clear% conse0uently% that the /erman aid programme is not based primarily on humanitarian or welfare criteria& The economic assistance interpretation of aid% therefore% is not valid% and an e*planation of the /erman aid programme primarily in terms of a Emoral obligationF is inaccurate& The donor interest model% on the other hand% provides a good fit to the distribution of /erman aid& Conse0uently% we can interpret /erman aid in terms of a foreign policy conceptuali-ation& While a variety of /erman interests underlie and dictate the pattern of /erman aid% the clearest and most important are trading or% more specifically% e*port interests& However% in addition to finding that the distribution of /erman aid is not e*plicitly (antithetical to humanitarian nor welfare dictates% we also find% within the general rubric of a donor interest interpretation% evidence of a 0uasi1humanitarian component& Thus% the /erman aid programme cannot be ade0uately summari-ed by either a stringent recipient need or a stringent donor interest model& Donetheless% we suggest that the /erman aid programme is premised primarily from the perspective of /erman Evital interestsF% and that as a conse0uence the interpretation of /erman aid from the perspective of its foreign policy utility is valid& However% this interpretation must be modified to accommodate a 0uasi1humanitarian component&

#cDinlay* !obert D6 -8;>;0* R,he Aid !elationshi": A Foreign Policy #odel and Inter"retation of the Distributions of Official
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Bilateral +conomic Aid of the (nited States* the (nited Dingdom* France* and 2ermany* 8;:/-8;>/*R in *omparative Political Studies* 5ol6 88* )o6 <* ""6 <88-<:96
While the humanitarian interpretation of aid transfers provides a very clear e*planation of the aid relationship% it is now generally accepted that this interpretation is inaccurate& The criticisms leveled at the humanitarian interpretation consistently suggest that aid transfers are premised more on the foreign policy interests of the donor than on the welfare or humanitarian needs of the recipient& $n general% however% the foreign policy view is stated only negatively + that is to say% in the form of a criti0ue and rejection of the humanitarian view& We have tried to establish a more positive and systematic foreign policy model on the basis of the proposition that aid provides the utilities of commitment and dependence which a donor can employ to promote and protect a variety of interests& $f this model and the test procedure are accepted% then it should now be clear that we have a reasonable% albeit rather low1level% e*planation of bilateral aid transfers& The obvious point of reference from which to ma,e a higher1level evaluation of our findings lies in the literature on imperialism& M; Bnfortunately% it is not easy to aggregate our findings with this literature& $n the first place% the analysis of aid comprises only one segment of imperialism% and% furthermore% our study% covering only the distribution% neglects the impact of aid& 7econdly% there is no such thing as t#e theory of imperialism& `uite apart from its si-e and diversity% the literature on imperialism is fre0uently polemical% written at a very gross level of aggregation and characteri-ed all too fre0uently by untestable proposition& $t is 0uite simply beyond us to use our findings to test or evaluate the multitude of so1called theories of imperialism& Rather% we shall indicate the approach to the analysis of imperialism that we find most persuasive% and then summari-e our findings in terms of this approach& Cohen)s wor, 4#95M6 represents% in our opinion% the most productive approach to the analysis of imperialism& $mperialism is defined 0uite simply and unambiguously as Eany relationship of effective domination or control% political or economic% direct or indirect% of one nation over another&F The attraction of this definition is that it begs no 0uestions and contains no overt or covert assumptions& The forms and forces of imperialism% as Cohen points out% should be divorced from the definition of imperialism% and treated as subjects for empirical in0uiry&

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'oving beyond the purely conceptual stage% we agree with Cohen that the taproot or e*planation of imperialism lies not so much in the domestic structure of advanced industrial states as in the structure of the international system& M9 4$n fairness to Cohen% we should point out that from now on we are not paraphrasing his wor,6& $n particular% the international system is characteri-ed by a high level of overt and unmoderated competition& This competition stems from the absence of any basic normative order and the lac, of complementary or collective goal formulation and implementation& The presence of substantial asymmetries within this environment of unmoderated competition encourages dominant actors to use control strategies to promote their interests and thereby maintain dominance& $n order to amplify this characteri-ation of the taproot of imperialism% we can use the distinction between a social system and a system consisting of social interactions& Whereas the former consists of a set of components which interact within a basic normative order to pursue a set of complementary or collective goals% the latter consists simply of interactions which ta,e place without any pronounced normative order or collective goal formation& The advanced industrial states are une0uivocally highly developed social systems& 3ach component subsystem manifests a large number of formal and informal rules% invariably reinforced by formal or informal sanctions& urthermore% there are rules and sanctions governing the interactions of all the component subsystems& These rules and sanctions create the basic normative order& $n addition% although all the component subsystems do not display identical goals% there is commonly a high level of complementarity& <" What is most critical% however% in this conte*t is the growth in the roles and capabilities of the central government& This organi-ation has come to assume responsibility for an enormous range of collective goals% and in the process has become the Egrand orchestratorF of modern industrial societies& <# Thus% while competition within industrial societies is still very prevalent% the combination of rules% sanctions% and collective goals serves to moderate this competition% and provide a basic order for domestic interactions& $n contrast% the international system should be seen either as a system comprising social interactions or at least an embryonic social system& Though formal and informal rules% at both official and private levels% do e*ist% they are not nearly as e*tensive& 7anctions to reinforce these rules% particularly at the formal level% are even less well developed& Collective goal formulation and implementation is virtually non1e*istent& The most highly developed manifestations of rules% sanctions and collective goals are found in the activities of intergovernmental organi-ations 4$/2s6& Without disputing the important innovations of these organi-ations as far as international rule1ma,ing and collective goal formation are concerned% a number of important caveats must be notedC $/2s possess limited resources and few sanctions& Their resources are tied to nation state contributions% and their outputs reflect 0uite closely the international hierarchy& 'any $/2s simply reflect and thereby reinforce prevalent international cleavages and tensions& A number of important issues or areas of interaction 4such as nontariff barriers or the 3urodollar mar,et6 are outside their sphere of jurisdiction& inally% major states often bypass these organi-ations& Thus% not only is it abundantly clear that $/2s are very far removed from supranational authorities% but also we would argue that% by virtue of rejecting and reinforcing the international hierarchy% they can actually e*acerbate competition&

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While the growth of interaction and interdependence within the nation state has been accompanied by a concomitant e*pansion of integrative and regulatory mechanisms% this has not been the case in the international system& As a conse0uence% the propensity for international actors to use domination strategies to control their environment is much more pronounced& This propensity to domination is further encouraged and facilitated by colossal asymmetries& We can distinguish two forms of imperialism% which we label political and economic% in terms of the rationales underlying attempts to maintain dominance& The political form has its origin in competition stimulated by preoccupations with national security% and conse0uently control and influence strategies are employed by dominant states to enhance their security& The economic form derives from competition stemming from issues such as trade and investment& Conse0uently% control and influence strategies are used in the pursuit of material well1being& 2ur proposition that aid provides the donor with commitment and dependence utilities is compatible with the imperialism assertion that dominant states employ control and influence strategies& 2ur proposition that donor interests underlie and structure the distributions of commitment and dependence is compatible with the imperialism argument that% in an environment of essentially unmoderated competition% states employ control and influence strategies in order to protect their interests and thereby preserve their dominance& urthermore% the interests profiled by our model accommodate both the political and economic interpretations& We find strong confirmation for the foreign policy interpretation for each of the donors& There is a further similarity among the donors in that% although different interests underlie the distributions of commitment and dependence of any donor% these interests tend to be complementary& inally% while there are changes in the interests structuring each donor)s distributions of commitment and dependence% there is generally a high degree of consistency in the critical interests over the period #9>"1#95"& There are% however% important difference among the donors in how systematically and comprehensively developed the foreign policy basis of their aid relationship is% and in the particular interests which are promoted& The foreign policy basis is most highly developed in the aid relationships of America and rance& 2n account of the si-e of its aid programme% America achieves high levels of commitment and dependence& urthermore% a clear set of complementary interests provides a good e*planation of its distributions of commitment and dependence& The much smaller aid programmes of the 3uropean donors mean that none can rival the global scope and scale of the American programme& By concentrating its aid in a relatively small number of countries% rance can e0ual% and% in some respects% even surpass America in a more restricted sphere& This is true% however% only for the rench aid relationship with its former colonies& Although the e*tension of rench aid to nonformer colonies is certainly compatible with the foreign policy interpretation% the low levels of dependence established in these recipients indicate that the foreign policy basis of this aid relationship is not highly developed&

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These two donors% however% pursue 0uite different sets of interests& The centrality of power political and security interests in the American aid programme reflects clearly the global superpower security role of America% and ma,es this aid relationship directly consonant with the political interpretation of imperialism& The salience of trading interests in the rench aid programme ma,es it more compatible with the economic interpretation& There are also aspects of the political interpretation present in the importance attached to the maintenance of a sphere of influence in the conte*t of the former colonies& However% the correspondence between rance)s trading interests and its sphere of influence perhaps ma,e the significance of the sphere of influence more politicoeconomic than purely political& The foreign policy basis% though certainly very clear% is less highly developed in the British and /erman aid relationships& While neither has an aid programme modeled primarily on humanitarian considerations% there is a 0uasi1humanitarian component in both programmes& urthermore% neither follows the rench strategy of concentrating aid in a relatively small number of recipients& Conse0uently% neither can match the global levels of commitment and dependence established by America or the more restricted levels established by rance& Britain% however% does allocate relatively more aid to smaller countries% and conse0uently achieves comparatively high levels of commitment and dependence& urthermore% we can provide good e*planations of the distributions of these distributions& 2n the other hand% the comparatively low levels of /erman aid dependence and the relatively poor e*planations of the distributions of relative commitment and dependence lead us to conclude that /ermany does not manipulate its aid allocations so as to ma*imi-e the benefit it could gain from its aid programme& The centrality of trading interests indicates a basic similarity in the /erman and rench aid relationships& However% the /erman aid relationship does not incorporate a sphere of influence dimension% and also its foreign policy basis is considerably less developed than that of rance& Conse0uently% /ermany)s aid programme more wea,ly reflects the economic interpretation of imperialism& Britain has parallels with both the American and rench aid relationship& Ai,e rance% Britain pursues the maintenance of a sphere of influence% but% unli,e rance% the rationale for this seems to be political rather than economic& Thus% the British sphere of influence does not correspond as closely with British gross trading interests& $n this respect% Britain% li,e America% conforms more closely to the political interpretation of imperialism& The critical difference between Britain and America is that while the former in some respects does attempt to play a global role% its interests are considerably more parochial than American ones& Thus% former colonial ties% though not all1embracing% are still very prevalent% while security considerations more closely reflect past associations than they do the more current preoccupation with the containment of communism& While there are important differences in the types of interest pursued and in how systematically and comprehensively the foreign policy orientations are developed% the aid relationships of each of the four major Western donors are compatible with the foreign policy interpretations of aid& Thus% in rather more general terms% the major Western bilateral aid programmes can be seen as dimensions of different manifestations of contemporary imperialism&

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#cDinlay* !obert D6 and Little* !ichard -8;>>0* 1A Foreign Policy #odel of (S Bilateral Aid Allocation*4 in World Politics$ 5ol6 9/* )o6 8* ""6 7A-A:6
The rationale for this paper is based on the proposition that although the foreign policy view of aid is now dominant% it has not been developed systematically& $nitially we establish an analytic foreign policy model of aid allocation& The model suggests that the provision of aid enables the donor to form relations of commitment and dependency& These in turn afford foreign policy utilities that can be used by the donor to promote and protect certain of its interests& The research objective is to identify the substantive interests pursued by the Bnited 7tates through its aid program over the period #9>"1 $95"& Although there is some variation in the specific interests associated with commitment and dependency% our findings indicate that power1political and security concerns are the central interests supported by and controlled through the B&7& aid program& There is% therefore% an underlying complementarity between commitment and dependency in the sense that both are used to pursue the same sets of interests& urthermore% we find that% during the period e*amined% there is a high degree of consistency and stability in the interests that are pursued& The foreign policy model that provides the most satisfactory e*planation of the B&7& aid program conforms to a general view of international relations characteri-ed by the political interpretation of imperialism& $mperialism assumes that there is ine0uality among states% and that the dominant states employ strategies of control and influence to preserve their dominance& There are% however% various interpretations of imperialism that are distinguished by the rationale underlying and e*plaining the attempts to maintain dominance& The political interpretation characteri-es the international system in terms of competing nation1states operating in an anarchic environment& The combination of competition and anarchy encourages a preoccupation with national security& The strategies of control and influence that are associated with imperialism can be used by states to enhance their security& 2ur proposition + that the provision of aid affords the utilities associated with commitment and dependency + permits aid to be seen as a dimension of imperialism& 2ur substantive finding + that power1political and security interests structure the pattern of commitment and dependency established through B&7& aid + is consonant with an e*planation of the B&7& aid program in terms of the political interpretation of imperial1 ism&!!

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#cDinlay* !obert D6 and Little* !ichard -8;>Aa0* 1,he French Aid !elationshi": A Foreign Policy #odel of the Distribution of French Bilateral Aid: 8;:<8;>/*4 in &evelopment and *han!e* 5ol6 ;* )o6 9* ""6 <7;>A6
The foreign policy criti0ue of the humanitarian interpretation of aid 4namely% that aid is more closely related to the interests of the donor than the needs of the recipient6 has not been developed more positively into a clear and systematic formulation of the aid relationship& We have attempted to provide a more positive and satisfactory alternative by establishing an e*plicit foreign policy model& Aid is conceptuali-ed as a form of commitment and dependency% and the rationale underlying its distribution is seen in terms of the attempt by the donor to promote and protect a variety of its interests through the utilities inherent in commitment and dependency& We have suggested that we can test our foreign policy model and interpretation of aid in the case of rance by e*amining whether clear and e*plicit interests underlie and e*plain its aid distribution& The appearance of a clear set of interests% which can e*plain well the distributions of commitment and dependency established through rench aid% suggest strong confirmation of the foreign policy interpretation of the rench aid relationship& 'ore precisely% our findings lead to the conclusion that rance maintains two distinct aid relations& While both are compatible with the general foreign policy interpretation% the aid relationship with the former colonies is more stringently foreign policy oriented& The legacies of the assimilation and association colonial policies are still very apparent in that former colonies are selected as recipients precisely because they constitute a distinct sphere of influence& The two major themes% characteri-ing the allocation process in the former colonies% are the promotion of rench trade and the maintenance of a sphere of influence& 7imilar considerations underlie the rench aid relationship with its non1colonial recipients& The diversification of rench trade has been closely followed by the diversification of its aid% so that by #95" rance has incorporated virtually all its major trading partners into its aid system& urthermore% an analysis of the allocation process illustrates the salience of rench overseas economic interests& However% the foreign policy basis of this relationship is not as highly developed& The non1colonial recipients do not constitute a sphere of

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influence% and the level of dependency is so low that we can interpret aid only in terms of commitment& This evaluation of the rench aid relationship can be placed in perspective by comparing it with our findings on the nature of the aid relationship of the B7 and B?&!H We have found that our general foreign policy interpretation of aid provides a good e*planation of the aid relationship of each of these donors& However% differences appear among the donors in how systematically and comprehensively the foreign policy basis of their relationship is developed% and in the particular interests promoted and protected through aid& $n terms of the systematic development of the foreign policy basis of its aid programme% rance in some e*tent rivals the B7 and certainly surpasses the B?& 7imply by virtue of the si-e of its aid programme the B7 can achieve much higher levels of commitment and dependency than any 3uropean donor& !M rance compensates to some e*tent% however% by having a relatively larger aid programme than the B7 and by concentrating its aid on a much smaller number of recipients& !< Thus% while rance cannot rival the global scope and scale of the B7 programme% it can e0ual the B7 in a more restricted sphere& $n contrast% the B? does not follow rance)s compensatory strategy& The relative si-e of the B? aid programme more closely resembles that of the B7 than rance% while the number of B? recipients shows that the B? has a global commitment which again is closer to the B7 than rance&!> Thus% while rance certainly cannot e0ual the B7% by pursuing a compensatory strategy it manages to maintain a well developed foreign policy basis and% unli,e the B?% avoids being a pale imitation of the B7& When we e*amine the major interests promoted and protected by the aid programmes of the three donors% the independence and well articulated foreign policy basis of the rench aid relationship is once again apparent& While rance and the B7 are similar in having a well developed foreign policy orientation% they pursue 0uite different types of interest& Power political and security considerations% reflecting very clearly the global superpower security role of the B7% are the central interests underlying the distributions of B7 aid commitment and dependency& rance demonstrates none of these concerns& While the maintenance of a sphere of influence has some parallel with the security concerns of the B7% the security considerations of the B7 are strongly influenced by the current preoccupation with the containment of communism% whereas the rench security concerns are not only less salient but also more parochial and more closely related to historic ties& urthermore% the predominant influence of overseas economic interests in the case of rance has no counterpart in the B7 conte*t& 7uperficially% there appears to be some resemblance between rench and British interests& Britain is certainly preoccupied with a sphere of influence which again is strongly reliant on historic associations& However% the B? aid relationship has signs of a 0uasi1humanitarian influence which is not apparent in the rench relationship: the B? also manifests a more e*tensive and general antagonism to communism% albeit not as pronounced as in the case of the B7: the B?)s sphere of influence is not nearly as clearly defined as rance)s: and% finally% the B? appears to be interested solely in a sphere of influence per se% and% unli,e rance% not in ma*imi-ing any particular interests within this sphere&

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Thus% all three major Western donors have an aid relationship which is generally consonant with a foreign policy interpretation& $n contrast to the B7% the rench aid relationship reflects its status as a major as opposed to a superpower& $n contrast to the B?% the rench aid relationship reflects a major power status characteri-ed by a more mar,ed degree of independence and a better articulated set of interests&

#cDinlay* !obert D6 and Little* !ichard -8;>Ab0* 1A Foreign Policy #odel of the Distribution of British Bilateral Aid: 8;:/>/*4 in +ritish Journal of Political Science* 5ol6 A* )o6 9* ""6 989-9..6
Hitherto the foreign1policy criti0ue of the humanitarian interpretation of aid 4that aid is more closely related to the interests of the donor than the needs of the recipients6 has not been developed into a clear and systematic formulation of the aid relationship& We have attempted to provide a more positive and satisfactory alternative to the humanitarian interpretation by establishing an e*plicit foreign1 policy model& Aid is conceptuali-ed as a form of both commitment and dependency and the rationale underlying the distribution of aid is seen as an attempt by the donor to promote and protect a variety of its interests through the advantages inherent in commitment and dependency& We have suggested that we can test our foreign1policy interpretation of aid in the case of the Bnited ?ingdom by e*amining whether clear and e*plicit interests underlie and e*plain its distribution of aid& The appearance of a clear set of interests which can ade0uately e*plain the distribution of commitment and dependency established through aid suggests strong confirmation of the foreign1policy interpretation& The most important factor responsible for dictating the structure of commitment and dependency is the attempt on the part of Britain to promote and protect a sphere of influence& We have argued that Britain)s interest in this is essentially political rather than economic& urthermore while the maintenance of the sphere of influence is not entirely divorced from Britain)s current or more long1term interests% it is clear that paternalistic and historical interests play an important and persistent role& While the major preoccupation is maintenance of a sphere of influence% other interests do contribute to the pattern of aid disbursed by the Bnited ?ingdomC there is a selective antagonism to Communism% a preference for multi1party (democratic)

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regimes% and% in the case of absolute commitment% a humanitarian influence& While the pattern of commitment and dependency differs% there is a basic consistency in the interests served% and in the persistence of these interests over time& This analysis of the B&?&)s allocation of foreign aid can be placed in perspective by comparing it with official governmental statements on foreign aid policy% and with our findings on the policies pursued by the B7A and rance& The #9<; 'ontreal Commonwealth 3conomic Conference introduced a series of major changes in the British governmentZs conception of aid& By #9>M the Bnited ?ingdom had clearly accepted a commitment to provide economic aid to independent countries% the volume of aid had been substantially e*panded% and the number of recipients had grown& .espite these innovations% the British government did not ta,e any major policy initiatives& !" However% the arrival of the Aabour /overnment in #9>M seemed to provide an opportunity& Before #9>M the Aabour party was committed to a humanitarian% large1scale aid programme% and this was reiterated% albeit in a more cautious form% in its #9>M election manifesto& The new Aabour /overnment acted 0uic,ly% establishing the 'inistry of 2verseas .evelopment 42.'6 and giving cabinet status to the minister& !# $n #9><% the 2.' produced its first White Paper which declared that the (basis of the aid programme is N a moral one&) While this statement was tempered by mention of certain long1 term British interests% the basis of the aid programme was e*plicitly defined in humanitarian terms& 2ur foreign1policy interpretation of British aid contrasts sharply with the official view& 2ur findings show that the basis of the aid is not a moral one% and reveal no signs of new policy initiatives or changes% and no major e*pansion in the volume of aid& 2n the contrary% our findings corroborate the general conclusion of other commentators% who% from a different perspective% have argued that on the whole Aabour)s record has been discreditable& !! $t is clear that British aid has not evolved as the result of any e*plicit or long1term initiative but rather as a conse0uence of more immediate and ad #oc considerations of foreign policy& !H 2ur analysis of British aid is much more compatible with the results of our study of American and rench aid&!M We have found that our foreign1policy interpretation provides a good e*planation for all three countries& However% differences between the three do appearC the foreign1policy basis is not as systematically and comprehensively developed in each case and the particular interests promoted and protected vary& $n general% the foreign1policy basis of the British aid programme is not as systematically developed as in the cases of the B7A or rance& 7imply by virtue of the si-e of its aid programme the B7A can achieve much higher levels of commitment and dependency than any 3uropean donor can& rance compensates to some e*tent by having a relatively larger aid programme than the B7A and by concentrating its aid among a much smaller number of recipients& Thus% while rance cannot rival the global scope and scale of the American programme% it can e0ual and in some respects even surpass the B7A in a more restricted sphere& The Bnited ?ingdom% however% does not follow the compensatory strategy of rance& The relative si-e of the B&?&)s aid programme more closely resembles that of the B7A than of rance% while the number of the B&?&)s recipients shows that it has a

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global commitment which again is closer to the B7A than to rance& As a conse0uence% the Bnited ?ingdom appears as a paler imitation of the B7A rather than a copy of rance% and so does not achieve the levels of commitment and dependency developed by either one or the other& The less systematically developed basis of the British aid programme becomes even more apparent when we e*amine the different types of interest pursued by these three donors& The central interests underlying the distribution of aid by the B7A are those of power politics and security& These reflect very clearly its superpower security role& The central interests underlying the rench aid programme are the maintenance of a sphere of influence and the promotion of its trade& The Bnited ?ingdom has parallels with both these donors& Ai,e rance% the Bnited ?ingdom has a preoccupation with a sphere of influence& However% the sphere of influence is not as clearly defined% and the B&?&)s interest in its sphere is essentially political while rance)s interests are both political and economic& The political basis of the B&?&)s aid programme has its counterpart in that of the B7A but while the Bnited ?ingdom in some respects does try to play a global role% its interests are considerably more parochial& Thus% former colonial ties% though not all1embracing% are still very influential% while security considerations reflect historical associations rather than the e*plicit concern with the containment of communism that is prevalent in the B7A)s programme& inally% although the B&?&)s aid programme is certainly not modelled on humanitarian considerations% it contains a humanitarian component that is absent from the policy of rance or the B7A& 2ur study of the B&?&)s aid programme shows it to be compatible with a foreign1 policy interpretation of aid% and thus clearly at odds with the official view& $n this respect the B&?&)s aid policy is similar to that of the B7A and rance& However% while there is a consistency and complementarity in the B&?&)s distribution of commitment and dependency% the B&?& does differ from the B7A and rance in that the foreign1 policy basis is not as e*plicitly or systematically developed&

#cDinlay* !obert D6* and Little* !ichard -8;>;0* R,he (6S6 Aid !elationshi": A ,est of the !eci"ient )eed and Donor Interest #odels*R in Political Studies* 5ol6 .>* )o6 .* ""6 .9:7/6
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Two models of aid allocation% offering alternative interpretations of the aid relationship have now been e*amined& The recipient need model% where aid is distributed in accordance with economic and social welfare needs% supports an economic assistance interpretation: the donor interest model% where aid is distributed in accordance with donor interests% supports a foreign policy interpretation& 2ur findings do not support the recipient need model% and therefore% disconfirm a humanitarian or economic assistance interpretation of the B7 aid relationship& They do% however% support the donor interest model and% therefore% confirm a foreign policy interpretation& 'any of the interests associated with a foreign policy interpretation% however% have little influence on the distribution of B7 aid& The level of economic development% the political structure% and the level of overseas economic involvement have no major direct influence& $t is the power political and security interests of the B7 which consistently prove to be the central criteria underlying the distribution of aid over the period #9>"15"& Two general conclusions can be drawn from the findings& The first is that the B7 does not appear to distinguish between a commitment and a leverage strategy& The two strategies coalesce& This situation arises because the B7 is primarily concerned with the power criteria of the potential recipients rather than the relationships and policies which they develop& By concentrating on the ascribed power characteristics of the recipients% it appears that the B7 is not simply using aid either to reward and punish potential recipients% on the one hand% or manipulate their policies% on the other& The findings are consistent with the view that the potential recipients compete with each other for B7 aid and that their success depends upon their relative power capabilities rather than their willingness to subscribe to a particular line of policy& 7tates which have developed policies commensurate with B7 interests% therefore% are not rewarded on the basis of the degree of their subservience to the B7% but rather on the level of their power capabilities& 7imilarly% the willingness of the B7 to supply aid to states pursuing policies detrimental to B7 interests is also determined by the power capabilities of these states& The B7% therefore% appears to use both commitment and leverage strategies% but these are byproducts of the decision to use power criteria to determine the si-e of aid allocation& The second conclusion follows from the first& $t is that the importance attached to power and security interests is consonant with the image of the international system advanced by the realist school&#5 The image depicts international relations in terms of competing states acting in an anarchic system& The absence of any central authorities capable of establishing and maintaining international order engenders a preoccupation with security& 7tates attempt to enhance their security by developing and maintaining a favourable balance of power& #; The significance of a state% from this perspective% is determined by the level of its power capabilities& 7ince the 7econd World War% the B7 has been preoccupied with the 0uestion of global security& 2ur findings suggest that this preoccupation has e*tended to the area of aid allocation& $n other words% the amount of aid allocated by the B7 is determined by the importance of the recipient in the power structure of the international system& The B7% therefore% appears to allocate aid on the basis of a realist view of international relations&

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#eerniB* ?ames and Poe* Ste$en %6 -8;;:0* 1(6S6 Foreign Aid in the Domestic and International +n$ironments*4 in International Interactions* 5ol6 ..* )o6 8* ""6 .8=</6
This study is an initial empirical investigation of domestic and international environment variables on B&7& foreign aid allocation% from #9M51#99"& We hypothesi-e that both of these environments affect aggregate aid levels% and are therefore important to the aid allocation process as conte*tual factors that influence the amounts of aid that will be available for allocation among recipient countries& When we test domestic and international environmental models separately% we find each performs 0uite well& However% in our most stringent test of these hypotheses% in which both international and domestic factors were included% we find that international variables% on the whole% tend to be more important& Iariables identifying years in which the B&7& was a participant in war% the degree of conflict in B&7& 7oviet relations% and the 'arshall plan period are found to have had statistically significant impacts on aggregate levels of foreign aid once other factors are controlled& We also find that the domestic factor of economic hardship% which we measure with a misery inde*% is associated with fewer funds being devoted to the aid budget& We close by discussing the implications of these findings to B&7& foreign aid allocation% and outline some ideas for future research on foreign aid&

#eerniB* ?ames* Drueger* +ric L6 and Poe* Ste$en %6 -8;;A0* 1,esting #odels of (S Foreign Policy: Foreign Aid During and After the %old &ar*4 in The Journal of Politics* 5ol6 :/* )o6
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8* ""6 :9-A7* Southern Political Science Association6

To conclude convincingly that strategic aims are declining in importance and that ideological goals are gaining prominence will re0uire more data for future years& 7ince the Cold War has only just ended and the norms and structures of the new order are just emerging% it is important to analy-e continually the evolution of American foreign policy goals& Having never been an active participant in a world bereft of an all1consuming threat% the Bnited 7tates has little e*perience to draw upon to guide it through an uncertain international environment& Thus% a great deal of change will still li,ely emerge in the conduct of B&7& foreign policy& And certainly it is important also to e*pand the analysis of foreign policy behavior in this new environment to other activities% such as the use of military force% the defense budget% and foreign investment& Bltimately% we believe that scholars should ta,e the opportunity afforded by the end of the Cold War to develop models of state behavior and foreign policy that are more dynamic and comprehensive& We ought to derive measures of changes in the level of systemic threat and the effect of changes in the international distribution of power that are more sensitive to predict to what e*tent states can modify foreign policy goals& $f the international environment has become less threatening% states may become less concerned with relative gains and more interested in cooperation& This ,ind of new world order ought to encourage states to ta,e a long1term% enlightened self1interest approach to international affairs& $t may ma,e possible the fostering of institutions among states that promote economic development and the rights of individuals& Certainly if the Bnited 7tates remains a hegemonic power% we can e*pect it to try to inculcate these ,inds of values 4$,enberry and ?upchan #99"6& 2r if% as some argue% the international environment is becoming more unstable 4Huntington #99H: 'earsheimer #99"6% we may observe states increasingly resorting to beggar1thy1neighbor type policies& $f such disorder arises 4or has already arisen6% states may be pressured to reduce their commitments to ideological goals and depreciate the value of long1term objectives& While our initial evidence would indicate this has not been the case yet% we would urge scholars to ta,e into consideration the changes wrought by the end of the Cold War when developing and testing models of international relations& We need to ta,e the recent criticism of international relations and foreign policy analysis 4/addis #99!1#99H: Aebow #99M6 to heart by broadening our hori-ons and studying change or ris, failing to foresee the ne*t big event&

#enBhaus* Denneth ?6 and Degley* %harles &6 ?r6 -8;AA0*

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1,he %om"liant Foreign Policy of the De"endent State !e$isited: +m"irical LinBages and Lessons from the %ase of Somalia*4 in *omparative Political Studies* 5ol6 .8* )o6 9* ""6 987-<:6
7tudies of the lin,age between economic dependence and foreign policy compliance have been confounded by the difficulties of measuring dependence& 7ingle indicators of dependence may be inade0uate reflections of what appears to be a multidimensional phenomenon% but the relative potency of these factors has not yet been weighed& The ability to determine the relative salience of dependence factors has been limited by the Edominant state1centricF model employed in prior research% which e*amines a single dominant state and the foreign policies of its many dependencies& This model fails to capture what% in reality% is the normC that most peripheral states find themselves involved in dependent relations with two or more regional and global powers& A Edependent state1centricF modelYone that e*amines a single dependent stateZs foreign policies vis1c1vis its several dominant statesYthus is theoretically warranted% and its application provides an opportunity to compare the relative salience of different types of dependence across multiple dominant partners& An initial application of this model to the foreign policy of 7omalia toward its dominant states from #95> to #9;" suggests that e*port trade dependence is highly associated with a subordinate stateZs subse0uent foreign policy behavior% whereas levels of foreign aid and military assistance dependence are not& $n suggesting that wea, states may e*perience different types of dependencies on different dominant countries and that these diverse relationships are associated with different ,inds of behavioral conse0uences% this case study demonstrates the utility of this alternative model for addressing the lin,age between economic dependence and political compliance% and reduces confidence in e*isting EbargainingF1based investigations of the generali-ed compliance hypothesis&

#ichalaB* &6 -8;;70* 1Foreign Aid and +astern +uro"e in the

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P)eC &orld Order@*4 in TiCdsc"rift voor Economische en Sociale Geo!raphie* 5ol6 A:* )o6 9* ""6 .:/-.>>6
Aid to 3astern 3urope is designed specifically for macro1economic stabili-ation and projects in infrastructure% nuclear weapons and nuclear waste disposal% improvement of the environment% training% transfer of technology and ac0uisition of ,now1how related to the functioning of democratic institutions% mar,et economies and administrative systems& 'ost of these aid programmes are conditional upon adoption of far reaching economic and political reforms& Bnfortunately% the donor countries lac, coherent strategy and political will to devote substantial resources to the goal of stabili-ation of eastern 3urope& Western aid is often considered in eastern 3urope as overly cautious and overdue& 3thnic conflicts% the depth of economic decline and the sheer si-e of this region contribute to the confusion and shortsightedness of aid policies& Western aid is unli,ely to ma,e any significant impact on the process of reforms and stabili-ation of eastern 3urope if it is to continue unmodified&

#ilner* elen 56 and ,ingley* Dustin -./8/0* 1,he Political +conomy of (S Foreign Aid: American Legislators and the Domestic Politics of Aid*4 in Economics and Politics* 5ol6 ..* )o6 .* ""6 .//-.9.6
Theories developed in the international political economy literature and used successfully on trade policy can help e*plain voting on foreign economic aid& 'any have claimed that there is no set of domestic interests that supports foreign aid 4e&g& Aancaster% !""56& 2ur data show that this is not the case: i&e& it allows us to reject the null hypothesis that there are no systematic influences on legislators) support for foreign aid& An identifiable and theoretically predictable group of

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legislators who support foreign aid e*ists& .omestic political and economic factors systematically influence American legislators when they cast their votes on foreign aid& urthermore% we show that legislators seem to respond to the diffuse interests of their constituents% as some models of Congress predict& Aegislators appear to understand the distributional implications of aid and to vote in accord with the preferences of their constituents% even though they are not organi-ed and lobbying for such aid& oreign aid is politici-ed and others have shown that domestic interests within donor countries affect aid policy 4e&g& Alesina and .ollar% !""": .udley and 'ontmar0uette% #95>: lec, and ?ilby% !"">: $rwin% !""": Therien and Doel% !"""6& 2ur contribution is to show which domestic groups support and oppose foreign aid and to provide a theoretical e*planation for these voting patterns&

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We show that two of the most important political economy theories + the Hec,scher+2hlin and 7tolper+7amuelson theorems + have significant e*planatory power for aid votes& 2n economic aid votes that have domestic distributional conse0uences% the 7tolper+7amuelson predictions provide a strong e*planation for patterns of support and opposition to such aid& Controlling for a wide variety of factors% districts that are better endowed with capital 4labor6 are more 4less6 supportive of economic aid% as the theory predicts& 2n other votes% li,e food aid and military aid% where the distributional conse0uences of aid are muted% the division between capital and labor is less salient& We thus offer one of the first systematic theoretical and empirical analyses of preferences surrounding foreign aid& We also utili-e differences in types of aid to help evaluate our theoretical predictions& We show that political economy theories can be usefully imported into other issues areas when those areas have distributional conse0uences& An interesting 0uestion is whether this type of influence on aid policy e*ists in other donor countries& $nterests matter% but so does ideology& Aegislators respond not just to the material interests of their constituents% but also to their ideological predispositions& Aegislators in left1leaning districts favor economic aid more than do right1leaning ones& 2n military aid% however% this relationship is reversed& .istricts and legislators who prefer a larger role for the government in the economy and have stronger tastes for egalitarianism seem to be more disposed toward providing economic aid to others abroad& As Aumsdaine argued% a preference for government intervention at home to alleviate poverty appears to carry over to the international realm& Research on other countries suggests that this ideological pattern of support e*ists in other donors 4Tingley% unpublished6& The support that we sometimes find by organi-ed labor for aid seems to rest heavily on its ideological appeal& But unli,e in trade where conservative individuals generally support free trade% conservatives tend to oppose foreign economic aid& This ideological division is the opposite of the one in trade% and it ma,es the political coalitions in trade and aid different&

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Another contribution is our finding that organi-ed interest groups and their contributions to legislators are systematically related to support for aid& Aegislators respond to the diffuse preferences of their voting constituents% but they are also attentive to the pressures brought to bear by organi-ed interest groups& 'any studies have found that campaign contributions do not affect legislators) voting on issues 4e&g& iorina and Peterson% #99;: 7mith% #99<6& $nstead they argue that interest groups give contributions to li,e1minded legislators and that this Efriendly givingF is driven by common ideology and constituent interests and not an attempt at influence 4e&g& Bauer et al&% #95!6& Here we e*amine whether organi-ed interest groups and their PAC contributions are systematically associated with votes on aid& We show that campaign contributions are channeled in ways that correlate with both ideological and political economy models of support 4and opposition6 to foreign aid& 7uch contributions 4from money1centered ban,s and corporations6 may account for why some conservative Republicans have been more li,ely to defect from their party)s position against aid% and why some liberal .emocrats 4because of contributions from labor organi-ations6 may be more supportive of aid as a strategy of international engagement than they are of international trade& This finding stands alongside our other results% which suggest that a district)s factor endowments also influence legislators with particular ideological positions to vote differently than they might have on purely ideological grounds& $n sum% organi-ed interest groups and district economic characteristics seem to be predictably associated with legislative activity on economic aid% as they are on trade policy 4Baldwin and 'c/ee% !""": Beaulieu and 'agee% !""M6& 'ore generally% our analysis implies that foreign aid policy is not driven solely by American foreign policy objectives% but also responds to underlying domestic political conditions& Presidents do not seem to dominate aid policy: their positions and preferences are not among the ,ey factors that we identify in affecting a legislator)s votes on economic aid& Aid may well be used as an e*change mechanism to alter other countries) behavior% but it must first command enough domestic support to win Congressional approval 4Bueno de 'es0uita and 7mith% !""56& The e*isting literature that e*amines whether donor interests or recipient needs shape aid indirectly tests whether domestic interests matter by e*amining the characteristics of the recipients 4Alesina and .ollar% !""": 'c?inley and Aittle% #9596& $n contrast% our study shows that domestic interests in the donor country directly affect foreign aid& Presidents must construct aid policy so they can garner majority support for aid in Congress& Aegislators do not vote on aid randomly: they ta,e into account its effects on their districts and vote accordingly& Political economy models can well e*plain this&

#itchell* ?ohn -8;;80* 1Public %am"aigning on O$erseas Aid in the 8;A/s*4 in Bose*
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Anurdha and Burnell* Peter -eds60 -8;;80* +ritain2s 3verseas Aid Since 1454# +etween Idealism and SelfInterest* ""6 8<:-87>* #anchester: #anchester (ni$ersity Press6
The #9;"s were a period of mi*ed fortunes for public campaigning on Britain)s overseas aid& There are some successes and also some failures& The #99"s opened with campaigning proceeding from a rather higher base + better informed as a result of the lessons of the e*perience of the last decade% and with several notable (firsts) to its credit: and% in the case of the World .evelopment 'ovement a membership that was seven times larger than in #9;"& The aid programme of the British government will undoubtedly have to face up to some new challenges and also some e*citing opportunities& But% because of the widespread ac,nowledgement that global environmental matters concern everyone% there is now a real chance of mobili-ing new and powerful sources of public support&

#oon* Bruce +6 -8;A90* 1,he Foreign Policy of the De"endent State*4 in International Studies Quarterly* 5ol6 .>* )o6 9* ""6 987-9</6
The above conclusion ma,es it very tempting to imagine that it is possible to e*tend the dependency model to offer an e*planation of longitudinal as well as cross1 sectional findings& Richardson 4#95>% #95;6 and Richardson and ?egley 4#9;"6 have succumbed to this temptation and attempted a longitudinal test of the proposition

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that increasing dependence leads to increasing foreign policy compliance& $n so doing% however% they have merged the bargaining and dependence models in a mista,en way& 7ubstituting measures of dependence for measures of aid1giving in the above longitudinal formulation does not produce a test of the dependency model% since the essense of the dependency view lies in the focus upon structural characteristics of relationships which persist over time& To e*amine yearly changes in measures of e*ternal reliance is to invite measurement error andGor conceptual confusion& or e*ample% while the precise volume of e*ports 4the measure of dependence employed by Richardson and ?egley6 certainly fluctuates over the short term% this says very little about changes in e*ternal reliance& $ndeed% even the sense of dependence most often utili-ed in discussions of national power and influence 4as opposed to the formulations associated with dependencia6 involves the sensitivity of one nation to conditions in another 4Caporaso% #95;6& 7uch sensitivity or responsiveness cannot be measured in the short1term but only in the longer run& To say that a nation depends upon e*ports is to say that in years when e*ports are high% the nation prospers and that in years when e*ports fall% the nation suffers& Thus% yearly fluctuations in e*port levels do not constitute a measure of dependence such that dependence is higher when e*ports are good and lower when e*ports are bad& 'ore significantly% however% dependence is simply not a concept which ma,es very much sense within a framewor, whose foundation is the notion of short1term bargaining& This is not to say that the attempt to merge the two models is either impossible or undesirable& Rather% a different fusion is called for& Cross1sectionally% measures of dependent relations are impressively correlated with voting agreement& Dot all features of dependent relations are as immutable over time as the dependencia tradition would seem to indicate% however& 7ubstantial year1to1year fluctuation in voting behavior% for e*ample% does occur& But much of this change seems to occur with change in regime& $t seems plausible that the syndrome of dependent relations% based upon a foundation of e*ternal reliance% generates strong% though not always irresistible% pressure towards the establishment of a government whose views are compatible with those of the dominant nation and which is then supported by foreign aid flows& The foreign policy of that government can be viewed as the result of a process of distortion in the sense that in the absence of such dependent relations% a very different policy would probably have been generated& 7hort1term influence has very little place within this view% since the need to influence a government whose orientation is already fundamentally similar is rather small& However% e*ternal reliance does not deterministically generate a foreign policy distortion and in this sense some element of tacit bargaining may be said to be involved& The promise of American aid 4and most li,ely other benefits such as trade and policy support6 implicit in the choice of a government with pro1American views is li,ely to influence the course of political events in a poor nation& $n this sense% bargaining of a sort does occur: the cost1benefit calculations of individuals within a society must surely be altered by the ,nowledge that American aid 4of a variety of forms6 will follow certain ,inds of choices& 2f course it remains that structural relations of dependence are sufficiently powerful that choices counter to the preferences of the dominant nation are at best difficult and in some circumstances impossible& These constraints appear to operate broadly% however% at the level of the creation of structural political and economic forms rather than in the short1term and relatively narrow areas suggested by the

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bargaining model& The ,inds of longitudinal change in dependent relations which may indeed carry the implications suggested by the dependency formulation are not li,ely to occur e*cept in the case of 0uite massive and step1level transformations such as that identified in the literature as a dependency reversal 42rton and 'odels,i% #959: Holsti% #9;!6& The processes by which such transformations occur are worthy of study since it appears that it is at such junctures that American influence is most li,ely to be manifested& $t may also be the case that the constraints imposed by political dynamics $it#in the nation are e0ually powerful in preventing substantial changes in foreign policy e*cept in the case of a massive lurch in which one set of elites are replaced by another& The contribution of this study is to point the way toward a reconceptuali-ation of the sources of American influenceGpolicy distortion in the Third World in recognition of the rather limited role that influence as an on1going bargaining process seems to play& A number of tas,s remain% however& The generally disappointing findings of the bargaining model may suggest to some that either the theoretical formulations of bargaining must be re1e*amined 4probably with respect to scope conditions6 or that better measures and tests be designed& They may be correct& $t seems more li,ely% however% that the findings correctly identify the correspondence of American and Third World foreign policy orientations as a conse0uence of consensus% rather than compliance& $f so% the dependency perspective would seem to offer a promising trac,% though% it must be noted% far from the only such possibility& With the issue framed in this way + why do various nations arrive at roughly similar foreign policiesW + we see clearly that we have returned the 0uestion to the mainstream of comparative foreign policy concerns& Why does a nation arrive at the foreign policy it doesW While we have arguably eliminated one possible answer 4bargaining6 we have not conclusively chosen between two broad trac,s& 2ne% not discussed here% pursues the problem by searching for parallel processes operating across nations which operate independently to yield similar outcomes& The other% centering around dependency conceptions% pursues the possibility that the foreign policyma,ing processes 4broadly conceived6 of nations are as joined as their economic% political% social and cultural relations& 2ur very crude findings seem generally supportive of efforts along these latter lines&

#orgenthau* ans ?6 -8;:.0* 1A Political ,heory of Foreign Aid*4 in The American Political Science Review* 5ol6 7:* )o6 .* ""6 9/8-9/;6
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The major conclusions for policy to be drawn from this analysis are three: the re0uirement of identifying each concrete situation in the light of the si* different types of foreign aid Khumanitarian foreign aid% subsistence foreign aid% military foreign aid% bribery% prestige foreign aid% and foreign aid for economic developmentL and of choosing the 0uantity and 0uality of foreign aid appropriate to the situation: the re0uirement of attuning% within the same concrete situation% different types of foreign aid to each other in view of the over1all goals of foreign policy: and the re0uirement of dealing with foreign aid as an integral part of political policy& The tas, of identifying concrete situations with the type of foreign aid appropriate to them is a tas, for country and area e*perts to perform& Can country A not survive without foreign aidW $s its government li,ely to e*change political advantages for economic favorsW Would our military interests be served by the strengthening of this nationZs military forcesW .oes this country provide the non1economic preconditions for economic development to be supported by foreign aidW Are our political interests li,ely to be served by giving this nation foreign aid for purposes of prestigeW Can a case be made for foreign aid in order to alleviate human sufferingW What ,ind and 0uantity of foreign aid is necessary and sufficient to achieve the desired resultW To answer these 0uestions correctly demands first of all a thorough and intimate ,nowledge and understanding of the total situation in a particular country& But it also re0uires political and economic judgment of a very high order% applied to two distinct issues& $t is necessary to anticipate the receptivity of the country to different ,inds of foreign aid and their effects upon it& When this analysis has been made% it is then necessary to select from a great number of possible measures of foreign aid those which are most appropriate to the situation and hence most li,ely to succeed& $n most cases% however% the tas, is not that simple& Typically% an underdeveloped country will present a number of situations indicating the need for different types of foreign aid simultaneously& 2ne type given without regard for its potential effects upon another type ris,s getting in the way of the latter& 2ne of the most conspicuous wea,nesses of our past foreign aid policies has been the disregard of the effect different types of foreign aid have upon each other& Bribes given to the ruling group% for instance% are bound to strengthen the political and economic status 9uo& 'ilitary aid is bound to have an impact upon the distribution of political power within the receiving country: it can also have a deleterious effect upon the economic system% for instance% by increasing inflationary pressures& 7imilarly% the effect of subsistence foreign aid is bound to be the support of the status 9uo in all its aspects& $nsofar as the giving nation desires these effects or can afford to be indifferent to them they obviously do not matter in terms of its over1all objectives& But insofar as the giving nation has embar,ed upon a policy of foreign aid for economic development which re0uires changes in the political and economic status 9uo% the other types of foreign aid policies are counterproductive in terms of economic development: for they strengthen the very factors which stand in its way& This problem is particularly acute in the relations between prestige aid and aid for economic development& The giving nation may see, 0uic, political results and use prestige aid for that purpose: yet it may also have an interest in the economic development of the recipient country% the benefits of which are li,ely to appear only in the more distant future& Prestige aid is at best only by accident favor1 able to

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economic development: it may be irrelevant to it% or it may actually impede it& What ,ind of foreign aid is the giving country to chooseW $f it chooses a combination of both it should ta,e care to choose an innocuous ,ind of prestige aid and to promote economic development the benefits of which are not too long in coming& Afghanistan is the classic e*ample of this dilemma& The 7oviet Bnion% by paving the streets of ?abul% chose a ,ind of prestige aid that is irrelevant to economic development& The Bnited 7tates% by building a hydroelectric dam in a remote part of the country% chose economic development% the very e*istence of which is un,nown to most Afghans and the benefits of which will not appear for years to come& $t follows% then% from the very political orientation of foreign aid that its effect upon the prestige of the giving nation must always be in the minds of the formulators and e*ecutors of foreign aid policies& oreign aid for economic development% in particular% which benefits the recipient country immediately and patently is a more potent political weapon than aid promising benefits that are obscure and lie far in the future& urthermore% the political effects of foreign aid are lost if its foreign source is not obvious to the recipients& or it is not aid as such or its beneficial results that creates political loyalties on the part of the recipient% but the positive relationship that the mind of the recipient establishes between the aid and its beneficial results% on the one hand% and the political philosophy% the political system% and the political objectives of the giver% on the other& That is to say% if the recipient continues to disapprove of the political philosophy% system% and objectives of the giver% despite the aid he has received% the political effects of the aid are lost& The same is true if he remains unconvinced that the aid received is but a natural% if not inevitable% manifestation of the political philosophy% system% and objectives of the giver& oreign aid remains politically ineffectual + at least for the short term + as long as the recipient says eitherC EAid is good% but the politics of the giver are badF: or EAid is good% but the politics of the giver good% bad% or indifferent + have nothing to do with it&F $n order to be able to establish psychological relationship between giver and recipient% the procedures through which aid is given% and the subject matter to which it is applied% must lend themselves to the creation of a connection between the aid and the politics of the giver which reflects credit upon the latter& The problem of foreign aid is insoluble if it is considered as a self1sufficient technical enterprise of a primarily economic nature& $t is soluble only if it is considered an integral part of the political policies of the giving country + which must be devised in view of the political conditions% and for its effects upon the political situation% in the receiving country& $n this respect% a policy of foreign aid is no different from diplomatic or military policy or propaganda& They are all weapons in the political armory of the nation& As military policy is too important a matter to be left ultimately to the generals% so is foreign aid too important a matter to be left in the end to the economists& The e*pertise of the economist must analy-e certain facts% devise certain means% and perform certain functions of manipulation for foreign aid& Xet the formulation and over1all e*ecution of foreign aid policy is a political function& $t is the province of the political e*pert& $t follows from the political nature of foreign aid that it is not a science but an art& That art re0uires by way of mental predisposition a political sensitivity to the interrelationship among the facts% present and future% and ends and means& The

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re0uirements by way of mental activity are two1fold& The first is a discriminating judgment of facts% ends and means and their effects upon each other& However% an analysis of the situation in the recipient country and% more particularly% its projection into the future and the conclusions from the analysis in terms of policy can only in part be arrived at through rational deduction from ascertainable facts& When all the available facts have been ascertained% duly analy-ed% and conclusions drawn from them% the final judgments and decisions can be derived only from subtle and sophisticated hunches& The best the formulator and e*ecutor of a policy of foreign aid can do is to ma*imi-e the chances that his hunches turn out to be right& Here as elsewhere in the formulation and conduct of foreign policy% the intuition of the statesman% more than the ,nowledge of the e*pert% will carry the day&

#orrissey* Oli$er -8;;90* 1,he #iKing of Aid and ,rade Policies*4 in World Economy* 5ol6 8:* )o6 8* ""6 :;-A<6
We have argued that tied aid% or more generally aid that is used to further the e*port objectives of donors% provides less benefit to recipients than untied aid 4there is a presumption that aid from multilateral agencies will generally be preferable to tied bilateral aid6& We see no need to summarise the issues here but ma,e two points& irst% donor self1interests rather than recipient1interests are the principal determinants of bilateral aid policy for most of the major donors% although the strength of trade within donor self1interests does vary considerably 4the B7% for e*ample% appears to place most emphasis on its foreign policy objectives6& 7econd% e*port competition between donors is the dominant trade objective for which aid is used% as an e*port subsidy 4such as mi*ed credits6 or in more general support for e*ports 4such as tying6& Bse of aid in this way induces rent1see,ing in the donor economy% as e*porters try to capture aid policy% and may well reduce net donor welfare in addition to reducing the potential benefits of aid to recipients& The essence of our argument is that the use of aid to further trade interests does not serve the recipient)s objectives for aid nor does it necessarily serve the donor)s trade objectives& $t will be clear by now that we advocate the use of public procurement rules to institute 3C1wide tying of aid: this will increase the competition in supplying many aid1supported goods to A.Cs and will benefit recipients& .onors which support tying% such as rance and $taly% should ta,e heed of the increased transnational lin,s between major 3C companies as these imply that they cannot be sure that it is their domestic producers who actually benefit from tying 4this is particularly relevant to mi*ed credits% see 'orrissey% #99#6& urthermore% we advocate that the .AC ta,e a stronger% more restrictive% line on tying and mi*ed credits& The recommendations listed below derive from this conclusion% as does our view on the (optimal) mi* of aid

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and trade policies% which is no mi* at all 1 aid and trade policies should be independent of each other&

#osley* Paul -8;A80* 1#odels of the Aid Allocation Process: A %omment on #cDinlay and Little*4 in Political Studies* 5ol6 .;* )o6 .* ""6 .<7-.796
Within individual donor countries% two separate forces have recently been tending to induce greater progressivity in allocations of aid% with the results shown in Tables # and !& The first is a decision on the part of many donors to be more selective in the allocation of aid and concentrate it on countries that need it more% originating some ten years ago but borne into policy under the impetus of the famines in much of Africa and the oil price rise in #95H1M% which between them drove a large wedge between the more fortunate and the less fortunate developing countries& 7uch a decision to concentrate aid on the poorest countries of the world had by #955 been ta,en by% amongst .AC countries% the Detherlands% 7weden% Australia% Canada% 7wit-erland% the B? and the B7A& #! Whether one sees these decisions as altruistic or not is irrelevantC to the e*tent that they are carried through into policy% they produce ipso facto greater conformity with the predictions of the recipient need model& 7eparately from this% however% donors are li,ely to be pressured in the direction of greater responsiveness to recipient needs by the recipients themselves& $t is a constraint on the validity of 'c?inlay and Aittle)s general approach that it is wholly donor1centredC a given donor% on their approach% has a certain sum of money to hand out% which he then allocates to recipients either on criteria of (donor interest) or on those of (recipient need)& 7uch an approach obscures the bargaining power of recipient countries in the process of aid allocation& $n fact% if a particular country e*periences an event which causes it to have sudden (needs)% for e*ample natural disaster 4Bangladesh #95!% 3thiopia #95H6 or balance of payments crisis% then these needs will generate re0uests from recipients which will be met (passively) by aid to the limit of the donor)s capacity& But the aid thus given% of course% builds up aid1 dependent vested interests and commercial channels% which are unli,ely to lapse when the immediate emergency does& There is thus a gradual% and in general irreversible% shift of aid to the more disaster1prone countries: and as these are in general the poorest%#H it is li,ely that aid donors) practice of responding to emergency re0uests will of itself tend over time to push aid programmes in a more (recipient1need centred) direction& To argue this way is% of course% to do no more than to apply to the specific case of overseas aid e*penditure a general principle applying to all public e*penditures% namely Wildavs,y)s principle of budgetary

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incrementalism& Just as% in Wildavs,y)s analysis% the allocation of a government)s e*penditure between spending departments generally remains loc,ed in the conventional channels of past practice but can alter at the margins if one spending department puts up a particularly plausible case for an increase in its share of the total budget%#M so also the pattern of a donor)s aid allocation is% in the absence of any e*ternal stimulus% loc,ed in the conventional channels of past obligation 4including% in many cases% e*1colonial ties6 in (normal) times but can alter at the margins if particular recipients evince an e*ceptional (need) for aid& 7uch alterations% we have argued% are most li,ely to occur in favour of the poorer countries: and they are subject to a ratchet effect which ma,es them unli,ely to be reversed however transient the circumstances which led to their being implemented& Additional to these factors ma,ing for a greater salience of (recipient need) criteria $it#in donor countries% it is also the case that there has been a drift of the over1all 23C. aid burden from countries whose ability to apply such criteria is constrained by past colonial and strategic ties% and in particular the Bnited 7tates% to countries subject to no such constraints 4for e*ample West /ermany% Canada% and the 7candinavian countries6& Table H illustrates this: it should be noted that the Bnited 7tates is included among the (constrained) countries on account of the large 0uasi1colonial military commitments it built up among Third World countries% particularly Asia% during the #9<"s& The (unconstrained) donor countries% of course% are freer to respond to the promptings of recipient need than are the (constrained) countries& This partly e*plains the fact that for #955 the recipient need model fits the total of .AC donor countries 4Table #% bottom part6 much better than any of the individual donors in Table !& We therefore conclude that if an appropriate model is used it is not possible% contrary to the contention of 'c?inlay and Aittle% to reject the hypothesis that recipient need is a significant determinant of the pattern of aid allocation for most Western capitalist countries& As one moves forward from the #9>"s in time and outwards from the special case of donors who are e*1colonial powers to consider the case of aid donors not constrained by historical commitments to specific less developed countries% the e*planatory power of the recipient need model increases&

#osley* Paul -8;A70* 1,he Political +conomy of Foreign Aid: A #odel of the #arBet for a Public 2ood*4 in Economic &evelopment and *ultural

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*han!e* 5ol6 99* )o6 .* ""6 9>99;96

What determines the type and 0uantity of overseas aid given by individual donor countriesW Answers to this 0uestion in the e*isting literature are polari-ed into two groups& 2ne of them offers a theoretical treatment based on the theory of public goods which is not consistent with the available data% and the other offers empirical correlations without any e*planatory theory& The first group + for e*ample% Pincus and 2lson and \ec,hauser + treats aid% li,e defense% as an Einternational public good&F 7mall countries% on this approach% are free riders% spending relatively little themselves while deriving benefits from the e*penditures of larger countries& But this approach is not consistent with even a casual scrutiny of the 23C. aid community in which% broadly spea,ing% the smallest countries are the most generous donors& The second group + for e*ample% Hoadley and Beenstoc, + discover correlations between a country)s ratio of aid to /DP and certain independent variables which may be e*pected to influence it 4e&g&% that country)s /DP% its dependence on foreign trade% its government)s position in the ideological spectrum% and the state of the domestic economy6& However% these findings are not fitted into any theoretical framewor,% so that it is difficult to wor, out what they really mean& The approach of this paper is to treat foreign aid as a public good for which there is a mar,et% albeit a highly imperfect one because the consumers + donor country ta*payers + are ignorant about the very nature% let alone the price% of the commodity they are buying& 2n this view% factors on the demand side 4i&e&% ta*payers) response to their country)s aid program6 will help to determine the 0uantity of aid disbursed as well as factors on the supply side such as the donor government)s desire to obtain strategic or trading benefits from aid& This view will be shown to be consistent in many cases with the available data: it contrasts with the approaches previously discussed% all of which consider only supply side influences on aid disbursement& KNL $n conclusion% there are three perceptible patterns of adjustment in the mar,et for international aid& $n the first pattern% electorates are responsive to the 0uality of aid which their governments provide% and their governments respond to the pressures they impose by altering the 0uantity of their aid& $n the second pattern% governments respond to such pressures from citi-ens by changing the 0uality rather than the 0uantity of their aid& $n the third and last pattern% governments do not respond to public pressure by altering the pattern of their aid% but rather by see,ing to persuade the electorate to accept the pattern of aid which they have already decided to adopt& The implication of the e*isting literature is that only this last pattern of adjustment is worth considering: this preliminary study suggests% however% that it is not the only pattern of adjustment which e*ists% and that the aid1 giving process is by no means as e*clusively characteri-ed by mar,et leadership on the part of the state as that literature has implied&

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#oss* ,odd* !oodman* Da$id and Standley* Scott -.//70* 1,he 2lobal &ar on ,error and (S De$elo"ment Assistance: (SAID Allocation by %ountry* 8;;A-.//7*4 *enter for Glo"al &evelopment Wor)in! Paper .o,/86
The launch of the /lobal War on Terror 4/W2T6 soon after 7eptember ##% !""# has been predicted to fundamentally alter B7 foreign aid programs& $n particular% there is a common e*pectation that development assistance will be used to support strategic allies in the /W2T% perhaps at the e*pense of anti1poverty programs& $n this paper we assess changes in country allocation by B7A$. over #99;1!""# versus !""!1!""<& $n addition to standard aid allocation variables% we add several pro*ies for the /W2T% including the presence of foreign terrorist groups% sharing a border with a state sponsor of terrorism% troop contributions in $ra0% and relative share of 'uslim population& KNL We do not find that any of our /W2T pro*ies 4or their interactions6 are significantly correlated with changes in country allocation of aid flows to the rest of the world% including to sub17aharan African countries& Concerns that there is a large and systematic diversion of B7 foreign aid from fighting poverty to fighting the /W2T do not so far appear to have been reali-ed&KNL Before drawing any conclusions about the impact of the /W2T on aid flows% several important caveats are re0uired& irst% we have only loo,ed at the provision of development assistance% which is but one aspect of B&7& foreign policy& 7econd% our measure of B&7& development assistance has been circumscribed by using only bilateral aid from only one B&7& agency& Third% we have only loo,ed at total aggregate flows to countries and not at the composition of flows by sector or other substantive category& ourth% we have also chosen five particular /W2T pro*ies% but many others could be envisioned& Aastly% it may simply be too early to pic, up any significant differences in aid allocation& Changes in allocation criteria and systems may ta,e years to become established and refined% and the pipeline effect for aid is well documented% often re0uiring several years for actual changes to occur& .espite these caveats% one conclusion% even if only preliminary% does emerge from the dataC any major changes in aid allocation due to the /W2T appear to be

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affecting only a handful of critical countries% namely% $ra0% Afghanistan% Jordan% and the Palestinian Territories& The e*tra resources to these countries also seem to be coming from overall increases in the bilateral aid envelope% combined with declines in aid to $srael% 3gypt% and Bosnia and Her-egovina& 7ince the aid curtailments to $srael and 3gypt were planned well before !""#% and the decline to Bosnia and Her-egovina is the result of the end of the immediate post1conflict reconstruction phase having nothing to do with the /W2T% this increased availability of funds may be a coincidence% but also is clearly an enabling factor to allow aid to be channeled elsewhere& There may also have been a subtle shift outside such countries toward those with higher shares of 'uslim population& Time may tell whether this is the beginning of a larger trend& But at this point% concerns that there is a large and systematic diversion of B&7& foreign aid from fighting poverty to fighting the /W2T do not appear to have been reali-ed&

#ourmouras* AleK and !angazas* Peter -.//<0* 1%onditional Lending (nder Altruism*4 I#F &orBing Pa"er &PE/<E8//6
$ $ loan programs help li0uidity1constrained A$Cs raise human capital investments& $f $ $s could commit in advance to demanding full loan repayment from their low1 income borrowers% unconditional loans would produce efficient outcomes& This paper e*amined the implications of $ $ altruism for the effectiveness of such loan programs when $ $s cannot commit to re0uire full repayment& When $ $s cannot commit in advance to demanding any agreed repayment from poor countries% unconditional loans are inefficient& The A$C would set investment too low in the attempt to gain loan repayment forgiveness in the future& We have demonstrated that $ $s can design time1consistent conditional loan programs that overcome this moral ha-ard& $n our model% conditionality preserves pareto optimality and achieves first1best redistribution even in the presence of complications related to uncertain A$C investments and selfish recipient governments& 2ur solution to the 7amaritan)s dilemma is for the altruistic donor to present recipients with a loan schedule where both the loan amount and its interest rate are conditional on investment& The optimal loan schedule creates incentives for the recipient to choose investment efficiently while at the same time receiving an interest subsidy% and thus a transfer% that varies with investment and future income reali-ations& The optimal interest rate subsidy balances the tension between the $ $s) altruistic concerns for A$Cs and its fiduciary responsibilities to $ $ creditors& The solution does not re0uire commitment on the part of the donor and does not trigger

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renegotiation to write principal down at the time of repaymentYa recurrent practice with loans to A$Cs& Conditional loans to some A$Cs have not always been associated with solid results in the past 4see .ollar and 7vensson% !""": $' % !""!a: and $vanova% 'ayer% 'ourmouras% and Anayiotos% !""H6& 7ome countries have not been able to grow out of their poverty despite long1standing $ $ engagement& 2ur analysis suggests that $ $ altruism does not need to be a fundamental source of this failure& $f $ $ altruism is properly reflected in the financial terms and conditionality of $ $ loans% full efficiency can be achieved% encompassing pareto optimality and first1best redistribution& Reconciling the prediction that conditional loans will help poor countries achieve first1best allocations with the mi*ed results of conditional loans on the ground is a challenge& 2ne possibility% not e*amined in this paper% is that $ $s and their A$C borrowers face incentives to systematically overstate A$C repayment prospects% leading to boom1bust cycles in which $ $ lending is followed by A$C debt distress and e* post debt relief& 3mpirical evidence does suggest that $ $ projections of A$C economic growth and e*port earnings are consistently overoptimistic% leading to understatement of future A$C debt and debt1servicing burdens& Partly in response to this problem% the $' has recently revamped its framewor, for assessing debt sustainability 4$' % !""!b6& A second issue concerns the effectiveness of conditionality in the presence of domestic policy failures and $ $ commitment problems& The present paper provided a welfare case for conditionality based on the $ $s) inability to commit in a model that abstracted from policy inefficiencies in recipient countries& $n a companion paper 4'ourmouras and Ranga-as% !""M6 we e*amine a model of special interest groups that features inefficient fiscal redistribution& $n this environment% the effectiveness of conditional loans in mitigating domestic policy inefficiencies is circumscribed by the $ $)s commitment problem&

#ourmouras* AleK and !angazas* Peter -.//;0* 1Foreign Aid Cith 5oracious Politics*4 in I%' Staff Papers* 5ol6 7:* ""6 >A:-A8/6
Countries with voracious politics divert large amounts of public resources to unproductive transfers to powerful interest group KsicL& This is a source of poverty% because resources devoted to such redistribution reduce the efficiency of resource allocation and lower national welfare& ractious politics also ma,es it more difficult for the international community to assist developing countries& Aoans conditioned on public investment alone may not improve welfare in countries with voracious

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politics& The higher ta*es needed to pay bac, foreign debt may further increase rent1see,ing% which could lower the returns to public investment below the cost of debt repayment& When confronted with a highly contentious political environment in recipient countries% donors may re0uire additional conditions to guarantee that their loans will increase the recipient)s national welfare& 2ne guiding principle for the donor community is to develop conditions that shift the burden of debt repayment away from the ta*ation of productive wor, and toward the ta*ation of rent1see,ing& This may be accomplished by insisting that debt be repaid by cuts in programs susceptible to rent1see,ing& Because the susceptible programs are li,ely to vary from country to country% it is critical that the recipient country)s finance minister% and similar officials are involved in establishing the appropriate conditions in partnership with donors& $n wor,ing with recipient country officials% donors should help wea, central governments reduce the incentives to engage unproductive rent1 see,ing& Consistent with our analysis% donors have sought to place conditions on their assistance to developing countries that aim at increasing government investment and reducing government consumption 4which may also include corrupt public EinvestmentF projects6& 3mpirical evidence suggests that lowering government consumption raises economic growth 4see% for e*ample% Barro% #995% Chapter #: and Baldacci% Clements% and /upta% !""H6& 2ur analysis offers a new supporting argument for loan conditions that re0uire cuts in government consumption% rather than increases in ta*es% to finance loan repayment&

#urshed* S6 #ansoob -.//<0* 1Strategic Interaction and Donor Policy Determination*4 in International Review of Economics and 'inance* 5ol6 89* )o6 9* ""6 988-9.96
"ummar #& $n motivating agents to e*ercise effort% attention needs to be focussed on intrinsic motivation as well as e*trinsic financial payments& 2utcomes will improve when effort is a signal of the agent)s ability and motivation& This means that the principal has to be seen to ta,e the agent)s effort into account&

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!& The public sector is notorious for fi*ed wage contracts leading to minimal effort levels by the agent& When the agent)s type or 0uality is in doubt 4adverse selection6% incentive payments may be designed to ma,e the agent reveal his true type& 3ven then a problem remains% as the inferior1type agent will reduce effort e*acerbating moral ha-ard& This trade1off between moral ha-ard and adverse selection needs to be borne in mind even in principal+ agent relationships involving legislature+aid agency relations& H& When a variety of principals with divergent interests interact with the same agent% they are not only better off colluding with each other% but would also be pooling their influence on the agent at the initial stage of the principal+ agent relationship& $n a sense they will be trading in their concerns& 3*amples of varying objectives include the dilemmas posed by strategic and commercial interests on the one hand% and developmental concerns on the other hand& Certain principals will be more interested in the former% and others 4including D/2s6 in the latter& M& $n the conte*t of endogenous domestic policy formation regarding aid% median voter preferences need to be considered mainly in direct democracies utili-ing referenda& But usually it is powerful lobbies that influence aid policy& There will also be altruistic motivation regarding aid related to common humanity considerations& These altruistic motivations need to be wor,ed on& $n most societies% however% lobbies are most important because the few 4rich and powerful6 are far better at collectively organi-ing around their interests& <& When signalling credible commitment to preannounced policies is the problem% the governance structure in donor countries needs to generate e*tra and immediate costs to reneging on agreed policies& This is particularly necessary in donor countries where on many occasions a newly elected government commits to development and human rights improvements% but at some later stage reneges on them in favour of strategic interests&

#ushBat* #arion -8;>.0* 1,he Politics of De$elo"ment Aid* Its Planning* Financing and Strategy in the Se$enties*4 in &ritte Welt* 5ol6 8* )o6 .* ""6 8;>-.99* #eisenheim6
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2ften researchers considering development and aid policy% assume the problem is of recent origin& $n fact the B&D& 'achinery or Aid And .evelopment began to ta,e form only #< years after its creation and the B&D& Charter ma,es no specific mention of development tas,s#& $t is e0ually true that related activities by the /reat Powers and other countries were determined by the changes in international relations% the instigation of competition in the fields of economics% society and culture and efforts to maintain spheres of influence by non1bellicose means !& $t is also true that presentation of the problems by the developing states were first formulated upon their transition from dependency to independence% as the process of decoloni-ation developed in the si*ties H& 7till one cannot ignore the fact that the problem was raised earlier by the pioneers of the struggle for home rule% advancement of education and society among different peoples M and also by the early fighters for fundamental change in the family of nations to further freedom% e0uality% justice% and peace through cooperation among all countries <& $t should be pointed out that this approach found concise e*pression at the Columbia Congress comprised of representatives from all religions held on the occasion of the #;9H Chicago World)s air& There it was stated that the peoples of all continents living under foreign rule have an e0ual claim to e0uality% freedom and their own culture as well as 3uropean aid to help them overcome their social plight& /radually this stand gained prominence in other non1governmental conferences including not only Pan1African congresses but also in pacifist% inter1parliamentary% science and socialist gatherings > as well as in deliberations on international law 5 and in the activity programs of international organi-ations% particularly following World War $& The Aeague of Dations and the mandate system in particular and the $A2 which were founded during that period% already reflected to varying degrees greater attention to dependent peoples and the obligations to aid their development& This tendency grew following World War $$& Hence the pertinent principles in the B&D& Charter + the role assigned to the 3conomic and 7ocial Council% trusteeships and the Trusteeship Council% the Charter)s .eclaration regarding non1self1governing 4colonial6 territories% the provisions concerning the activities of the B&D&)s speciali-ed agencies and other organi-ations ;& But until the #9>< Bandung Conference% and in fact up to the crises brought on by the Russian intervention in Hungary and the 7ue- Campaign in #9<>% which gave prominence to the demands of the EThird WorldF on the one hand and to the initial crumblings of the blocs on the other + aid to developing countries did not play any important role either in 7oviet or American foreign policy& The B&7& aid activities up to this point reflected a continuation of the same policies + with but a change of address + applied already during World War $$ as a means of offering political% economic% military% and human support to the allies% this time in order to rehabilitate and unify them against a new enemy& That is why% starting from the ?orean War in #9<" and especially in view of the B77R)s successes in developing nuclear weapons% the military and security aspects of aid became crucial&

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The ETruman .octrineF of #9M5% which promised economic and military support to countries whose freedom was endangered by the 7oviet threat% laid the foundations for the E'arshall PlanF of the same year and for the western alliance of #9M;% which in #9M9 became DAT2& These steps% and continuing fear of the B77R led to an increase in the military share of this support% until #9<H it constituted two thirds of the total American aid% most of it direct to her 3uropean allies& However% at the same time it became clear that aid of a non1military nature was needed not only for security purposes but also for advancement of the B&7& economy in view of her role in international trade and the need to resuscitate for this purpose the mar,ets and currency in countries tied to the .ollar 9& 2n this foundation emerged the 2rgani-ation for 3conomic Cooperation in 3urope% the 3uropean Coal and 7teel Community and later the 3uropean Common 'ar,et with its attendant institutions& 7imilar phenomena in the 3astern Bloc included the Council for 'utual 3conomic Aid in #9M9 and the Warsaw Pact in #9<< and all other steps ta,en for unification% e*pansion and military preparedness #"& This new stress on non1military aid began to be felt during #9<H% the year 7talin died% and with the first signs of the easing in inter1bloc tensions at the end of the ?orean War and later in $ndo1China& They were tied to the deepening reali-ation that political1military doctrines based first of all on preparations for a new world order were already dated& This change of emphasis accompanied the wea,ening of the bi1polar system in international relations% the appearance of crac,s in established blocs% and an increase in the number of new states and their pressure in the international arena& All this emphasi-ed the role of aid to the EThird WorldF as a whole and Africa in particular as an essential part and most important arm of the foreign policy of the /reat Powers as well as other countries& 2f course% the aid problem received different treatment by the B&D& in spite of the fact that the B&D& crystalli-ed its policies under the influence of the /reat Powers because the organi-ation too, into consideration its basic principles and the demands of the majority in the amily of Dations + those receiving aid& The influence of the Bandung Conference on these changes was not directly felt because the main issues of the conference were mainly tied to the efforts at limiting and abolishing all forms of colonial domination including Chinese and 7oviet% crystalli-ing the internal relations of the EThird WorldF ##& 7ince it became clear that this aim could not be easily achieved without economic growth and social change and without proper outside aid% discussions were initiated in the B&D& amily and for the betterment of the e*isting relations bi1lateral ties were re1consolidated& As a result% the need arose to define the term bac,wardness and to establish the value of planning and appropriate aid channels #!&

)atsios* AndreC -.//:0* 1Fi$e Debates on International

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De$elo"ment: ,he (S Pers"ecti$e*4 in &evelopment Policy Review* 5ol6 .<* )o6 .* ""6 898-89;6
Andrew 7& Datsios was Administrator of the Bnited 7tates Agency for $nternational .evelopment until January !"">& The B7 has the largest aid programme in the world but labours under certain constraints% notably a proliferation of Congressionally1imposed budget earmar,s& 'r Datsios has been an articulate advocate as well as an outspo,en reformer of the B7 approach to aid&

)elson* ?oan #6 -8;:A0* Aid$ Influence$ and 'orei!n Policy* )eC MorB: #ac#illan6
5#apter 1+ )id Purposes (pp. 11<C0) KNL )id as a 8ultipurpose Instrument 'ost B&7& economic aid is intended either to promote economic and social progress% or to help restore security and stability in countries where terrorism% insurgency% or e*ternal attac, are current or imminent& 'uch smaller sums are used for more immediate political purposes or for humanitarian programs& But each of these general objectives encompasses many more specific goals& 'oreover% the B&7& economic assistance program in any one country often is designed to pursue more than one type of these objectives& Dor is there any simple correlation between the form of aid and the primary purpose of specific aid actions& 'ost technical assistance serves development purposes& But political considerations not infre0uently enter the selection and design of particular projects% and occasionally technical assistance is used for primarily political or security goals& 7imilarly% both capital projects and commodity imports may serve virtually pure development purposes% almost e*clusively political or security goals% or a combination of objectives& However% when A&$&.& finances technical% capital% or commodity assistance for political or security purposes% it normally draws on a special fund called 7upporting Assistance% which has been appropriated by Congress specifically for such purposes& The fact that aid is used to serve so many goals causes confusion and draws criticism at home and abroad& There is broad support among the B&7& public for

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developmental and humanitarian aid% although many are impatient that the tas, of development seems to ta,e so long& But aid for political purposes has a nasty ring& Xet specific political uses of aid + for e*ample% withholding aid from military juntas to demonstrate B&7& disapproval + win widespread approval& Congress is deeply divided regarding the proper goals of foreign aid& 7ome Congressmen steadfastly support developmental aid to Aatin America and% for e*ample% $ndia% but 0uestion the value and wisdom of economic aid for security goals& 2thers heartily approve of aid that seems to serve clear security or stability interests% but challenge pouring millions + indeed% billions + into developmental aid& The disparities within Congress regarding aid priorities are illustrated by 7enator ulbright)s and Representative Thomas 'organ)s respective views on the wisdom of separating the military assistance and economic assistance bills& rom #9>! to #9><% 7enator ulbright% as Chairman of the 7enate oreign Relations Committee% urged that economic assistance legislation be divorced from military assistance bills% while Chairman 'organ 4.emocratic% Pennsylvania6 of the House of oreign Affairs Committee insisted that separating the two programs would cause the economic aid bill to be cut to ribbons& As for using aid to promote immediate political objectives% Congress virtually unanimously condemns the idea in principle% yet is 0uic, to propose using aid for protecting B&7& fishing interests or discouraging trade with Cuba& $n the developing countries themselves% the fact that B&7& economic aid is sometimes used to protect B&7& economic interests or to try to influence internal politics or foreign policy positions of recipients is readily interpreted as proof that the entire program is part of a neo1imperialist scheme& The further 0uestion arises whether aid)s multiple goals are consistent with each other& There is no simple answer& To a large degree% different uses of aid are complementary& The outcome of an immediate political crisis within an aid1receiving country may be crucial for its long1term development prospects& Reasonable security and stability are prere0uisites for economic and social progress% and in some circumstances evidence of such progress may be an essential ingredient in re1establishing security and stability& But not infre0uently% foreign policy purposes for which aid is an instrument conflict& .esire to maintain cordial diplomatic relations% or concern for a regime)s stability% or interest in maintaining access to a military installation may inhibit B&7& efforts to promote reform& Conversely% insistence on development criteria may interfere with effective use of aid for short1run political goals& The manner in which aid is used in one country may also affect B&7& interests in other countries& 'ilitary aid that stimulates an arms race is an obvious e*ample& Aess obvious is the disincentive effect that B&7& crisis support for an inept regime may have in neighboring countries& $f the Bnited 7tates is willing to come to the aid of a government that has failed to ta,e needed measures to avoid a budget or foreign e*change crisis% others may well conclude that they need not underta,e painful reforms to 0ualify for aid& $n 3thiopia% for e*ample% the Bnited 7tates has sought simultaneously to maintain the right to operate an important military communications center% to encourage moderni-ing forces in a country where feudal authority is still strong% and to dampen down the long smoldering border dispute with 7omalia& 'ilitary aid is a

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0uid pro 0uo for the communications center& But strengthened 3thiopian military forces may threaten the precarious truce with 7omalia% and may divert a growing portion of the budget from development uses& 'oreover% B&7& arms aid to 3thiopia is a major cause for 7omalia)s heavy reliance on Communist arms aid& 2n the economic side% substantial reforms are prere0uisites for real progress& Xet too vigorous support for moderni-ing groups may antagoni-e others whose good will is essential for maintaining access to the communications center& 2n the other hand% moderni-ing groups may be e*pected to grow more powerful and apparent B&7& support for conservative forces may jeopardi-e future good relations& 7ome conflict among objectives is inevitable& However% there is a strong tendency in the 3*ecutive Branch not only to gloss over conflicts among goals in defending proposed or actual actions before Congress and the public% but also to minimi-e such conflicts in its own deliberations& 7ometimes conflicts are transitory% and muddling through may be preferable to borrowing trouble% that is% to anticipating problems which may not materiali-e& 2ften% however% obscuring a potential conflict increases the chances that it will occur& ran,er appraisal of relations among objectives and more effort to anticipate the side1effects of programs would be feasible and almost surely useful&

5#apter 2+ )llocation 5riteria and - pes of 5ountr Programs (pp. C1< H7) B&7& economic aid programs are a veritable menagerie of si-es and shapes% reflecting both the wide range of B&7& interests they serve and the tremendous variation in the aided countries) own circumstances& 5riteria for )llocating )id Three basic criteria largely determine the volume and content of B&7& economic assistance in any particular country& These are the political importance to the Bnited 7tates of the country)s stability and growth: the ability of the country to absorb e*ternal resources for growth: and the availability to the country of resources on appropriate terms from other sources& KNL - pes of 5ountr )ssistance Programs The purposes% and therefore the design% content% and administration of the B&7& economic assistance programs in different countries vary widely& Any classification of types of country programs is arbitrary% and some individual programs do not fit comfortably into the system& Donetheless% some grouping is essential if one is to grasp the pattern of the total B&7& economic aid effort& 'ost of A&$&.&)s country programs can be reasonably described as fitting one of three categoriesC major development1oriented programs: major programs directed to restoring security and stability: or limited programs directed to narrower goals& This classification is not a system for ma,ing decisions% but a description of the results of the decision1ma,ing process& $n other words% A&$&.& does not classify countries and thereby determine what si-e and ,ind of aid program they shall receive& Rather% the basic allocation criteria% country circumstances% and B&7& interests produce the pattern& KNL

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5#apter C+ Program Planning (pp. HG<37) The precise amount and composition of aid to particular countries is largely determined through an elaborate annual program planning process& The process has inherent limitations% which should be stated immediately& Program analysis ta,es B&7& foreign policy objectives in each country as given& Therefore% if some B&7& interests conflict with others + for e*ample% desire to press for reforms versus concern for the immediate stability or the good will of the host government + the conflict will be reflected in inconsistent or vacillating aid programs& The current program also constrains planners& ew technical or capital assistance projects are completed in one year& At any one time% the bul, of most country assistance programs consists of projects started several years earlier and not yet completed& The country situation% or B&7& judgment of priorities% or the nature of the B&7& interest in the country may have changed in the interim& But the projects cannot be abruptly bro,en off or modified without badly damaging mission morale% violating contractual obligations% and% in all li,elihood% straining relations with the aided country& The annual program analysis is intended as a serious reappraisal of the current program and a framewor, for future programs& But those who planned the current program are understandably committed to it& $f they have been replaced by newcomers% the latters) fresh loo, is properly constrained by the ,nowledge that the total program cannot be abruptly or radically altered& Therefore% the major contribution of good program analysis and planning is to guide new activities and additional measures to promote self1help + a fraction of total activity& This is not necessarily unfortunate& 'ost development measures re0uire sustained effort& 'oreover% B&7& economic assistance is afflicted with periodic fadsC community development is ,ey to growth one year: human resource development is the watchword a few years later& $t may be better to stic, with and accomplish a Esecond bestF program than to disrupt B&7& host country efforts with repeated changes& A still more fundamental constraint is our inade0uate ,nowledge about development& The benefits e*pected from proposed major changes should be great enough to allow for substantial margins of error& And yet% precisely because our ,nowledge is inade0uate% program planning must be fle*ible enough to accommodate new ideas and approaches& The line between continuity and inertia is often hard to draw& inally% many aid decisions are made completely outside the annual planning cycle& This is true of many% though not all% short1run political uses of aid& These constraints sometimes ma,e the program planning process loo, li,e and elaborate play1act% with little connection to actual action& Xet for all its limitations% the annual program cycle remains the single most important channel for decisions regarding B&7& economic aid& $t affects some ,inds of aid much more directly and immediately than others& The volume of commodity assistance and the self1help conditions attached to such assistance are largely determined by annual analysis& 7election and design of new technical assistance projects is less closely tied to

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overall analysis% and capital projects float more loosely still% for reasons discussed later in this chapter& $n terms of types of country programs% the annual program planning process is much more relevant and important for development programs than for programs that emphasi-e security or limited political objectives& Programming Principles Among the program planning principles that have emerged from twenty years) e*perience with large1scale foreign aid programs% the most basic are the closely lin,ed concepts of country programming and concentration& Country programming implies both tailoring B&7& efforts to the particular circumstances of the individual country% and coordinating all types of B&7& aid into an integrated Ecountry programF rather than conducting semi1independent technical% capital% and commodity aid efforts& Concentration simply means focusing aid on a few high1priority goals& KNL -#e 5ontent of Program )nal sis This s,etch of the program planning process has identified the major steps and actors% but gives little sense of its substance& $n theory% program analysis moves through a logical se0uence covering the following stepsC #& $ndentifying the major B&7& objectives that aid is intended to promote in the country& !& Assessing the host country situation and trends% including its plans% programs% and policies% in order to identify major problems and important lines of potential progress& H& Anticipating the probable role of other donors during the planning period under consideration& M& $n view of these considerations% selecting more specific goals on which to focus B&7& economic aid& The principle of concentration suggests that these goals be relatively few + say four to si* + in number& <& or each goal% identifying all the important measures needed% including policy or administrative changes as well as capital investment and creation or improvement of s,ills and institutions& 'any of the necessary actions can be ta,en only by the host government& The Bnited 7tates may be able to encourage self1help measures& 2ther donors may already be assisting with some aspects of the problem% or might be encouraged to do so& inally% some of the needed measures will be appropriate for direct B&7& action + technical assistance% capital projects or commodity assistance& Iery few significant goals can be accomplished solely or primarily through B&7 aid& Therefore% it is important that aid be viewed in the broader conte*t of all the important measures the goal implies& KNL

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)eumayer* +ric -.//.0* 1Is 2ood 2o$ernance !eCarded3 A %ross-)ational Analysis of Debt Forgi$eness*4 in World &evelopment* 5ol6 9/* )o6 :* ""6 ;89-;9/6
The analysis in this paper has shown that the need for debt forgiveness is clearly a powerful determinant of the allocation of debt forgiveness% thus confirming the first hypothesis& As concerns the second hypothesis% the evidence supports the statistical significance of creditors) political interest only for the B7 military grants variable& As concerns the third hypothesis% there is no clear answer& There is evidence that some aspects of governance have an influence on the allocation of debt forgiveness% but other aspects and governance in general were often found to be statistically insignificant& $t is maybe not surprising that of all the different governance aspects Evoice and accountability%F Epolitical rights and civil libertiesF and Eregulatory burdenF should stand out as having some% if modest% influence on the allocation of debt forgiveness& After all% the respect for the political and participatory rights of citi-ens and the abstention from highly distortionary and burdensome economic policies have long been a top priority on the demand list of aid donors and debt creditors& As mentioned above% while respect for political and participatory rights of citi-ens is more consensually accepted as one aspect of good governance% Eregulatory burdenF is more contestable as it relates to a particular view on economic policy ma,ing& 2verall% it seems therefore fair to say that in the past debt forgiveness has not been used much to reward countries with good governance& rom a normative point of view% future debt forgiveness should revert this& Allocating a greater share of debt forgiveness to countries with good governance would create the right incentives for highly indebted countries and would most li,ely lead to a more effective and productive use of the resources employed& This will be true no matter what the total amount of debt forgiven for all countries% an issue% which this article has not discussed& By implication% a similar argument can be made for the allocation of new lending and% indeed% for aid disbursement& Critics argue that the debt crisis is partly to blame for loose lending to corrupt and unaccountable governments with poor and highly distortive economic policies% that is% countries with bad governance 4Hanlon% !""": Roodman% !""#6& To prevent this from re1occurring lenders need to ta,e better into account the 0uality of governance of potential borrowers while at the same time trying to help those countries improving their governance that are committed to reform&

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$n order to do so% creditors and lenders need to invest more into developing high1 0uality indicators of governance and collecting the necessary data& At the moment% besides major efforts at the World Ban,% the construction of governance indicators is mainly left to private companies that sell their information to international business& Their view on what constitutes good governance need not coincide with how creditors and lenders perceive good governance% however& There is therefore still a long way to go to strengthen the role of good governance in international financial lending and aid allocation decisions&

)eumayer* +ric -.//9a0* 1,he Determinants of Aid Allocation by !egional #ultilateral De$elo"ment BanBs and (nited )ations Agencies*4 in International Studies Quarterly* 5ol6 <>* )o6 8* ""6 8/8=..6
The results of analy-ing the determinants of aid allocation by various multilateral donors can be summari-ed as followsC many multilateral donors have a bias toward less populous countries in giving more aid to them% at least initially& This represents a rather stri,ing result given that our dependent variable is not even aid per capita% but aid as a share of total aid allocated& $f one loo,ed at aid per capita instead the bias toward less populous countries would be even clearer& Considering that poor people in more populous countries are not any less in need of aid than those in less populous ones% this result is somewhat disturbing& .o multilateral agencies believe that aid is more efficiently spent in less populous countriesW $s it because they believe that an aid program below a certain minimum si-e ma,es no senseW There currently seem to be more speculations than confirmed findings and more 0ualitative research is needed as to why this bias e*ists and why it is apparent at the multilateral level as well& All multilateral donors loo,ed at here with the possible e*ception of BD.P ta,e the economic needs of potential recipient countries into account and tend to allocate more aid to countries with lower per capita incomes& As concerns human development needs as represented by a low P`A$ score% these are ta,en into

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account by the BD agencies% but not by the regional development ban,s% which mostly focus on economic need& The only e*ception is the $nter1American .evelopment Ban,& $t is maybe not surprising that the development ban,s focus on economic development needs rather than human development needs given that often big infrastructure projects and the promotion of economic growth are on the top of their agenda for development assistance& Devertheless% given that all development ban,s proclaim a commitment to poverty reduction and human development as well% their perception of what constitutes recipient need seems to follow a narrow view in being confined to the level of national income& The BD agencies all seem to embrace a more comprehensive view% which again is maybe not surprising given the emphasis on human development in such agencies as% for e*ample% BD.P and BD$C3 % which do not finance big infrastructure projects and whose primary goal is not the promotion of economic growth& As e*pected% higher military e*penditures and arms imports by and large do not induce multilateral aid donors to provide more aid& The only e*ceptions are the Asian .evelopment Ban,% for which arms imports and military e*penditures test with opposite signs% and BD.P% as well as BD$C3 % which strangely seem to provide more aid to countries with greater arms imports& Dote that it is not claimed here that the latter result reflects an intentional allocation decision by the two agencies& $t might just be due to chance& As argued above% it puts the two agencies into a bad light nevertheless given that countries with higher arms imports are li,ely to have low e*penditures on human development& Whilst respect for political freedom 4but not for personal integrity rights6 is a statistically significant factor for aggregate multilateral aid allocation% this is not true for every donor loo,ed at in this study& There is some wea, evidence that the $nter1American .evelopment Ban,% BD$C3 % and BDTA provide more aid to countries with higher respect for political freedom& But for the BD agencies this evidence is not very robust with respect to the si-e of the sample being determined by the inclusion or not of certain control variables& The African .evelopment Ban, is the only donor to ta,e into account respect for personal integrity rights within recipient countries% but the result is not robust to the inclusion of other control variables and the conse0uent decrease in sample si-e& As concerns the perceived level of corruption in a recipient country% it only tests significantly in the case of the $nter1 American .evelopment Ban, and BD$C3 % but the estimated coefficient is negative& $n other words% if anything these two donors tend to give more aid to more corrupt countries] Dote% however% that this result is not robust with respect to substituting the relevant variable with a time1varying one& As concerns former colonial e*perience and geographical pro*imity to either the Bnited 7tates% Western 3urope% or Japan% donors differ from each other& The Asian .evelopment Ban,% BD$C3 % and BDTA share the bias of bilateral as well as aggregate multilateral aid allocation in providing more aid to countries with a longer colonial e*perience& The opposite is true for the African and $nter1American .evelopment Ban, as well as possibly for BD.P& The three BD agencies all give more aid to countries geographically more distant from the Bnited 7tates% Western 3urope% or Japan& 2ne can interpret this to the effect that the BD agencies try to counteract to some e*tent the bias that is apparent in the aid allocation of many other donors&

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This article has analy-ed aid flows% which have not been loo,ed at before& $t has thus added to a more comprehensive understanding of the determinants of total aid allocation& All in all% there are not all that many differences among the multilateral aid donors loo,ed at here and between these and bilateral donors& Beyond economic and possibly human development needs there is very little evidence that regional development ban,s and the three BD agencies ta,e into account respect for political freedom and the e*tent of perceived corruption in recipient countries& /iven that political freedom constitutes a fundamental human right and that corruption represents a fundamental obstacle to the proper use of e*ternal finance one would wish that these two factors played a more prominent role in their aid allocation& Perhaps most disappointing from a normative point of view is the outright insignificance of respect for personal integrity rights as a determinant of multilateral aid allocation& But% again% this is not much different from bilateral aid allocation in spite of much rhetoric to the contrary 4Deumayer% !""Ha% !""Hb6& 2n a more positive note% the multilateral aid donors loo,ed at here do not share the geographical pro*imity bias of bilateral donors and only some of them share the bias toward countries with former colonial e*perience& However% the amount of aid distributed by these agencies is of course much smaller as can be seen from Table #% so that on an aggregate level more aid clearly goes to countries with longer colonial e*perience and closer geographically pro*imity to the centers of the developed world&

)eumayer* +ric -.//9b0* 1Do uman !ights #atter in Bilateral Aid Allocation3 A Ouantitati$e Analysis of .8 Donor %ountries*4 in Social Science Quarterly* 5ol6 A<* )o6 9* ""6 :7/=:::6
3*isting studies that loo, at the role of personal integrity rights in addition to civilGpolitical rights have focused on B&7& aid allocation& 7tudies loo,ing at aid allocation by other donors have not included personal integrity rights& This article has attempted to fill this gap& $ndeed% to the best of my ,nowledge% it is the first study to comprehensively analy-e the role of human rights in the allocation of aid of all the !# member countries of the 23C.)s .evelopment Assistance Committee&

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The results reported above convey a mi*ed picture of the role human rights play in the allocation of aid& 2n the one hand% respect for civilGpolitical rights is a statistically significant determinant of whether a country is deemed eligible for the receipt of aid for most donors& Respect for these rights thus clearly plays a role as a gate,eeper for most donors& Respect for personal integrity rights% on the other hand% is insignificant for most donors& At the level stage% respect for civilGpolitical rights and respect for personal integrity rights e*ert a positive influence on the pattern of aid giving of only few donors& Table H compares our results at the level stage to those of 7vensson 4#9996 and Alesina and .ollar 4!"""6% the only studies addressing the impact of civilGpolitical rights on aid allocation by donors other than the Bnited 7tates& 2ur results with respect to the effect of civilGpolitical rights on aid allocation are consistent with at least one of these studies in the case of rance% /ermany% $taly% Japan% the Bnited ?ingdom% the Bnited 7tates% the Detherlands% and Dorway& or Canada and .enmar,% 7vensson 4#9996 finds a positive effect of civilGpolitical rights& 2ur study suggests that it is personal integrity rights instead that matter for these two donors% and that 7vensson)s result is due to model mis1 specification% given that he does not control for these rights& A similar argument applies to Australia% for which Alesina and .ollar 4!"""6 report a positive effect of civilGpolitical rights% whereas our results suggest again that it is personal integrity rights that matter& 2nly in the case of 7weden does our study fail to find any positive effect of human rights on aid allocation contrary to 7vensson)s 4#9996 result& As concerns the Bnited 7tates% our results confirm Poe and 7irirangsi)s 4#99M6 finding that human rights matter at the aid eligibility stage and not at the level stage% as suggested by Cingranelli and Pas0uarello 4#9;<6& 2ne of the major results of this article is that the li,e1minded countries do not fare better as a group than the other donors in spite of usually being portrayed 4not the least by themselves6 as committed to the pursuit of human rights& This does stand in contrast to 7vensson 4#9996 and Alesina and .ollar 4!"""6& What this article has shown is that the impact of human rights on aid allocation by these countries is much less consistent than the other studies would suggest& The Detherlands and Dorway indeed provide more aid to countries with higher respect for civilGpolitical rights% but also less aid to countries with higher respect for personal integrity rights& Canada and .enmar, provide more aid to countries with higher respect for personal integrity rights% but not civilGpolitical rights& $ndeed% there are only two countries 4Japan and the Bnited ?ingdom6 that give more aid to countries with greater respect for both aspects of human rights% and they belong to the group of big aid donors% not li,e1minded countries& All in all% the results reported in this study are rather sobering from a normative point of view& Respect for human rights does not e*ert a consistent influence on aid allocation by most donors& There is inconsistency across the two stages of aid giving as well as across the different aspects of human rights& There is not a single donor that would consistently screen out countries with low respect for civilGpolitical and personal integrity rights and would give more aid to countries with higher respect for both aspects of human rights& $f donors want to appear less hypocritical about their commitment to the pursuit of human rights% our analysis suggests that they still have a long way to go&

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)eumayer* +ric -.//70* 1Is the Allocation of Food Aid Free from Donor Interest Bias34 in Journal of &evelopment Studies* 5ol6 <8* )o6 9* ""6 9;<<88* !outledge ,aylor ' Francis 2rou"6
$s food aid allocation free from donor interestW Dot 0uite so% as the results of the analysis here have shown& $n particular% almost all donors give preference to countries that are geographically close to the donor or to the B7 or Western 3urope in case of W P and D/2 aid& The geographical pro*imity bias need not be interpreted strictly in terms of donor interest as the attempt to maintain a regional sphere of influence& The plight of geographically closer countries is also more salient in the public perception and those of policy1ma,ers& $n addition% in the case of the B7 and the 3B% the geographical bias could also imply that these donors are willing to assume responsibility for their respective regions& ood aid seems to be used sometimes to reward political allies as measured by similar BD general assembly voting patterns& Perhaps more importantly% however% and contrary to general 2.A% food aid is not used to reward countries in which donors have economic e*port interests& $n non1reported sensitivity analysis it has been chec,ed that this holds true not only for food% but for e*ports of all other goods and services as well& Deither do donors pursue military1strategic interests in food aid allocation& The only e*ception to this is D/2 aid at the level stage% where major recipients of B7 military aid also receive more D/2 food aid& This result could be down to chance of course& 30ually% no bias towards former Western colonies is apparent& This represents 0uite an important result that stands in stri,ing contrast to the allocation of general 2.A& $nterestingly% there is no difference apparent between the B7 on the one hand and the multilateral donors W P and 3B as well as D/2s on the other hand& This also stands in contrast to the allocation of general 2.A% for which the B7 together with rance is often found to promote vigorously its own interest KDeumayer% !""Ha% !""HcL& 2ne or the other aspect of recipient need impacts upon the food aid allocation of almost all donors at both stages and with respect to both emergency and total food aid& Dot surprisingly% given the prominent humanitarian role of the W P and D/2s in relieving food aid needs in disaster situations% it is found that the number of refugees hosted has a statistically significant impact at both levels and for both emergency and total food aid of these donors& 2n the whole% 3B food aid allocation seems to ta,e recipient need most comprehensively into account% whereas the opposite is the case for B7 food aid allocation& 3ven in the case of B7 food aid%

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however% it is only at the level stage of emergency aid that one or the other variable of recipient need does not test significantly& 7ome have suggested that W P food aid is not well allocated with respect to recipient need and have e*plained this with the fact that the W P gives aid to a great many countries& The W P has always followed a policy% as a BD agency% of the widest coverage with its multilateral donations of the ma*imum number of countries eligible to receive food aid% rather than concentrating its food resources in larger projects and programmes KCathie% #995C #"ML& /abbert and Wei,ard K!"""C !#HL similarly argue that the widespread W P delivery of food aid (is less effective% because it means that a large fraction of the aid goes to countries not having the most urgent needs)& However% our estimation results do not bac, this claim and instead support the opposite findings of Barrett and Heisey K!""!L as W P food aid allocation in the #99"s appears 0uite sensitive to recipient need throughout and at both stages& Population si-e has a positive impact upon food aid allocation almost throughout& At the level stage% it is not surprising to find that more populous countries receive more food& /iven that both the dependent and the population si-e variables are in natural logs% one can interpret the estimated coefficients as elasticities& With estimated elasticities of below one in all cases evidence is found that the well1 ,nown population bias of general 2.A K$senman% #95>L towards less populous countries in terms of per capita aid allocated carries over to food aid as well& The positive effect of population si-e at the food aid eligibility stage almost throughout is more pu--ling% however& The bias is probably due to the higher saliency of more populous countries in the public mind and that of policy1ma,ers ali,e& $t also represents some cause for concern% however% as there is no reason to presume that less populous countries are any less in need of food aid than more populous ones& All in all% the fact that food aid appears to be less biased towards donors) interests is to be welcomed from a normative point of view& Aid should be allocated on the basis of recipient need% not of donor interest& The allocation of food aid in the #99"s seems to comply with this re0uirement to a greater e*tent than general 2.A& $n particular% the (hard) economic e*port and military1strategic interests that impact upon much of the allocation of general 2.A has no impact on the allocation of food aid& $n future research% it might be interesting to do a similar analysis for the period before #99" to compare the results from before and after the end of the Cold War more directly& Another direction worth ta,ing would be to simulate what the allocation pattern of food aid would loo, li,e if it was entirely free from donor interest bias and to compare the results either with actual food allocations or the ones predicted by the estimated models in this article& 7uch an analysis would shed even more light on how important the impact of donor bias on food aid allocation actually is&

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)itsch* #anfred -8;A.0* 1!ich %ountry Interests and ,hird &orld De$elo"ment: ,he Federal !e"ublic of 2ermany*4 in %assen* !obert* ?olly* !ichard* SeCell* ?ohn* and &ood* !obert -eds60 Rich *ountry Interests and Third World &evelopment* ""6 .87.<>* London: %room elm6
The profile of /erman interests in Third World development can be grouped in four fieldsC globalistic interests% Western bloc interests% control interests on the national as well as the 3uropean level% and humanitarian interests in human rights and overcoming poverty and marginality& The resulting profile mirrors the ederal Republic)s role as the world)s leading e*porter of capital goods: globalistic economic interests are the most powerful% articulating themselves in the doctrine of free trade and favourable investment climate% which in turn tends to blur the line between global economic relations% regardless of economic and social systems% and economic relations with the Western bloc& The interests in a universal world order comprises all nations can thus not be directly derived from narrow economic interests% but has to be related to peace and development as paramount though rather abstract objectives of policy which lac, the bac,ing of compact pressure groups& When the profile of /erman interests is matched with the re0uirement of (development) and its various facets and dynamic implications% only partial clear1cut mutuality can be detected% though a large field of diffuse common interests waiting for activation can be mapped out& 7elf1reliance in the articulation and the pursuit of interests on the side of the Third World remains essential% since it is obvious that /erman interests cannot be relied upon as strong enough for securing development outside the borders of the ederal Republic of /ermany and its larger political economic unit% the 3uropean Community&

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)oSl* Alain and ,herien* ?eanPhili""e -8;;70* 1From Domestic to International ?ustice: ,he &elfare State and Foreign Aid*4 in International 3r!ani7ation* 5ol6 <;* )o6 9* ""6 7.9=7796
The end of the cold war gave much credence to the liberal criti0ue of international realism and to the call for a better understanding of the domestic sources of international cooperation& The most fundamental international changes of our era% noted riedrich ?ratochwil% resulted from domestic% not systemic% transformations: concentrated on systemic interactions% realist scholars failed to e*plain% let alone predict% these changes&;< As a result% international liberalism appeared reinforced% as a research program that offered many plausible insights to understand contemporary trends&;> EWelfare%F wrote one observer% Enot warfare% will shape the rulesF of international politics&;5 This study is inspired by the liberal perspective on two counts& irst% it deals with the power of values and principles in international politics& 7econd% it e*plores the relevance of institutions and domestic politics for international cooperation& With respect to foreign aid% at least% the liberal perspective appears vindicated& Welfare principles institutionali-ed at the domestic level shape the participation of developed countries in the international aid regime& Previous studies suggested such a relationship& $mbeau% for instance% found a relationship between partisan orientations and aid contributions: Aumsdaine lin,ed social spending and foreign aid: and Pratt and 7to,,e identified similar associations in case studies of the so1 called li,e1minded countries& 2ur findings e*pand on these initial results& Because socialist welfare attributes capture the logic of solidarity that prevails within a society more directly than spending or partisan indicators% they best e*plain foreign aid contributions& 7uch an institutional approach accounts not only for variations in the volume of development assistance% but also for the fact that foreign aid orientations change slowly& 2f course% foreign aid constitutes a peculiar domain of international politics& 7ome would argue it is a minor% unrepresentative instance of international cooperation& $n fact% aid constitutes a fundamental% enduring aspect of north1south relations and a major financial transfer&;; $t is also a critical case for the realist% neo1'ar*ist% and liberal perspectives& 3ach approach has sought to interpret development assistance in a manner consistent with its vision of world politics& Realists see aid as an interested behavior% neo1'ar*ists as rooted in class relations and imperialism% and

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liberals as a form of humanitarianism& 2ur conclusion gives credence to both the liberal and the neo1'ar*ist points of view& Ai,e liberals% we see aid as principled and rooted in domestic values& Ai,e neo1'ar*ists% we see state actions as anchored in institutional arrangements that themselves result from class and partisan conflicts&
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An obvious limitation of comparative% institutional e*planations is their tendency to ta,e a static character& 9" Although welfare institutions are usually stable% they are not immutable& Dew collective and political actions can change the rules of the game& To go beyond comparative statics% institutional e*planations must incorporate social actors and conflicts and account for the emergence and transformation of hitherto stable arrangements& 9# $n periods of change% however% conceptions of justice should also play a major role% as they guide political movements and shape political debates&9! $n the end% one may also 0uestion the very distinction between a domestic and an international order% increasingly challenged by global economic% political% and social e*changes of all types&9H With respect to liberal democracy% however% the distinction remains operative& The domestic level is still the best arena for social movements and political parties to impose and institutionali-e distinctive and meaningful conceptions of justice& 2ne should ,eep in mind that while developed countries dedicate !< percent of their /DP to social programs% they collectively allocate no more than "&H< percent to development assistance& 9M Whether they concern domestic welfare or foreign aid% conceptions of justice stand at the core of political debates and conflicts% and they provide a ,ey mechanism to ma,e various institutions and policies relatively coherent& Between the domestic and the international arenas% however% the commitment to redistribute remains very different&

O@Leary* #ichael Dent -8;:>0* The Politics of American 'orei!n Aid* )eC MorB: Atherton Press6
5#apter 1+ 1ac2ground to Foreign )id 'any signpost point to America)s changing course in world affairs& Among the most stri,ing are Presidential responses to economic hardships abroad& $n the #9!"s% the nations of 3urope were in debt to the Bnited 7tates because of loans made during World War $ and were unable to ma,e repayments largely because of American trade restrictions& As they headed toward economic and ultimately political disaster% the American mood was all too well e*pressed by President Calvin Coolidge% who tartly dismissed suggestions that America render assistance with the observation% EThey hired the money% didn)t theyWF Aess than forty years later% President John &

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?ennedy voiced a new mood in America) response the economic plight of peoples abroad when he not only affirmed America)s concern but also added a moral commitmentC ETo those peoples in the huts and villages of half the globe struggling to brea, the bonds of mass misery% we pledge our best efforts to help them help themselves% for whatever period is re0uired N because it is right&F This sharp about1face in American orientation toward world economic problems has% understandably% been accompanied by doubt and criticisms& Xet the trend of policies has been such that when Henry Ha-litt% a severe critic of foreign aid% facetiously as,s% EWill dollars save the worldWF # there is at least a partial replyC The Bnited 7tates /overnment has in fact become committed to the use of dollars to try to save a world in which Americans can live with freedom and security& Xet official government commitment is not enough& American foreign aid policy% li,e many American policies since World War $$% operates in a parado*ical conte*t& 2fficials have at their disposal physical and intellectual resources of a magnitude unprecedented in the history of international relations& These stores of potential power% however% can often accomplish very little by themselves& American officials must% as never before% rely on the cooperation of others + at home and abroad + for the successful conduct of policy& $n our concern with what vast and fearful conse0uences might ensue from the secret decisions of a small handful of officials% we must not lose sight of how current national and international political forces actually restrict the actions of policy1ma,ers& oreign aid is a primary case in point& A successful policy re0uires both technical ,nowledge to analy-e problems and access to the material resources necessary to solve the problems& 'ore than this% assistance programs must be acceptable to those for whom the aid is intended& They must also be actively supported by the American public and Congress& The failures to satisfy this latter re0uirement% no less than the others% can mean the failure of the entire program& $n the past% governments needed to mobili-e widespread public support on foreign policy matters only in times of war& Today% however% if the Elong twilight struggleF for economic development is to succeed% it must be constantly supported at every level of American society& The best intentions of policy1ma,ers% the shrewdest analyses of e*perts% the immense national wealth will be useless if citi-ens turn against officials who strive to provide assistance abroad% if e*perts are unwilling to apply their s,ills overseas% or if Congress will not support the policies& Any study of foreign aid must come to grips with the difficult problem of definitions& The American government)s economic policies range from permitting normal commercial trade% to encouraging trade through various subsidies% to loans with varying terms of repayment% to direct grants& 3*perts disagree as to where trade leaves off and aid begins& urthermore% the composition of aid involves everything from surplus food to the s,ills of technicians% to military% industrial and consumer goods% to direct dollar payments& 'uch of the public malaise about foreign aid can be attributed to this ambiguity& Bnhappily% a search for the historic origins of foreign aid does not clarify matters& $n one sense% America has been in the business of foreign aid for its entire history& When Thomas Paine said% EThe cause of America is the cause of all man,ind%F he

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e*pressed a faith that has shaped American thought and action to this day& The American e*periment in politics and economics has been judged to be not only for internal use: in the words of Charles Burton 'arshall% Americans considered their Enew nation N an e*emplar for all man,ind + a nation with a world mission% the guide to a new Jerusalem&F ! 7uch enthusiasms have transformed trade relations% diplomatic recognition and e*change% and all other political intercourse into opportunities for e*tending the American way of life as Eforeign aidF to willing or unwilling nations& KNL

5#apter 2+ Foreign )id and )merican Political 5ulture We can best begin to appreciate American thin,ing about foreign aid by considering the general culture and ideological environment in which public judgments and evaluations are made& oreign policy is physically and psychologically remote from most people& 3vents are so comple* and obscure that detailed understanding is beyond the capabilities of all but the e*pert& As a substitute for sufficient ,nowledge most people% occasionally even e*perts% will interpret events in terms analogous to their own e*periences% their own traditions% and their own previously established judgments of right and wrong in matters of public policy& We laugh at the sign% E'y mind is made up% don)t confuse me with facts&F Xet this is a slogan we all follow to some degree in ma,ing comprehensible an otherwise intolerably comple* and uncertain world&# We fashion judgments% especially about new policies% on the basis of what we already ,now and believe&! 2ur concern with the cultural underpinnings of opinion leads us to e*pect opinions and attitudes to be formed not so much through deliberate thought and analysis as through reactions to EimagesF or generali-ations about foreign aid& We will investigate% in other words% the affective rather than the effective bases for judgments about foreign aid&H Americans rely on three principal sets of criteria in evaluating foreign aidC whether foreign aid policies are consistent with traditional American responses to the international environment: the role of foreign aid in current diplomatic strategy: and the place of foreign aid in the area of government economic policy& Internationalism $t has been argued that the sentiment of the American people has historically followed well1defined alternating EmoodsF in the degree to which internationalist activity is favored&M The present is clearly a period of e*troversion characteri-ed by an initial presumption in favor of international activity& The fre0uently described postwar ErevolutionF in American foreign policy consists in part of public endorsement of increased economic% political% and military activity overseas& $n opinion surveys% the public has repeatedly placed 0uestions of war and peace and other international matters at or near the top of the list of the major problems facing this country&< 7ince the last years of World War $$% appro*imately three1 fourths of those polled have ac,nowledged the need for America to ta,e an active role in world affairs&>

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Approval has also been high for policies of economic assistance abroad& The 'arshall Plan enjoyed high levels of support% 5 and even aid for economic development% the more controversial aspect of aid policy% has received more than >" per cent approval as a general proposition&; $n the press and elsewhere% most public comment presumes the need for some sort of aid% although% as we shall see% there is little consensus as to the details of an optimum foreign aid program& The e*act reasons for this internationalist outloo, are not easy to determine% but perhaps a chief factor is the venerable ideal of an American EmissionF throughout the rest of the world& This attitude was born in the American Revolution and nurtured in the geographical and economic e*pansion of the nineteenth century& $t reached an aggressive adolescence at the turn of the century and% having attained a somewhat subdued maturity since #9""% it still operates to give strength to the feeling that America can effect an uplifting of the 0uality of life in foreign nations& 7uch an attitude does not necessarily imply support for any one type of foreign policy& $n some cases the notion of American uni0ueness may even lead to a ,ind of national parochialism calling for e*clusion from contracts with the benighted foreigners& But for the most part it helps create support for an activist% even aggressive% style of foreign policy& The concept of mission has included a strong dose of humanitarianism% a component which lends support to certain forms of aid& The strength of this idealism and humanitarianism can be surprising& 2n two occasions in #9MH over ;" per cent of survey respondents indicated a willingness to remain on the despised rationing system for another five years% E&&& to help feed the starving people in other countries&F9 $n #9<9% 5H per cent of poll respondents approved an idea to create a E/reat White leetF of unused Davy vessels fitted out Eas hospital ships% food supply ships% training schools and the li,eF for the benefit of poorer nations& #" $n 'arch #9>>% ># per cent of a survey named building hospitals% training nurses and doctors% and providing medicine as the ,inds of foreign aid which they favored most& ## Coupled with humanitarianism as a motivating force in the American missionary ideal is the belief that the EAmerican way of lifeF + however variously that may be defined + can be e*ported to the advantage of the other nations& This feeling% based on America)s self1image as Ea uni0ue combination of economic power% intellectual and practical genius% and moral vigor%F #! has contributed important% if selective% support for aid regimes& $t has helped lead to the high popularity of those aspects of foreign aid which involve Americans in face1to1face relations with foreigners for purposes of teaching% training% and instructing& 7uch a feeling helps e*plain the results of the #9>> poll cited earlier% in which between ># and >< per cent of the survey favored aid programs in the fields of education and agriculture assistance& #H This feeling has meant continuing public support for the Point our technical assistance component of foreign aid which was more popular% in the view of at least one government official% than even the 'arshall Plan& #M 'ore recently% the American dedication to spreading Americanism has led to enthusiastic support for the Peace Corps&#< Popular approval is due in large measure to the Peace Corps) image as a means of sending abroad a host of selfless Americans to wor, with bac,ward peoples and thereby% in the phrase of 7argent 7hriver% the Peace Corps) first director% to Eenergi-eF activity in the host country& #> The Peace Corps also profits from the attraction of citi-en diplomacy% which has

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always been at least a minor theme of the patriotic missionary ideal& $ndeed% the two1year limit on the tour of the Peace Corps volunteers 4with a slightly longer limit for the staff6 is an echo from the diplomatic style of a much earlier day% when the tenets of Jac,sonian democracy called for tenure of about two years in all diplomatic posts&#5 As we loo, closely at the characteristics of the American missionary spirit we can see that it contains seeds of its own negation& $f most Americans% as /eoffery /orer has argued% consider that ta,ing part in an international underta,ing means simply Ee*tending American activities outside the boundaries of the Bnited 7tates%F #; it follows that foreigners are often e*pected to reciprocate with appropriately compliant behavior& 'ost Americans can scarcely be said to apply close analysis to the detailed conse0uences of aid policy& But there is evidence that many Americans nevertheless share a general e*pectation that foreign aid will help EsellF or transmit Americanism abroad& $n #9M9 the Dational 2pinion Research Center as,ed a sample of the population whether they thought foreign aid helped the Bnited 7tates& Those who considered aid helpful 4<< per cent of the sample6 were then as,ed to give the reasons for their opinions& 2f this group% just under half gave answers classifiable as Ehelps us politically%F which seemed to mean either that aid would ma,e others li,e the Bnited 7tates more% or that it would ma,e them more li,e the Bnited 7tatesC Ebuilds good will% promotes friendly feelings toward usF: Ethey)ll be on our side in case of warF: Eit)s good propaganda for democracy% capitalism&F #9 Hans 'orgenthau has noted the similarity between Wilsonianism and present1day thin,ing about foreign aidC Wilson wanted to bring the peace and order of America to the rest of the world by e*porting America)s democratic institutions& His contemporary heirs want to bring the wealth and prosperity of America to the rest of the world through the e*port of American capital and technology&!" We might amend this to say that many of his contemporary heirs want to outdo Wilson by e*porting political and economical institutions through foreign aid& !# $t should be easy to see how undependable is the support for foreign aid which flows from the missionary spirit& 2nly frustration and disappointment can result from e*pectations that aid recipients will mesh their foreign policy with America)s% will come to resemble America in their political % economic% and social systems% or even will feel more favorably disposed to America as their benefactors& $ndications of public sensitivity to inade0uate foreign responses are not difficult to find& As far bac, as the late #9M"s% when public support for the 'arshall Plan was running between <> per cent and 5H per cent of those interviewed% the D2RC uncovered a strong undercurrent of something less than enthusiasm over 3urope)s own part in the recovery program& 2n two occasions 4.ecember #9M5 and April #9M96 respondents were as,ed whether they thought 3uropeans were wor,ing as hard as they could% or whether they were depending too much on the Bnited 7tates for help& $t was felt by >M per cent and <; per cent of those answering% respectively% that the 3uropeans were overdependent on the Bnited 7tates& !! 3ven earlier soundings of opinion had discovered the same sort of feeling& $n 2ctober #9M<%

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respondents were as,ed a two1part 0uestionC 7hould loans for recovery be made to our three wartime allies + 3ngland% Russia% and ChinaW $f loans were made% would the countries repay themW The replies demonstrated two things about public feelingC the chances for repayment were thought to be rather slim: and sentiment in favor of such a loan to each country varied with the e*pectations that the country would repay% with China receiving the most favored public judgment 4see Table $$1$6& The negative side of America)s response to international aid was illustrated in #9M9 by a poll in which those who opposed aid to underdeveloped countries were as,ed to give their reasons& 2ver <" per cent indicated a fear that the psychological rewards of aid would be insufficient + that the recipients would not be grateful% or that aid was in itself inconsistent with American traditions of self1help and minding one)s own business&!; A more recent e*ample shows how this belief in a uni0ue American mission wor,s both for and against foreign aid& $n #9># there was a brief period of public discussion concerning the desirability of assisting the /hanian government to build a hydroelectric dam on the Iolta River& 'ost of this discussion% both favorable and unfavorable% was concerned scarcely at all with the economic or technical feasibility of the project& $nstead% concern was e*pressed at the time in /hana% and about the e*tent to which President D,rumah was favorably disposed to the Communist Bloc& Those who favored the project argued that American aid would ma,e /hana)s politics more free and stable& 'any were opposed because they wondered% with the P#iladelp#ia In9uirer% if nations anywhere would see an advantage Ein practicing the principles of democracy and freedom% and supporting the fight against communism%F since we would be giving money to a government which did neither of these things&!M There is a final point about the twofold impact which the American missionary attitude has upon the support of foreign aid& Degative feelings represent much more simply a diminution of the base for positive reactions& As an aid program departs from those characteristics which ma,e it appear to be essentially American life transplanted abroad% the idealism becomes dampened and the missionary feeling may turn inward% rejecting foreign aid& The wor,ings of this anti1aid syndrome can be easily summari-edC Americans tend to assume that other nations want the essence of our political and economic institutions% and that they have the means to obtain them& When this anticipated Euniversal aspiration toward AmericanismF!< is not manifested in the nations that we help% American fears of being rejected and e*ploited can lead to an abandonment of international cooperation& 3very deviation from American policy goals% every unfriendly gesture by Aatin Americans% Africans% or Asians% becomes new justification for cutting down or eliminating aid&!> As /orer has summed up this attitude% EPeople so perverse as to choose to remain foreign deserve no help&F !5 Foreign )id and Diplomac A second major aspect of opinion revolves around consideration of foreign aid)s role in American diplomatic strategy% especially in cold1war competition with China and the 7oviet Bnion&

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oreign aid gains support insofar as it is seen as a potent anti1Communist weapon% improving the living standards of others to ma,e them less susceptible to communism% and as an inducement or reward for nations allying themselves with the Bnited 7tates against immediate or potential Communist aggression& 7upport for the 'arshall Plan can be traced in large measure to the widespread feeling not only that American aid to 3urope would help prevent the spread of Communism by e*ternal aggression in 3urope but also that in the absence of aid some of the domestic politics of countries would probably become dominated by Communists& !; The image of aid as a direct anti1Communist tool has also led to support for military assistance& A series of polls since June #9<" has shown that >" per cent or more of the population has supported the general notion of military assistance to 3uropean and Asian allies&!9 As we shall see later% however% Americans have their doubts about military aid% too& The view of aid as a diplomatic tool li,ewise fails to evo,e unmi*ed support& The widespread simplifications involved in opinion1formation are nowhere more apparent than in the case of diplomatic strategy& $f aid is to be supported as a tool against international communism% it therefore must not be used ambiguously& Thus% assistance to Communist countries% or even neutrals% is highly inconsistent with the general attitudes favoring aid& This uncertainty or even antipathy toward aid to non1allies was clearly show in a series of #9<> polls which as,ed whether we should continue to aid Esome countries li,e $ndia% which have not joined us as allies against the Communists&F The e*pressed sentiment was as much as MH1<" per cent against continuing such aid& H" The American approach to foreign policy commonly distrusts any sharp and basic disagreement with America)s conception of world affairs% and includes an active sensitivity to being rejected or e*ploited by others& This is part of the reason for the e*treme bitterness of newspaper and other public reaction to $ndia)s military sei-ure of the Portuguese territory of /oa in #9>#& This action was interpreted as an anti1Western and anti1American move just a short time after Prime 'inister Dehru% who had received much aid from the Bnited 7tates% had visited this country and had received considerable editorial sympathy& Another reason for the difficulty of reconciling the concept of aid as a means of advancing the national interest with the policy of aid to nations which do not share American purposes is the unwillingness of the American public to accept the uncertainty of diplomacy + the persistence of this problems and the tentativeness of its opportunities& $n arguing as to who should receive aid% public judgments tend toward polar e*tremesC if a 7u,arno or an D,rumah initiate anti1American actions they are impossible to deal with and wholly undeserving of aid& $f they ma,e the slightest friendly gesture or% better yet% if they are overthrown% then things loo, much rosier in that region of the world% and the foreign aid gamble is held to be justified&H# The basic problem remains much the same now as when de Toc0ueville% in his study of America% noted that democracy appeared Ebetter adapted for the conduct of society in time of peace% or for a sudden effort of remar,able vigor% than for the prolonged endurance of the great KinternationalL storms that beset the political e*istence of nations&FH!

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or whatever reasons% the American has typically reacted in e*tremes to foreign policy challenges& He tends to wish to solve international problems by either unentangling precept or short1term massive intervention& This approach is applied to foreign aid as well as other foreign policies& $n #9M9% when sentiment was 5" per cent or more in favor of aid to underdeveloped countries% a sample of those who approved was as,ed if the Bnited 7tates should Eput up some of the money for this purposeF or Ejust help in other ways&F The division was even 4M>1M> per cent6 between those who were willing to e*pend money for this purpose and those who selected the unspecified Eother ways%F which probably seemed less costly and less entangling&HH When the choice has been between economic and military aid the pattern has been similar% though more comple*& Between June #9M; and .ecember #9<!% the D2RC conducted seventeen polls which included 0uestions regarding economic aid& avorable opinion averaged >! per cent& HM .uring appro*imately the same period 4April #9M; through #9<"6 a series of 0uestions was as,ed regarding military aid& 7upport was about ten points lower% averaging <H per cent& H< 7imilarly% on seven occasions in the #9<"s% respondents were as,ed direct 0uestions as to which they would prefer sending% military or economic aid& $n every case economic aid was preferred over military% by margins averaging H> per cent& H> 2n the other hand% after the outbrea, of the ?orean War support for military aid was much higher& rom July #9<" to Dovember #9<> support for military assistance averaged 5" per cent in a series of twelve 0uestions&H5 $n early #9>> a survey showed that the more entangling forms of aid + military assistance% road buildings% and assistance for capital projects such as factories + were the least popular forms of aid& These forms were chosen by an average of !M per cent% as opposed to the most popular item% educational assistance% which was chosen by >M per cent& H; We are a tas,1oriented society% and will favor even ha-ardous and e*pensive actions if they are measurably achieving some goal& But in the absence of clear1cut goals and achievements% we are li,ely to limit our ris,s as much as possible& As I& 2& ?ey concluded% we show a strange mi*ture of verbal toughness and Eof the trustfulness of a delighted puppy when treated in a friendly manner&FH9 The increase in support for military assistance after the outbrea, of the ?orean War was not simply a shift from pacifism to blind militarism% but rather a change in the interpretation of the international situation& Previously% secondary means were thought sufficient to meet the demands of the international situation: later% both the wealth and the armed force of the Bnited 7tates were seen as necessary to eliminate a state of affairs intolerable because of its threat and ambiguity& $t must be remembered that this proposed military assistance which received increased support was not for Asia% where fighting was ta,ing place% but for 3urope% where the need for the military was only potential& The tendency to react in e*tremes can also be seen in the continuing public debate concerning international aid to Communist countries such as Poland and Xugoslavia& 2pponents of such aid base their case on the assertion that Poland and Xugoslavia still remain anti1American and pro1Russian in so many respects as to ma,e them un0ualified to receive our aid& Those favoring aid do so on the grounds that in the

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absence of our aid all is lost and that Xugoslav and Polish leaders will be forced to Ego all the bac, to 'oscow&FM" We can% in other words% spea, of a widespread failure to appreciate that both the gains and the losses of diplomacy often are limited and temporary& Americans overestimate both the impact that aid can have on a given international situation and also the degree of change that can be e*pected during any short period& This trait has been well summari-ed by the economist Robert Asher% who has spo,en of the American tendencyC to oversimplify our problems N% to shortcut our way to a solution& 2ne year it)s the Bretton Woods agreement that will solve our postwar economic problems: another it)s the 'arshall Plan: then it)s technical assistance: today KJuly #9<HL it)s Etrade not aid&F We tend to overloo, these slogans and% in doing so% to blind ourselves to the comple*ity and the long1range character of our foreign1 economic problems&M# Foreign )id as an &conomic 0uestion oreign aid% being to a large e*tent an economic policy% is also judged in terms of economic assumptions and doctrines& As already noted% some of the support which aid has received comes from the belief in the efficacy of a ,ind of international Efull bellyF policy as a barrier to the growth of communism within nations& The polls indicate that Americans associate high living standards in both 3urope and Asia with low levels of communism&M! 3conomic development has been favored not only as an anti1Communist device% but also as one way in which America could e*port the economic aspects of Americanism + a healthy% affluent% and% most especially% free enterprise economic system& The passage of time has shown how radically this goal differs from what is% in fact% achievable& Anticipation of widespread imitation of American economic practices no longer serves to bac, up support for foreign aid& MH Polls in the #9M"s show support for aid on the basis of more narrowly conceived economic considerations& $n the last year of World War $$% 5; per cent of respondents agreed with the proposition that Ewe)ll have the best chance of prosperity in this country by helping other countries in the world get bac, on their feet NF) and <5 per cent agreed that Eif our government ,eeps on sending lend1 lease materials% which we may not get paid for% to friendly countries for about three years after the war N this will mean more jobs N for most Americans NF MM $n response to open1end 0uestions on reasons for li,ing the 'arshall Plan after it was under way% MM per cent of respondents who favored the Plan volunteered their e*pectation that it would help the Bnited 7tates economically& M< Although% as we shall see in subse0uent chapters% arguments are still made in behalf of foreign aid on the basis of its favorable impact on the American economy% such arguments are now sharply challenged& $t may very well be that one of the most potent arguments against foreign aid is now the economic one% in particular that aid is too e*pensive&M> $t must be pointed out that opposition to aid on the basis of cost% while important% is a secondary phenomenon& The American citi-en will support the spending of his ta*

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dollars for many different reasons + altruism% national emergency% or narrow and immediate self1interest& $n the philosophical limbo in which foreign aid finds itself% no consistent clear1cut rationale has been advanced to convince any large numbers of people of the wisdom of spending several billions of dollars a year for aid& The relative saliency of anti1foreign1aid opinions within the conte*t of cost was demonstrated in a #9<9 /allup Poll which as,ed whether it was preferable to cut bac, on government spending or to increase ta*es& To this vague proposition an unsurprising 5! per cent chose to cut bac, on spending& This group was then as,ed what things they would li,e to see cut bac,& 2f a long list of activities considered e*pendable% foreign aid was mentioned most fre0uently + in H" per cent of the cases% twice as much as the second1place item& M5 A #9M9 D2RC poll found that the single most fre0uently objection to foreign aid was the cist + especially the problems of Espending money overseasF when things needed to be done at home& M; A #9>< survey found that three times as many people feel we are giving too much aid as we feel we are not giving enough& M9 The anti1spending component of negative attitudes about foreign aid has continued to be rather consistent over time% and is apparently independent of the changing currents of political debate& $n #9<9% for e*ample% the 0uestion of whether to raise or lower the defense budget was being hotly debated in Washington& The /allup Poll% in order to find out what the public was thin,ing about this issue% as,ed respondents to note the budget items for which they thought the government should spend more or less money& $n the list of things for which the government should decrease spending% defense was in third place% named by 9 per cent of respondents: leading this list was foreign aid% named by #5 per cent& <" 2n the other hand% when respondents are as,ed open1ended 0uestions about governmental problems not in the conte*t of spending% foreign aid does not invo,e the same high degree of negative response& $n .ecember #9<9 the /allup Poll as,ed respondents what topics they would li,e to discuss in letters to their congressmen& Cutting ta*es 4named by #M per cent6 and labor legislation 4named by #" per cent6 headed the list + after the #; per cent who ,new of nothing to write& 2pposition to foreign aid was far down the list% mentioned by only ! per cent& <# Interrelations#ips of ,pinion We can now in0uire about the impact on public opinion of the many contrasting images of foreign aid which might activate conflicting attitudes of the man in the streetC e*porting the American way of life vs& dangerous and uncertain international involvement: worthy assistance to people in need vs& undesirable governmental spending: building bulwar,s against communism vs& helping nations which seem all too friendly to communism& 7ome notion of current judgments of aid may be gained from a /allup Poll of early #9>>C E$n general% how do you feel about foreign aid% are you for it or against itWF A bare majority% <H per cent% were in favor of foreign aid% H< per cent were against it% and #! per cent had no or uncertain opinions& <! 3arlier polls show about the same distribution of opinion% indicating the persistence of general opinion patterns& <H This consistency of the general response% coupled with the wide swings in responses to variously worded 0uestions% ta,es us bac, to the primary pint of this chapter&

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oreign aid means many things% some favored and some feared& To appreciate public judgments more fully% we need to as, not only what factors influence opinion about aid% but also what their relative strengths are& To begin with% aid benefits simply from being an internationalist policy& 7ome additional characteristics of aid which increase its public approval areC programs which seem to e*port elements of American society and values 4ideological aid6: programs which contain elements of humanitarianism: programs which support international allies: programs which are low in cost& Conversely% other 0ualities of aid programs increase the li,elihood of oppositionC programs which aid nations that do not share the Bnited 7tates) view of the cold war: programs which involve relatively deep entanglement in international problems: and programs which are costly& Predictably% positive characteristics appearing together in an aid program intensify support% while combinations of negative characteristics intensify opposition& The 'arshall Plan was directed toward a group of familiar countries which increasingly came to be thought of as allies vis1c1vis the Communist world: 'arshall aid also had a more or less definite price tag and fairly well1defined goals and time limit& Aid to underdeveloped nations% on the other hand% is directed toward a host of unfamiliar peoples and societies whose international loyalties are uncertain at best% and is of open1ended cost% uncertain ends% and indefinite duration& 7pecific poll 0uestions bear this out& $n #9<< and #9<> the D2RC as,ed a series of 0uestions concerning economic aid& These 0uestions sought opinion on the economic% and therefore relatively unentangling% form of aid and also aid to Ecountries that have agreed to stand with us against Communist aggression%F thereby stressing two of the positive factors mentioned above& The average rate of approval for this type of aid was ;H per cent& At the same time the respondents were as,ed about giving economic aid to Ecountries li,e $ndia% which have not joined us as allies against Communists&F The average approval of this proposition + a desirable type of aid to non1allies + was only M9 per cent& <M 7imilar evidence of the interaction of positive and negative forces can be found in public comment on policies of giving food to people in Communist countries& 2pinion seems to be divided about evenly& 7ome% even among those who generally oppose aid to Communist countries% say we should not use starvation as a weapon& 2thers reply that sending food to starving peoples in Communist countries is doing them no favor if it helps strengthen their oppressive governments& << $t appears that elements affecting evaluations of foreign aid may be tightly compartmentali-ed in the public mind& $t will be recalled that in one previously cited poll only HH per cent of respondents approved of a loan to 3ngland when they were as,ed about it within the conte*t of cost% through a preliminary in0uiry into whether or not the loan would be repaid& $n the same poll ;! per cent agreed that Ethe Bnited 7tates should continue to give relief to people in 3uropean countries that were occupied by the enemy + such as rance and /reece&F <> $t is possible% of course% that the sharp difference in answers to these two 0uestions is a result of strong anti1British and pro1 rench and /ree, feeling by the sample interviewed& But it seems more reasonable to account for these differences by the wording of the

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0uestions% one stressing the strong negative factors of cost and possible non1 repayment: the other stressing a positive factor1humanitarian assistance& This compartmentali-ed thought also occurs in relation to other aspects of opinion about foreign aid& $n an investigation of the relationship between opinions on cutting ta*es and on supporting foreign aid% I& 2& ?ey found that only one1fifth of those he studied Emaintained a consistent position on both issues& N $t may be that only about one1fifth of the population can be relied upon to give a consistently sensible and firm support to interrelated policies of the ,inds described&F <5 /eig#ing Positi!e and %egati!e Factors What are the relative weights of these positive and negative factors% or their ability to influence opinion in one direction or anotherW 7ome of the polling on foreign aid is helpful in this process& 'any poll 0uestions are worded in such a way as to elicit opinion about different ,inds of aid& By comparing responses to poll 0uestions on different aspects of the aid program we can ma,e inferences about the relative popularity or unpopularity of various ,inds of aid& We can ma,e such comparisons most effectively when two conditions prevailC 4#6 A given 0uestion pertains to two factors on which opinion seems to be based: 4!6 A set of two or more such 0uestions has one factor in common& We compare% for e*ample% the responses to a 0uestion regarding humanitarian aid to neutrals in order to determine the ran,ing of the missionary and humanitarian factors& 47ee the Appendi* for a discussion of this complete process&6 Through this method we have obtained the ran,ings of four of the positive factors and three of the negative& $n order of the ability to provo,e favorable response% the positive factors areC ideological aid% humanitarianism and low involvement 4of e0ual weight6% and aiding allies& The negative factors% in order of their importance in influencing a negative response% areC aid to neutrals or non1allies% high cost% and deep involvement& The importance ascribed to ideological missionary feelings is to some e*tent borne out empirically since this style of aid tends to ran, not only as the strongest positive factor but also as more influential than any of the three negative factors listed& Also% the factors which can logically be paired + aid to allies and aid to non1allies% low involvement and great involvement + do not have e0ual weight& The positive influence e*erted by aid to allies is less strong than the negative influence of aid to non1allies& And low involvement is stronger than its negative e0uivalent& Thus% an aid program which gave assistance to allies and non1allies would tend to lac, public support& ?ey)s research has given indirect support to this point& 2pinions opposing aid to neutrals 4non1allies6 are held with an intensity more than two and one1half times greater than opinions favoring such aid& <; 7imilarly% if one segment of the population saw an aid program as re0uiring deep involvement while an e0ual segment saw it as re0uiring little involvement% the program would benefit in terms of popular support& The reasons for these uneven ran,ings are not always clear& $n the case of aid to allies vs& non1allies% asymmetry may result from the general association of allies

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with the negative concepts of deep involvement and possible high cost& $n the same way the negative strength of deep involvement may be wea,ened by its tendency to be associated with either missionary or humanitarian activities& The analysis also shows% however% that these factors cannot be given even ordinal ra,ings which hold in every case& A Ehumanitarian% aid to alliesF 0uestion and a Ehumanitarian% high costF 0uestion% for e*ample% have the same level of public approval& This presents a parado* in formal logic but not necessarily in social psychology& $t seems reasonable for a strongly held factor such as humanitarianism either to cancel out negative factors with which it is associated or to ma,e accompanying positive factors irrelevant&

5#apter C+ -#e Political Distribution of ,pinion KNL We can end this chapter by restating the point made at the beginning& The values affecting opinion on foreign aid are interrelated in a wide variety of ways: opinions themselves are widely diffused throughout American society& Partisan electoral activities and pressure groups + the standard political lin,s between the governed and the government + fail% in the case of foreign aid% to have great influence on policy1ma,ing& oreign aid involves the American population directly and indirectly + in selling to the government% in wor,ing for it% in concern with government spending% and in other controversial ways& 'any groups pay some attention to foreign aid& Xet both the ma,ing of policy and the relevant discussion and debate on policy still come almost e*clusively from the formal decision1ma,ers in Congress and the e*ecutive& Congress% as the ratifier of values and principal policy1ma,er% will be our ne*t concern&

5#apter H+ 5ongress and Foreign )id KNL We conclude by noting that Congress may be part of America% but is not all of it& $t may be that part of America which feels the need to e*tend its power abroad but is not sure how to do it: it may be that part which recogni-es the need for government activity% even while fearing the government)s increase in power and spending: it may be that part divided by images of what the world is li,e and preferences as to what the world should be li,e: and it may be that part united to some e*tent by party affiliations and regional attitudes& But if it is the America which has met payrolls and carried precincts% it is not the America which has observed the economic and political problems of underdevelopment% formulated plans to counter these problems% and attempted to win approval for the plans& $t is to this latter tas,% the role of the e*ecutive branch in see,ing support for foreign aid% that we shall now turn&

5#apter F+ -#e &'ecuti!e )s ,rgani6er of )ttitudes KNL The principal difficulties elaborated in this chapter + an uncertain rationale for foreign aid and the organi-ational problems of disseminating effective publicity +

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further illustrate the political wea,ness of foreign aid& 2n the one hand these difficulties indicate the importance of Presidential and other top1level support for the program: on the other hand% they suggest some of the deficiencies in the resources available to win support for foreign aid& Presidential activity in behalf of foreign aid can best be discussed in terms of the political conte*t created by public and congressional reaction to foreign aid& The final chapter will summari-e the earlier descriptions of this political conte*t% and will discuss Presidential attempts to wor, within this conte*t to ma*imi-e acceptance of foreign aid&

5#apter 3+ Foreign )id in t#e Political " stem The responses of the public and Congress constitute the political environment within which Presidents must wor, to secure continuation of an acceptable foreign aid policy& Although this environment is fre0uently characteri-ed by its hostility to foreign aid% its over1all influence is both comple* and diverse& oreign aid is evaluated by the public according to a series of contrasting and contradictory standards& Aid is favorably received insofar as it appears to project American values or practices abroad% furthers humanitarian aims avoids deep involvement in the affairs of other nations% and assists cold1war allies& The public and Congress view aid with disfavor to the degree that it offers assistance to nations not allied with the Bnited 7tates% appears to be e*pensive% and results in deep involvement in overseas problems& 2n the whole% survey results have shown slight majorities favoring aid as a general notion& urthermore% above average support for aid is found among professionals% white1collar wor,ers% the better educated and the higher salaried + those groups in society which are generally the most active and articulate in promoting their political views& This apparently favorable distribution of opinion is supplemented by the fact that pressure groups supporting foreign aid far outnumber those opposed& And for the past ten years% most spo,esmen of the two major political parties have endorsed continued American aid activities& There are% previously noted% definite anti1aid pressures among the public as well% but a reading of opinion data would seem to point to no worse than a balance between pro1 and anti1aid sentiment& $n light of this% it is perple*ing% but nevertheless true% that participants in foreign1aid policy1ma,ing + both congressmen and e*ecutive branch officials + normally perceive public opinion as wor,ing against foreign aid rather than for it& 'any congressmen who support aid policies fran,ly do so in opposition to the rough indices of their constituents) opinions: congressional opponents% on the other hand% freely cite the EdemandsF of voters for their antagonistic positions& rom the days of the 'arshall Plan to the present% Presidents and their advisers have felt it necessary to engage in campaigns% appeals% studies% and reorgani-ations in the unfulfilled hope of increasing public support for assistance programs& Part of the reason for this parado* may be found in the attitudes from which opinion is formed& While the aggregate of these attitudes may lead to approval of aid in principle% there is actually no such thing as foreign aid Ein general&F There are instead many alternative means for pursuing specific goals in many disparate environments throughout the world& 7pecific aid activities may fall far short of

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activating positive reactions& 'uch aid policy% in fact% conjures up the very images which create hostile feelings among American& Aid to Communist countries% to unfriendly neutralists% and to nations with government1controlled economies all clearly fail to measure up to widely held standards of approval& 3ven military assistance to allies can provo,e latent fears of undesirable long1term commitments& The Peace Corps% which benefits from its low1cost% missionary aura% seems a clear e*ception which proves the general rule& KNL 7uch limiting of the purpose of foreign aid may seem to be denigrating the concept& And it may prove harmful to public support for the program& As the Peace Corps shows% the only really politically successful programs are those for which the public can generate some enthusiastic emotion& But such limiting may also be a step in closing the gap between what is e*pected of foreign aid and the means to fulfill these e*pectations& The historical record shows that with s,ill% enough resources + and luc, + foreign aid can occasionally help promote increased per capita income% progressive social change% or other aspects of development& 'uch of the dissatisfaction with the program stems from its inability to achieve other purposes& 2ne might well as, whether we have not programmed failure into foreign aid by demanding that it do things for which it has neither the 0uantitative nor 0ualitative resources& Cataloguing these answered 0uestions and unresolved issues is an unsatisfactory% but realistic% way to conclude this study& $f this overview of the American response to foreign aid has shown anything% it is that for all the billions of dollars spent% for all the countless words uttered% for all the actual achievements attained% the American view of foreign aid remains at an astonishingly primitive level& There is a truly remar,able gap between the potential of foreign aid% the practice of foreign aid% and the rhetoric with which aid is discussed& rom one perspective the Bnited 7tates has% in a tangle of necessity and design% embar,ed upon the uni0ue international e*periment of genuine international problem1solving to eliminate the physical deprivation which has been the lot of the majority of man,ind since the dawn of history& rom another perspective this country has merely reacted to a series of short1run problems with the minimum of insight or planning& The 'arshall Plan% now viewed as a ,ind of Egolden ageF of foreign aid% wedded remembrances of post1 World War $ instability with current fears of Communist e*pansion: it was largely a finesse which succeeded& President Truman)s much1lauded Point our Program was essentially a last1minute public relations gesture designed to enliven an otherwise uninspired inaugural address& H" $ts implications were apparently given very little consideration before being announced to the world + and to the .epartment of 7tate% where it was received with surprise% hostility% or both 4the reports vary6& H# 2ne loo,s in vain at present for signs that the challenge and response within the political system are producing a clearer vision of where we are going or% indeed% where we now stand with regard to foreign aid& 3ven President Johnson)s widely advertised power to perform legislative miracles has had little impact in resolving doubts about the program& He scored some statistical successes in minimi-ing budgetary reductions as the bill went through Congress& But much of his achievement was caused by the unprecedented% and temporary% large liberal majority in the ;9 th Congress% elected in the course of the monumental Republican defeat in #9>M& 3ven his ;9th Congress% in its second session% revived the habit of cutting aid funds sharply% adding numerous administrative restrictions% and seriously 0uestioning the basic premises of which the aid program was organi-ed& That the impetus for these

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attac,s came from the normally friendly 7enate% rather than from the House% merely indicates the depth of doubt and hostility which the program attracts& Clarification of these doubts is certainly not the responsibility of any one leader% any one part of the government% any one political party% or any one faction of the American people& The material and philosophical demands upon society are too great% and the opportunities for accomplishment too broad% to permit a narrowly1 based view of foreign aid& Reconciling foreign aid activities% if they can% in fact% be reconciled% with traditional notions of national interest and evolving judgments of national purpose re0uires fundamental decisions which can be reached in the only way democracies ,now how + by the continuing challenge and debate of all those who care&

Palmer* 2lenn* &ohlander* Scott B6 and #organ* ,6 %lifton -.//.0* 12i$e or ,aBe: Foreign Aid and Foreign Policy Substitutability*4 in Journal of Peace Research* 5ol6 9;* )o6 8* ""6 7-.:* London* ,housand OaBs* %A and )eC Dehli: Sage Publications6
$n this article% we have ta,en several steps toward an e*planation for foreign aid& By drawing from an established general theory of foreign policy% and addressing the topic broadly and systematically% we hope to have made foreign aid less of a pu--le and more understandable within the general conte*t of foreign policy& The theory e*plains foreign aid as a change1see,ing behavior% directed toward encouraging recipient states to behave in ways favorable to donors& That is% while foreign aid may be applied toward the production of either change or maintenance% we argue that it is more efficient% ceteris paribus% for change1see,ing: therefore% states will employ foreign aid in their foreign policy portfolios largely as a change1see,ing policy& .evelopmental assistance% in particular% e*emplifies this argument and is the focus of this article& Applying the theory to state donations of development assistance yields two sets of implications&

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irst% the theory specifies the conditions under which states give aid% positing a relationship between national capabilities and development assistance donations& 3mpirical tests of this relationship showed support not only for the intuitive idea that foreign aid donations are positively related to national capabilities% but also for the more specific and novel proposition that foreign aid donations increase as an increasing function of capabilities + that is% increases in national capabilities lead to even greater increases in development assistance donations& 7econd% the theory posits a more comple* but better1specified conception of foreign policy substitutability% and lin,s foreign aid with other foreign policy behaviors states employ in their foreign policy portfolios& The theory posits that donations of development assistance will be substitutable for other change1see,ing behaviors% but not for maintenance1see,ing& 3mpirical tests of this proposition show that the amount of foreign aid given by a state is negatively related to that state)s rate of dispute initiation% its e*penditure on change military% and the change it derives from its alliance portfolio& We have found additional support for this conception of foreign policy substitutability through a specific analysis of the effects of participation in DAT2 on the foreign aid donations of member1states& Consistent with our e*pectations% the wea,er members of DAT2% receiving maintenance from the alliance% donate greater amounts of foreign aid than would otherwise be e*pected% while stronger members% receiving change from the alliance% donate less foreign aid than would otherwise be e*pected& Putting all of this together% we believe this initial analysis has been largely successful& Bsing a relatively simple approach% we have been able to derive a number of interesting theoretical propositions% and these have found support in the empirical analysis& This is not to suggest% however% that we now have a complete theory of foreign aid + rather% this initial analysis has only opened the door for further theoretical development and research& uture research should continue to develop and specify these ideas% generating insight about whether we are on the right trac, and adding to our cumulative ,nowledge&

PatricB* SteCart and BroCn* Daysie -.//:0* 1Fragile States and (S Foreign Assistance: ShoC #e the #oney*4 *enter for Glo"al &evelopment Wor)in! Paper .o, 4/,
The Bush administration has increasingly ac,nowledged that wea, and failing states represent the core of today)s global development challenge& $t has also recogni-ed

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that such states are potential threats to international peace and security& But despite rhetoric% it has yet to formulate a coherent strategy around fragile states or commit ade0uate resources towards engaging them& 3*cluding funding for $ra0% Afghanistan% Pa,istan% and H$IGA$.7% the administrations X"5 budget re0uest proposes to spend just T#&# billion in direct bilateral assistance to fragile states + little more than a dollar per person per year& $n this new wor,ing paper% C/. research fellow 7tewart Patric, and program associate ?aysie Brown urge B7 policyma,ers to consider increasing aid to fragile states and to thin, creatively about how and when to engage these troubled countries& The authors also call for the policy community to integrate non1aid instruments into a more coherent government strategy& To put its money where its mouth is% the B7 should treat aid to wea, and failing states as a form of venture capital% with high ris, but potentially high rewards&

Picard* Louis A6 and Buss* ,erry F6 -.//;0* A 'ra!ile +alance# Re-E>aminin! the =istory of 'orei!n Aid$ Security and &iplomacy* Sterling: Dumarian Press6
1+ Foreign )id Polic in t#e -$ent <First 5entur Bpp. C<12E ,ur )pproac# or the third time in a generation% the Bnited states is embroiled in a war in a developing country based on false information and faulty decision ma,ing& 'ore than forty years ago% the Bnited 7tates escalated its involvement in Iietnam& $n 2ctober !""# and 'arch !""H% the Bnited 7tates invaded Afghanistan% then $ra0% respectively% becoming entangled in one of the longest military engagements in B7 history& Commentators often note the uncanny similarities among the three conflicts& 3ach shows the triangulation of foreign policy% then military intervention% followed by foreign aid% all for the worse& $n all three% though one hopes for a better future% B7 diplomacy has ta,en a global beating that might ta,e decades to repair: the military faced a situation where it could not gain a decisive victory and became mired in nonmilitary actions for which it was neither designed nor prepared to e*ecute: and aid found itself serving goals that were more supportive of military objectives rather than development goals that were largely unattainable in a war -one&

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2ur boo, e*amines B7 foreign aid from a public policy perspective& 2ur approach concurs with the view of Iernon Ruttan% who states% EChanges in B7 KforeignL assistance policy respond to and are constrained by domestic political and economic interests and concerns&F # 2ur approach uses history as its methodology& Bnderstanding the history and conte*t of foreign aid within foreign and security policy is as important as understanding technical formulas or narrow calculations of cost1benefit analysis& The international assistance story Eis full of entertaining and penetrating commentaries about the ironies + as well as the historic failure + of foreign aid&F ! Along with the irony% there is also a great deal of sadness and lost opportunity in the enterprise& 2ur boo, analy-es failures and successes as lessons for future foreign assistance approaches& Although we hoped to find more successes than failures% that was not the case in foreign aid& The boo, assesses B7 foreign aid policy at this critical juncture + immediate post1 7eptember ## + to contribute to the policy debates about future B7 foreign and security policy& $t loo,s at decisions policies and processes% placing each in a historical% social% and economic conte*t& 2ur view is that foreign aid% foreign policy% and security policy reflect broad political values of government and society% and understanding these is not only an empirical e*ercise but also a normative one& Richard Deustadt and 3rnest 'ay warn us about the danger of ignoring the past and assuming that the world is new and that Edecisions in the public realm re0uired only reason or emotion% as preferred&FH 2ur approach places foreign aid within the conte*t of diplomacy% as well as foreign and security policy beginning in the eighteenth century and e*tending to the post17eptember ## world& oreign aid appeared to many observers to begin in #9M; as a blan, canvas swept clean by the carnage of World War $$& $n reality% what seemed a new approach carried e*cess baggage from past events% values% and assumptions that originated centuries earlier& 2ur boo,)s goal is to e*amine that baggage and lin, it to decisions made at critical points in history% from the beginnings of the Cold War to post17eptember ##& We do not intend for this boo, to be merely a wor, of abstract social science& M $t addresses both academic debate and practical perceptions as reflected in the normative discussions about foreign aid& Rather than leaving foreign and security policy to the EpurityF of the academy% it ta,es political% journalistic% activist% and normative debates seriously& $t treats all sources as pro*imate% and% while social science research is important% the approach here assumes that foreign and security policies are to important to be relegated to armchair debates& 'otivated by the tragedies of Iietnam% Afghanistan% and $ra0% the focus of this boo, is on B7 foreign aid policy and its relationship to foreign and security policy issues& oreign aid cannot be separated from either foreign or security policy% in spite of the propensity of many analysts to do so: however% all three can be reconstructed in ways that emphasi-e one over the other at any point in time& This is important in light of the current emphasis on bringing together foreign% defense% and international assistance policies 4the so1called triangulation of B7 international policy6& 7ome have dubbed triangulation the three .)sC diplomacy% defense% and development&<

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2ur goal is to e*amine various influences on foreign aid over time and discuss the conte*t and process of policy ma,ing on and implementation of aid policies and their impact on international relations& A conceptual framewor, for understanding foreign aid reflects on the search for an enlightened but realistic optimism that deals e0ually with commercial% security% and humanitarian concerns in a manner nonthreatening to nations receiving aid& $f there is a causal relationship involved in foreign policy and foreign aid% it is a simple% if not profound% oneC politics and implementation should be e*amined historically because past events are always antecedents of future events& There is no single e*planation of foreign aid policy decisions in terms of realpoliti,% economic determinism% or religious obligation& .ifferent elements weigh in differently at different times& Deustadt and 'ay call for the EplacementF of events in a weighted timeline to understand both patterns and processes of decision ma,ing& > We believe there is no single e*planation for state behavior% whether it acts diplomatically% militarily% or through international assistance& oreign aid% li,e foreign policy as whole% reflects a multitude of influences on group dynamics and individuals decisions% cultural% social and economic% which combine over time to influence the policy and implementation of international assistance& 5 7ome aid decisions are made by people in power: many are reflected in actions by people wor,ing on the ground& 2ur goal was to write a boo, accessible to students while also presenting new ideas% debates% and information of interest to foreign policy specialists and informed citi-ens& This boo, does not shy away from policy debates but tries to use them to understand the diversity of the issues and our understanding of foreign aid at a time when foreign policy choices may have gotten out of control& Correctives are important% and self1correction is part of the process of policy debate&; 2ur boo, has been influenced by what Robert Cowley calls EcounterfactualF history% that is history that might have been but is not but which can Ecast a reflective light on what did KoccurL&F 9 This boo, is a commentary and% perhaps% a corrective& :nderstanding Foreign )id Paul 'osley defines foreign aid correctly% though narrowly% as Emoney transferred on concessionary terms by the governments of rich countries to the governments of poor countries&F#" $n this sense% there was some government financial or humanitarian assistance prior to World War $$% though the first broad transfer of funds on a worldwide basis in peace time occurred with the 'arshall Plan& Bnli,e most writing on foreign aid% however% we loo, at the earlier period of international assistance prior to #9M; because it defined values and boundaries of contemporary foreign assistance and helped to establish processes under which it would be granted& The definition of aid is important when one places the Bnited 7tates within the conte*t of its isolationist and e'pansionist history represented in the nineteenth century by the notion of 'anifest .estiny& This% as we will see in the ne*t several chapters% resulted in a messianism defined by isolationism prior to World War $$ and

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unilateralism in the late twentieth and early twenty1first century% with the Bnited 7tates increasingly willing to go it alone in foreign and security policy after #9;9& oreign aid is one tool for achieving foreign policy goals& $n addition to foreign aid% this pool of potential actions includesC Threat and use of force Cover operations and pro*y interventions $ntelligence gathering and information dissemination .iplomacy Propaganda Cultural e*changes 4visits and e*changes6 3conomic threats and promise and trade policies 4sanctions and tariffs6

oreign aid should be seen in the conte*t of historical patterns and international assistance + private or public&## International assistance is the transfer of any resources 4grants of money and concessionary +less than mar,et rate + loans6% the provision of goods and services% and technical assistance% including military assistance 4in !""5% the .epartment of .efense and its .efense 7ecurity Cooperation Agency administered one1fifth of B7 assistance6& 7ome observers also include debt forgiveness in foreign assistance& $nternational assistance comes from private foundations and philanthropists% as well as publicly funded assistanceC government1to1government and government1to1nongovernmental organi-ations 4D/2s6& Bse of the term foreign aid% as a subset of international assistance here% means the subset of government 4donor6 economic and financial transfers + directly or indirectly& oreign aid as it evolved after #9M; was an e*tension of diplomacy and an alternative to sanctions% conflict% intervention% and war& #! Along with Carol Aancaster% we see foreign aid as a Evoluntary transfer of public resources% from a government to another independent government% to an D/2% or to an international organi-ation with at least a !< percent grant element&F #H -ec#nical assistance is the provision of e*pert assistance more often than not on a temporary basis to government agencies 4and sometimes to D/2s6& #M This includes technical assistance provided to the private sector or D/2s and interest associations& Technical assistance includes consulting% service support% education% and training&#< 7pecifically% such technical assistances provides technical specialists% civilian and sometimes military% on direct contract with government agencies or with private businesses and D/2s or foundations that provide services& 2ften technical assistance concerns institution or capacity building& Consulting% both long1 and short1term% constitute the heart of technical assistance& The technical assistance e*pert is responsible to the client% but it is not always clear who the client isC the

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host country% its leadership and its program managers% or the donor agency and its contracting and program officers& This boo, tries to demonstrate and simplify the comple* world of foreign aid with all its diversity and meanings& /iven the comple*ity of aid% discussion is necessarily selective and incomplete& $n the end% foreign aid% li,e trade% defense% and security policy Emay productively be viewed as a microcosm of nation1states) broader efforts in foreign affairs&F#> The most common form of international aid is the transfer of economic resources for political% social% and economic development& 2ften incorporated into foreign aid is international technical assistance& 8ilitar and securit assistance is also a subset of foreign aid in some cases as is eradicating illegal drugs e*ports and interdiction of illegal migrants + Eboat people&F Traditionally% foreign aid focuses on at least four primary objectivesC Broadly based economic growth An effective attac, on poverty and disease An end to the destruction of the physical environment of the world The promotion of democracy and governance 4increasingly common since the end of the Cold War6#5

ollowing from this there are four components to foreign aid policy visible through timeC Physical infrastructure development 7upport for social and economic development Humanitarian and security assistance 7upport for good governance% conflict resolution% and political development

.emocratic governance and political development have become particularly important in the last fifteen years& As early as #9<"% advocates made it clear that democratic governance was essential for development aid to succeed& #; $ncreasingly since #9;9% there is concern for the establishment of legitimacy for democracy and good governance% which predominates% at least conceptually% in aid debates: however% if aid is inappropriately provided% this can ma,e governance problems much worse& unding opposition political parties with assistance may create political instability for e*ample& $n the twentieth% foreign assistance served a multiplicity of purposesC diplomatic% security% cultural% developmental% humanitarian relief% and promotion of commerce& After the Cold War% promotion of economic and social transitions in former socialist countries% the support for democratic governances% mediating conflicts% managing postconflict transitions% addressing environmental and fighting international terror are increasingly important&

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2ur boo, has a point of viewC foreign aid can be used to provide social services% develop human resources% and promote democratic institutions% but it is not in itself the best tool to promote economic growth or redistribution of resources& Again% if used injudiciously% aid can also do great damage& While not always an independent policy% foreign aid is a tool of foreign and security policy% and it also serves as a strong symbol and signal to the international community& 7ince the #9<"s% foreign aid and technical assistance were Eestablished on the premise that the developed world possessed both the talent and the capital for helping bac,ward countries to development&F #9 7ince !"""% observers have 0uestioned the validity of that assumption& KNL

2+ International )ssistance, Foreign Polic , and "ecurit Polic Bpp.1C<20E 7everal factors have had an impact on the foreign aid process during the last two hundred years& /oing bac, to the origins of the nation1state% there was always statecraft and commercial motives involved in international humanitarian assistance& $n international relations% there are both a Erealist paradigm in international relations theory N and cosmopolitan% cooperative% or altruistic strainsF based on idealism% which operate in tandem& #> There are two broadly defined schools of foreign policy and foreign aidC a EhardF school and a EsoftF school& The hard school focuses on security assistance and commercial concerns% and it is both costly and politically ris,y& The soft school ta,es the classical path of foreign aid with soft power being more effective than the use + or threat + of force in securing influence in international relationships& #5 7oft power calls on well1endowed states to improve public health and education: introduce modern agricultural technologies: encourage small1scale industries: and carry out a wide range of agrarian reform% from land redistribution through the organi-ation of cooperatives and provision of rural credit and farm inputs& oreign aid humanitarian and development goals sometimes become distorted through the use of aid by donor countries for commercial% military% and other political purposes& Prior to #9;9% foreign aid% in large part% centered on Cold War influences between and among the super1powers& $n the post Cold1War period% foreign aid often was offered as a carrot to tempt conflicting sides in civil strife into accepting mediation or as a component of the war on terror& Beyond security concerns% all nations% large and small% have lin,s between foreign aid and trade policies% and the private sector plays an important role in providing both commodities and services to foreign aid recipients& Humanitarian% and even moral arguments% justified foreign aid% but in the end% it was systems of international intercourse that framed the parameters of foreign aid& All of these factors% as perceived by political leaders% interests groups% and administrators in the field% helped define foreign aid into the twenty1first century& or almost <"" years% it was the imperial system that began in fifteenth century and the industrial revolution beginning in #;"" that defined global international relations and political economy& We turn to these issues ne*t& KNL

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C+ 7istorical )ntecedents Bpp.21<C3E /overnment and administration Ein most of the countries of Asia and Africa and more distantly% Aatin America% KwereL conditioned by their colonial pasts&F MH Colonialism defined authority in most of what we call the developing world until well after the #9>"s and much of the practice of foreign aid and technical assistance grew out of that heritage& Bnderstanding that legacy is important to any attempt to define the mi*ed legacy and the moral ambiguities that frame international assistance after #9>"& These values remain an important factor in influencing foreign aid& $t is our contention that many of the characteristics of the colonial period + in terms of administration% development policy and normative values% some for better% many for worse + carried over to both bilateral and multilateral aid programs& 2ur boo, does not argue that a history of colonialism and imperialism is the only driver of aid% security% and diplomacy in the twenty1first century& 'uch would occur in the evolution of foreign aid policy that was not a product of that history& Xet% to reiterateC three components of international assistance + economic e*change% commercial development% and religion1based humanitarian impulses + converged in the #;<"s as the 3uropean powers% along with Japan and the Bnited 7tates% created world1wide empires& To what e*tent this convergence continues to define world governance is a focal point here& Also at issue is to what e*tent there are similarities between Britain in the early twentieth century and the Bnited 7tates since !"""& $n the latter case% the Bnited 7tates was overloaded with misused foreign aid and was made a pawn of its Eattempts to secure that indefinable and ultimately unattainable thing KcalledL (national security&)FMM We will revisit this issue at various points in this boo,& KNL

Part II# Epochs of Aid$ &iplomacy$ and Security Policy H+ 8anifest Destin and )merican &'pansionism Bpp. C7<3HE 2ne can learn much about foreign aid policy during the period prior to #9M;& $t)s all thereC missionaries% concern with terms of trade% professional specialists% idealism% balance1of1power calculations% and even military support& Technical assistance played an important role in B7 involvement in international assistance prior to #9M"& 'otives were variedC technical specialists were sometimes missionaries% sometimes had commercial ties% and often defined their roles in moral and even ethical terms& What was not there was the volume of financial transfers that would come into being after #9M; with the 'arshall Plan and Truman)s Point our Program& Dor would one find the bureaucrati-ation and Eprojecti-ationF that would all but eliminate fle*ibility and creativity as components of B7 foreign aid& Both would begin in the postwar period with the announcement of the Point our Program&

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What preceded World War $$ and the beginning of the Cold War were the developmental dilemmas and moral ambiguities built into the Western moderni-ation concept% pushed by both colonialists and developmentalists ali,e& $t was these dilemmas that would deepen as the Bnited 7tates entered the period of modern foreign aid after #9M<& The development of modern state1sponsored foreign aid and technical assistance was ultimately% however% a product of two World Wars and the Cold War se0uel& $t is to these developments that we now turn& KNL

F+ -#e Impact of -$o /orld /ars Bpp. 3F<G2E While foreign aid and technical assistance in its modern form is only si*ty years old% their antecedents go bac, well into the #;""s& The move to massive government1to1 government aid represented a major shift in international assistance after World War $$& Patterns of international assistance% however% did have their roots in the nineteenth and the first half of the twentieth century& The 'arshall Plan)s legacy can still be seen in the world today& 'ost importantly% the aid scheme mar,ed the beginning of a time when the Bnited 7tates first became permanently involved in the world& $ronically% for all its success% the Plan would become a reminder of B7 timidity in foreign aid terms as the Cold War dragged on& $t became a mar,er of bolder times& After #9M;% for the first time% governments in more1developed countries assumed that the redistribution of wealth internationally was part of their responsibility& While private funds remained important% by #95" voluntary private transfers of resources accounted for only H percent of the flow of resources into developing countries& We discuss creation of a more formali-ed foreign aid program in the postwar period% emanating from the 'arshall assumption% in Chapter >& KNL

3+ Point Four, :")ID, and t#e 5old /ar Bpp. GC<102E There is a tendency among Americans to believe that their values and needs are universal& 2n the whole% Americans have remained an optimistic society& $nternationalism since the #9<"s meant historical commitment% compromise% and recognition of the inherently political nature of the international process& This remained difficult for many policyma,ers who may see moral choices in interaction& This perception can lead to difficulties in distinguishing between that which a country declares and that which is real& .uring the immediate postwar period% the purpose of foreign aid was to restore war torn countries% strengthen the military and political defenses of EfreeF nations% and wea,en the appeal of communism& There was a messianic element to the enterprise& By the end of the #9>"s% however% foreign aid as reform Ehad lost its evangelistic tone and ta,en on a legal flavor&F ># The shift toward government1to1government aid represented a major change in international assistance after World War $$ and was defined in the period between #9M; and #9>#& Dow% at least in theory% governments assumed that some

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redistribution of wealth internationally was part of their responsibility& The goal of policyma,ers in the #9<" was to create a foreign aid system that included a unified administration and policy formulation% long1term planning and financing% and integrated country1level programming& Perceptions of foreign aid failure originated in strategic rather than developmental considerations during the Cold War& There may be a lesson here for those who see foreign aid as a part of a war on terrorism& As a result% it is not unli,ely that there may be similar perceptions of failure in future as the B7 reaches into the twenty1 first century& KNL

7+ -#e .ietnam /ar Bpp. 10C<11GE With the end of the Iietnam War and the related collapse of $ran on ebruary <% #959%<< foreign aid concerns toward basic needs although still influenced by many of the assumptions of established in 7outheast Asia& The Bnited 7tates began withdrawing rather than e*panding foreign aid and technical assistance% a withdrawal that would continue until 7eptember ##% !""#& This shrin,age was the first time that had occurred since the end of World War $$& Iietnam)s legacy for the Third World was to solidify% in the minds of A.C intellectuals and elites% an image of the West that made no distinction between the Bnited 7tates and the West 3uropean former colonial powers& Both 3urope and the Bnited 7tates were seen as Ecolonial e*ploiters%F rich and white& As the Iietnam War illustrated% in both isolationism and interventionism% the Bnited 7tates has need an evangelical vision and a moral role in reforming and developing the lesser developed parts of the world& As a result of Iietnam% both in terms of foreign and development policy% the Bnited 7tates veered away from the very concept of playing a global role a s country% leaving much of foreign aid in the hands of international organi-ations and a handful of 3uropean nations& Withdrawal would have significant conse0uences% and debate as to whether Iietnam was a foreign policy or military defeat would continue through the end of the twentieth century& With a much less global foreign aid policy% A.C elites became suspicious of the twin goals of stability and moderni-ation that had defined foreign aid through so much of the Cold War& The fateful events of 7eptember ## would restore B7 concern for international affairs% if not development management concerns& KNL

G+ 1asic %eeds, "tructural )d*ustment, and t#e 5old /ar;s &nd Bpp. 11D<1FHE Throughout the #99"s under structural adjustment% the Bnited 7tates and other donors increased support to promote in their bilateral programs politically sensitive% restrictive% and intrusive policies and actions that would encourage conservation measures% such as energy efficiency% renewable energy% and forest management& 7uch action often advocated policies that would not be acceptable to the Bnited 7tates and other countries at home& As 7everigne Rugumamy has noted% Ethe

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institutional and organi-ational capacities of the recipient states Kcame to beL considered as critical intervening variables in e*plaining the aid relationship&F #!9 Throughout much of the developing world there e*isted a continuous tension between the humanitarian functions of foreign aid in trying to improve social welfare conditions in A.Cs and the narrower imperatives of self1interest& $n !"""% neither concern appeared to be important to the American public& .uring the !""" presidential campaign% foreign aid had reached its nadir& Candidate /eorge W& Bush would attac, nation1building and overseas assistance& Bush wanted to focus on domestic affairs& 2verall% as the millennium approached% interest in foreign aid waned& 3*cept for a few ban,rupt African countries% B7A$. no longer represented a significant transfer of resources to A.Cs relative to the si-e of their economy& By the end of the twentieth century% the path to apathy about international development was clear& .espite the acceptance of structural adjustment by many A.Cs% by the mid1#99"s% foreign assistance levels continued to plunge& 7eptember ##% however% would change all of thatC policyma,ers became concerned that impoverished people fed by fundamentalist religions and living in failed states would offer sanctuary and become a breeding ground for terrorists& As a result% foreign aid budgets would surge with allocations% more than doubling in ten years& We will turn to those developments in the ne*t two chapters& KNL

D+ "eptember 11 and t#e Ira9 /ar Bpp.1FF<172E The fallout from 7eptember ## demonstrated the limits of multilateralism and the dangers of unilateralism in foreign aid% security% and foreign policy& There was still an absence of a clear strategy to deal with some fifty or so wea, and fragile states that were not $ra0&5M With a new administrator of B7A$. in early !"">% the concept of fragile states was dropped as concern increased over short1term conflict resolution& The fragile and collapsed states metaphors may have reminded the political leadership too much of the problems in $ra0 and Afghanistan& $n late !"";% the $ra0 story remained unfinished& The popularity of President Bush was at an all1time low% HH percent or less& The $ra0 7tudy /roup had released its devastating critical report& Rumsfeld had resigned& 'idterm elections in !""> had returned the .emocrats to power in the House of Representatives and 7enate% and on Dovember M% !"";% Bara, 2bama won the presidency& Xet despite all of the criticism% focus in $ra0 remained on the military situation and the success or failure of the surge& 'uch more needed to be understood of the long1 term conse0uences of foreign aid and security assistance policy in the post1 7eptember ## era& Bnilateralism had% at least for the moment% been debun,ed& But could the Bnited 7tates return to the multilateralism that had allowed it to muddle through the Cold WarW $t is to these issues that we turn in the ne*t chapter& KNL

10+ (econstruction, 5i!ic )ction, and )F(I5,8 Bpp. 17C<1D2E

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.espite the challenges of underdevelopment% there is a Erich trac, record of over forty years of success in reducing infant and child mortality% raising agricultural production through scientific innovations% and spurring economic growth and the building of democracies in many regions of the world&F <5 These success created mar,et opportunities and strategic alliances for the Bnited 7tates during the Cold War: however% the 0uestion is whether armed social wor, can contribute to foreign policy and the foreign aid agenda% and% of course% help to win the peace in Africa& These changes li,ely re0uire a staged process of public service reform% both lengthy and planned over time to avoid the distortions of a donor1funded% postconflict situation with its EparallelF administrative structures& <; A primary lesson derived from B7 support for civil society and civic1action activities is that institutions and institutional processes matter& This perspective may not be reflected in the geographical command approach developed by the Bnited 7tates in Africa& Historically% the focus of much of foreign assistance was on the support of civil society organi-ations that can underta,e civic1action development projects% including community1based sanitation and cleanup efforts% rebuilding schools and clinics% installation of water pumps% and establishment of community health service delivery& The purpose is to combat the hostility of ethnic% ideological% andGor religious1based grassroots organi-ations% D/2s% and other financial institutions that run counter to B7 interests&<9 At issues is the e*tent to which A R$C2')s creation was more than a change of bureaucratic structures% reflecting a different methodology toward nonmilitary reconstruction and stability support for fragile and collapsed states% or whether it represented business as usual for .efense& Civilian involvement in A R$C2' assumes there is a lin, between poverty and terrorism& This remains unproven& 'uch of the leadership in religious terrorist groups is middle class% sometimes educated in Western 3urope& A R$C2' focuses on governanceC physical security% political institutional development% economic management% and social service delivery& 'ost of the assistance will be civilian in nature& Xet to be determined is the e*tent to which the civilian structures blend with the military leadership in .efense& KNL

Picard* Louis A6* 2roelsema* !obert and Buss* ,erry F6 -eds60 -.//A0* 'orei!n Aid and 'orei!n Policy# essons for the .e>t

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=alf *entury* )eC MorB: #6 +6 Shar"e* Inc6 Picard* Louis A6 and 2roelsema* !obert -.//A0* 1(6S6 Foreign Aid Priorities: 2oals For the ,Centy-First %entury*4 in Picard* Louis A6* 2roelsema* !obert and Buss* ,erry F6 -eds60 -.//A0* 'orei!n Aid and 'orei!n Policy# essons for the .e>t =alf *entury* ""6 9-.:* )eC MorB: #6 +6 Shar"e* Inc6
oreign aid and technical assistance% however% ultimately are vehicles of a country)s foreign policy 47ogge !""!6& Aid agencies are Epart of an institutional framewor, N that continues to fall short of its potentials& KAid isL about politics and% crucially% the relationship between donors and recipients + not only at the higher echelons% but at all levels of contactF 4Wedel #99;% >6& According to 'ontgomery 4#9>!% 96% Eforeign aid a political instrument of B&7& policy is here to stay because of its usefulness and fle*ibility&F oreign aid is about states and individuals& To conclude% if not to caution% we can go bac, to 7muc,ler and Berg)s 4#9;;% #6 wise wordsC EThe world of the #99"s% and that of the Twenty1first century% will be substantially different from one in which a worldwide enterprise ,nown as (foreign aid) was launched forty years ago& Dew circumstances ma,e the concept of foreign aid less appropriate& To much of Asia and Aatin America% the concept of (cooperation for development) fits better& By developmental cooperation% we mean that we share responsibilities widely and appropriately&F

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Poe* Ste$en %6 -8;;/0* 1 uman !ights and (S Foreign Aid: A !e$ieC of Ouantitati$e Studies and Suggestions for Future !esearch*4 in =uman Ri!hts Quarterly* 5ol6 8.* )o6 <* ""6 <;;-78.6
$n this review serious problems were pointed out in 0uantitative studies which focus on the lin,age between human rights and foreign aid% leading their findings to be suspect& 7olutions to these problems were suggested in the hope that future research will not e*hibit the same wea,nesses% thus allowing better estimates of the importance of human rights variables& $n the future researchers should strive for a more sophisticated model of foreign aid decisionma,ing processes which ta,es into account the effects of organi-ations and bureaucrats thus ma,ing possible a much more complete understanding of the lin,age between human rights and foreign aid&

PoCell* AndreC and Bobba* #atteo -.//:0* 1#ultilateral Intermediation of Foreign Aid: &hat is the ,rade-Off for Donor %ountries34* Inter-American &evelopment +an) Research &epartment Wor)in! Paper .o, 7;<* &ashington* D%: InterAmerican De$elo"ment BanB6
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2ur general view is that donor countries may face a trade1off regarding whether to channel aid bilaterally or use the intermediary of a multilateral& 2n the one hand a multilateral may bring benefits in terms of leverage and enhanced coordination% but on the other hand a multilateral may dilute the individual objectives of bilateral donors& $n ,eeping with the previous literature% we find that for direct bilateral assistance% politics matters& We find that with fi*ed effects added we cannot reject the hypothesis that politics influences different bilateral donors in the same way% and the relevant pooled coefficient is positive and significant& We also find strong evidence for an aid fragmentation effect& Where aid is more concentrated% then controlling for other factors% recipients receive more aid& inally% if anything% we find evidence that aid pac,ages from different donors are strategic complements consistent with an aid1for1favor type game& 'ultilaterals intermediate in two ways% first financing aid from their own resources built upon the capital initially invested by bilaterals and second more directly through the medium of trust funds and other vehicles that bilaterals may finance but that are managed by the multilaterals& or aid financed by multilaterals we find some evidence for dilution of the effect of politics% especially with reference to World Ban, aid& We find little evidence for the dilution of politics in aid intermediated through trust funds and the li,e% perhaps due to the conditions that are applied to the use of these resources& We find strong evidence that multilaterals solve problems of coordination and of strategic interactions between donors& $n short% intermediating through multilaterals may enhance donor coordination% but at some cost in terms of individual bilateral 4political6 objectives% which is consistent with the idea of a trade1off& There is much more to be done in this area of research& We have suggested a set of tradeoffs% but as yet there is no good theoretical model that captures all of the ideas mentioned& This is an obvious area for future research& As suggested in the introduction% we also believe that there is a lin, between the determinants of the pattern of aid and its effectiveness& $n particular% bilateral aid allocated according to colonial ties or politics may also imply ineffective aid% whereas aid e*tended due to other donor characteristics may suggest more altruistic motives and perhaps more effectiveness& inally% aid fragmentation may also lead to less effective aid& These all appear to be interesting avenues for future analysis&

Pratt* %ranford -8;A;0* 1%ha"ter 8: umane Internationalism: Its Significance and Its 5ariants*4
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in Pratt* %ranford -ed60* Internationalism 6nder Strain# The .orth-South Policies of *anada$ the .etherlands$ .orway$ and Sweden* ""6 9-.9* ,oronto* Buffalo and London: (ni$ersity of ,oronto Press6
We have used the phrase humane internationalism to identify the ethical component which has to a varying but significant degree distinguished the attitude towards Third World development in the postwar political cultures of Canada% the Detherlands% Dorway% and 7weden and which has influenced their policies on Dorth1 7outh issues& The major component of humane internationalism can be easily identified& At its core is an acceptance by the citi-ens of the industriali-ed states that they have ethical obligations towards those beyond their border and that these in turn impose obligations upon their governments& The emergence of this responsiveness to cosmopolitan values; as a politically significant phenomenon does not relate solely to the Third World and the needs of its poor& $ndeed% one of the earliest international obligations to be widely ac,nowledged% the obligation to eschew international obligations the use of force in the pursuit of national goals% was initially seen as relevant to the major powers in particular% west or east& Another cosmopolitan value that is now being championed with increasing vigour is respect for human rights& $t% too% is as relevant to the developed countries as to the A.Cs& Devertheless in the last several decades a responsiveness to the development needs of the Third World has become an important e*tension of humane internationalism endorsed by many in the developed countries& As popular awareness of the acuteness of the suffering of many in the Third World grew% and as the Dorth)s economic and political lin,s with these countries increased% there emerged in our four countries and elsewhere in the Dorth and increased sensitivity to the common humanity which unites the global community& That sensitivity gave rise% in turn% to an acceptance of new and wider obligations relating to global poverty& This is the first and primary feature of humane internationalism as it has been e*tended to Dorth17outh relations& This claim being made here is carefully circumscribed& $t is not suggested that cosmopolitan values have become the dominant determinant of the responsiveness of the citi-ens and governments of these four countries to international issues& or almost everyone in these countries% obligations regarding the welfare of fellow citi-ens remain far more strongly ac,nowledged& 'oreover% it is recogni-ed that governments have many other legitimate concerns pressing upon them& These concerns fre0uently minimi-e the

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impact which cosmopolitan values have on policy& Devertheless% however fragile and often overwhelmed by more worldly considerations% a sensitivity to the development needs of the Third World has been widespread in these countries% providing an important ethical underpinning for government policies that are seen as helping to meet those needs& A second feature of humane internationalism is that it has tended very much to meld what it accepts as an ethical obligation and what it regards as the real long1 term interests of the rich countries& This melding of the ethical and the self1 interested is most obvious in regard to the obligation to refrain from the use of force to secure advantages from neighboring states& An acceptance of this obligation encompasses both a respect for the sovereignty of other states and a recognition that if this obligation is universally accepted it will be directly advantageous to one)s own country& A similar reconciliation of ethical and self1interested motivations typically occurs in regard to the obligations toward s the world)s poor which humane internationalism propounds& The poor countries% it is typically assumed% would be more stable% less li,ely to be threatening% more li,ely to be democratic% and altogether more attractive as trading partners and outlets for investment if they could e*perience high rates of growth over a long period& 7hould the rich countries actively pursue humane internationalist policies% the result would therefore be a world which would be to the advantage of the rich countries% economically and politically& This coincidence of what is felt to be morally correct and what is viewed as self1 interest truly perceived is% of course% a common feature% of much traditional ethical philosophy and% indeed% e*presses a deep wisdom& $ndividuals and states are li,ely to be more at peace% more satisfied with their roles% and less inclined to pursue destructive% unfulfilling% and unachievable objectives if they ta,e account of the needs of others& This fact does not diminish or cheapen the primarily moral thrust of the response to the challenge posed by global poverty& $t does not suggest that responding to the development needs of the A.Cs is but a self1righteous pose concealing motivations that are basically self1interested& Devertheless this melding of the moral and that which is in one)s long1term self1interest has meant that amongst the advocates of policies that are responsive to Third World needs% there have been 4and still are6 some who primarily emphasi-e the compelling ethical obligation to help the less developed countries and others whose arguments are primarily based on the long1term overall interests of the rich countries& A third characteristic of humane internationalism in the political cultures of these four countries can be more swiftly identified& This internationalism is a natural and uncomplicated e*tension to the wider world of the broad networ, of national and social welfare programmes in these societies& 2bligations towards those in other countries who suffer severely as less strongly felt than obligations to fellow citi-ens% and the duties they are understood to entail less e*tensive& But once lin,s have been established with other peoples% even if these lin,s are primarily economic% and once their suffering is ,nown% it would be hard for any who accept the legitimacy of the obligations typical within modern welfare states to hold that neither they nor their governments need to be concerned about the well1being of these poles& The basic values of these societies% the values on which their social welfare systems are based% are not thought of as national or racial or ethnic% but as having a universal validity& The normal assumption has been that while they generate duties primarily

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towards fellow citi-ens% they also imply obligations beyond state borders& A far more comple* argument would be re0uired to give a semblance of reasonableness to the notion that these values have relevance only to those within national border& or a great many% it would surely be unconvincing& or them% a commitment to effective and comprehensive welfare services and full employment and a commitment to a foreign policy that is responsive to the development needs of Third World societies are natural% appropriate% and mutually consistent components of a single social ethic& These then are the three central components of the humane internationalism that has been a prominent feature of the political cultures of these four countries as it relates to the Third WorldC an acceptance of an obligation to alleviate global poverty and to promote development in A.Cs: a conviction that a more e0uitable world would be in their real long1term interests: and an assumption that the meeting of these international responsibilities is compatible with the maintenance of socially responsible national economic and social welfare policies& Humane internationalism stands in star, contrast to international realism which is the main alternative world1view that shapes perceptions of Dorth17outh relationships& $nternational realism suggests that all states do in fact pursue their own national interests in international relations and that to do otherwise would be ineffective and probably costly& The logic of this position rests on the undeniable fact that there is no international authority superior to the power of states which can ensure that each state complies with international laws and underta,es its fair share of the burden of humanitarian international actions& As a conse0uence% national leaders% whose obligations are to the civil societies they govern% are thereby severely constrained from accepting ethical obligations towards those beyond their borders& This absence of any supra1state authority also leads international realists to doubt that inter1state negotiations are li,ely to be able to produce stable and lasting arrangements that will be beneficial to all parties% in contrast to humane internationalists who do believe that international institutions and co1operative international actions offer the world a real prospect of peaceful and e0uitable international relations& $nternational realism thus rejects the first and the third characteristics of the humane internationalism that became a part of the dominant political culture of our selected countries in the #9>"s& While humane internationalism in an ade0uate description of an important ethical component of the postwar political cultures of our countries% it has always been much more a cluster of related but not always totally compatible attitudes and ideas rather than a single and homogenous viewpoint& There were in conse0uence always a number of separate strands to this humane internationalism as it related to the Third World% even in the years before #95< when it seemed most homogenous& All strands shared the core component + the acceptance of an ethical obligation to alleviate global poverty and to assist the development of the less developed countries + but each varied in the e*tent to which and the manner in which it shared in other two components which characteri-ed humane internationalism in the period from #9<< to #95< and which remain powerful to this day& By #95< these different strands had become three distinct e*pressions of humane internationalism which we will call liberal internationalism% reform internationalism% and radical internationalism& They constitute the three most important dominant tendencies relating to global poverty and Third World

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development within the ran,s of those who ac,nowledge the claims of cosmopolitan values& Liberal internationalism combines the core component of humane internationalism% an acceptance of an ethical obligation towards the poor of the Third World% with a strong commitment to an open multilateral trading system& $t is able to support substantial development assistance and emergency relief programmes because it recogni-es that the benefits and advantages of international trade are greater when all the economies participating in it are economically healthy and growing& Aiberal internationalism is in effect a limited international ?eynesian perspective& .omestically% a ?eynesian perspective permits and indeed calls for e*tensive social welfare and countrycyclical measures% seeing them as contributing to the stability and prosperity of a capitalist economy& Aiberal internationalism similarly views the development assistance programmes of the rich countries as positive contributions to the stability and prosperity of the internationalist capitalist economic order& $t is% however% a limited ?eynesian perspective because it rejects any international e0uivalent of the mar,et interventions represented by countrycyclical public spending& Within a liberal internationalist perspective% support for an open international economic system is not incompatible with the ethical obligations that are integral to humane internationalism& Those who view the world in this way are confident that such an international economic system is in the economic interest of all who participate in it& As an e*tension of that position and as a deduction from actual international e*perience% they also believe that direct international interventions in the operation of the international economic order will in fact not be li,ely to produce economic benefits for the poorest countries or the poorest people within the Third World more generally& Aiberal internationalists believe% as do international realists% that all states are motivated by 4usually immediate6 economic and national security interests& However they go on to argue that there is a sufficient mutuality of these interest between rich and poor states to permit these states to co1operate successfully in their pursuit& Because of% first% an international co1operation built upon these mutual interests% second% generous development assistance programmes supported by the rich countries% and% third% the beneficent operation of a liberal international economic order% liberal internationalists in the #9>"s and early #95"s were able to be optimistic that the challenges of world poverty could be met in a morally tolerable period of time and with a manageable e*penditure of effort and resources by the rich countries& These views received their classic e*pression in Partners for De!elopment% the report of the Commission on $nternational .evelopment chaired by Aester Pearson in #9>;19&9 They were endorsed in the #9>"s as much by the social democratic governments of 7weden and Dorway as by the liberal Canadian government& The conviction that assistance to the less developed countries is also in the interests of the rich countries and the assumption that the newly ac,nowledged ethical obligations in regard to global poverty and development can be met without threat to the economies and the national welfare policies of the rich countries became enduring components of humane internationalism largely because of the dominance of liberal internationalist views& Along with a commitment to a liberal international

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economic order% each is a prominent feature of the liberal internationalism which continues to be a major strand in the political cultures of Canada% the Detherlands% Dorway% and 7weden& Aiberal internationalists have shed some of their earlier more nabve e*pectations& They no longer e*pect that global poverty can largely be eliminated within a generation% and they are much more aware of the obstacles to a global acceptance of an open multilateral trading system& 'uch of the self1confidence of liberal internationalists in their limited response to the needs of the Third World was gradually undermined by harsh reality& The gap between the rich countries and most of the poor countries continued to widen& There were fewer and fewer grounds for any reasonable hope that absolute poverty could be largely eliminated within a generation& Projections of the numbers of people who would be living in e*treme poverty in !""" would e*ceed the numbers in the year the projections were made& #" At the same time% the Third World became increasingly assertive in its demands for major reforms to the international economic order& These changes% which were intended greatly to increase the benefits received by the A.Cs from international trade% were strongly interventionist and counter to liberal international economics& As these realities pressed in upon the consciousness 4and consciences6 of those individuals% non1governmental organi-ations% public officials% and political leaders who were particularly concerned with Third World issues% greater attention began to be paid to alternative schools of thought on international economics& $n particular% the structural economists% such as /unnar 'yrdal% Rafl Prebisch% .udley 7eers% and ?eith /riffin% and the increasingly powerful dependency school in its several e*pressions became more and more influential& By #95<% reform internationalism had become a second significant perspective among those who sought to understand Dorth17outh relations and to define the obligations which states of the Dorth ought to accept& Reform internationalism shares with liberal internationalism an ac,nowledgement that rich countries have an obligation to see, to alleviate abject poverty in the less developed countries& However% reform internationalism believes that an open international economic system operates to the comparative disadvantage of wea, and poor countries in persistent and significant ways& 30uity between rich countries and poor countries as well as effective action to alleviate global poverty therefore re0uires a fairer distribution of power within international financial% monetary% trade% and development institutions and a range of state and inter1state interventions to correct the ine0uities and to alleviate the poverty that international capitalism otherwise perpetuates& $f liberal internationalism is timid ?eynesianism writ internationally% reform internationalism is social democracy applied internationally& Reform internationalism is more pessimistic about the social conse0uences of unguided mar,et forces than is liberal internationalism and more optimistic that international interventions can correct the adverse distributional and other socially undesirable conse0uences of uncontrolled mar,et forces& Reform internationalism is not% however% merely international altruism& Central to the reformist position is the conviction that a more e0uitable and just international economic order is also in the interests of the rich countries when these interests are seen in sufficiently broad terms and within a longer time hori-on& $t thus embraces the international ?eynesian idea that economic development in the Third World will be to the

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economic advantage to the rich countries& 'oreover% it suggests that there are also many non1economic reasons for the rich countries to alleviate global poverty% to promote development% and to achieve a more just international order& Reform internationalism% as is clear from its classic statement in the Brandt Report% hopes that these considerations as well as more purely ethical considerations may induce the developed states to support a wide range of international reforms that will promote development in the A.Cs& (adical internationalism is the third major perspective on Dorth17outh relations which emerged by #95< as a strand of the humane internationalism of the political cultures of Canada% the Detherlands% Dorway% and 7weden& $t is distinguished by a primary emphasis upon an obligation to show solidarity with the poor of other lands& $n its purest form this solidarity with the poor replaces any narrower interest in the further advancement of the living standards of the already rich& $ndeed% radical internationalism is often accompanied by a hostility to consumerism and the ethics of capitalism& Typically% while reform internationalists are concerned to support those Third World societies that they regard as sensitive to the needs of their own poor% radical internationalists favour support for states that are striving to be as autonomous of world capitalism as they can manage and that have separated themselves politically from the major Western powers& They are very suspicious of the policies of the major Western capitalist countries and of the internationalist capitalist system& They are e0ually s,eptical of the social commitment of the civilian bourgeoisies and the military that control so many Third World governments& By and large adherents of radical internationalism do not devote a great deal of energy to public policy issues& $n their view% any structure that is integral to the economic or political system is so tainted by dominant capitalist interests that little of value can be accomplished through it& As a result% they are usually hostile towards the bilateral aid agencies and such international trade and aid structures as the /eneral Agreement on Tariffs and Trade 4/ATT6 and the World Ban,% believing that the activities of such organi-ations serve to tie the A.Cs more closely to the international capitalist system& They favour sending aid only to the few regimes they accept as ade0uately revolutionary and to social groups and forces in other societies that are li,ely to become agents of radical change& The identification of these three strands of human 4sic6 internationalism is no mere intellectual e*ercise& $t permits a number of clarifying generali-ations about the sectors and structures in our chosen societies in which these different perspectives tend to predominate& $n effect% it permits a socio1political typography of these attitudes& To illustrate% within the politici-ed community of non1governmental organi-ations concerned with Third World issues% both radical internationalism and reform internationalism are strongly represented& 'ost of those in this community are probably still reformers but many have moved to a radical position& Church activists in particular are 0uite sharply divided between radicals and reformers& Within what used to be called the development community% that is% those professionally involved either in the study of development or in the organi-ation and management of development1related activities% the important division is between reformers% who continue to insist upon the need for changes that go beyond anything that the Dorth would accept as in its own interests% and liberal internationalists% who see, to identify significant mutually shared interests which can provide a basis for greater collaboration and a truer partnership& While the

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reformist view is still widely shared within the D/2 and academic communities% liberal internationalist sentiments have come to predominate in most national and international official aid agencies& inally% within the bureaucracies of these countries% an internationalist realist perspective% though always influential% was often held in chec, by liberal internationalist ideas% especially in regard to the Bnited Dations and its family of institutions and to development assistance& 'ore recently% international realism appears to be more influential& These generali-ations are% $ thin,% borne out in the country studies which follow& They are introduced at this point not to persuade readers of their validity but to demonstrate the usefulness of the strands of internationalism that have been defined& The perspectives also permit generali-ations about the positions which are typically ta,en by the main political parties in our selected countries& Aeft socialist and communist parties tend to be radical& 7ocial democratic parties% typically% are reform internationalists but with both radical and liberal wings& Christian parties and liberal parties with strong capitalist support are li,ely to be liberal internationalist with a strong emphasis on humanitarian aid% and% as one moves to the right of the political spectrum% liberal economics is joined more fre0uently with an international realist perspective& This conceptuali-ation of different types of internationalism also facilitates fruitful comparisons& or e*ample% within some but perhaps not all of the governments of the four states% the main struggle on Dorth17outh issues in recent years has been between a liberal internationalist emphasis on more open% global% multilateral trading relations and a realist concern to protect immediate economic interests by initiatives that would however undermine the commitment to multilateralism& As will become clear in the country essays% reform internationalism was an influential view within% in particular% the Dorwegian% 7wedish% and Detherlands governments in the period between #95< and #9;#% but in Canada it hardly penetrated policy1ma,ing circles& $n all four countries% reform internationalism was influential in varying degrees in the legislature% in Christian and in social democratic political parties% in the D/2 communities% in the churches% and in the universities& Radical internationalism% however% has been less influential& 2n a few issues such as the choice of countries to be major recipients of aid and the value to the A.Cs of international trade% radical ideas had some impact upon the social democratic governments of Dorway and 7weden in the mid to late #"5"s& $n the main% however% radical internationalism has never seriously penetrated decision1ma,ing circles in any of these countries&## These categories% finally% permit us to give additional clarity to the 0uestions that have motivated this project& What e*plains the strength of humane internationalist sentiments in these societies and the mar,ed variation therein of the influence of reform internationalist ideasW What constraints have limited the influence of these ideasW How resilient have these traditions been in the years since the advent of the global recession and since the recognition that the principal industrial powers were not going to permit any significant reforms to the international order or to increase greatly the transfer of the concessional resources to the poorer countries of the Third WorldW Has liberal internationalism become the preferred stance of these states in more recent yearsW Are there as well important structural factors related to new technologies and the rise of the newly industriali-ed countries which constrain the internationalism 4both reform and radical6 of these middle powersW Are many of

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the specific ideas of middle power internationalism now datedW $s there a need for a fresh definition of the international policies re0uired by reform internationalism and a fresh appraisal of the assumption of liberal internationalism that a predominantly open international mar,et can serve the interests of both rich and poor countriesW The primary tas, is to understand the internationalism of each of these four countries& 2nly then can we hope to discuss the prospects of middle power internationalism& The ne*t four chapters address this primary tas, with reference in turn to Canada% the Detherlands% Dorway% and 7weden& A concluding chapter then offers some comparative and more general comments on the determinants of the internationalism of these middle powers% on its strengths and its limitations% and on whether and with what emphasis it may yet become a significant force for more humane relations between rich and poor countries&

Pratt* %ranford -8;A;0* 1%ha"ter :: #iddle PoCer Internationalism and )orthSouth Issues: %om"arisons and Prognosis*4 in Pratt* %ranford -ed60* Internationalism 6nder Strain# The .orth-South Policies of *anada$ the .etherlands$ .orway$ and Sweden* ""6 8;9-../* ,oronto* Buffalo and London: (ni$ersity of ,oronto Press6
"ources of 7umane Internationalism in 5anada, t#e %et#erlands, %or$a , and "$eden $t is not at all self1evident why Canada% the Detherlands% Dorway% and 7weden should have chosen to play particularly active roles in regard to Dorth17outh issues&

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Their societies were% of course% influenced by that greater sensitivity to the dimensions of global poverty and to the pain and misery it causes which the media and% in particular% television have brought to the attention of most the people of the industriali-ed world& Devertheless% on the face of it% a number of factors might well have operated to minimi-e the interest of these countries in the development problems of the Third World& With the important e*ception of the Detherlands% none of these countries has been a colonial power& They therefore lac, the lin,s of sentiment and interest which are the particular legacy of the Western powers that had previously ruled most of the Third World& 'oreover% their trade relations with the less developed countries 4A.Cs6 have been significantly less important for their economies than has been true of many other industriali-ed countries& inally% contemporary perceptions of their security re0uirements and the unavoidable conse0uences of their respective geographic locations have meant that their relations with the major Western countries are unavoidably seen as vastly more important than their relations with the Third World& With the e*ception of 7weden% these countries are lin,ed in a security alliance + the Dorth Atlantic Treaty 2rgani-ation 4DAT26 + with the Bnited 7tates and the major 3uropean powers% while in each case their pro*imity either to the 3uropean powers or% in the case of Canada% to the Bnited 7tates has made the management of that relationship a central foreign policy concern& Devertheless there emerged in each of these countries a more than average sensitivity to the aspirations and development needs of the A.Cs& The four country studies provide a variety of convincing and mutually reinforcing e*planations of why this happened despite the various factors that might have made it otherwise& These fall under the three general headingsC the first relates to the internationalist orientation of their policies% the second to their responsiveness to cosmopolitan values% and the third to political considerations that helped to increase the importance these countries attached to their relations with the 7outh& A 7trong Commitment to a Constructive $nternational Role After #9M<% the political leadership% the senior civil service% and most citi-ens active and informed about public affairs in each of the four countries concluded that their nations must see, a positive role in the building of a new and peaceful international order& The #9H"s and the war years had made it clear in each country that the shaping of international politics must not be left entirely to the major powers& The four countries did not all ta,e the same decisions& 7weden% for e*ample% joined neither DAT2 nor the 3uropean 3conomic Community while the Detherlands joined both% and Dorway and Canada joined only DAT2& Devertheless% each was determined to play a role in international affairs& Three of them had been involved in the 7econd World War% Canada as a primary combatant and the Detherlands and Dorway as occupied countries overwhelmed by the military power of Da-i /ermany& rom that e*perience cam a powerful commitment to the creation and strengthening of the Bnited Dations system as a source of collective security% an international instrument with which to promote shared objectives% and a mechanism for the peaceful settlement of inter1state disputes& .espite its long history of neutrality and a continuing determination to stay outside any defence alliance% 7weden had nevertheless clearly drawn the same message from history and has been as a vigorous supporter of the Bnited Dations as the others&

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3conomic factors reinforced this determination to play an active international role rather than to stay 0uietly in the bac,ground% preoccupied with purely domestic concerns% and leave the shaping of international affairs to those more powerful than themselves& The point has been made before% and is repeated in the country studies% that it is very much in the interests of middle powers% particularly those dependent upon trade% to contribute to the development of international trade% financial% and monetary regimes which would negotiate and enforce common rules and standards& A number of country1specific factors reinforced the commitment of the governments concerned to assert themselves in international affairs& $n Canada% a self1confident and greatly e*panded .epartment of 3*ternal Affairs was determined to maintain the important role which it had played in the negotiations of the mid to late #9"M"s leading to the creation of the Bnited Dations% the new financial institutions% and DAT2& $n 7weden% as 7gdersten suggest% there was an upsurge of pride and self1confidence in the moral and economic superiority of its democratic socialist (middle way&) Pratt and Hveem suggest that the internationalism of Canada and Dorway% respectively% in the late #9<"s was also a response to prodding from the Bnited 7tates and the Bnited ?ingdom that other Western states share the burden of development assistance as part of a general Western effort to (contain communism&) All these factors combined to create a remar,ably wide consensus in each country that it should see, to play a conciliatory role in international affairs and to support actively the major international institutions and regimes& This consensus did not necessarily encompass a particular concern for issues relating to poorer countries% but without this disposition towards responsible internationalism% humane internationalist policies towards the 7outh could hardly have developed at all& A Widely 7hared 7ensitivity to Cosmopolitan Ialues KNL To summari-e the argument being offered here& $n each of these four countries the values of the dominant political culture support e*tensive domestic social welfare systems which assist those unable to find employment and those involuntarily distressed& These same cultures% by e*tension% have supported humane internationalist measures to assist the very poor of the Third World& The breadth of this support is demonstrated by the fact that parties of the right and the centre% as well as of the left% have endorsed the high levels of aid that have been a feature of government policy in these countries& Within these same political cultures% Christian and social democratic influences have sought to generate support for international interventions to promote greater e0uity and to conciliate the demands of the A.Cs& Within these same cultures more radical sentiments have also been promoted& Where the Christian and social democratic components have been strong% as in the Detherlands and the 7candinavian countries% these reform internationalist ideas have had an impact on government policies% as have more radical ideas to a lesser e*tent& Where they are wea,er% as in Canada% the ideas of reform internationalism have remained outside the consensus supporting the government& They have been prevalent in the D/2 community% in the churches% and in the universities in Canada% but have had little% if any% influence upon policy& Radical internationalism has been even more of a minority view&

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The Political Advantages of Humane $nternationalism 7everal contributors% and other commentators as well% have stated that our middle powers also secured significant domestic and international political advantages by ta,ing an altruistic stand on a range of international issues& or e*ample% Canada)s substantial aid programme has helped it to win the good will of Third World countries and thereby to be more influential within la rancophonie and the Commonwealth& The prominent support given by the Detherlands and 7candinavian governments to the Bnited Dations .evelopment Programme has secured a sympathetic hearing for them on other issues from Third World countries& The point can surely be generali-ed& Canada% the Detherlands% Dorway% and 7weden have been an*ious to play a significant role in the major international political and economic institutions& Their ability to win favourable response to the positions they ta,e has been aided by the reputation which they have ac0uired as sensitive to Third World issues and responsive to Third World needs& .omestic political gains have also been a conse0uence of their internationalist policies& Hveem comments that the Dorwegian government found a substantial aid programme was domestically the most acceptable way to demonstrate its active involvement with the efforts of its allies to contain communism& This point% too% can be generali-ed& 3*cept for 7weden% these countries are formally tied to major Western powers in various ways& Xet their citi-ens would not easily accept the adoption of a purely peripheral or satellite role as junior partner in either DAT2 or the 3uropean Community& 7trong and independent initiatives relating to Third World development that e*presses the humane values of their political cultures have been an important way for the governments of these countries to reassure their electorates that they have lost neither the capacity nor the will to ta,e independent initiatives in international affairs& $t is perhaps these factors which open these governments to the accusation that they are tempted sometimes to become (free riders%) indulging in more responsive posturing on Third World issues when they ,now there is no chance that the majority of the 23C. countries will support what they advocate& Cooper and Ierloren van Themaat suggest that the Detherlands government may thus be glad to have the 3uropean Community ta,e the new protectionist decisions which it favours but which conflict with the more responsive internationalist image of which it is proud& Hveem% more mischievous still% refers to a possible Peer /ynt syndrome in Dorway% whereby Dorway joins the rest of the 23C. members in measures that discriminate against A.C imports while affirming its preference for 0uite different and more generous policies& That these accusations are offered primarily by nationals of these countries suggests that there is a near inevitable gap between public positions which would fully e*press the humane internationalist components of the political culture of these countries and the more self1interested measures that those in power are happy to accept& $t may well be that as long as these political cultures have a solid humanitarian component% there will be domestic political advantages as well as international advantages for the governments of these countries to cast their policies in an altruistic light& Do doubt there are rhetorical e*aggerations and distressing gaps between affirmed principles and concrete policies& But the strength of humane internationalism within the dominant political culture has had its impact on more than merely the tone and style of their policies& $t has helped to ensure the selection of policies which the government can

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honestly present as humanitarian& The aid programme of the Detherlands% Dorway% and 7weden illustrate this in 0uite a dramatic fashion& There is evidence also that it has contributed to some e*tent to their selection of more responsible Dorth17outh policies& $t can also reasonably be assumed that the strength of humane internationalist sentiments within the Canadian political culture contributed to the decision of the Canadian cabinet in #9;" to reject the advice it received from its .epartment of inance that Canada settle for a ceiling on its aid e*penditures of "&H< per cent of /DP& -#e Limited Influence of 7umane Internationalism of %ort#<"out# Policies A major initiating interest of this project had been to identify the constraints that have limited the responsiveness of Western powers to the ethical obligations posed by global poverty and the development needs of the Third World& $t was proposed in the opening chapter that these constraints have been very significant even in countries with a reputation for humane internationalism& The evidence from the country studies suggests that this has indeed been the case in Canada% the Detherlands% Dorway% and 7weden& While the impact of humane internationalism on the Dorth17outh policies of these countries has been limited% it has not been negligible& $n the Detherlands% Dorway% and 7weden% and% to a much lesser e*tent% in Canada% humane internationalist concerns have proven strong and resilient in one policy area% that of development assistance& The Canadian chapter argues that humane internationalist considerations have always had to struggle against commercial and political considerations for prominence in the shaping of Canadian development assistance programmes& $t suggests that since #95<% narrowly commercial considerations have had an increasingly important impact on Canadian aid policies& $t is clear from the other country studies that the aid agencies in these countries have not been free of commercial and political influences& Readers need only to recall% for e*ample% Hveem)s telling discussion of the use of aid funds to assist the Dorwegian shipbuilding industry% 7gdersten)s identification of the political dynamics behind the 7wedish aid programmes to Iietnam and Cuba% and the greater care being ta,en in all four countries to ensure that a higher proportion of formally untied aid is nonetheless spent on goods and services from the donor country& Devertheless% in the Detherlands% Dorway% and 7weden those responsible for the aid programmes have been able to contain% if not 0uite to minimi-e% the undermining impact of pressures to secure greater immediate benefits for domestic economic interests from aid programmes& rom the perspective of Third World development and the alleviation of poverty% the record of the aid programmes of these countries is far superior to those of other countries& < This is true in regard to the tying of aid% to country selection% to the allocation of funds to multilateral aid institutions% to the sectors assisted% to the use of programme support% and to responsiveness to immediate crises& This superiority is above all illustrated by the fact that these three countries have% in comparison to other 23C. countries% sustained far higher levels of per1capita budget allocations to their aid programmes& ROal Aavergne uses with effect the argument that development assistance is above all an international public good% that is% that many of the benefits which it brings to the rich countries are indiscriminately enjoyed by all of them% be they large aid

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donors or small donors&> The pressures are therefore understandably great that the cost of such a public good should be e0uitably shared by the states that benefit from it& A major preoccupation in the .evelopment Assistance Committee of the 23C. and in the international negotiations which fi* the national contributions to the various international financial and development institutions has been an e0uitable sharing of (the aid burden&) The willingness of the Detherlands% Dorway% and 7weden to sustain their aid programmes at such high levels is thus all the more e*ceptional& This can surely be ta,en to reflect the breadth of the popular commitment to these high levels of development assistance% the influence within these societies of the non1governmental organi-ations 4D/2s6 that champion the needs of the Third World% and the solidity of the inter1party parliamentary support for substantial aid programmes& KNL 7ince #9;# the momentum has largely gone from the efforts of the 7candinavian and Detherlands governments to win Western support for reforms to the international system in the interests of international e0uity and development& Their initial effort to that end has been a response to demands from the 7outh& 2nce that pressure had dissipated% the advocates of reform internationalism lost their agenda& Reform internationalism has not totally disappeared from the public positions ta,en by these countries& Devertheless% they no longer advocate many of the original proposals such as the Common und and the $ntegrated Programme for Commodities& Dor do they vigorously promote new proposals for international initiatives with regard to% say% Third World debt or the disastrous state of so many of the economies of the less developed countries that would give contemporary e*pression to a concern for greater e0uity in the international economic order and a rapid amelioration of the condition of those in absolute poverty& 3ven the more limited ideas of liberal internationalism are less influential% as protectionism in its various guises becomes for prevalent& Humane internationalism in its several forms is clearly disheartened and under siege& Hveem writes of Dorway having adopted (a more self1interested and conformist Third World policy): 7gdersten identifies the end of a (flower1power) period in Dorth17outh policies and a return to pragmatic policies in 7weden: Cooper and Ierloren van Themaat characteri-e Detherlands policy in recent years as (pragmatic internationalism and social morality N tempered by a realistic but usually unobtrusive concern for .utch interests N without being at all reformist&) Pratt refers to a bureaucratic consensus in Canada (that represents a mar,ed shift of basic attitudes away from liberal internationalism and towards a realism that is narrowly national% preoccupied with economic objectives% and little interested in the Third World&) These are depressing observations& The final section considers why the humane internationalist ideas of the #95"s and early #9;"s had so limited an impact on policy even in those countries where these ideas constituted a substantial component of the predominant political culture& KNL /# /as t#e Impact of 7umane Internationalism so LimitedL KNL 2ur answer% in fact% embraces eight different factors& The first three are major e*ogenous factors% the ne*t three relate to political and ideological influences that

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directly impinge upon senior policy1ma,ers% and the final two are wea,nesses within the humane internationalist community which have diminished its impact on policy& 1. -#e greater preoccupation $it# immediate economic ob*ecti!es $#ic# #as been nearl uni!ersal since t#e ad!ent of t#e global recession #as lessened t#e responsi!eness of go!ernment to #umane internationalist considerations. BRE 2. ,nce it $as clear t#at t#e principal ,&5D po$ers $ere re*ecting an mo!e to$ards t#e %I&,, $ere becoming increasingl protectionist, and $ere eit#er cutting t#eir official de!elopment assistance or at least not significantl increasing it, t#e go!ernments of 5anada, t#e %et#erlands, %or$a , and "$eden $ere bound to reconsider t#eir o$n more internationalist positions. BRE C. -#e gro$ing c#allenge of manufactured e'ports from t#e ne$l industriali6ed countries #as also $ea2ened t#e responsi!eness of t#ese go!ernments to #umane internationalist !alues. BRE H. Lo alties, a sense of communit , and an et#ical responsi!eness t#at are national in c#aracter are still !astl stronger $it#in eac# of t#ese countries t#an are t#e ne$er ties and obligations $#ic# a responsi!eness to cosmopolitan !alues #as generated.BRE F. (eform internationalist !alues and attitudes are less $idel s#ared and less securel anc#ored $it#in t#e political cultures of t#ese countries t#an is t#e #umanitarian concern $#ic# supports t#e substantial aid programmes. BRE 3. -#e senior foreign polic decision<ma2ers of t#ese four countries #a!e #eld a $orld<!ie$ $#ic# does not easil accommodate an important #umane international component. BRE 7. -#e specific international policies recommended b reform internationalism $ere often ill concei!ed and unli2el to accomplis# t#e #umanitarian and e9uit ob*ecti!es on t#e basis of $#ic# t#e $ere being supported. BRE G. Finall , t#e groups and sectors $it#in t#ese four countries t#at #a!e been critical of t#eir %ort#<"out# policies #a!e been di!ided and t#erefore less effecti!e politicall t#an t#e mig#t ot#er$ise #a!e been. BRE

Putnam* !obert D6 -8;AA0* 1Di"lomacy and Domestic Politics: ,he Logic of the ,CoLe$el 2ames*4 in International

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3r!ani7ation* 5ol6 <.* )o6 9* ""6 <.>-<:/6

The most portentous development in the fields of comparative politics and international relations in recent years is the dawning recognition among practitioners in each field of the need to ta,e into account entanglements between the two& 3mpirical illustrations of reciprocal influence between domestic and international affairs abound& What we need now are concepts and theories that will help us organi-e and e*tend our empirical observations& Analysis in terms of two1level games offers a promising response to this challenge& Bnli,e state1centric theories% the two1level approach recogni-es the inevitability of domestic conflict about what the Enational interestF re0uires& Bnli,e the E7econd $mageF or the E7econd $mage Reversed%F the two1level approach recogni-es that central decision1ma,ers strive to reconcile domestic and international imperatives simultaneously& As we have seen% statesmen in this predicament face distinctive strategic opportunities and strategic dilemmas& This theoretical approach highlights several significant features of the lin,s between diplomacy and domestic politics% includingC the important distinction between voluntary and involuntary defection from international agreements: the contrast between issues on which domestic interests are homogeneous% simply pitting haw,s against doves% and issues on which domestic interests are more heterogeneous% so that domestic cleavage may actually foster international cooperation: the possibility of synergistic issue lin,age% in which strategic moves at one game1table facilitate une*pected coalitions at the second table: the parado*ical fact that institutional arrangements which strengthen decision1ma,ers at home may wea,en their international bargaining position% and vice versa: the importance of targeting international threats% offers% and side1payments with an eye towards their domestic incidence at home and abroad: the strategic uses of uncertainty about domestic politics% and the special utility of E,in,y win1setsF: the potential reverberation of international pressures within the domestic arena: the divergences of interest between a national leader and those on whose behalf he is negotiating% and in particular% the international implications of his fi*ed investments in domestic politics&

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Two1level games seem a ubi0uitous feature of social life% from Western economic summitry to diplomacy in the Bal,ans and from coalition politics in 7ri Aan,a to legislative maneuvering on Capitol Hill& ar1ranging empirical research is needed now to test and deepen our understanding of how such games are played&

!ai* Dul B6 -8;>.0* 1Foreign Policy and 5oting in the () 2eneral Assembly*4 in International 3r!ani7ation* 5ol6 .:* )o6 9* ""6 7A;-7;<* (ni$ersity of &isconsin Press6
The findings of this research indicate that certain aspects of foreign policy and voting in the /eneral Assembly are closely related& Do causal relationship between foreign policy indicators and voting in the /eneral Assembly is either asserted or implied in the above discussion& The discussion of causality needs more evidence than the results of the regression analysis in this study can supply&

!ai* Dul B6 -8;A/0* 1Foreign Aid and 5oting in the () 2eneral Assembly* 8;:>-8;>:*4 in Journal of Peace Research* 5ol6 8>* )o6 9* ""6 .:;-.>>* Sage Publications* Ltd6
$n the case of American foreign aid% our findings support the first hypothesis on the use of aid as an inducement more than the second hypothesis on the use of aid as a reward or a punishment& $n the case of the 7oviet foreign aid% there is greater evidence in support of the second hypothesis than the first hypothesis& The

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American aid has certainly been more effective as an inducement to the recipients to vote similarly with the Bnited 7tates in the period #9>515>% or rather #95"15<% than was the case in #9>#1>< 4see my studies% #95" and #95!6& $t has been% however% used less effectively as a reward or a punishment in this period than in #9>H1>> 4see Witt,opf% #95H6& The findings on the 7oviet aid support the behavior patterns of the 7oviet Bnion and its aid recipients in the /eneral Assembly discerned in #9>#1>< also 4my studies% #95" and #95!6& Causality cannot be concluded from correlations% even if they are 0uite high% and causality between foreign aid and the /eneral Assembly votes is not even implied in this paper& However% the correlations discussed in this study do suggest the consideration of foreign aid and the /eneral Assembly votes in relation to each other by the decision1ma,ers in the donor as well as the recipient countries& urther research on such (consideration) would bring us closer to establishing causality between foreign aid and the /eneral Assembly votes% if indeed it e*ists

!iddell* !oger %6 -.//A0* &oes 'orei!n Aid Really Wor)@* OKford: OKford (ni$ersity Press6
3. -#e Political and 5ommercial Dimensions of )id KNL The clear conclusion of this chapter is that political% commercial and other criteria than the developmental and humanitarian motives for providing aid matter greatly& The ways that aid is allocated and the tying of aid have profound effects on the overall contribution of aid to development and welfare goals& Aid always has been% and still is% provided for non1developmental purposes% contributing to and shaping the way that it has been allocated% and the forms in which it is provided& 2verall% the evidence forcibly shows% although not as rigorously as one might li,e% that these influences have reduced and continue to reduce aid)s potential development and welfare effects& $n many cases% political influences have also accentuated the volatility of aid1giving% reducing its potential impact still further& $n a recent study% Collier% /oderis and Hoeffler 4!"">6 find that political shoc,s are more damaging to poor countries than natural shoc,s& The politics of aid remains central to any discussion of whether and how aid wor,s&

7. Public "upport for )id KNL The title of this boo,% Does Foreign )id (eall /or2L % is based on the premise that the impact of aid is an issue of major importanceC what aid achieves really matters& But what is the lin, between public support for aid and their views on the

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impact of aidW A widely shared assumption is that support for aid is closely correlated with its impactC support for aid rises to the e*tent it is ,nown to wor,% and falls to the e*tent that there is evidence that it doesn)t& 2pinion poll data fre0uently seem to confirm this& or instance% in a !""H poll on aid to Africa% HH per cent of Americans said they believed aid to the continent to be higher than it is& When as,ed whether they though aid to Africa should be increased if they had more confidence that it would really help those who needed it% support for increasing aid more than doubled to reach "; per cent of those polled 4P$PA !""HC <1>6& 2fficial donors and D/2s and many aid researchers ta,e it as given that support for aid is not only based upon% but needs to be based upon% evidence of its success& Reflecting this view% in a major study of the political economy of aid% Hop,ins argues that (a major condition for sustainability of future aid is the belief in its efficacy) 4!"""C MM<6& 'ore controversially% this belief has all too often been used by donors as a motive for giving prominent publicity to stories of aid)s successes% in the hope that this will boost support for aid% regardless of whether these stories are representative of all aid& The importance of the relationship between aid impact and support for aid was well e*pressed in the #9;> 23C.G.AC annual report reviewing !!< years of aid1giving% which stated boldly% and without 0ualification% that (maintaining and strengthening public support for aid can be facilitated by more effective communication of N the successes that N aid has achieved) 423C. #9;>C >H6& $n contrast% as discussed at length in Part $$$ of this boo,% the evidence of aid)s impact is decidedly mi*edC the impact of aid is usually dependent upon the conte*t in which it is given and the commitment and ability of the recipient to use it effectively& $n reality% while some aid does wor,% a significant proportion of aid does not achieve its objectives% and most aid is less effective than both donors and recipients would wish& Against the reality of the impact of aid% donors could adopt three different approaches to providing information to the publicC #& Try to convince the public that some aid does indeed wor,& !& Try to convince the public that steps are being ta,en to enhance the impact of aid% by trying to reduce the number of cases where it does not wor, well& H& Try to nurture% e*tend and deepen support for aid% ac,nowledging that a significant part of it is clearly ineffective% and sharing ,nowledge about aid)s failures as well as its evident successes& $n practice% both official donors and D/2s have focused their efforts overwhelmingly on the first two approaches& They have deliberately avoided addressing the third challenge almost entirely& .onors have never really thought about coming forward and providing the public with a rounded view of the evidence of its impact% presumably believing that evidence of failure will undermine public support for aid&#" What is therefore of particular interest is that one of the clear and consistent findings of public opinion polls on foreign aid across almost all donor countries is the high degree of support there is for foreign aid among people who believe that aid is failing to achieve its objectives& Contrary to the (common1sense view) and some opinion poll data which suggest that support for aid is dependent on evidence that it

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wor,s% there is a significant group of people who would appear to be supportive of aid even when they ,now% or believe% that it has not been wor,ing well& $f the views e*pressed by these people and reflected in these polls accurately reflect wider public opinion% then aid failure is not the ,iss of death to public support for aid that donors believe + and dread& Table 5&# presents evidence which shows this% summari-ing recent poll data for the leading !! 23C.G.AC donor countries& $t does this by placing the overall level of support for aid 4column A6 alongside the percentage of people who do not believe that aid achieves its objectives 4column B6& The figures in column C are derived by subtracting the proportion of those who do not support aid at all 4#"" minus the figures in Column A6 from the proportion of people who judge aid to be a failure 4Column B6&## This proportion of people who support aid but judge it a failure is termed (the /ap&) As is clearly shown% in every donor country e*cept Dew \ealand 4comparable data for Dorway could not be found6% there is a greater percentage of people who believe aid is not effective than who are not in favor of foreign aid& #! $n eight countries + Belgium% Canada% $taly% /reece% Japan% 7pain% the Bnited ?ingdom and the Bnited 7tates + more than !" per cent of the population who are supportive of aid believe it is not effective: and in the case of four of these eight countries + Canada% 7pain% the B? and the B7 + the figure is H" per cent or higher& #H There is other evidence which not merely confirms this finding but suggests that these figures could well underestimate the phenomenon& #M or instance% in .enmar,% where public ,nowledge about aid issues is amongst the highest of all countries% polls suggest that almost <" per cent of people believe that aid doesn)t wor, yet% consistently over time% 5< per cent and more of the public remain supportive of aid 423C. !""#C !M1<6& Ai,ewise% in Dorway in the #9;"s% widespread publicity highly critical of Dorwegian aid was spread across the Dorwegian media but support for aid remained high 4B=Rs !""!C M6& 'ost researchers who have commented on the phenomenon of people supporting aid when they believe it is ineffective have referred to it as an anomaly% a contradiction or a parado*% in some cases suggesting that it is an indicator of the shallowness of public understanding of foreign aid& But why should this be soW Why not ta,e the findings at face valueW 'ight it not be that a significant proportion of people do indeed support the giving of aid even when they ,now it is highly li,ely that it may not be effectiveW#< Contrary to the mainstream view% some have suggested that this is the case& or e*ample% in his review of support for aid in the Bnited 7tates% Rice observes that in spite of aid being widely perceived as ineffective and wasted% (this opinion does not dissuade many Americans from supporting assistance efforts) 4#99>C 5M6& $f significant numbers of people do support aid1giving when they ,now much of it doesn)t wor,% we need to try to understand why& $t is li,ely that for many% this could have something to do with their understanding of the moral case for providing aid& $t is to this issue that we now turn&

G. 5#arit or Dut L -#e 8oral 5ase for )id

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There is a strong moral case for providing aid& This has been continually and repeatedly argued since aid was first given& 'ost non1governmental organi-ations 4D/2s6 believe that aid should be provided almost entirely for moral reasons% while practically all individuals% companies and foundations who give voluntarily to support the wor, of humanitarian and development charities do so because of some sense of responsibility or duty to help people suffering and in need& Perhaps not so widely ,nown is that governments have also repeatedly stated that they provide aid for moral reasons& Conse0uently% ethics is central to any discussion of aid and why it is given& The purpose of this chapter and the ne*t is too loo, closely at the moral case for giving aid% by holding up to scrutiny the different elements which constitute the moral case for aid& What precisely is meant by the claim that aid should be provided for moral reasonsW .oes it mean that governments and people should give and respond to the needs merely (out of the ,indness of their hearts)W $n other words% should aid1giving be viewed solely as an act of charity% where the giver feels good in giving% but there is no particular re0uirement to give% and no lin, to any rights that those who receive aid might haveW 2r does it mean that there is a moral duty or obligation to provide aidW urther% if go!ernments + in contrast to indi!iduals + have obligations and responsibilities to provide aid% what precisely is the nature of these obligationsW $f individuals and governments have obligations to provide aid% how much needs to be provided to satisfy that obligationW How do government obligations to provide aid ran, in relation to other obligations and responsibilities that governments have within their own countriesW What moral obligations do D/2s have in providing aidW Perhaps most crucially and controversially% to what e*tent do the obligations or responsibilities or rich governments to provide aid re0uire them to wor, together to ensure sufficient aid is providedW What happens to the (duty) of give if aid is not used for the purpose intendedW These are all important 0uestions: a number are 0uite comple* and have been given a range of different answers& They e*tend the discussion about aid to the disciplines of moral and political philosophy% and also to the field of international relations% where a number of answers to these 0uestions are ,eenly debated and remain contested& $ncreasingly over the past !" years% the ethical dimensions of aid1giving% and aid1receiving% have been the focus of attention of scholars wor,ing in the relatively new area of the ethics of development& # Against the bac,drop of a large and growing literature% the ambitions of this chapter and the ne*t are modestC more to provide an overview of the ,ey issues involved in ma,ing the moral case for aid than to engage in an in1depth discussion of the merits of all the different arguments& That would re0uire a boo, in itself& The ne*t chapter loo,s at the reasons that governments and individuals give in arguing the moral case for providing aid% and hold these up to scrutiny& The present chapter prepares the ground for that discussion by e*amining the different elements which contribute to ma,ing the moral case for aid& At the heart of the discourse about the moral basis for aid1giving lies the notion of obligation& However% most theories of and approaches to obligation s,ip over% ta,e as read% or simply assume that aid is needed% and that it wor,s& This chapter ta,es a more holistic approach& irst% it discusses% briefly% the basic (facts on the ground) upon which almost all theories of obligation to provide aid are based& $t then loo,s at the different ethical theories% theories of justice% and perspectives based on a

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human1rights framewor, which have been used to argue the moral case for providing aid& KNL

D. -#e 8oral 5ase for 4o!ernments and Indi!iduals to Pro!ide )id This chapter e*amines the ways that governments% individuals and non1 governmental organi-ations 4D/2s6 e*plain why they believe there is a moral obligation for them to provide aid& The bul, of the chapter focuses on the moral case for governments to provide aid& $t starts by summari-ing the e*planations that different governments have given to e*plain why they believe they have a moral obligation to provide aid& $t then holds up these statements to scrutiny% assessing them both against the different theories and approaches discussed in Chapter ; and against the changes ta,ing place in the world& $t discusses ways in which thin,ing about governments% aid and mortality are shifting% and perhaps being fundamentally altered% as a result of changes in global politics and international relations% and of changes in approaches to human rights& The last section of the chapter moves the focus away governments to loo, at the ethics of individuals aid1 giving and some of the new moral 0uestions and dilemmas that voluntary agencies and D/2s are having to face& Donor 4o!ernments+ 5urrent and &!ol!ing .alues 'ost governments claim that there is a moral reason for them to provide aid& 'any official donors have also e*plicitly stated that they have some sort of obligation or responsibility to provide aid% thus moving the discussion about aid and mortality well beyond the narrower confines of charitable giving& # $f there is amoral case for providing aid% there must be a moral problem% or set of moral problems% which the provision of aid is meant to address& ! Contrary to what one might at first suppose% however% both among themselves and over time% donors have differed in their articulation of the core problems and sets of issues from which they conclude that they have a responsibility% duty or obligation to provide aid& or 7candinavian donors% the notion of (solidarity) has been a particularly important and prominent reason for providing aid& 7ome forty years ago% in #9>!% when its parliament authori-ed 7weden to provide official aid% it needed (no other motivation than moral duty and international solidarity) 4Andersson #9;>C !96& H These motives still have strong resonance today& Recently% .enmar, stated its acceptance of responsibility for supporting development% demonstrated in its (solidarity with millions of people in the world whose lives are mar,ed by poverty)& M or inland% moral obligation is lin,ed to distributive justice and based on a cosmopolitan view of the world% where rich countries have a particular responsibility for the well1being of citi-ens in poorer countries& Also for inland% distribution issues are importantC given the growing wealth of the world (it would be morally indefensible to ma,e no effort to tac,le these ine0ualities% and for this reason rich countries give money to development co1operation)&< Ai,ewise for the Detherlands% a fair distribution of wealth% social justice% and non1 discrimination are presented as important factors e*plaining why aid is given% while% for the $rish aid programme% absolute priority is given to the reduction of poverty% ine0uality and e*clusion in developing countries& or the Bnited ?ingdom the

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objectives of international development are embraced by the government because it is (right to do so)C (3very generation has a moral duty to reach out to the poor and needy and to try to create a more just world) 4. $. #995C #>6& World poverty% says Tony Blair% (is one of the greatest moral challenges we face) 4. $. !"">cC ii6& Beyond the 3uropean Bnion% similar% sometimes strong assertions have also been made about the moral obligation to provide aid& These have also been e*plained in different ways& or Dorway% development policy is (not about charity)C the fight for poverty is a fight for justice& As one of the richest nations% Dorway accepts its moral responsibility not only to combat justice and promote development% but to ma,e a difference% playing its role in speeding up reforms to reduce poverty% and allocating resources to fulfill its obligations& > $n Dorth America% both Canada and the Bnited 7tates have continuously e*pressed the view that providing humanitarian aid% in particular% is a moral imperative& 5 $n the case of the Bnited 7tates% the government has pledged to provide humanitarian assistance solely on the basis of urgent need% reflecting the concern (for saving lives and alleviating suffering% regardless of the character of their governments) 4B7A$. !""MC !"6& The moral obligation to provide development aid was% perhaps% most clearly articulated by President ?ennedy% whose words are still prominently displayed on the B7A$. websiteC (Why% then% should the Bnited 7tates continue a foreign economic assistance programW The answer is that there is no escaping our obligationsC our moral obligations as a wise leader and good neighbor in the interdependent community of free nations: our economic obligations as the wealthiest people in a world of largely poor people N To fail to meet those obligations now would be disastrous)& ; Historically% e*treme poverty% dire need and human suffering% contrasted with growing wealth% widening ine0ualities and the ability to help% have provided the main cluster of reasons for donors to suggest or assert that they have a moral obligation to assist% and provide aid& $n recent years% these reasons have been lin,ed to% and in some cases eclipsed or replaced by% an e*plicit focus on human rights% complementing and% in some ways% recasting the way that the moral case for providing aid is understood& The rights1based perspective in aid1giving has been particularly prominent in the justifications articulated by 7wit-erland% inland% /ermany% Dorway% and 7weden& or e*ample% /ermany has recently stated that all its development wor,% including its aid1giving% now ta,es place within a human rights framewor,% the core objective of which is the respect% protection and fulfillment of rights 4of poor people6% for which the international community% including /ermany% is partly responsible& $ndeed% /ermany has asserted that human rights not only the moral% but also the legal basis for development& or Dorway% the (fight for justice) is% in essence% a human rights agenda% with Dorway contributing to the reali-ation of economic% social and cultural as well as civil and political rights& or inland% a (justice1based) approach to development implies that the fulfillment of rights defined in human rights agreements provides the starting point for its support& or 7wit-erland% aid1giving is part of a process of helping in the reali-ation of basic rights% with human rights providing the framewor, through which its wor, on addressing problems of poverty is approached& 7wit-erland has committed itself to using binding human rights treaties and mechanism as the basis for its wor, at both the bilateral and multilateral level&9 Bo* 9&# summari-es the different reasons that donors have given to e*plain why they believe there are moral grounds for them to provide aid&

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BOT ;6. '2RAA 3VPAADAT$2D7 /$I3D BX .2D2R /2I3RD'3DT7 2R PR2I$.$D/ A$.

a

2n the basis of (solidarity)& $n response to human sufferingC the humanitarian imperative& $n response to e*treme poverty% need% marginali-ation and e*clusion& $n order to enhance human freedoms% and to contribute to human development% and to the reali-ation of capabilities& $n order to e*tend and enhance the fulfillment of human rights% especially (core) or (basic) rights& Because of ine0ualities% notably wide and widening% or growing relative wealth compared with those living in e*treme poverty& or reasons of distributive or social justice and fairness% to contribute to the fairer distribution of wealth& To secure a safer% more secure and peaceful world% including for the donor)s own citi-ens&a

$t is sometimes claimed that the moral case for providing aid is different from that for providing aid for self1interested reasons& However% this is too narrow a view& There can 4often6 be strong moral reasons for counties to ensure the long1term interests of their citi-ens&

$t is not only governments which have evo,ed morality as the basis for giving aid& $n presenting the (case for aid)% and after posing the 0uestion why rich countries should provide aid% the World Ban,)s response was that human being have a basic responsibility to alleviate suffering and to prevent the needless deaths of other human beings& They not only have a (moral obligation to share their good fortune with others%) but failure to ta,e action is deemed to be (morally reprehensible) 47tern !""!C #<1#>6& 7imilarly% in !""M% the 'anaging .irector of the $' asserted that the rich countries bear the (greatest responsibilities) for achieving the goals of poverty reduction as encapsulated in the 'illennium .evelopment /oals 4'./s6% by meeting their commitments to provide higher levels of aid 40uoted in BD 'illennium Project !""<C #956& $n !""<% the !! member states of the 3uropean Bnion signed the (3uropean Consensus on .evelopment)% agreeing not only that (combating poverty is a moral obligation)% but that progress in eradicating poverty will help to build a more interdependent world where we (would not allow) one billion people to struggle on less than one dollar a day& #" )id and t#e %ature of 4o!ernment;s 8oral ,bligations /overnments say aid is a moral issue and say they provide aid because it is morally right to do so& But in what sense do governments have a moral obligation to provide aidW $f governments do have an obligation to provide aid% what does that obligation entailC precisely how should they respond to the problems of e*treme poverty against the bac,drop of their large and growing wealth and the widening gulf between rich and poor s,etched out in Chapter ;W $f governments have moral obligations to provide aid% are these obligations which apply solely to individual donors% or are there wider obligations which e*tend beyond the confines of the choices that individual governments ma,e in isolationW These are fundamentally important 0uestions% but they remain insufficiently discussed and e*amined&

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A ,ey issue in determining whether governments have obligations to the distant needy revolves around the 0uestion of the (moral unit) around which the discussion is cast& While to cosmopolitans it is clear and self1evident that the basic moral unit is the world% for many others% this is self1evidently wrong& $ndeed% it would seem to be at variance with one of the most fundamental tenets of international relations and the way that governments have thought about issues of morality and obligation& or many people% that fact that we inhabit a world consisting of different nation states% and that there is no world government and no state wants one% means that moral obligations need to be framed within the prevailing state1based system& Conse0uently% it is the state which constitutes the core moral unit around which obligations and potential obligations evolve& ## As governments views the world through the lens of states% we will begin the discussion on governments% morality and aid1giving by considering the core moral unit to be the state% and states% though the discussion will subse0uently be broadened to the international (system of states)% not least because this is what states themselves increasingly have been doing& Against this bac,drop% we now loo, in turn at governments% aid and morality through three different lenses& The first% which we will call the (narrow absolutist perspective)% assumes that governments only have moral obligations to their own citi-ens& The second% called the (mi*ed perspective)% assumes that donor governments have some moral obligations to the poor beyond their borders but these obligations are wea, and can usually be trumped by moral obligations at home& The third% called (an evolving international perspective)% assumes that the moral obligations of states are in part formed and shaped by factors and decisions beyond their borders which% in turn% influence the traditional mi* of obligations between citi-ens and non1citi-ens& KNL

!oeder* Phili" 26 -8;A70* 1,he ,ies that Bind: Aid* ,rade* and Political %om"liance in So$iet,hird &orld !elationshi"s*4 in International Studies Quarterly* 5ol6 .;* )o6 .* ""6 8;8-.8:6
The findings of this study suggest a comple* relationship among aid% trade% and political compliance in 7oviet1Third World relations& $t has long been noted that the 7oviet Bnion uses aid as a direct instrument of influence% by see,ing to induce Third

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World states to adopt policies favorable to the 7oviet Bnion& 2n the one hand% in order to encourage Third World states to adopt anti1Western or pro17oviet policies% the 7oviets have offered assistance 4Walters% #95"CHH6& 2n the other hand% (the 7oviet Bnion has demonstrated a willingness to cancel credits abruptly or e*ert severe economic pressure on countries of importance to the B77R which adopt anti1 7oviet policies) 4Walters% #95"C#>5: .awisha% #959C#;#6& Xet% this direct use of 7oviet aid appears to be only part of a more comple* causal ne*us& According to the theory of 7oviet1centered dependence and the results presented here% 7oviet aid apparently can also induce compliant behavior indirectly through the creation of trade dependence& $ndeed% specific features of the 7oviet aid programs appear designed to accentuate their trade dependence effect& irst% almost all 7oviet aid has been tied% in the strictest sense% to purchases of 7oviet machinery and e0uipment& This enhances the import dependence effect& 7econd% the 7oviets have permitted many Third World recipients of arms and economic aid to repay these loans with local currencies or commodities 4Cooper and ogarty% #959C><": 7tevens% #95>C5;6& This enhances the e*port dependence effect& The results of this study suggest that while the importance of the 7oviet arms program as a direct instrument of influence has grown% its importance as a tool for creating trade dependence among recipients has declined& The diminished e*port dependence effect of 7oviet arms assistance may result from the shift in 7oviet arms sales policy toward commercial terms with repayment in hard currency& 2riginally% the 7oviet Bnion was li,ely to offer liberal terms of repayment% including a repayment period of eight to ten years at ! per cent and% importantly for its e*port dependence effect% repayment in commodities& $n the #95"s% the 7oviets increasingly re0uired repayment in hard currencies 4Cooper and ogarty% #959C><"6& 3ricson and 'iller 4#959C!#M6% both of the Central $ntelligence AgencyZs 2ffice of 3conomic Research% estimate that hard currency receipts rose from about #" per cent of total arms deliveries in #95"1#95! to about MH per cent in #95>1 #95;& This has meant that recipients% on average% are less li,ely to redirect their e*ports to the 7oviet Bnion in order to pay for 7oviet arms& #5 $n short% while 7oviet arms transfers appear to have accentuated the growth of Third World trade dependence on the 7oviet Bnion in the #9>"s% they do not appear to have slowed its decline in the #95"s& Conversely% the results suggest that the offer or threatened loss of 7oviet economic assistance has not directly increased compliant behavior among recipients% but that the 7oviet economic assistance program has increased in importance as a tool for building trade dependence among recipients& The second may be a result of important shifts in 7oviet policies since the fall of ?hrushchev away from his (political approach to development) 4Ial,enier% #95"CM!M6& 7pecifically% the growing e*port and import dependence effect of 7oviet economic assistance may be the conse0uence of more effective administration as well as growing pragmatism and commercialism in the 7oviet program& $mproved administration + institutionali-ed in such practices as (e*tensive long1term planning) through joint permanent commissions with individual recipients 4Ial,enier% #95"CM#51M#;6 + means that projects are more li,ely to be completed successfully and efficiently 4Cooper and ogarty% #959C><H: see also Walters% #95"C##>6& /rowing pragmatism has meant fewer (showy) projects that are unproductive or uneconomical& $t has been reflected in a less dogmatic approach to 0uestions of nationali-ation% agricultural

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development% and state planning within Third World economies 4Ial,enier% #95"CM!H1MH#6& The greater commercialism of 7oviet economic assistance policy has meant that the 7oviet Bnion gives closer attention to projects that promise production that complements the 7oviet economy& $ndeed% some 7oviet analysts have (viewed aid1giving primarily as an alternative to domestic investment and argued that it would be cheaper for the B77R to import certain goods and materials than to produce them at home) 4Ial,enier% #95"CM#>1M#5: cf B7 Central $ntelligence Agency% #9;"C;: Poc,ney% #9;# C<M6& These shifts in policy seem to have increased the import and e*port dependence effect of 7oviet economic aid& This apparent difference in effect between the two aid programs suggests that the relati!e importance of the two forms of 7oviet aid as instruments of influence varies with time& That is% in the short term 7oviet arms appear to be the more significant instrument: in the longer term% economic assistance may be the more conse0uential& This difference implies that in a broader 7oviet strategy its aid instruments can complement one another in the Third World& A rational 7oviet strategy concerned with building political influence in the Third World can balance both forms of aid% using economic assistance to build longer1term ties that bind Third World states to the 7oviet Bnion for political purposes% while using arms transfers as a more immediate inducement of favorable policies 4 cf Albright% #9;!CH"#1H"!6& inally% the findings of this study raise 0uestions about the claim of the theory of 7oviet1centered dependence that the longer1term 7oviet objective behind its aid programs is to build an (international socialist division of labor)& This theory argues that the ultimate 7oviet objective in building trade dependence is to integrate A.C economies with the socialist system and to deny those sources of raw materials and mar,ets to the capitalist economies& $f this is% indeed% the 7oviet objective% the findings of this study argue that the 7oviet Bnion is failing& While 7oviet economic aid has been associated with increasing trade dependence on the 7oviet Bnion% its effect has not been enough to overcome those forces that are eroding that dependence& As noted above% the proportion of Third World trade with the 7oviet Bnion has been declining among recipients of 7oviet aid as well as non1recipients& $n our study of >! Third World states% only #; saw the proportion of their e*ports going to the 7oviet Bnion grow between the beginning and the end of the #95"s and only three saw this grow by more than five percentage points 4Argentina% #M&M percentage points: 3thiopia% ;&5: and /hana% <&>6& $n this period% only !M states saw the proportion of their imports coming from the 7oviet Bnion grow and only one saw this grow by five percentage points or more 43thiopia% >&9 percentage points6& 2f these three states% only 3thiopia was a major recipient of aid in the #95"s& Poc,ney 4#9;# CH6 notesC The #95> Report of the Bnited Dations Conference on Trade and .evelopment shows that whilst the trade of the B77R has e*panded in physical and monetary terms% as has the trade of most developing countries% the proportion of the world $mport13*port mar,et each group has ta,en has been falling for most of the years since #9>"& The importance of this cannot be over1 emphasi-ed& 3ven with all the problems of oil prices% inflation% stagflation% and the biggest depression in the trade cycle since #9M<% the developed mar,et

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economies have been ta,ing% together with 2P3C countries% larger s#ares of an e*panding world mar,et turnover 4emphasis in original6& $n short% the growth in 7oviet1A.C trade has failed to ,eep pace with the far more dynamic growth of Western trade& $t would appear that in the aggregate Third World trade dependence on the 7oviet Bnion is declining& $n fact% this claim by the theory of 7oviet1centered dependence may be based on a misunderstanding of both 7oviet and Third World objectives& irst% this theory may fail to understand Third World intentions in opening economic ties with the 7oviet Bnion& 7tevens 4#95>CH;6 argues that in Blac, Africa (commercial relations with the 3ast have been thought of& & & not as an alternative to Western mar,ets but as an adjunct to them)& Third World states% for the most part% have remained interested in trade with the West% which earns them hard currency and provides commodities of higher 0uality& Xet they cannot continue to e*pand their sales of primary products to the West without depressing the prices they receive& To avoid such gluts that might jeopardi-e their trading relations with the West% many Third World states have turned to the 7oviet Bnion and the 3ast as a second1best mar,et to which they can sell their primary products without depressing the world mar,et price& $n short% Third World states oftentimes turn to the 3ast not to redirect their trade from the West but to protect that trade& This limits 7oviet opportunities to build trade dependencies and build a separate (international socialist division of labor)& 7econd% the claims of this theory may be based on 7oviet theories that are now dated and have been revised& Ial,enier)s research 4#95"% #9596 into 7oviet foreign economic policies points out that the 7oviet view of the international division of labor has changed fundamentally& 7he argues persuasively 4Ial,enier% #959C#56 thatC The new trends in aid and trade policies and much of the attendant discussion suggest that the aim is not so much the displacement of the e*isting economic order as its modification to create appropriate conditions for greater and more advantageous 7oviet participation& $nstead of trying to enlist less developed countries 4A.Cs6 of the Third World in an international socialist division of labor & & & the 7oviets are increasingly discussing and instituting new forms of economic e*changes wherein mutual advantage% modified mar,et forces% multilaterali-ation% and commercial gain will benefit not only the A.Cs and the socialist bloc but the West as well% with all three categories considered and treated as parts of an interdependent world 4 cf Albright% #9;!C H"!6& The decline in Third World trade dependence on the 7oviet Bnion may be closely tied to this change in policies& $n particular% the 7oviet Bnion% in its commercial relations with the A.Cs% may increasingly be see,ing to complement its growing trade with the West by earning hard currency and attempting to support economic development at home by satisfying consumer demands and providing primary products more economically& With this shift in purpose% the 7oviet Bnion is less concerned with building a separate international socialist division of labor& Ta,en as a whole these findings suggest a second policy implicationC the 7oviet Bnion% in see,ing political influence% may find reliance on military% rather than economic% assistance more profitable in the future& The apparent continued value of

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arms assistance as a direct inducement to political compliance 4just as economic assistance seems not to have had that value6 gives priority to the first in the short run& The inability of economic assistance 4even with an apparent increase in its ability to build trade dependence6 to compensate fully for all those forces eroding the proportionate position of 7oviet trade in the Third World may lead the 7oviets to 0uestion the value of economic assistance for even long1term political purposes& $ndeed% the growing economic rationality in 7oviet economic assistance programs may% in part% be a reflection of the growing recognition that these programs have only limited political value& And the rise of 7oviet military involvement in the Third World during the last ten years may be a manifestation of growing 7oviet recognition that they are unable to e*tract great political value from economic asistance KsicL or to build an international socialist division of labor 4 cf Albright% #9;!CH"#6& 7tripped of its sometimes apocalyptic fears% such as the denial of raw materials to the West and the (inevitable crisis of capitalism)% the theory of 7oviet1centered dependence describes conse0uences of military and economic aid that are not uni0ue to the 7oviet programs& While this theory and other studies of aid% dependence% and compliance have largely developed independently of one another% each posits a set of relationships that might be argued to e*ist for all great powers& The effort here has been limited to formulating the theory of 7oviet1centered dependence as a series of hypotheses% testing those hypotheses% and drawing parallels to the e*tant literature on dependence in a manner that is faithful to the original% albeit inchoate% theory& Xet% the parallels found to e*ist in the empirical evidence suggest that future research on either 7oviet or Western aid% dependence% and compliance must consider the effect of competing efforts by other great powers dispensing aid% e*panding trade% and building political influence&

!oodman* Da$id -.//<0* 1,he Anarchy of )umbers: Aid* De$elo"ment* and %rosscountry +m"irics*4 Wor)in! Paper :8$ *enter for Glo"al &evelopment6
3ach of the papers e*amined here embodies a set of choices about model specification and data& Aid is measured a certain way& A certain epoch is studied& Periods have a certain length& And so on& 7ome of these choices imply certain assumptions about the world% such as% say% that aid is not endogenous to growth& All limit the scope of a strict interpretation of the results&

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To wit% the Burnside and .ollar results can be stated more precisely as followsC )id $as associated $it# #ig#er 4DP gro$t# in a good polic en!ironment during 1D70SDC, on a!erage, in countries and periods $#ere t#e necessar data $as collected, e'cept for outliers (unless aid 2Tpolic is included to allo$ for diminis#ing returns to aid), $#en aid is defined as =&ffecti!e De!elopment )ssistance> as a s#are of real 4DP and polices are defined b inflation, budget deficit, and t#e comple' "ac#s</arner =openness> !ariable, controlling for log of initial real 4DPUcapita, assassinations per capita, et#no<linguistic fractionali6ation, t#e product of t#ose t$o, mone suppl U4DP, and period effects, assuming t#at no unobser!ed countr <specific effects simultaneousl and substantiall influence aid, policies, and gro$t#, and no !ariables ot#er t#an aid aidTpolic are endogenous to gro$t#. This is not 0uite Eaid has a positive effect on growth in a good policy environment&F $n fairness% such 0ualifiers could be tac,ed on to the conclusion of any study in the cross1country literature on aid and development% or in econometrics more generally 4though perhaps not always 0uite so many6& 'oreover% Burnside and .ollar did test some of their assumptions% such as the e*ogeneity of the policy variables& Devertheless% a 0uestion of great scientific and practical importance remains% and it is how many of such implied 0ualifiers in studies of aid and growth can be dropped without harming the conclusions& This study attempts to contribute to answering that 0uestion& The test results reported here suggest that the fragility found in 3asterly et al& 4!""M6 for the case of Burnside and .ollar is common in the cross1country aid effectiveness literature& $n surveying the results% it is tempting to as, which results are robust and which are not& But the test data are best seen in shades of grey& The results tested here brea, roughly into five groups% ranging from wea,est to strongest& The wea,est group consists of the results on aidhpolicy in the Burnside and .ollar% Collier and .ollar% and Collier and .ehn regressions% which lose significance at "&"< in all but the wea,est tests& $n the second division $ put the Collier and .ehn result on iaidhnegative shoc,% which passes more tests but is 0uite sensitive to changes in the control set% as well as to removal of a minority of the negative shoc,s in the sample& The Collier and Hoeffler result on post1conflict #haidhpolicy 4or the collinear post1conflict #haid6% the Hansen and Tarp results on aid and aid !% and /uillaumont and Chauvet result on aidhenvironment seem stronger& They generally pass the EwhimsyF1based tests at or near "&"<& 'ost survive the sample1e*pansion test% but with autocorrelationYand then fail the AR1robust test meant to address this problem& The /uillaumont and Chauvet result could not be put to the sample1 e*pansion tests% so the degree of its robustness is less certain and $ add it to this middle category& $n the fourth and fifth categories are the /'' results of Hansen and Tarp and .algaard et al.% respectively& Both fare well under the sample e*pansion& The Hansen and Tarp /'' results% especially those on aid and lagged aid% generally persist through the test suite% though not always significantly at "&"<& The only test that completely eliminates the Hansen and Tarp /'' results is that of defining aid as 3.AGreal /.P% but this is a misleading measure of aid& As for the .algaard et al&

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results% they come through powerfully in all the tests but the #!1year aggregation that reduces the sample si-e to ##>& .oes this mean that the statistically wea,er stories of aid effectiveness should be dismissedW Are recipient policies% e*ogenous economic factors% and post1conflict status irrelevant to aid effectivenessW Do& There can be no doubt that aid sometimes finances investment 4Hansen and Tarp% !""#6% and that domestic policies% governance% e*ternal conditions% and historical circumstances influence the productivity of investment& Why then do such stories of aid effectiveness not shine more clearly through the numbersW The reasons are several& Aid is probably not a fundamentally decisive factor for development% not as important as% say% domestic savings% ine0uality% and governance& 'oreover% foreign assistance is not homogenous& $t consists of everything from in1,ind food aid to famine1struc, countries and technical advice on building judiciaries to loans for paving roads& And some aid is poorly used& Thus the statistical noise nearly drowns out the signal& $f there is one strong conclusion from this literature it is that on a!erage aid wor,s well outside the tropics but not in them& But just as it would be a mista,e to conclude that the other stories of aid effectiveness contain no truth% it would also be mista,en to conclude that this result is the wholly% simply true& $ndeed% the .algaard et al& result is more of a 0uestion than an answer& Presumably distance from the poles is not a direct determinant of aid effectiveness& Rather% the causal pathways are comple*% and so it cannot be assumed that no ,ind of aid will wor, well in the tropics& 'uch the same can be said about the more optimistic% but somewhat less robust% Hansen and Tarp result on the overall positive effect of aid on growth& 3ven accepting it as true% it gives little guidance about where aid ought to be sent% and in what forms& Perhaps further econometric wor, will disaggregate aid by types of program and recipient and unearth more robust answers to the fundamental 0uestions of aid policy& 2r perhaps re1searchers have hit the limits of what cross1country empirics can reveal about aid& The search for truth may need to rely more on the particularistic case study approach& Ian de Walle and Johns1ton 4#99>6% for e*ample% synthesi-e conclusions from case studies on the use and effects of aid in seven African countries% each jointly conducted by researchers from donor and recipient countries& 2f course% the lessons that emerge from case studies are particular to the country studied& But they can be generali-ed& ?illic, 4#99;6 provides an e*cellent e*ample by conducting a systematic survey of case studies that feeds into a trenchant analysis of the effects of $' conditionality& Devertheless% robust generali-ations will not come easily&

!oodman* Da$id -.//>0* 1,he Anarchy of )umbers: Aid* De$elo"ment* and %ross!!

country +m"irics*4 in The World +an) Economic Review* 5ol6 .8* )o6 .* ""6 .77-.>>6
The results reported here suggest that the fragility found in 3asterly% Aevine% and Roodman 4!""M6 for Burnside and .ollar 4!"""6 is the norm in the cross1country aid1 growth literature& $ndeed% in a counterpoint to the focus of Aeamer 4#9;H6% Aevine and Renelt 4#99!6% and 7ala1i1'artin 4#9956 on the choice of controls as a source of fragility% it turns out that modifying the sample generally affects results the most& or e*ample% in the Collier and .ollar 4!""!6 regression% half of the specification1 modifying tests leave the t statistic at #&M9 or higher and two more lower it to near #&"" 4see table <6& But adding more years sends it to +"&#9Yand% after dropping outliers% to +"&;# 4see table >6& .oes this mean that the various stories of aid effectiveness should be summarily dismissedW Are recipient policies% e*ogenous economic factors% and postconflict status irrelevant to aid effectivenessW Are there no diminishing returns to aidW $s helping the neediest countries a hopeless tas,W Do& There can be no doubt that some aid finances investment and that domestic policies% governance% e*ternal conditions% and other factors these authors study influence the productivity of investment& Why then do such stories of aid effectiveness not shine through more clearlyW Aid is probably not a fundamentally decisive factor for development% not as important% say% as domestic savings% ine0uality% or governance& 'oreover% foreign assistance is not homogeneous& $t consists of everything from food aid for famine1struc, countries to technical advice on building judiciaries to loans for paving roads& And much aid is poorly usedYor% li,e venture capital% is li,e good bets gone bad& Thus the statistical noise tends to drown out the signal& Perhaps researchers will yet unearth more robust answers to the fundamental 0uestions of aid policy& 2r perhaps they have hit the limits of cross1country empirics& 3ither way% robust% valid generali-ations have not and will not come easily& .espite decades of trying% cross1country growth empirics have yet to teach us much about whether and when aid wor,s&

!othchild* Donald S6 -.//80* 1,he (S Foreign Policy ,raHectory on Africa*4 in SAIS Review* 5ol6 .8* )o6 8* ""6 8>;!!

.88* ?ohn Press6

o"Bins (ni$ersity

.espite an activist foreign policy orientation% the B&7& trajectory on Africa has% on the whole% tended toward low1profile involvement& 55 To be sure% there have been notable e*ceptions% such as the #9;> Comprehensive Anti1Apartheid Act% the #9;; mediation of the Angola1Damibia accords% and the humanitarian intervention in 7omalia& $n general% however% B&7& administrations% Republican and .emocratic ali,e% have been cautious in their engagement with Africa& The Clinton administration% despite its rhetoric on partnership% held firm to the post1World War $$ trend of limited involvement& $ts initiatives on enlarging democracy% promoting trade% bac,ing a debt write1off% and sponsoring ACR$ KAfrican Crisis Response $nitiativeL represent low1cost and low1ris, efforts that reflect B&7& interests and values& $ts record on foreign economic assistance and peace,eeping are not what one would e*pect of a great power& By acting pragmatically% the Clinton administration had to limit its foreign policy objectives to what was acceptable to Congress and the public& Bnder these circumstances% what can be done to promote a change in the Bnited 7tates trajectory toward a more constructive and life1affirming interaction with AfricaW We do not want an activist foreign policy that does not respect Africa)s desire for autonomy and self1reliance% but rather one that supplements responsible African decision1ma,ing to achieve Africa)s own goals and purposes& 7uch a spirit of self1effacing cooperation and enlightened self1interest may be essential to achieve long1term African and B&7& interests% but it will not be easy to cultivate& To do this% it will be necessary for political leaders to commit greater energies to encourage an increased public understanding of Africa)s needs and aspirations% and for a stronger B&7& constituency on Africa to emerge& 2nly a concerned B&7& leadership and domestic constituency for Africa will be sufficient to overcome the trend toward drift and detachment that has mar,ed B&7& policy toward Africa&

!uttan* 5ernon &6 -8;A;0* 1&hy Foreign +conomic Assistance34 in Economic &evelopment and *ultural *han!e* 5ol6 9>* )o6 .* ""6 <88<.<6
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The first conclusion that emerges from this review is the wea,ness of the self1 interest argument for foreign assistance& The individual 4or group6 self1interest arguments% after careful e*amination% often represent a hidden agenda for domestic rather than international resource transfers& The political ErealistsF have not been able% or have not thought it worthwhile% to demonstrate the presumed political and security benefits from the strategic assistance component of the aid budget& Rawlsian contractarian theory does provide a basis for ethical responsibility toward the poor in poor countries that goes beyond the traditional religious and moral obligations of charity& $t also provides a basis for ma,ing judgments about the degree of ine0uality that is ethically acceptable& But the contractarian argument cannot stand by itself& $ts credibility is wea,ened if% in fact% the transfers do not achieve the desired conse0uences& ailures of analysis or design can produce worse conse0uences than if no assistance had been underta,en&<# There is no obligation to transfer resources that do not generate either immediate welfare gains or growth in the capacity of poor states to meet the needs of their citi-ens& $t becomes important% therefore% to evaluate the conse0uences of development assistance and to consider the policy interventions that can lead to more effective development assistance programs& 7ince the #9<"s our understanding of the development process has made major advances& But we can never fully understand the conse0uences of any assistance activity or of intervention into comple* and interdependent social systems& 2ur limited ,nowledge about how to give and use aid to contribute most effectively to development does not% however% protect us from an obligation to assess the conse0uences of our strategic or development assistance and to advance our capacity to understand the role of e*ternal assistance in the development process&

!uttan* 5ernon -8;;:0* 1,he Domestic Sources of Foreign Assistance Policy*4 in !uttan* 5ernon* 6nited States &evelopment Assistance Policy# The &omestic Politics of 'orei!n Economic Aid* ""6 8-8A* Baltimore: ?ohns o"Bins (ni$ersity Press6
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'y basic premise in approaching the study of B&7& foreign economic assistance policy is that domestic sources have been more important in determining the si-e and direction of assistance than has the international economic and political environment the assistance is intended to influence& $n this chapter $ have outlined a three1level conte*t in which to test this premise against the history of B&7& development assistance policy& At the macropolitical le!el $ emphasi-e the persistent aspects of B&7& political cultureC the tendency to vacillate between the two offspring of American e*ceptionalism + the liberal doctrine% which emphasi-es cooperation in international relations% and the realist doctrine% which emphasi-es the need for political dominance by the Bnited 7tates& At the polic formation le!el% $ emphasi-e the role of American economic and political power% a reactive style of policy formation% and popular anticommunist ideology& At the micropolitical le!el + the level of program direction and design + $ emphasi-e the role of the several constituencies and interest groups that bring their influence to bear on the process of policy formation and program design and project administration& $n subse0uent chapters $ assess the role of these domestic macro1 and micropolitical factors they impinge on the actors or agents involved in assistance policy formation and program design&

!uttan* 5ernon -8;;:0* 1+conomic Assistance for Strategic ObHecti$es*4 in !uttan* 5ernon* 6nited States &evelopment Assistance Policy# The &omestic Politics of 'orei!n Economic Aid* ""6 .7999.* Baltimore: ?ohns o"Bins (ni$ersity Press6
Activities programmed under the 37 budget declined steadily after the mid1#9;"s 4Chap& 56& The growth of the 37 during the late #95"s and early #9;"s reflected% in large part% the more activist approach of the late Carter and Reagan administrations to contain actual and presumed 7oviet political penetration of 7outhwest Asia% Central America% and Africa& $t also reflected an effort to circumvent what the administration viewed as e*cessive congressional earmar,ing of resources allocated

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under development assistance in the foreign aid budget& 2ne effect of the dramatic increase in the number of countries that received 37 aid was to erode the separate rationale of the development assistance and 37 programs& The collapse of the 7oviet empire further wea,ened the rationale of economic assistance for strategic purposes& $n draft legislation submitted to Congress late in #99H% the Clinton administration proposed eliminating 37 as a separate item in the A$. budget& But elimination of 37 as a budget item will not eliminate the use of economic assistance for strategic purposes& What lessons should be drawn from the history of economic assistance for strategic purposesW The lesson from earlier e*perience in Aatin America% Western 3urope% /reece% China% and ?orea did not provide useful guides to our e*perience in Iietnam& Dor have the lessons that were drawn from Iietnam protected the Bnited 7tates from devoting e*cessive resources to the defense of presumed national interests in other areas of little strategic significance% such as Dicaragua and 3l 7alvador& The lesson from assistance to 3gypt + that economic assistance to strategically important countries typically produces little in the way of economic development + had been learned earlier in Tur,ey& The lesson that we have learned from assistance to $srael is that domestic political pressure can be mobili-ed to force an allocation of assistance resources that are clearly inconsistent with an incumbent administration)s definitions of broader B&7& strategic interests& 2ne of the most difficult lessons to accept from the history of economic assistance for strategic purposes is that% in the area of foreign policy% American presidents and their senior advisors cannot be e*pected to be honest with the American people or their representatives in Congress&!!9 3ach president from 3isenhower to Di*on tried to plant both feet firmly on both sides of the Iietnamese issue% promising to minimi-e American commitment to Iietnam while e*aggerating the significance of Iietnam to American society& And each president since 3isenhower shamelessly lied to Congress and the American people about the commitments being made in Iietnam& Peace proposals were advanced with the objective of sustaining domestic support for the war rather than with any realistic e*pectation that they could be accepted by Dorth Iietnam& The art of dissembling to the public and to Congress was practiced with particular s,ill and deliberation by Henry ?issinger during his term as national security adviser and as secretary of state& $t was practiced with at least as much deliberation% but with somewhat less s,ill% by President Reagan and his national security staff in defending B&7& policy toward Dicaragua and 3l 7alvador and during the $ran1Contra controversy& The acceptance of this practice by the establishment press has been particularly disturbing& Joseph ?raft of the %e$ Por2 -imes commented about ?issinger% EWhile he almost certainly lied% the untruths are matters of little conse0uence when weighted against his service to the state&F $ cannot be so generous as ?raft& Aac, of honesty in dealing with the American people destroys the credibility of the policies that are being advanced and of the institutions the policies are designed to protect& $ am not able to go as far as the iconoclastic journalist $& & 7tone% E3very government is run by liars% and nothing they say should be believed&F !H" But $ do insist that we have been taught to loo, behind every policy pronouncement + to as, not what was said but why it was said& The failure to deal openly with the American people and with Congress on issues of national security has been costly& $n his introduction to the Tower commission

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report% R& W& Apple argued that EAyndon B& Johnson was shouldered into retirement by massive disenchantment with the war in Iietnam& Richard '& Di*on was sun, by Watergate and resigned in the face of probable impeachment& /erald R& ord was doomed by the pardoning of his predecessor& Jimmy Carter ran aground on the shoals of $ran&F!H# rom the perspective of the mid1#99"s% one might add that Ronald Reagan)s incapacity for governance was revealed by the $ran1Contra affair and that the legacy of /eorge Bush)s presidency was severely tarnished by his failure to dislodge 7addam Hussain from power in concluding the #99"19# war with $ra0 and by his effort to deflect attention from his role in the $ran1Contra affair& $ see little hope% however% that the lessons from the past will provide substantial guidelines in considering the use of economic assistance in a post1Cold War environment& The power of the American government to act in the national interest is so influenced by parochial interests and by cycles in popular sentiment that the capacity to pursue longer1term national interests lies effectively outside the competence of those charged with the shaping and e*ecution of foreign policy& $ argued earlier that the tendency to vacillate between the two offspring of American e*ceptionalism + between idealist and realist doctrine + has been a persistent aspect of B&7& political culture 4Chap& !6& The tension between these two poles has been a continuing theme in the political dialogue on economic assistance for strategic purposes& Aiberal politicians and their constituents have found it difficult to support economic assistance that could not be rationali-ed in terms of the well1being of aid recipients& Conservatives have typically insisted that economic assistance be justified in terms of B&7& economic or strategic self1interest& rom the end of World War $$ to the mid1#9>"s% liberals found it easy to support foreign economic assistance because of a presumed convergence between moral purpose and strategic interest: a more prosperous world would also be a safer world& $n contrast% conservatives typically opposed foreign assistance& They could find little political or ethical justification for ta*ing Americans to do good for foreigners 4Chap& !6& By the late #9>"s positions had reversed& Aiberals found the moral costs of the Iietnamese war + the human and material costs to both Iietnam and the Bnited 7tates + too large to continue to rationali-e when measured against the limited strategic value of 7outh Iietnam to the Bnited 7tates& $n contrast% conservatives came to view success% or at least Epeace with honor%F in Iietnam as a test of America)s credibility in its effort to contain communism& By the #9;"s% this same test was being applied in Dicaragua and 3l 7alvador& By the #9;"s liberal and conservative roles again began to reverse positions& !H! $n the #99! presidential campaign% there were calls by conservatives% in both the Republican and the .emocratic parties% for disengagement from international responsibilities& But the brea,up of the 7oviet empire% followed by an eruption of genocide in former Xugoslavia% and the brea,down of civil order in 7omalia provided a moral rationale% acceptable to liberals and even some conservatives% for humanitarian assistance to parts of the world of little economic or strategic value to the Bnited 7tates&

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$t is now time for the Bnited 7tates to underta,e a thoroughgoing reassessment of its strategic interests in a post1Cold War world and of the use of economic assistance for strategic purposes& $ argued earlier 4Chap& !6 that ethical considerations re0uire% at a minimum% that foreign assistance do no harm to recipients& The history of our use of economic assistance for strategic purposes suggests that this minimum criterion has seldom been met when B&7& assistance has been given for strategic purposes&

Schraeder* Peter ?6* ooB* Ste$en &6 and ,aylor* Bruce -8;;A0* 1%larifying the Foreign Aid Puzzle: A %om"arison of American* ?a"anese* French* and SCedish Aid FloCs*4 in World Politics* 5ol6 7/* )o6 .* ""6 .;<=9.96
The cross1national analysis clearly demonstrates that the origins of the foreign aid policies of the northern industriali-ed democracies are comple* and varied& .espite the fact that the four donor states under review maintained shared democratic values and a common industrial base of development% notable differences as concerns historical bac,grounds 4for e*ample% rench colonialism in Africa6 and positions within the international system 4for e*ample% the B&7& as a strategic hegemon and 7weden as a middle power6 ensured that foreign aid policies were influenced by different combinations of foreign policy interests& Do two cases were ali,e% a fact that reinforces the need for detailed scrutiny of the individual cases& Xet empirical patterns that emerged in three of our four cases allow us to draw some general conclusions about the nature of the foreign aid regime of the final cold war decade& irst% the results clearly reject the rhetorical statements of policyma,ers within the industriali-ed Dorth who publicly assert that foreign aid is an altruistic tool of foreign policy& Rather than demonstrating a positive relationship between foreign aid and recipient social1welfare factors% our findings discounted the role of humanitarian need in the aid policies of these industriali-ed democracies& $n the cases of rance% Japan% and the Bnited 7tates% the fact that foreign aid does not stem from altruism is hardly a new finding +despite vigorous past efforts on the part of rench% Japanese% and American policy ma,ers to project such an image abroad& $ndeed% in the case of Japan% aid was targeted toward countries with relatively high

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levels of life e*pectancy% the opposite of what one would e*pect if humanitarian interests were operative& However% the lac, of a relationship between foreign aid levels and humanitarian need in the case of 7weden cast doubt on the preponderant view that 7weden and other middle powers% most notably Canada and the other Dordic countries% were e*ceptional in this regard& 7pecifically% our findings call for a thorough ree*amination of the prevailing assumption within the aid community that the Dordic countries and other middle powers maintained a uni0ue% humanitarian based set of policies within the foreign aid regime of the #9;"s& >5 The second cross1national trend confirmed that ideology played an important role in the foreign aid regime of the #9;"s& $n the American% Japanese% and 7wedish cases% there e*isted a positive relationship between foreign aid levels and the ideological posture of African regimes& Whereas B&7& foreign aid policies were targeted toward capitalist regimes willing to support WashingtonZs containment policies% 7wedish policyma,ers were particularly interested in strengthening li,e1minded progressive regimes in 7outhern African and Japanese aid policies favored capitalist over 'ar*ist regimes& The rench case emerged as an anomaly& Xet despite the fact that ideological factors as conceptuali-ed in this study ultimately did not influence rench policies toward Africa% rench policyma,ers approached the necessity of ensuring the spread of rench culture with the same ideological fervor adopted by B&7& policyma,ers to prevent the spread of communism during the cold war era& $n this regard% la francop#onie could be characteri-ed as a culturally based ideology that strongly influenced all other rench interests in Africa& A related yet less pervasive cross1national trend was the importance of strategic interests in the foreign aid regime of the #9;"s& As correctly surmised in the 0ualitative case study literature% neither Japanese nor 7wedish policyma,ers based their foreign aid policies on the strategic importance of recipient states% although Japan did pursue a foreign aid relationship with Tan-ania based not on economic self1interest but on calculations of Tan-ania)s regional diplomatic influence& 2nly among American and rench policyma,ers + representing states with aspirations to global political leadership + did security interests play an important role in foreign aid calculations& $n the case of the B&7&% these pretensions emerged in the form of security alliances with strategic allies willing to join Washington in its 0uest to contain communist and revolutionary e*pansion throughout Africa& $n the case of rance% aid supported growing local military forces designed to ,eep pro1 rench elites in power and therefore ensure continuation of the status 0uo& A fourth cross1national trend evident in all four cases was a negative relationship between aid levels and /DP per capita% clearly rejecting the e*pectation that northern donors favored those recipients that represented the most powerful economies in their region& Ta,en at face value% these results could be interpreted as verifying the importance of humanitarian need in the calculations of foreign aid administrators& 7pecifically% although /DP per capita is utili-ed as an economic variable% its inclusion as a humanitarian interest variable could suggest that aid has been targeted toward the neediest countries 4that is% those with a low /DP per capita6& However% a careful reading of the case study literatures and a comprehensive view of the statistical relationships suggest that factors other than humanitarian need e*plain this possibility& $n the case of the B&7&% for e*ample% the top recipients of B&7& foreign aid were anticommunist% authoritarian regimes that% li,e those regimes supported by Japan% rance% and 7weden 4albeit for different

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reasons6% were confronted with the ongoing deterioration of economies mar,ed by corruption and the negative repercussions of e*ternally imposed structural adjustment policies&>; Perhaps the most surprising cross1national trend was the emergence of trade as an important determinant of northern aid policies& Whereas this result was anticipated in the case of Japan% it clearly confounded the conventional wisdom concerning American and 7wedish foreign aid policies& However% when one focuses on the evolution of domestic politics in each of our four cases during what was earlier referred to as the EhingeF decade of the #9;"s% the emergence of trade interests in retrospect is more understandable& 3ven with 7weden% long recogni-ed by foreign aid opponents and proponents ali,e as a special case within the global foreign aid regime% increasingly vocal domestic actors were demanding a positive lin,age between foreign aid and the promotion of the 7wedish economy% most notably in terms of trade& According to the 23C.% this trend was prevalent throughout the industriali-ed northern democracies by the end of the #9;"s& >9 $n this regard% the end of the cold war merely laid bare the growing importance of trade in a foreign aid regime that was already being readjusted to meet the new economic challenges of the #99"s& The findings of this study not only help to clarify the foreign aid regime of the #9;"s but also provide us with a base from which to underta,e further analyses of earlier cold war decades and particularly the post1cold war decade of the #99"s& or e*ample% the decline of the majority of 'ar*ist and socialist regimes throughout the African continent in the aftermath of the fall of the Berlin Wall in #9;9 will almost certainly lessen the impact of the role of ideology in foreign aid calculations% most notably in the cases of the B&7& and 7weden& $n the case of rance% the devaluation of the C A franc in #99M + the first such devaluation since the creation of the ranc \one + perhaps suggests a decline in the overriding importance of culture and the beginning of greater rench concern with economic issues in an increasingly competitive post1cold war economic environment& 2ne would therefore e*pect trade interests to become more salient in rench foreign aid calculations during the #99"s& $ndeed% it is li,ely that the statistical importance of trade as seen during the #9;"s + regardless of whether this decade was uni0ue during the cold war era or constituted part of an ongoing trend + will intensify in the post1cold war era& A final note is re0uired concerning the generali-ability of our results beyond the African subset of the global donor1recipient foreign aid regime& 2ur study was based on the assumption that countries constituting a specific region such as Africa share certain characteristics that differentiate that subsystem from other geographical regions and therefore potentially affect northern aid policies differently& or e*ample% will the interests driving rench policy be different if the region of analysis 4for e*ample% Central America6 is not part of what rance historically has considered to be part of its African c#asse gardAe 4private hunting ground6W 7imilarly% will B&7& policy be driven by different interests if% rather than focusing on a region considered peripheral to B&7& foreign policy interests 4for e*ample% Africa6% the region of analysis constitutes part of what those policyma,ers historically have considered to be part of the B&7& bac,yard 4for e*ample% Central America and the Caribbean6W .efinitive answers to these 0uestions will be possible only when further empirical research focuses on donor1recipient relations in other regions of the developing 7outh during both the cold war and post cold war eras&

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Schraeder* Peter ?6 -.//80* PPPForget the !hetoric and Boost the 2eo"olitics@: +merging ,rends in the Bush Administration@s Policy ,oCards Africa .//8*4 in African Affairs* 5ol68//* ""6 9A>-</<6
This article assesses the Bush administrationZs selfjproclaimed (realist) policy towards Africa% the essential thrust of which is captured by the mottoC ( orget the rhetoric and boost the geopolitics)& Three essential elements of this approach include the strategic imperative of cultivating strong lin,s with AfricaZs leading regional powers% most notably Digeria and 7outh Africa% har,ening bac, to the Di*on administrationZs strategy of relying on such powers to ensure regional stability: building upon the Clinton administrationZs success in promoting B7 trade and investment with African countries% with a special focus on oiljproducing countries: and underscoring the need for Africans to (do more for themselves) in the realm of conflict resolution% suggesting a lowjprofile Bush administration approach to involvement in either peace,eeping or peacema,ing operations& 3merging trends are analy-ed by treating the B7 policyma,ing establishment as a series of three concentric circlesC the inner circle of the White House: a second circle comprising the bureaucracies of the e*ecutive branch: and an outer circle inclusive of the B7 Congress and the larger African affairs constituency& An important result of White House and Congressional neglect of Africa is that the Bush administrationZs foreign policy towards Africa% perhaps more so than that directed towards any other region of the world% essentially will be delegated to the highjlevel bureaucrats and political appointees within the e*ecutive branch% leading to an outcome best characteri-ed as (bureaucratic incrementalism) in which continuity rather than change will mar, the administrationZs policies towards Africa&

SchCeinberger* Albert 26 and Lahiri* SaHal -.//:0* 1On the

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Pro$ision of Official and Pri$ate Foreign Aid: A Political +conomy A""roach*4 in Journal of &evelopment Economics* 5ol6 A/* )o68* ""6 8>;=8;>6
The main purpose has been to e*plain the stri,ing differences in the provision of official relative to private aid among donor countries& To this end we have developed a political+economic model of official and private aid provision& To endogeni-e the public provision of foreign aid we have made use of a political support function& Also we assume + e*cept in 7ection < + that a group of households is not altruistic toward the recipients& urthermore we allow for the fact that government may not be able to credibly commit itself to a certain level of foreign aid& 2ne of the ,ey features of our model is that an increase in the income ta* rate creates a conflict of interest between donors and non1donorsC the welfare of the donor households rises and the welfare of the non1donors falls& Private foreign aid is reduced and therefore there is an increase in the underprovision from the donorsZ point of view& This decline implies% ceteris paribus% a decline in the welfare of donors& However there is also a transfer effect% i&e& an implicit transfer of income from the non1donors to the donors& $n our model the latter positive effect on donorZs welfare dominates the negative crowding out effect& $nitially we treat official aid e*ogenously and derive several (crowding out) results in the sense that an increase in official aid reduces private aid 4see 7ection !6& These preliminary results enable us to integrate our approach with the received literature on the official and private provision of public goods& They also appear to be relevant to the e*planation of the differences between official and private aid provision in countries such as Japan and the B7A& We generali-e the main results of our benchmar, model in three directionsC 4a6 we allow for official aid from a third country% 4b6 the assumption that official and private aid are perfect substitutes is rela*ed and 4c6 we drop the assumption that the utility functions of the donor households are separable in consumption e*penditure and aid provision& We proceed to endogeni-e official foreign aid in 7ection !&!& Proposition # in 7ection ! represents our first main result& We show that% contrary to intuition% total aid provision is lower in a country where the government can credibly commit itself to official aid& $n deriving Propositions H and M6 we treat the government and the donor households as players in a simultaneous game& The effect of differences in country si-e and household composition on total aid and official aid raised from each household is analy-ed& $t is shown% for e*ample% that in more populous countries official aid raised from each household is lower than in less populous countries& Proposition H and M can e*plain differences in the provision of official aid raised

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from each household in large countries such as the B7A and Japan on the one hand and smaller economies such as the 7candinavian countries on the other hand& $t can also e*plain the fact that the five countries which provided 4per one million of inhabitants6 more than one hundred million B7 dollars of total foreign aid in #99; are all relatively small countriesC .enmar,% Dorway% Au*embourg% 7weden and the Detherlands& $n 7ection M we allow for the provision of official foreign aid from a third country 4see Proposition <6& $t is shown that official foreign aid from a third country crowds out official foreign aid from the home country& $f the number of non1donor households is relatively large there may even be a crowding out of private aid& Proposition > of 7ection < focuses on differences in the distribution of income between the two donor types in different countries as a (cause) for different levels of total aid provision& $n this section% we allow the non1donors to be altruistic as well% and the fact that they are non1donors is treated endogenously& We derive a counterintuitive resultC if the distribution of income favors the more altruistic household total aid is lower& This again appears to be relevant to a comparison of aid provision between countries li,e the B7A and 7weden& $n our view the modeling framewor, put forward in this paper could be e*tended in three directions& irst% one should allow for the disincentive effects of income ta*ation& 7econd% one may argue that warm glow effects are important: i&e&% that an increase in the contribution per se increases the utility of the donors because of (joy of giving&) Third% one could allow for the interaction of official aid provision between two or more donor countries by endogeni-ing the provision of official foreign aid ma,ing use of political support functions& The latter may% of course% be different in the various donor countries&

SeCell* ?ohn and #athieson* ?ohn -8;A.0* 1,he (nited States and the ,hird &orld*4 in %assen* !obert* ?olly* !ichard* SeCell* ?ohn* and &ood* !obert -eds60 Rich *ountry Interests and Third World &evelopment*

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""6 <8-;9* elm6

London:

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At the beginning of the #9;"s% America)s relations with the developing countries seem to have come almost full circle since the #9<"s& 2ver the past three decades% B7 policies towards the countries that comprise the Third World have gone through several phases& irst there was a concern with alliances and aid designed to (contain) the 7oviet Bnion& $n the #9>"s the emphasis shifted towards (nation1 building) and winning the (hearts and minds) of people in the Third World& The #95"s was a period of relative neglect as the Bnited 7tates focused on domestic problems% tempered only by a dawning awareness of dependence on certain countries + most notably for petroleum + and a sense that (interdependence) was strengthening the lin,s between developed and developing countries and at the same time ma,ing conduct of American foreign policy more difficult& 'ost recently the primary concern seems to have swung bac, to the activities of the 7oviet Bnion and its allies& The Regan Administration% which came into office committed to restoring America)s relative economic and military power and pursuing America)s national interests vigorously overseas% has been slow to define its policies towards the developing countries& Renewed worries over the strategic intentions and military capability of the 7oviet Bnion is dominant along with growing an*iety about B7 resource dependence% most mar,ed in the case of oil% but not negligible in the case of some other raw materials& 2nce again the developing countries are viewed largely as an arena for 3ast1West competition reminiscent of the Cold War era% as a drain on scarce B7 budgetary resources% and as potentially unstable sources of ,ey materials needed in the Bnited 7tates& The preparation for participation in the Cancun summit provided the stimulus that helped the Regan Administration develop its basic approach towards development issues and B71Third World relations& This approach% essentially a variant of the administration)s domestic programs% attaches great importance to the role of the private sector as opposed to government and lays great stress on the need for developing countries to adopt a proper set of domestic policies% rather than to attempt to change the rules of the international economic game& Within this framewor,% efforts to inaugurate global negotiations on Dorth17outh economic issues are viewed great scepticism by the Administration% as is the possibility of new government initiatives% whether bilateral or multilateral% to improve the economic prospects of the developing countries& By the end of #9;#% however% the Regan Administration)s approach still lac,ed specifics and many issues remained to be decided& Xet the world in which these (new) concerns are being addressed is very different from the bipolar world of the #9<"s and the #9>"s% in which B7 economic and political pre1eminence as well as military power was unmatched& The position of the Bnited 7tates in the world)s economy has changed considerably& The B7 now shares its formerly dominant position in the world economy not only with the other industrial countries% which have greatly increased their economic competitiveness

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in the post17econd World War period% but also with a number of developing countries that have emerged in recent years as major actors in international economic transactions& As a corollary development% the Bnited 7tates is no longer immune to e*ternal economic shoc,s& loating e*change rates% import penetration% commodity shortages 4with resulting inflationary pressures6 and oil price rises have all signalled the end of the relative economic independence of the Bnited 7tates& These developments have in turn given rise to a growing unease among many Americans& 'oreover% most industrial nations are now beset with a combination of slow growth% high unemployment and high inflation% and only marginal improvements in economic performance can be anticipated& 'ost economists agree that a return to the historically spectacular growth rates e*perienced by much of the world in the #9<"s and #9>"s is unli,ely at least for the first half of this decade& $n this environment + and particularly in the absence of greater co1operation + the prospects for dampened growth in trade 4along with increasing pressures for restrictions6% continued financial imbalances and instability and uncertainties in the supply price of major commodities such as food and oil& The international system has also become far more comple* because of the greatly increased number of nations which are asserting KNL in effect designed by only two countries% the Bnited 7tates and the Bnited ?ingdom% and for several decades was managed almost e*clusively by the Bnited 7tates& $n contrast% the Aaw of the 7ea negotiations include representatives of #<M independent countries& $n #9<9 there were only 9! independent countries: by the beginning of the #9;"s% the number of independent countries had grown to #>M% and all of the new entrants were developing countries& These numbers alone could complicate management of any international problem% but in addition% the actions of the developing countries% in some cases individually and certainly collectively% now can affect the interests of the Bnited 7tates in significant ways& The developing have for some time called for reforms in international economic and political systems% which are seen by the Third World nations to be providing ine0uitable representation and opportunity& Their proposals + referred to as the (Dew $nternational 3conomic 2rder) + call for comprehensive changes in e*isting rules and institutions% and are being advanced in practically every international meeting and forum& 2ne of the remar,able features of the #95"s was the surprising unity of the developing countries in pressing for these changes despite their disparate levels of economic and social development& The historic (Dorth17outh) summit meeting of the leaders of the governments of !! developed and developing countries who met at Cancun% 'e*ico in 2ctober #9;# underlines the new importance of relations between the rich and poor countries and sets the stage for a reassessment of American relations with the Third World& American policy1ma,ers% and those concerned with B7 foreign policy% therefore need to identify B7 economic as well as political and strategic interests in the development of the Third World nations and B7 relations with them% in light of the changes that have ta,en place over the last three decades both in the developing world and in the international environment in which those relations will be carried out& This paper is designed to contribute to that process&

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SeKton* +dCin A6 and DecBer* ,errence )6 -8;;.0* 1(S Foreign Aid: Is It for Friends* De$elo"ment or Politics34 in Journal of Social$ Political and Economic Studies* 5ol6 8>* ""6 9/9-9876
The history of American economic assistance is a troubled one because foreign aid has not always achieved its two primary objectivesC support for B7 policy and successful economic development in Third World nations& 2ne of the clearest indicators of the failings of the first objective can be seen in the voting records of the BD 7ecurity Council& The second objective is glaringly faulty because no recipient of B7 aid has become a truly developed nation since World War $$&

Smith* !ogers #6 -8;A;0* 1#orality* umanitarianism* and Foreign Policy: A Pur"osi$e 5ieC*4 in Loescher* 2il ?6 and )ichols* Bruce -eds60* ""6 <8:/* The %oral .ation# =umanitarianism and 6S 'orei!n Policy Today* )otre
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Dame: (ni$ersity Dame Press6

of

)otre

What should be the relationship between humanitarianism and American foreign policy% and between humanitarian agencies of the Bnited 7tates governmentW These 0uestions are embedded in the perennial debate over the proper relationship between morality and the national interest& $n that debate% many stances can be discerned% but two cast the longest shadows& The orthodo*y in government% perhaps in academia% surely remains some version of the disenchanted ErealismF advanced in the postwar years by /eorge ?ennan% Hans 'orgenthau% and others& Realism soberly admonishes us not to ma,e too much of morality in international dealings& $t often sanctions the harnessing of humanitarian ideals and agencies to other% more hard1hearted governmental objectives& 3specially since the mid1#95"s% many academic writers have therefore rejected such ErealismF as cynical selfishness& They have instead called on us to strive to heed morality% and humanitarian organi-ations and advocates% in international affairs& 'ost of these writers have identified EmoralityF with cosmopolitan perspectives derived from the idealism of $mmanuel ?ant and sometimes from universalistic religious outloo,s% as Henry 7hue did% for e*ample% in his noted boo, 1asic (ig#ts% and as he continues to do in his contribution to this collection& # While these two positions% the ErealistF and the cosmopolitan Eneo1?antian%F come down on different sides% in many respects they depict the relationship of morality to national interest similarly& 'orality is held to e*press the grand aspiration to do right by all humanity& Although it may sometimes be ta,en as an element of national policies% it is at heart distinct from% and in tension with% purely national interests& Those interests are not thought of as chiefly moral% but as EpragmaticF or Epolitical&F By these terms writers usually mean that national interests center on preserving if not enhancing the wealth and power of a nation)s government and people& Hence both camps agreeC morality is fundamentally something apart from national interests% so that however often the two may coincide in practice% sooner or later morality must be subordinated to national claims% or vice1versa& Deither side% let me stress% maintains this distinction absolutely& ERealistsF often contend that avoiding e*cessive moralism in foreign policy leads to more moral results& Deo1?antian moralists often stress% as 7hue does% that certain moral considerations are part of the very definition of% at least% American national interests& Both are points on which $ will build% especially the latter% for $ believe that writers li,e 7hue have done a service in arguing persistently for the relevance of morality to American foreign policy and international affairs& But the neo1?antian moralists have not fully captured the genuine wisdom about practical possibilities contained in realism& Conse0uently% in this essay $ will argue for an understanding of the relationship of morality to national interests% and of the proper substance of American national morality% that differs from each of these dominant camps& $nstead of ta,ing our bearings from the somberly amoral worldview of realpoliti2 or cosmopolitan

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idealism% $ will suggest we adopt a more conse0uentialist view of liberal morality% traceable to one dimension of John Aoc,e)s pragmatic% yet morally directed% political philosophy& $n brief% this view goes beyond the neo1?antians) criti0ue of realism by arguing that certain moral principles are not merely intertwined with American national interests& They constitute the very core of those interests& $ndeed% they give moral standing to imperatives to provide for national welfare and defense so long as the nation does not permanently abandon the precepts that give its e*istence moral value& Those precepts are not best understood% however% as embodying transcendentally based universal principles of social justice& Rather% they e*press the nation)s reflectively chosen moral goals + to respect human liberties throughout the world and to advance them% initially and especially% at home& This view encompasses the concerns for actual conse0uences% and recognition of certain national claims% which form the strengths of the realist perspective% without sanctioning the dismissiveness toward morality realism can foster& And while it does not overcome the real differences in private and public perspectives on humanitarianism and national claims% it does clarify those differences and their moral appropriateness in ways that may ma,e healthy dialogue and cooperation between governmental and private agencies more feasible&

Sogge* Da$id -.//.0* 1,&O: &ho Is Aiding &hom3*4 in Sogge* Da$id* Give and Ta)e# What2s the %atter with 'orei!n Aid@* ""6 .<-9;* London ' )eC MorB: Ned BooBs6
oreign aid is full of ambiguities and double bottoms& $t does not fit neatly into any one of the three ways people are said to go about their material transactionsC coercion% e*change and gift1giving&! Being tied with geo1politics% trade and ban,ing% foreign aid can)t be classified as purely gift1giving& /iving and getting have shadow sides% where even in daily life they can mas, e*change or coercion& Across culture% people have been wary of gifts& $n some Western and non1Western languages% words for (gift) share the same root as words for (poison)& H Aid is routinely portrayed as high1minded beneficence& But a little probing around an aid deal will usually e*pose a lively intermingling of high and low intentions& The bigger the sta,es% the greasier the fingerprints of commerce% geo1politics and ideological crusading& Dewcomers to the foreign aid business embody this& Public figures in industries as diverse as oil prospecting% media networ,s% computer

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software and popular entertainment want to be donors& Dot only do they hand over cash% they also study the subject% swap ideas with e*perts and busy themselves in the details of aid provision& The Dew Rich% li,e those with 2ld 'oney whose privately endowed foundations were among forerunners to the modern aid system% have learned that (noble e*penditure) is among the best means of self1defiance in the court of public opinion&M As long as some rich people and firms can portray their ,ind as beneficent% the day of rec,oning with normal progressive ta*ation can be postponed for ever& The gratifications of giving are many% including a better bottom line& The case of ta*es and their avoidance recalls the fact that beyond coercion% e*change and gift1giving there is a fourth type of transaction% that based on obligation& Progressive ta*ation is a main e*ample& $t is self1imposed% and accepted by huge majorities as both fair and a good idea& $t ma,es possible the provision of public goods and the combat of public bads& 7till other ,inds of public policy are based on obligation& Thin, of health insurance companies) duties 4in some welfare states6 to provide insurance cover to persons regardless of ris,& Xet foreign aid is only rarely grounded in obligation& The duties of the $nternational Committee of the Red Cross and the BD High Commissioner for Refugees are established in law and practice% but elsewhere in the aid system% no one is a duty1bearer& /$I$D/ AD. TA?$D/C $D73P3RABA3 TW$D7 Aid has deep and tangled roots in the history of Western e*pansion& Deeding a respectable rationale for imperial rule in Africa and Asia% British ideologists came up with the notion of a .ual 'andate& 2ne face of the mandate was trusteeshipC Britain had paternal obligations toward its subject peoples: it had to ta,e decisions on their behalf% protect them and guide them& The other face was accumulationC the colonial power had to develop the colonies) economies for profit and insert them into the world system run by the West& The unspo,en rationale of the aid regime stri,ingly resembles the .ual 'andate& /uiding the B7A was a vision of an open frontier& < rance pursued a mission ci!ilsatrice& .etectable in these and other colonial ideologies were two drivesC giving and ta,ing& To legitimi-e those two purposes + trusteeship for others and accumulation for one)s self + colonial power elaborated doctrines of moderni-ation and development& To manage the territories politically% they imposed systems of indirect rule via local potentates& $n the end% however% colonialism was too costly& The trustee and mercantile rationales could not be sustained% at least under one imperial flag& As people in the 7outh asserted rights to spea, for themselves and manage their own affairs and resources% Western powers had to drop their tal, about civili-ing missions and mandates towards (bac,wards) areas& ormer overseas dominions were repac,aged as e*clusive clubsC America)s /ood Deighbors in Aatin America% Britain)s Commonwealth% rances francop#ine% 3urope)s e*1colonies assembled as the AomO group% and Japan)s floc, of (flying geese) in Asia& > Dorthern officials collaborated with the new e*1colonial leaders% cultivating them through elite networ,s& 7ome African rulers too, their vacations% had their suits made% and sent their children for schooling in 3urope&

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Behind rhetoric about self1determination% the B7 and 3uropean powers have used aid to compete with one another through their colonial and neo1colonial systems& 5 Trade and investment wars have gone on in the name of a super1project of social engineering called (development)&; -#e Pla ers The aid system has played with a fi*ed cast% but has also seen givers and receivers come and go& 'ajor trends and episodes may be summari-ed as follows& AT TH3 PR2I$.3R 3D. The B7A has held commanding positions% first as the major bilateral donor% but also the driving force behind the $ $s& Japan)s aid effort has grown dramaticallyC in the #99"s it became the biggest spender in absolute terms& igure !&# shows the relative importance of main aid providers from #9>" to !"""& or the 7oviet Bnion and its 3astern 3uropean allies the role of aid donor ended around #99"% whereupon% bro,en up and bro,en down% they became net aid recipients& The period #95H19! saw a number of oil1producing countries 4chiefly 7audi Arabia and the /ulf 7tates6 appear for a while as heavyweight donors& Pea,ing at T9&> billion in #9;"% their grants and loans went chiefly to Asian and African countries with large $slamic populations& 'uch of the money went into projects in transport and energy: theirs was an aid programme for $slam and for the oil industry& oreign aid comprises many ,inds of flows& This boo,)s chief focus is on foreign aid as used by officials 4most of the time6 in the strict sense of flows from official sources under soft or (concessional) terms% chiefly for purposes of economic development and welfare& Resources for political or military purposes are thus% in principle% e*cluded& When directed towards low1income countries of Asia% Africa and Aatin America it is termed (official development assistance) 42.A6: when directed towards 3astern 3urope% the e*17oviet Bnion or other (countries in transition) it carries the less condescending label (official aid) 42A6& $n this boo,% 2A is included in 2.A unless otherwise noted& 7ince the early #9;"s bilateral or country1to1country aid has accounted for about two1thirds of total 2.A& About one1third of net 2.A has flowed from multilateral bodiesC the $ $s% 3uropean Bnion channels and the Bnited Dations agencies& 'ultilateral aid has helped shield donors from the political ris,s of acting alone where recipient sovereignty is breached% namely in attaching macro1economic and political conditionality to aid& $t has also helped in special cases such as 7outh Africa and Damibia% where donors together helped pull the plug on apartheid& AT TH3 R3C3$I$D/ 3D. Recipient countries form a mi*ed group& ormer colonial or current neo1colonial relationships strongly determine who gets what from whom& This appears in informal sphere of influenceC the B7A in the 'iddle 3ast and Aatin America% Australia in Papua Dew /uinea and iji& Appendi* A provides a snapshot of top recipients of #M major donors at the end of the #99"s& /eography% colonial history and culture are decisive for rance% Britain and Portugal% countries whose aid goes chiefly to their e*1colonies& Historical ties show up in /ermany)s aid to Tur,ey& or over a decade the same populous countries have been among the top four recipients of total bilateral 2.AC $ndonesia% China% $ndia and 3gypt&

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The poorest countries have never been the highest priority: they account for less than one1third of total 2.A& 'ore important have been those in the (other low1 income) category such as $ndonesia% China% Ckte d)$voire% $ndia and Pa,istan% and (lower1middle1income) category% such as 3gypt% Jordan% /uatemala% Bolivia and the e*1Xugoslavian states& Table !&# presents net 2.A disbursements in the #99"s across si* categories& Poverty may be a main justification for aid% but it has seldom been the main criterion for allocating it& $f aid were distributed according to a simple head count of poor people% then China% $ndia and other 7outh and 3ast Asian countries would have received most of it& But in the #99"s they received only about one1third 2.A& 2ther factors% such as si-e of a country)s population% count& or a given poverty rate% smaller countries tend to receive more aid& $mperial scrambles for territories and preferences for island and enclave nations have biased aid)s distribution& As shown in igures !&! and !&H% both bilateral and multilateral 2.A have been directed towards poor countries% but not the poorest& Who2s Really Aidin! Whom@ Aid)s public image is one of Western beneficence and non1Western beggary& Apart from a parade of stories told to ma,e benefactors feel good about their aid% there is rarely a hint that the Dorth gets something in return& 2n the contrary% the usual insinuation is of unproductive and ungrateful welfare 0ueens living high on Dorthern generosity& That is an illusion& oreign aid is a sideshow& Real benefits% and real costs% appear in 0uite different and larger flows and bloc,ages& Between richer and poor countries% gains and losses can be estimated in various ways& 2fficial flows in funds% goods and people can be compiled with some accuracy& But the global growth of unregistered transactions + in illicit goods% ta* evasion% remittances + blow large holes in the date& Aac, of information is in part a result of deliberate deregulation of capital% and the rewarding of old practices of ban, secrecy% ta* paradises and fictitious boo,,eeping& Table !&! shows only recorded transactions& $n the case of wor,er remittances% actual values are far larger& $n the case of tiny 7omaliland% for e*ample% they total about half a billion dollars annually& #! Personal transfers surpass all official and non1 governmental aid& $n #99;% officially recorded remittances from the Detherlands to M! low1income countries 4e*clusive of 3astern 3urope6 totaled about B7T one billion% a sum e0uivalent to ##< per cent of official .utch aid to those countries& #H 'ost value% however% is redistributed upwards and outwards% from poorer to richer& These flows ta,e the following forms& BRA$D .RA$D Richer places gain from professionals migrating from the 7outh% many of them trained at university level through aid1funded bursary programmes& The BD estimates that African professionals departing for wor, abroad numbered about !5%""" in the #< years up to #95<% >"%""" from #9;< to #99"% and !""%""" in the period #99"199&#M Today an estimated one in three African university graduates wor,s outside Africa& #< Asia has suffered a (haemorrhaging of talent)% particularly to the B7A% where (stay rates for advanced students in engineering disciplines and the sciences can be higher than 5< per cent for students from particular countries)& #>

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CAP$TAA A$/HT Dorthern financial circuits gain from 7outhern capital% whether looted or legitimately saved& To escape regulation and ta*ation% well1connected firms and persons use many scams including mis1invoicing of imports and e*ports and suitcases of cash to stash wealth abroad& Ta* havens help account for the difference between the T;< billion poor countries should receive in ta*es from foreign corporations and the T<" billion they actually receive& #5 KBLy the end of #99" the cumulative total of flight capital from developing countries was appro*imately T5"" billion% e0uivalent to more than half the si-e of the e*ternal debt of developing countries& $n effect% roughly half of the foreign borrowing by developing countries was transformed into an outward movement of private capital by citi-ens of the indebted countries& #; igure !&M indicates the importance of capital flight in some selected African countries& Researchers have speculated that the impact (of a return of such 4relatively6 huge investment flows would clearly be massive)& #9 D2RTH3RD TRA.3 BARR$3R7 Dorthern business interests gain from e*cluding imports from the 7outh& (3ach year developing countries lose about T5"" billion as a result of trade barriers in rich countriesC for every T# provided by the rich world in aid and debt relief% poor countries lost T#M because of trade barriers)& !" A27737 .B3 T2 D2RTH3RD .B'P$D/ Dorthern interests gain from crushing 7outhern competition& Crop and livestoc, agriculture have been especially hard hit& ($n some African countries where it costs T5M to produce #"" ,ilos of mai-e% the local mar,et price feel to T!# due to subsidi-ed Dorthern e*ports&) !# $n #9;>% Haiti was largely self1sufficient in rice% a staple food for its people& orced by donors and lenders to drop trade restrictions% the country was flooded with rice from the B7A% where farmers are subsidi-ed& (By #99>% Haiti was importing #9>%""" tons of foreign rice at the cost of T#"" million a year& Haitian rice production became negligible& 2nce the dependence on foreign rice was complete% import prices began to rise% leaving Haiti)s population% particularly the urban poor% completely at the whim of rising world grain prices&)!! R3PAX'3DT 2 .3BT .ebt repayment from poor to rich far e*ceeds aid& $n !"""% lower1income countries paid to their creditors% net of what they received in new long1term loans% T#"#&> billion + more than three times what they received in aid grants in that year& $n #999 the imbalance had been even greaterC lower1income countries had paid to creditors almost five times more than what they received in aid grants&!H rom #99! to !"""% debt repayments as a share of poor country earnings from their e*ports and services changed as follows& Repayment of loan principal rose from #M to #9 per cent: repayment of interest on loans rose from ; to #" per cent& All together in #999% debt repayments 4interest l principal6 consumed !; per cent of the earnings of lower1income countries&!M BD AI2RABA3 TR3D.7 $D T3R'7 2 TRA.3 Trade losses swamp aid flows& The purchasing power of most 7outhern e*ports has fallen steadily throughout the era of foreign aid& (Right through the #9;"s% commodity prices fell on average by < per cent annually in real terms& By #999" they were M< per cent below their #9;" level N Between #9;" and #99#% the developing countries suffered an estimated

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cumulative loss in total e*port earnings in real terms of B7T!9" billion% an annual average loss of B7T!< billion&)!< ( or the nonoil African countries% e*cluding 7outh Africa% the cumulated terms of trade loss Kfrom #95" to #995L represent almost minus #!"Q of /.P% a massive and persistent drain on purchasing power&) !> The usually optimistic World Ban, estimates that the purchasing power of most commodity e*ports in !"#" will be lower than it was in #995& !5 These dismal trends stand in contrast to the unremitting pressure aid providers have put on low1incomes countries to (e*port their way out of poverty)& m Aid is an ambiguous% two1faced thing& There is commonly a lot less to it than meets the eye& Bnder its many padded layers% the business of giving camouflages its much larger and inseparable twin% ta,ing& Deither bilateral nor multilateral aid is targeted in proportion to the poverty at the receiving end& The terms of loans from the helpers can be as hard as% if not harder than% the terms% set by merchant ban,ers& inally% aid flows are simply dwarfed by the flows from poor to rich& Done of the foregoing should be read as new or astonishing& 'ost of these processes are not the result of intentional scheming or wic,edness% but merely the unreflecting pursuit of the rules of the game& 'ost depend on collusion within the cosmopolitan (global Dorth)% such as between ban,ers and other business people in both richer and poorer countries& A story of uni0uely predatory Dorthern actors victimi-ing uni0uely defenceless 7outhern actors is a myth& Predation is worldwide% though some countries are better1positioned that KsicL other to practice it&

Sogge* Da$id -.//.0* 1, !++: ,he Aid !egime and PoCer Agendas*4 in Sogge* Da$id* Give and Ta)e# What2s the %atter with 'orei!n Aid@* ""6 </-:<* London ' )eC MorB: Ned BooBs6
$t has been called a sector% an enterprise and an industry& As a hierarchy of bodies whose practices converge around a set of rules% the aid system may also be called a regime& $t is a system of power doing its wor, in a wider realm of international politics& .uring the Cold War% the 7oviet Bnion and its allies formed their own modest aid regime& That collapsed around #99"% whereupon most of its members

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found themselves at the receiving end of today)s only major regime% that of the 23C. club of rich countries& This chapter loo,s at what drives the regime% what institutions occupy its commanding heights% what chec,s and balances constrain its members) powers% and what rules are supposed to guide it& The chapter sets the stage for the following two chapters about aid chains at upper and lower levels& $s the aid regime one coherent thingW 7ome specialists have voiced doubt on the point% arguing that Western aid was at best an arbitrary set of practices run by each country according to its own rules and purposes& rance% for e*ample% has fre0uently gone its own way& Japan ma,es business the centerpiece of its aid& 'ore fre0uently at the non1conforming fringe have been a few smaller% trade1 dependent countries with robust traditions of domestic social welfareC Dorway% 7weden% .enmar,% Canada and the Detherlands& As middle1power internationalists% from the mid1#95"s to the late #9;"s this so called Ai,e1'inded /roup tried to harmoni-e their aid and related policies along social1democratic lines& 'uch earlier than others% they focused on poverty and on political and civil rights& 7ince #95<% all e*cept Canada have met the BD spending norm of "&5 per cent of /DP& This suggests that a Dordic1.utch sub regime of aid e*ists% or did e*ist& Today)s aid regime discourages non1conformity& $ndeed% it loo,s% tal,s and wal,s li,e a state1run monopoly& $t is a prime candidate for brea,1up and for the cure it blithely prescribes othersC competition& Why such structural adjustment is unli,ely may be apparent in the following pages& Why Provide 'orei!n Aid@ Rarely has one compelling drive been pre1eminent% although victory in the Cold War was clearly the dominant purpose in the aid regime)s first four decades& Assigning a single motivation to the aid regime would be absurd& Aid)s motives are always mi*ed& Hence the ris,s of incoherence + the frustration of some aims by other aims + are always high& The mi* changes over time% and varies between donors& 7mall trading nations will pursue a mi* of aims different from those of a continental super1power& The useful 0uestion% then% isC what motives predominateW Aid specialists have probed the matter and commonly locate motives in three clusters& "trategic "ocio<Political 8oti!es "#ort<term Abroad% to reward and ,eep a client (on side) politically during negotiations% wars or other crises: to defuse public protest and insurrection: to provide a base for intelligence1gathering: to influence decision1ma,ing in international fora& At home% to reward or retain loyalty of ethnicGpolitical constituencies% to be seen to be (doing something) during a crisis& Longer<term Abroad% to gain regular access to and loyalty of leadership at the receiving end: to win or deepen acceptance of a doctrine or model of development: to reinforce a country)s place in a larger economic% political and military system: to stabili-e economic or demographic trends in a

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country or region in order to stem unwanted effects such as terrorism and migration: in international institutions% to set and steer economic and political agendas& At home% to consolidate political and support of voter and contributor constituencies% particularly the private sector% but also those with ethnic ties to aid recipients& 8ercantile 8oti!es "#ort<term Abroad% to sei-e mar,et opportunities& At home% to promote interests of a sector of business and related employment: to improve the lenderGdonor)s balance of payments: to assure the solvency of creditor ban,s% public or private& Longer<term Abroad% to win% e*pand% protect trade and investment opportunities% including strategic access to raw materials and cheap labor: to shape and stabili-e Dorth17outh economic roles and hierarchies: in international institutions% to win and stabili-e adherence to economic rules& At home% to consolidate and protect economic sectors&

7umanitarian and &t#ical 8oti!es "#ort<term To show concern and compassion for victims of war% upheaval and natural catastrophes: Longer<term Abroad% to demonstrate concern about poverty% human rights abuse including the human rights of women: to compensate for damages& At home% to show solidarity with a particular country or group% to claim the high moral ground&

.iscussions of what motives actually drive aid fre0uently get clouded by tal, about what s#ould drive it& .ebates about it can evo,e public displays of doubt or pride about national character and power& Are we a generous peopleW Are we pulling our weight in the worldW A study of how .utch% Belgian and British politicians tal, about their nations) foreign aid roles in the period #95<19" reveals much about national self1regard& .utch rhetoric shows a self1image of (The Activist)C aid should be used to advance social justice% development and stability& Belgian politicians% by contrast% tal,ed about their country)s interests in terms of (The 'erchant)C aid should benefit the domestic and international mar,et& $n British parliamentary debates% the dominant role conception was that of a (Power Bro,er)C aid should support friendly governments and advance British power and influence& ! /reater solidarity at home can mean greater beneficence abroad& 7trong political commitments to domestic welfare% as in Dordic countries% are associated with strong aid performance% measured both by 0uantity 4aid spending as a proportion of national income6 and by 0uality 4proportion of aid aimed at poverty reduction6& Wea, commitments to domestic welfare% as in the B7A% coincide with wea, aid 0uantity and 0uality&H 7ome have argued that the Western foreign aid regime arises from ethical and humanitarian motives&M Certainly moral concerns influence conventional tal, about aid% especially tal, for the public at large& The World Ban,)s corporate motto since the late #99"s has beenC (2ur dream is a world free of poverty&) But does donor

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practice match this tal,W A team of researchers probed the determinants of aid1 giving behavior% comparing B7% rench% Japanese and 7wedish bilateral aid flows to Africa in the #9;"s& They loo,ed at how these donor distributed their aid according to recipient countries) strategic importance% economic potential for the donor% and humanitarian need& The results pour cold water on the notion that humanitarianism drives foreign aid& $deology and the pursuit of commercial advantage are the main determinants& 2fficial aid is seldom a tool of altruism% even in 7weden% whose aid was long assumed to be driven by humanitarian concerns& .ata suggest that 7weden acts rather more as a 'erchant than an Activist% even in the #9;"s% when it made important contributions to political change in southern Africa& < 7ince then% 7wedish commerce and investment% including corruption1tainted sales of weapons to 7outh Africa% have been consistent with those findings& 2ther researchers have reached similar conclusionsC (the direction of foreign aid is dictated by political and strategic considerations% much more than by the economic needs and policy performance of the recipients& Colonial past and political alliances are the major determinants of foreign aid&)> As noted elsewhere in this boo,% national aid agencies have largely fallen into step behind the $' and World Ban,& Xet here and there motives are getting re1mi*ed& Beginning in #995 a strea, of idealism was detectable in British aid policy& Ai,e other donors% the B? sees aid as a means to hitch low1income wagons to turbo1 charged global mar,ets& But it also accepts that aid should help civil society activists to mount pressure on decision1ma,ers to protect citi-ens) rights + even where those rights are frustrated by mar,et forces& B7 policy% on the other hand% shows a different trend& $t has downgraded foreign aid to Africa and the Caribbean% regions targeted in its Trade and .evelopment Act of !"""% whose theme is business% as usual& Aow1income countries% as far as the B7A is concerned% have to e*port their way out of poverty& 'otives behind aid never come in fi*ed and stable proportions& 2ne observer therefore concludesC (Perhaps the safest generali-ation to ma,e is that foreign aid% when used alone or in combination with other policy instruments% has a uni0ue ability to allow the donor to demonstrate compassion while simultaneously pursuing a variety of objectives&)5 TW2 D3/A3CT3. '2T$I37 Aid usually revolve around self1interest% but two types of motivation are often overloo,edC obligations to compensate for suffering and damage% and imperatives to respond to common problems of a region or the globe& 5ompensation rom the late #9M"s to #9;#% Japan made grants totaling T#&9 billion to #H Asian countries: commercial gain was part of its motives% but the formal purpose was to compensate those countries for losses in the 7econd World War and during Japan)s prior colonial e*ploitation& ; Through treaties and commissions% the B7A instigated and enforced Japanese reparations& $n so doing it applied a double standard% since elsewhere Western powers have (always insisted aid must not and cannot be seen as a form of compensation or reparation for damages inflicted by colonialism)&9 $n the #95"s% for e*ample% 7outhern advocates of a Dew $nternational 3conomic 2rder found no Western sympathy for their proposal to create judicial means to ta,e e*1coloni-ers to court for (development damage)& Today% counties

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hurt because of policies imposed by the World Ban, and $' have no means of legal redress& 5ommon interest .eadly microbes% criminal mafia% radioactivity and greenhouse gases easily spill across borders& 'igrants in search of a better life are now entering richer areas at faster rates& /lobal ris,s are increasing and vocal publics are demanding protection and guarantees of compensation& 7uch trends are concentrating the minds of politicians and policy1ma,ers& Bp until recently% complacent in their fortress nations% they paid little attention to approaches built around global and mutual interests& Today% among some policy elites and activist groups% and understanding is slowly crystalli-ing that lands both rich and poor face a common fate% whether they e*ist together in a region such as 'editerranean basin% or together in a single Planet 3arth& Where common interest is a point of departure% joint and reciprocal initiatives can be a fairly short step& Hence% recent tal, about global public goods #" and warnings% in the wa,e of the suicide attac,s in 7eptember !""#% that prosperous countries should prepare for significant transfers from rich to poor& That% however% would mean largely jun,ing today)s arrangements and moving towards redistribution + something wholly different from today)s aid system& KNL This chapter has cast a cursory loo, at the commanding heights the motivations% institutions and rules which drive it% and some balances that should ma,e it publicly accountable but usually regime operates and reproduces itself in e*tended hierarchies motif of the following two chapters& of the of the fail to or aid aid system% chec,s and do so& The chains% the

Sogge* Da$id -.//.0* 1S+5+): &hen #oney ,alBs* &hat Does It ,ell (s3*4 in Sogge* Da$id* Give and Ta)e# What2s the %atter with 'orei!n Aid@* ""6 8</-8:7* London ' )eC MorB: Ned BooBs6
When wealthy foreign donors come calling% recipients are not supposed to s0uirm in their chairs and put off accepting any money& Xet in the B7A% officials of major universities have shown just that ,ind of uneasiness towards some big donors from abroad& /overnments% business foundations and wealthy individuals from Taiwan% ?orea% 7ingapore% 'e*ico% Tur,ey + donors not ,nown as resolute defends of

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academic freedom + are offering millions to promote research and teaching about their respective lands& Academics may welcome the money% but they face serious misgivings about the benefactors and their motives& 2ne seasons B7 professor of 3ast Asian studies said bluntlyC (They are out to get over their point of view& They are paying to win support for their government&) ! Americans object because they fear the agendas driving those monies will close off genuine in0uiry& They can mount opposition% however% with few ris,s to themselves or others: indeed% they may gain status by standing up for scholarly autonomy& When institutions prostitute themselves + thin, of many universities getting handsome payments for research results favoring the products of pharmaceutical firms + there is no reason for serious alarm& Alongside such big and dangerous domestic pay1offs% those foreign millions loo, li,e minor threats to intellectual integrity& How analogous% but how different are the vulnerabilities in countries of the 7outh and 3ast& There% policy agendas of big donors and lenders% once pluc,ed of their rhetorical feathers% are also unmista,able& But to challenge them is to run serious ris,s& Too much is at sta,e& Iirtually every aid offer is one that cannot be refused% especially if it comes from Washington% .C& After decades of aid given only on condition that aid providers) ideas are accepted% refusal is no longer an option + e*cept perhaps from a few dissenters% who can be easily 0uashed& Where ideas are run towards goals under aid sponsorship% the playing fields are anything but level& $deology has long been at the heart for foreign aid& Producing and transmitting policies and discourse% and filtering out and delegitimi-ing others% are essential vocations of aid)s most powerful players& $t is not by caprice that the World Ban, is positioning itself as the world)s mightiest thin,1tan,& As the leading producer of doctrine and ,nowledge about how the planet should develop% it aims to achieve the supreme instrument of power + power to define the alternatives& H Those at the top of the aid system faithfully transmit the dominant ideas of business and political elites% but they also routinely research and develop their own& They often roam about plundering ideas of rivals and critics& $n the #99"s% aid1spea, at the top became saturated with terms such as (sustainability)% (civil society) and (empowerment)& These ideas sprang from the emancipator camp of social movements% but they found themselves cast in supporting role in mar,et fundamentalist scripts& This chapter suggests that the aid system)s most important instruments and outcomes are in the realm of ideas& $n the hands of sophisticated users% aid1driven ideas have leveraged change far out of proportion to the monies applied& The World Ban,% the endowed foundations% thin,1tan,s and policy activist D/2s all ,now this& 7urprisingly% only a few private aid agencies have begun to go beyond the charity micro1project to engage in battles of ideas& KNL *onclusion By concerning and shrewdly bac,ing the production% transmission and legitimation of ,nowledge and ideas% an elite corps of agencies + some endowed foundations% the World Ban,% and a few BD and bilateral bodies + have made a little money go a long way& or decades% those investments have shaped paradigms% the public

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policies nested in them% and the debates about those policies& And that was the intention& As one of the economists present at the #9MM Bretton Woods meeting said% (2ne of the most important functions of a development assistance institution is to influence the politics and strategies of aid recipient countries&) MH This is deliberate% but it is not high conspiracy& There is no control room steering the flow of ideas from a secret location& Xet what a Harvard professor wrote about his own branch of area studies suggests the limits to freedom in the mar,etplace of ideaC Hence% as always% the main drive comes from Washington itself and from the shift in the way which policyma,ers view America)s role in international affairs& As always% major shifts of this type wor, their way through the system with remar,able speed% soon causing the heads of federal agencies% private grant1 ma,ing foundations and university presidents to all spea, with one voice& MM

Sorenson* Da$id S6 -8;>;0* 1Food for Peace = or Defense and Profit3 ,he !ole of P6L6 <A/* 8;:9->9*4 in Social Science Quarterly* 5ol6 :/* )o6 8* ""6 :.->86
$n summary% only partial confirmation of the national security model resulted from the two tests employed here& 2n the one hand% the e*pected relationship between arms transfers and P&A& M;" aid did not materiali-e& Xet border distinctions did correlate with food assistance% thereby lending at least some credibility to the EcontainmentF hypothesis& However tenuous this argument% it is sounder than the EneedF e*planation% which collapsed with the discovery that nutrition level correlated positively with food aid& Clearly the location of a country is more critical than its level of nutrition in determining food assistance policy& inally% though there were real shifts in P&A& M;" policy that indicated a mar,et development strategy % there is insufficient evidence to suggest shifts in P&A& M;" allocations are used to open the door for more profitable returns on American food shipments abroad& > 7tudents of American foreign aid policy will not be startled by these findings& But they have provided partial confirm as well as refutation of several lingering justifications of food aid policy through the use of a multi1model approach& 5 However% no hypothesis generated here receives strong confirmation& This in itself is interesting% given the implication that whatever the policy intentions have been% P&A& M;" outcomes have not succeeded all that well in meeting them&

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$t must also be reali-ed that recent changes in ood for Peace policy alter these findings and the above conclusions were this study to be conducted five or #" years from now& The #95< congressional re0uirement that 5"Q of P&A& M;" shipments must go to Emost seriously affectedF 4by food shortage6 nations seems to indicate a trend in the direction of the humanitarian e*planation& inally President Carter)s recent decision to grant a small amount of P&A& M9" to communist Aaos% where serious food deficits e*ist% may portend a real shift in emphasis from the period of time focused upon by this research&

StoBBe* Ola$* -ed60 -8;A;0* Western %iddle Powers and Glo"al Poverty# The &eterminants of the Aid Policies of *anada$ &enmar)$ the .etherlands$ .orway and Sweden* (""sala* SCeden: ,he Scandina$ian Institute of African Studies6 StoBBe* Ola$ -8;A;0* 1,he Determinants of Aid Policies: 2eneral Introduction*4 in StoBBe* Ola$ -ed60* Western %iddle Powers and Glo"al Poverty# The &eterminants of
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the Aid Policies of *anada$ &enmar)$ the .etherlands$ .orway and Sweden* ""6 ;-9.* (""sala* SCeden: ,he Scandina$ian Institute of African Studies6
oreign aid is an integral part of the foreign policy of a nation& Aid for development may be conceived of as a foreign policy objective in its own right or as an instrument to achieve other objectives& As is the case with most foreign policy objectives% the roots are to be found in domestic politics& Aid policy is part of a cluster of domestic policies which emerge from the same or related traditions& Ai,ewise in the foreign policies which emerge from the same or related traditions& Ai,ewise in the foreign policy setting% aid policy is merged into foreign policy traditions and objectives& Aid policy% therefore% is molded in a setting in which traditions% norms and interests of both the domestic and e*ternal environment influence the outcome& 7uch determinants vary from one system to another& KNL -#e broader %ort#<"out# perspecti!es This study% which is limited to the aid policies of these five nations% is part of a project that focuses on their Dorth17outh relations& ! The project aims at identifying the main features of these relations and the main determinants of the various dimensions of their Dorth17outh policies& A core 0uestion in this regard is the followingC to what e*tent can these policies be e*plained with reference to the ideologies and basic values predominant in the countries in 0uestionW The project started out with the assumption that the predominant political philosophy and values of the countries would have a strong bearing on their Dorth1 7outh policies& Basic philosophy and values do not normally change easily& 7till% even these adapt to important changes in the e*ternal and domestic environment& 7ince the early #95"s% three changes in particular are assumed to have the potential to influence their political philosophy and basic values with a bearing on their Dorth17outh policiesC the economic recession in the Western world% which started in the early #95"s: the ideological change as far as political and economic doctrines were concerned% which too, place at government level in some major Western powers 4Bnited 7tates% Bnited ?ingdom6 during the late #95"s and early #9;"s: and the crises which% during the late #95"s and early #9;"s% hit most developing countries more forcefully than ever before + involving their e*ternal and internal economy% their ecology and in many cases the very survival of people in e*posed regions& 7umanitarian internationalism

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The framewor, selected as a point of departure for our analysis is that of #umanitarian internationalism&H The core of humane internationalism is an acceptance of the principle that citi-ens of the industrial nations have moral obligations towards peoples and events beyond their borders: it implies a sensitivity to cosmopolitan values% such as the obligation to refrain from the use of force in the pursuit of national interests and the respect for human rights& $n the conte*t of the theme of this volume% which focuses on development assistance% this implies a responsiveness to the needs of the Third World as regards social and economic development& The moral thrust of this responsiveness is combined with% and considered to be instrumental for% the promotion of the more long1term% overall interests and values of the rich countries& The responsiveness of Third World development needs represents an e*tension of internationally predominant socio1political values at home% as reflected in the five countries) national social welfare policy% broadly defined% although the commitment to Third World needs is less e*tensive than to their own citi-ens& We do not suggest% however% that the forces underpinning humane internationalism are the predominant determinants of the foreign policies of these countries% as more traditional determinants + economic% political and strategic concerns + fre0uently have the upper hand& Humane internationalism thus defined implies 4i6 the acceptance of an obligation to alleviate global poverty and to promote social and economic development in the Third World: 4ii6 a conviction that a more e0uitable world would be in the best long1 term interests of the Western% industrial nations: and 4iii6 the assumption that meeting these international responsibilities is compatible with the maintenance of a socially responsible national economic and social welfare policy& Humane internationalism% accordingly% is associated with a set of ob*ecti!es% vi-& to promote economic and social growth and economic% social and political human rights in the Third World and to alleviate human suffering& $t is based on humanitarian values and ethics% including respect for the dignity of man% and is moti!ated% in the first place% by compassion + the moral obligation to alleviate humane KsicL suffering and meet humane needs across national% political and cultural border& However% self1interest is part of the motivation% too: this includes broader national interests related to objectives of mutual benefit across borders% and narrower interests related to% inter alia% employment or an e*pansion of trade and investment opportunities& Humane internationalism stands in strong contrast to realist internationalism% which his based on the world view of anarchic international relations% in which states pursue% and should pursue% only their own national interests& $n the #9>"s% humane internationalism was reflected in the Pearson Report% M which e*pressed the view that e*panded trade% investments and aid would set off self1 generating% social and economic development in the Third World before the turn of the century and that international agreements and institutions would be conducive to the creating of peace% e0uity and stability& By the mid1#95"s% however% the contour of a different% less optimistic world had emerged% in which the gap between rich and poor countries had grown wider and

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the prospects for the future much blea,er& 3ven so% the main thrust of the D$32 programme + formulated in the mid1#95"s and supported% with a few reservations% by the 7candinavian governments and the .utch government% though to a varying degree + struc, an optimistic chord% namely that the industrially developed countries should adapt themselves to the developmental needs of the Third World through structural adjustments& However% very little came out of the D$32 efforts& 7ince then% the development paradigms of the Western% industriali-ed countries and their attitudes to cooperation with the Third World have changed dramatically& $n the #9;"s% the industrial world% including to a large e*tent even the five countries included in this study% have insisted that the poor countries should adapt their policies to the needs of the rich world& $n response to these developments + a reflection of the increasing predominance of realist internationalism + three clusters of related ideas and attitudes% which had all along been part of humane internationalism% came more distinctly to the foreC reform internationalism% liberal internationalism and radical internationalism& Both reform internationalism and liberal internationalism tend to be system oriented% concentrating on what the governments and international agencies should achieve in the 7outh& 3ach ac,nowledges that rich countries have an obligation to alleviate poverty in the Third World% considers that fair Dorth17outh relations are in the best% long1term interest of the Dorth and shares the conviction that the primary obligation governments is to their own nationals& (eform internationalism is associated with a set of ob*ecti!es much in line with mainstream humane internationalism% vi-& improved e0uity and social and economic justice% both within and between nations% and the promotion of human rights& $ts basis and moti!ation% too% are in line with mainstream humane internationalism% though with an e*plicit international ethic that goes furtherC the e*isting global distribution of resources and incomes is considered morally indefensible and the international economic system is considered unfair to the poor& Hence% li,e humane internationalism% it supports transfers of resources to promote development in the Third World& But it goes further by as,ing for reforms + both reforms within Third World countries for the benefit of poor social groups% and reform of the international political and economic system for the benefit of the 7outh& Ai,e humane internationalism% it is not e*clusively altruistic% in so far as fair Dorth17outh relations are considered to be in the best interests of the rich countries& $n contrast to liberal internationalism% reform internationalism does not consider the mar,et to be the most efficient instrument to determine production priorities or to settle income distribution& Hence% although basically belonging to a liberal tradition% it favors state and inter<state inter!ention in order to pursue the objectives identified& $t is gradualist in its approach& $t wor,s through the e*isting aid channels + the multilateral and bilateral aid agencies + which are considered to be useful instruments for the correction of global ine0ualities& However% it also strives for the improvement of these agencies so that they can do a better job in pursuing the objectives defined& $t is in favor of channeling aid through D/2s% too& Who% then% are the main champions of reform internationalismW They may be differently situated in our five countries% but are generally associated with 7ocial

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.emocrats and to a large e*tent also with the 7candinavian Christian .emocrats and Aiberals& Liberal internationalism combines the core component of humane internationalism with a strong commitment to an open% multilateral trading system& $t shares with realist internationalism the conviction that states should pursue immediate and long1term economic and political self1interest& However% unli,e realist internationalism% it ac,nowledges a responsibility for development in the 7outh& $ts ob*ecti!es include economic growth in the 7outh& This is to be achieved by pursuing genuine common interests between rich and poor countries& Aiberal internationalism is moti!ated by a humanitarian tradition in combination with an enlightened self1 interest emerging from the increased Dorth17outh interdependence and the new opportunities opened up by the integration of the Third World into the Western mar,et economy& Aiberal internationalism is basically against state and inter<state inter!ention% although it favors general rules that can create e0ual opportunities and reduce discriminatory practices and protectionism& $ts attitude towards major channels for aid + the bilateral and international aid agencies + depends on their degree interference and discrimination& Thus% it is s,eptical towards economic growth% by means of mobili-ing% in particular% the private sector to increase production and trade& $t is also s,eptical towards those agencies which pursue e*tensive procurement tying% and favors% in particular% the international development finance agencies and also the multilateral aid agencies within the BD system which practice open bidding& Aiberal internationalism favors the mobili-ation of the private sector in development efforts% including the mobili-ation of industrial and business enterprises of the Dorth% and the use of 2.A for this purpose& Who% then% are the main champions of liberal internationalismW They% too% may be differently distributed in the five countries% depending upon the economic structure of each country% but everywhere competitive transnational corporations would figure prominently& The core of radical internationalism is% in contrast% an acceptance of the obligation to show solidarity with the poor and oppressed in other countries% even at the sacrifice of narrower interests in one)s own country& $t is associated with a set of ob*ecti!es% vi-& the attainment of full economic% social and political e0uity% and increasingly coupled with ecological concerns% too& $deologically% it confronts the e*ploitive and oppressive economic and political structures at wor, within and between states& Radical internationalism% is rooted in ideologies professing e0uity of man and solidarity within and across national boundaries& $t insists that the dire need which prevails in the Third World should be given predominance over narrow self1interests at home% given the differences in terms of economic and social levels% pro!ided that aid is directed to meet these needs by creating or supporting structures for self1reliant% sustainable economic and social growth& $t considers it to be of crucial importance that the recipient of aid pursues a policy to this end% be it a government or a social movement 4D/26& $t is s,eptical to civilian and military bourgeois elites in control of the majority of Third World countries and reluctant about% if not against% the provision of state1to1state aid to countries ruled by such elites&

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Radical internationalism strongly favors state and inter<state inter!ention if such interventions are oriented towards the objectives outlined above& $t would be just as strongly against interventions by e*ploiting or repressive structures% whether a Third World government or an international organi-ation% and the Bretton Woods institutions are included in this category& However% radical internationalism also includes some non1authoritarian% anarchist elements that would be against any strong% intervening sate& $t prefers to channel aid via non1governmental solidarity movements& $t loo,s upon the major established aid c#annels% the bilateral and multilateral aid agencies% with basic s,epticism% but tends to differentiate between the according to their performance vis1c1vis the objectives outlined above and the policy of recipients chosen& $n the case of multilateral aid% it is against providing aid through international development finance agencies% particularly the Bretton Woods institutions% because of their development philosophy and the orientation of their aid& They are not considered instruments for securing genuine advantages for the Third World% but rather as instruments in the service of donor interests% in particular those of the Bnited 7tates& $t is more favor of the global aid agencies 4the Bnited Dations system6 because Third World governments are ensured a greater influence here 4although many Third World governments are pursuing policies deemed contrary to the objectives set out above6& The above represents the main features of the analytical concept& Who are the champions of radical internationalism in the domestic setting of the five countriesW A few e*amples may serve as descriptive illustrations& 7ome solidarity movements have this orientation& These are% generally spea,ing% politically to the Aeft% but in some of the countries they even include organi-ations belonging to the political centre 4especially youth branches6 and some Christian D/2s& 2ther protagonists include movements for an alternative future% environmental activists and political parties to the Aeft of the 7ocial .emocrats% and% for some aspects% even left1wing 7ocial .emocrats& To what e*tent can the aid policies of the five countries chosen for this study be e*plained with reference to humane internationalism and its offshoots as s,etched aboveW A brief presentation of some major features of their aid policy may serve as a basis on which this core 0uestion may be further e*plored and refined& 8a*or features of aid policies 7everal% though not all% dimensions of the aid policies of the five countries are similar& And in most aspects% their policies differ from the mainstream patter of Western countries& This may be illustrated by their performance in five major policy dimensionsC the volume of 2.A% the magnitude of the multilateral aid component% the choice of main recipients for bilateral aid% the financial conditions of aid and the degree of tying of aid& #& -#e !olume performances are shown in Table #& The patterns during the #9>"s reflect the low level of their previous relations with Third World counties% e*cept in the case of the Detherlands which was a colonial power& or the rest% the aid activity evolved to a large e*tent as a result of their active participation in% and strong commitment to% the Bnited Dations 4BD6& Here% development assistance emerged as an issue during the late #9M"s& Third World development increasingly attracted attention as a ,ey 0uestion% as the membership structure of the BD

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drastically changed during the #9<"s and early #9>"s& By #95"% the four non1 colonial countries had caught up with the average aid assistance 4as a percentage of /DP6 of the member countries of the .evelopment Assistance Committee 4.AC6 of the 2rgani-ation for 3conomic Cooperation and .evelopment 423C.66% which by then had declined from "&< per cent in the period #9>"1>< to "&HM per cent& At that point in time% the Detherlands was clearly ahead 4"&>! per cent6& By #95<% all five countries had passed the "&< per cent of /DP mar,% with 7weden and the Detherlands ahead 4"&5; and "&5M per cent6 and Dorway in a middle position& .uring the following years% the performances stagnated: in the period #9591;H% it even declined below "&< per cent of /DP& .anish 2.A climbed to the "&5 per cent level in #95; and further to "&;9 per cent of /DP in #9;>& .utch aid increased to reach "&; per cent in #95>% "&9M per cent in #959 and #&"5 per cent in #9;#% but declined somewhat during the subse0uent years to reach #&"# per cent in #9;>& Dorwegian 2.A increased to "&;M per cent in #955% "&9< per cent in #959 and #&# per cent in #9;H% declined somewhat the following two years and reached the pea, level of #&! per cent of /DP in #9;>& And the 7wedish 2.A increased to "&9< per cent in #955 and + after a decline during the subse0uent years + to #&"! per cent in #9;!& Then it declined to "&; per cent in #9;M% before it increased again somewhat% to "&;< per cent of /DP in #9;>& .uring this period% the .AC average + which included the aid given by the five + stagnated% varying around "&H< per cent of /DP& The performances of the four (front1runners) were% in relative terms% two to three times that of the .AC average% and Canada)s performance was also clearly above this average& Another indication of the relative importance of the development assistance is given in Table !% which shows 2.A appropriations as a percentage of the central government budget e*penditures& or all the five counties% the level is high% compared with that of the Bnited 7tates& 2n this account too% the trends in the five countries differ& Canada shows a slightly declining trend% while 2.A ta,es up an increasing share of the budgets of the four others up to #9;"% when it stagnates or slightly declines& !& All five countries are channeling muc# de!elopment assistance t#roug# t#e multilateral aid agencies& .ifferent measures of their multilateral commitments are given in Tables H1M& Their multilateral aid as a percentage of total 2.A is given in Table H% where aid channeled through the 3uropean Community 43C6 is included for the 3C members 4.enmar, and the Detherlands6& The multilateral share is high for all five countries% though both the level and the trends differ& After #95<% .enmar, and Dorway maintained the largest multilateral component% on average M> per cent in the case of .enmar, and MM per cent in the case of Dorway& The Canadian average was around M" per cent% the 7wedish HH per cent and the .utch !9 per cent% while the .AC average was H# per cent& This picture is supplemented by the data on multilateral contributions in terms of B7. 4current prices6 and as a share of /DP: the latter indicate the burden1sharing& As shown% the five countries contribute more to the multilateral aid agencies as a percentage of their /DP than the .AC average& Dorway% which comes out at the top% has since #95> contributed almost four times as much as the .AC average&

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Compared with the performance of the Bnited 7tates% their performances are even more distinct + both with regard to the level and the trends& Another aspect is presented in Table M% which shows how their multilateral aid is distributed between the international aid agencies& All five countries give strong support to the BD system according to this indicator% in particular the 7candinavian& However% the share is declining& 7till% by #9;< the BD agencies received about half + or more than half + of the multilateral aid of the three 7candinavian countries% around M" per cent of the Canadian and more than H" per cent of the .utch& The share of the multilateral finance institutions + the World Ban, 4mainly the $nternational .evelopment Association 4$.A66 and the regional development ban,s + has been increasing for all five countries% in particular the Detherlands& However% the levels differ% with Canada at the top% followed% in #9;< by the Detherlands and 7weden& .enmar, and the Detherlands channeled fairly large sums through the 3uropean Community& 3ven on this account% the profiles of the five countries differ from the .AC average% in which the BD agencies receive a smaller share and the financial aid agencies a larger& H& A large share of the bilateral aid of the five countries is concentrated on a fe$ main recipients% as show in Table <% which includes countries that received more than ! per cent of total 2.A in #95"15#% #9;!1;H or #9;<1;>& To a large e*tent% they have also chosen the same recipients + all have included $ndia% Bangladesh% Tan-ania and ?enya among their main recipients: at an early stage% four have also included Pa,istan& The regional concentration of bilateral aid to the $ndian sub1continent and eastern and southern Africa is also stri,ing& According to this indicator% the trend is towards decreased geographical concentration in the cases of .enmar, and 7weden% while Dorway has maintained the concentration at the same level& Another trend is the shift from Asian to eastern and southern Africa& The stability in aid relations is manifest for all five counties% although the degrees of stability differ& M& The generosity with which aid is given is reflected in t#e financial terms of t#e ,D)& Three dimensions of this aspect are shown in Tables >1;& The proportion provided as grants is the most clear1cut indicator 4Table >6& The patterns of the five countries differ% with Dorway and 7weden providing aid on the most favorable termsC since #95<% almost all of their 2.A has been given as grants& Canada% .enmar, and the Detherlands started out at lower grant1loan rations% and these were improved by #9;< to around 9< per cent in the case of Canada% 9" per cent for the Detherlands and ;" per cent for .enmar,& The performances of the five countries were clearly ahead of the .AC average 4;# per cent in #9;<6& A similar picture emerges from Table 5 on the basis of the calculated grant element of aid% although difference between DorwayG7weden and the other three become less% according to this indicator& The grant element of aid to the least developed countries 4AA.Cs6 has been fairly high for all five countries 4Table ;6& <& A series of mechanisms have been established with the main purpose of ensuring a high return flow of aid: some of these formal% others informal& 2ne of these mechanisms is the t ing of aid& 2n this account 4Table 96% performances differ among the five& Canada consistently ties a large proportion of its total aid& The Canadian figures suggest that tied aid as a proportion of the country)s total aid has declined sharply during the last three years& .enmar, has been tying its bilateral

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development credits 4about half of the bilateral 2.A6% but the proportion of tied aid declined after #95< to !M per cent in #9;>& .utch tying of aid started at a higher level but later on showed a strongly declining trend% according to .AC data 4below #" per cent after #9;<6& However% this trend is contested in the study on .utch aid policy which follows& Dorwegian and 7wedish 2.A has been tied at a relatively low and stable level 4largely below !" per cent6& Also on this account% the five countries differ from the .AC average% which varied between M< and H! per centC the three 7candinavian countries and the Detherlands with a lower level of aid1tying% Canada with a much higher level& This brief survey reveals several common features but also some differences in the aid policies of the five countries& This ma,es it interesting to e*plore to what e*tent the same or similar determinants have been forming the policies& The fact that the aid policies of all five countries + and in particular those of the Detherlands and the 7candinavian countries + differ from the mainstream 23C. policies on most dimensions of aid policy ma,es such a comparison all the more interesting& KNL

StoBBe* Ola$ -8;A;0* 1,he Determinants of )orCegian Aid Policy*4 in StoBBe* Ola$ -ed60* Western %iddle Powers and Glo"al Poverty# The &eterminants of the Aid Policies of *anada$ &enmar)$ the .etherlands$ .orway and Sweden* ""6 87;-.9/* (""sala* SCeden: ,he Scandina$ian Institute of African Studies6
'ost of the conclusions arrived at here have been set out in the previous section& Here% the relative impact of the determinants on the different aspects of aid policy will be assessed& $n some areas% the different determinants move the policy along more or less the same path% which ma,es any assessment of their relative impact difficult& $n others% however% they conflict% facilitating such assessments&

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The main conflict dimension is between altruism% in the first place associated with socio1political norms% and self1interest% in the first place associated with the systemic and business interest in e*port promotion% both belonging to the domestic environment& This conflict is manifest for most dimensions of the aid policy% in particular as concerns the magnitude of the multilateral aid component% the principle of geographical concentration of bilateral aid and the selection of priority countries% the principle of untied aid and% in general% the commerciali-ation of aid& #& 'ost aspects of Dorwegian aid policy are attuned to t#e dominant socio< political norms of t#e domestic en!ironment & This applies to the reasons for providing development assistance and to the development aims established& $t also applies to the two main strategies% in particular% to the welfare strategy% but also to the industriali-ation and trade strategy% in so far as they relate to development objectives in the Third World and efforts to bridge the gap between poor and rich countries by reforms of the international economic system% a new division of labor and improved trade relations& The established guidelines are also in tune with these norms& The dominant socio1political norms% therefore% constitute the main determinants of Dorwegian aid policy& They have in substantial part been strong enough and shared sufficiently widely across the political spectrum to be able to deflect attempts by Dorwegian systemic and economic interests to bend the aid programme significantly to their advantage& This applies% in particular% to the heyday of altruism% in the years between #95" and #95>& .uring this period% two major White Papers were presented by the government 4Aabor6 and adopted by Parliament& However% the increased commerciali-ation of 2.A during the second half of the #95"s and the early #9;"s + in particular% the way in which the principle of untied aid has been defined and implemented% and the use of 2.A in the promotion of Dorwegian e*ports + justify a modification of this general conclusion& !& The overarching systemic interest in the maintenance of peace and economic stabilit and in an international regime to enhance these values has been decisive for some dimensions of the aid policy& This transpires from the motives given for aid& 7ome aspects of aid policy are directed to this objective% in particular the large component of multilateral aid& Peace and economic stability belong to a cluster of international common goods that also includes poverty alleviation and economic and social growth in the Third World& Although there could be conflict% in the distribution of 2.A% between development objectives and peace objectives% this rarely happens& The social bearers of the dominant socio1political norms are in favor of both (peace) and (development)& A large% multilateral aid component conflicts% on the other hand% with the systemic and business interest in e*port promotion& 2n this dimension of the aid policy% the systemic interest in the maintenance of peace and economic stability has been the decisive one& H& 7ome elements of aid policy are direct to the systemic and business interest in e'port promotion& This applies to the motives given for aid% though not prominently% and to the long1term aid objective% though this is formulated in general terms% approaching the mutual interest in% inter alia% e*panded trade& The industriali-ation and trade strategy is also geared to this interest% and% by definition% the commerciali-ation of aid policies& After #95>% aid policy has increasingly been oriented towards this interest% in particular the introduction of a commodity aid

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component% the interpretation and implementation of the principle of untied aid% the free-ing of the multilateral component at "&< per cent of /.P% instead of the <" per cent of 2.A contained in the #9;M White Paper along with the interpretation of this guideline provided by Parliament in #9;5% and the many mechanisms established with the e*plicit purpose of promoting Dorwegian e*ports financed through the 2.A budget& 3*port promotion by means of 2.A conflicts 4as perceived6 with several of the dominant socio1political norms and the social bearers of these norms have been ardent opponents of the commerciali-ation of aid& 7ince #95>% however% the proponents of e*port promotion have increasingly ,ept the initiative% although the gains have not been too impressive in 0uantitative terms% and Parliament% again in #9;5% has put up a forceful resistance& 2ther aspects of aid policy are% on the other hand% dysfunctional to this interest& This applies% in the first place% to the large% multilateral% 2.A component and to several of the other established guidelinesC the principle of geographical concentration% the criteria for selection of priority countries and the selection that has been made 4poor countries6% the poverty orientation reflected in the welfare strategy and the target groups 4the poor% women6% untied aid% aid as grants% and recipient1oriented aid& As noted% some of these guidelines were adapted to the interest of e*port promotion after #95>% and several of the e*emptions from the principle of geographical concentration were accommodations of this interest& 3ven so% the guidelines have constituted barriers to the use of 2.A for the promotion of Dorwegian systemic and business interests in e*port promotion and have for this very reason been under attac, from the social bearers of these interests& 2n 0uestions that really mattered% however% involving the principle of untied aid% the e*port1guarantee system and mi*ed credits% substantial concessions were made after #95<% against the protests of the social bearers of the dominant socio1political norms& However% even in these areas% the gains were circumscribed& $n areas where the interest was affected in a more general way% vi-& the multilateral component or aid as gifts% the impact was less& M& The prevailing economic situation in Dorway was suggested as a major% potential determinant% involving several dimensions of the aid policy& The main changes in the domestic and e*ternal economic situation after #95< were the followingC (a) A rate of inflation during the early #95"s% continuing at a relatively high level even later% with a bearing on the level of Dorwegian costs& The Dorth 7ea oil discoveries + creating opportunities for industries% job opportunities at a far higher salary level than in other branches of industry% and the prospect of large state revenues + were a major cause of this development% affecting adversely the competitiveness of Dorwegian mainland industries and e*porters% including industries that faced competition from Third World producers on the domestic and international mar,ets 4te*tiles% shipbuilding6& (b) An acute% structural crisis in the shipbuilding industry that was perceived as a temporary crisis and dealt with accordingly& Dorwegian shipbuilding enterprises constituted the core industry in many minor towns& The crisis had% therefore% the

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potentiality of creating unemployment in many districts% as a close1down would also affect the employment provided by supportive enterprises& $t became a matter of priority for the government to rescue the shipbuilding industry by an active search for new contracts and various forms of subsidies& The new oil riches of the Dorth 7ea became instrumental% both in strengthening the financial basis% thus allowing for public subsidies% and in easing the efforts to convince prospective oilfield operators to place order with Dorwegian firms& The 2.A budget was also used as an instrument in this policy& (c) .uring #95<155% Dorway e*perienced high balance1of1payments deficits& /radually% however% the new incomes stemming from oil revenues and oil1related activities improved the public income and economic growth 4/DP6 and affected the balance1of1payments situation positively& .uring the early #9;"s% foreign debts were reduced& The adverse trends in the Dorwegian economy were reinforced by the international recession during this period& They were all wor,ing in the same general direction% along with the systemic interest in e*port promotion and a high employment rate and business and labor interests to the same end& $t was also e*pected that they would adversely affect the aid volume and terms of aid& The actual effects were% however% less than e*pected& The strained economic situation affected the volume of aid% but only temporarily and rather mildly& 2n this dimension% it was balanced by the socio1political norms which were reinforced by the deteriorating situation emerging in the Third World& Although strained% the main characteristic of the Dorwegian economy during these years was that of an economy in sustained growth + Dorway improved its relative position among the richest industrial countries& This also e*plains why the strained economic situation did not affect the financial conditions of aid& $t was% however% most decisive for the increased commerciali-ation of aid during the second part of the #95"s and early #9;"s% reinforcing the systemic and business interest to this end% involving increased emphasis on the return flow of aid% including the redefinition of the principle of untied aid and mechanisms to promote Dorwegian e*ports& $ts effects on most other aspects of aid policy% were small% even marginal& <& Although Dorwegian aid policy is in many respects different from the mainstream aid policy of the Western powers% several aspects also reflect values 4norms% standards and interests6 being pursued in the e*ternal environment& The Dorwegian aid policy has been well attuned to the policies of other Dordic countries% in particular% to "$edis# aid polic & The similarities are to be found especially in the large volume of 2.A on favorable financial terms% the poverty orientation% involving poor recipient countries% poor target groups and recipient governments that are e*pected to be geared towards social justice% the selection of priority countries% the principle of untied aid and the large multilateral aid component% although the pattern varies& The detailed% formal policies established in the #95! and #95< White Papers have similarities with other Dordic countries) policy statements& 7everal of the changes since #95<% including the commerciali-ation drive% the wea,ening of the principle of untied aid and the conditionality reflected in the rephrasing of the principle of recipient country orientation in the #9;M White Paper% came in the wa,e of changes in the same direction in 7wedish aid policy% though with a time lag& The fre0uent appearance of 7ocial .emocratic governments on both sides of a common

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border may be part of the e*planation& $t is% however% difficult to assess whether Dordic co1operation + or% rather% close pro*imity% involving communication% co1 operation and competition + has had a decisive impact on the various aspects of aid policy or has only reinforced a policy which has emerged from genuinely domestic% political processes& The values operating in the systems are basically similar& >& The norms established by t#e ,&5D 4.AC6 have also influenced some aspects of aid policy% although the impact has probably not been strong% as Dorway has been far ahead of the targets and standards set 4less aid tying% more aid on better financial terms% especially to the AA.Cs% increased aid through multilateral agencies% etc&6& The standards set by most .AC members% in their aid performance% may even have influenced Dorwegian aid policy in a negative direction% from the point of view of these norms% although such effects are not easily traced& The main partner in the regional security policy co1operation% t#e :nited "tates% has had some influence% though a rather marginal one% in the area in which its influence could be e*pected to be the strongestC the choice of partners for bilateral co1 operation& The influence of minor allies in DAT2 has been even less% as is indicated by the support given to the liberation movement of Portugal)s African colonies when the wars of liberation too, place& 5& The multilateral institutions + the World Ban, and the Bnited Dations system + have influenced several aspects of Dorwegian aid policy% particularly during the initial stage& This applies% in the first place% to aid philosophy% strategies and targets% although after #95< Dorway was ahead of the volume targets established by the BD& 7ome of the guidelines + in particular% aid as grants and the principle of untied aid + have been influenced by the multilateral aid agencies& Their main role% however% has been to reinforce the effects produced by the dominant socio1political norms of the domestic environment& The World Ban,% in particular% has underpinned the philosophical basis of the industriali-ation and trade strategy& ;& 'ultilateral aid agencies and priority countries have + in their capacity as aid channels + had a substantial impact on Dorwegian aid% though not necessarily on aid policy& Although several dimensions of the aid policy are attuned to the interests of the priority countries) governments 4vi-& a large volume of 2.A on grant terms% country planning with long1term commitments% and the principle of recipient1 oriented aid6% it does not necessarily follow that these governments are the main determinants& 7till% in spite of the asymmetrical power structure of aid relations% they have also influenced% indirectly as much as directly% some aspects of aid policy& These tentative conclusions are based on the correspondence between actual policy manifestations and the assumed outcome if the potential determinants were to be decisive& Although process analysis may add to or even modify the conclusions% the approach used has made it possible to identify the basic determinants of the aid policy& Attention has not been directly focused on the actors who would be important in any process analysis with a similar purpose& These have been included in broad% aggregate units& This applies in particular to political parties% although their positions in relation to the main issues have been indicated& Iariations in the aid policy over time% to some e*tent% coincided with changes in government along a

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(ig#t<Left dimension% although these variations have been small and the Right1Aeft division somewhat blurred& 2ne reason for this is the strong aid commitment of the parties belonging to the centre% in particular the Christian People)s Party 4CPP6 and the Aiberals% which% together with the 7ocialist Aeft Party 47AP6% have been the most ardent supporters of altruistic aid and increased aid& The predominant consensus between the political parties 4e*cepting the PP6 has occasionally been bro,en by the parties to the Aeft and to the Right& The main conflicts have involved 2.A volume% the selection of bilateral aid recipients% and% increasingly% the commerciali-ation of aid% in particular the mechanisms established with the primary purpose of promoting Dorwegian e*ports& Whereas the main political parties% and especially Aabor% have actively sought a broad consensus on aid issues% the minor parties to the Right and Aeft have not accepted such self1imposed restraints& The selection of recipient countries for bilateral aid is a case in point& Here% the 7AP has argued for more aid to countries with a 7ocialist orientation% the inclusion among priority countries of additional countries with this orientation 4Angola% Cuba% Dicaragua% Iietnam6% the e*clusion of countries with mar,et1oriented% conservative regimes 4?enya% Pa,istan% 7ri Aan,a6 and more support to the liberation movements of southern Africa& As noted% the party has not been alone + the left wing of the Aabor Party 4and on some issues% the whole party6% the Aiberals and the CPP have adopted similar positions on several of these issues& 3ven on the more fundamental issue of whether to provide aid at all% there is a cleavage between the parties% as the tiny Progress Party has advocated the abolition of all public aid% in particular multilateral aid and any aid that does not engage private Dorwegian enterprises and business& The main division + within the broad consensus among the main political parties + has been between the Right 4Conservatives6 and the Centre1Aeft 4Centre Party% CPP% Aabor% Aiberals% 7AP6& However% the participation of smaller parties in coalition governments in which the Conservatives have been the main partner has modified the positions of the parties belong to the Centre on many issues% thus blurring this division& This applies in particular to the CPP during the #9;"s% when the party in a government position 4in charge of the 'inistry of .evelopment Co1operation6 gave legitimacy to several mechanisms identified with the commerciali-ation of Dorwegian aid and accepted 2.A budgets far below its commitments + and even below what Parliament might have accepted on the basis of the electoral platforms of the parties& 2n balance% the party managed to commit the Conservatives to a poverty1oriented aid policy and volume targets above #&#< per cent of /.P& The Conservatives have been dependent on the parties in the Centre to form a government + a fact that has influenced the aid policy positions adopted by the party and blurred the conflict along the Aeft1Right a*is& The conflict between altruism and self1interest% manifest above all in the commerciali-ation1of1aid issue% involves the political parties along a RightYCentre1 Aeft a*is% though this split is also found within Aabor& .uring the late #95"s and early #9;"s% however% the conflict appeared first of all as one between the national political institutionsC the governments 4'inistry of oreign Affairs6 and Parliament& ># The e*port1promotion drive was carried out by the government administration 4in particular by the 'inistry of Trade and 7hipping and the 'inistry of $ndustry6% in liaison with private sector% economic interest groups& $n #9;"% in a report to

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Parliament 4Report Do& H<6% the government 4Aabor6 made an effort to transform the practice of aid established during the second half of the seventies + the increased commerciali-ation% in which aid was geared towards broader economic co1operation + into policy norms& $n #9;#% Parliament rejected reorientation and insisted that the old guidelines be maintained + with an emphasis on the poverty orientation of aid geared to social justice and the channeling of aid to poor countries& Although the principle of untied aid was modified% the redefinition was made with the intention of containing the way in which it had been implemented& $n Parliament% all the parties represented on the oreign Affairs Committee bac,ed this position% including the governing Aabor Party& 7everal factors contributed to these political pirouettes% in particular the feeling that practice had become too far removed from established principles& 'anifestations of double standards are probably more conspicuous in the cluster of policy areas to which aid policy belongs 4together with social security% employment% etc&6 than in other areas of domestic or foreign policy& The government issue also influenced the positions of the political parties& The general election of #9;# was close% and political parties were in the process of formulating their manifestos + a fact that facilitated a pre1occupation with norms and values& The government 4Aabor6 was a minority government and had parties both to the Aeft and in the centre which were opposed to the increased commerciali-ation that had ta,en place& The main opposition parties had agreed to form a non17ocialist government if the elections allowed& $n this setting% the Conservative could not afford an open clash with the CPP on an issue which that party + sensitive to strong signals from the Council of oreign Relations of the Church of Dorway + had at heart& or this reason% the CPP played a decisive role in the outcome& The crucial role of the parliamentary situation% and in particular the conse0uences involved in partnership in a coalition government% is also illustrated in some specific issues during the period up to mid1#9;H with minority governments 4Aabor and Conservative6& When in #9;" the government 4Aabor6 decided to apply for membership of the $nter1American .evelopment Ban, 4$.B6 financed by 2.A% Parliament turned the proposal down& When the government 4Conservative6 in #9;! proposed that D2? #M< million should be allocated in the aid budget for #9;H to cover losses under the special e*port1guarantee system% contrary to the yearly limit previously agreed on 4D2? !" million6% Parliament unanimously turned the proposal down& Bnder the new majority regime from mid1#9;H to late #9;<% matter changed& With the CPP included in a majority coalition government% these issues were decided in line with the position of the Conservatives& The various mechanisms for the promotion of Dorwegian e*ports were reinforced in the /overnment)s White Paper 4#9;M6 and new mechanisms were added% including mi*ed credits% an arrangement which was rushed through Parliament ahead of the White Paper and obtained the votes of the three coalition parties and 4somewhat hesitantly6 Aabor)s as well& The White Paper also included the proposal to use 2.A e*tensively to cover losses on e*port guarantees in the future too 4D2? !"" million a year6 and membership of the $.B& The redefinition of the principle of untied aid concluded this course of events& Clearly% the government structure was instrumental in bringing about the 0uite fundamental changes that too, place on these issues + as it had been a few years earlier in defense of the then established policy&

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These changes + in favor of self1centered Dorwegian economic interests + are important but do not provide the full picture& The CPP did not abandon all the altruistic principles with which it had been previously identified& The poverty orientation came out stronger than ever in the White Paper + a fact that implies set1 bac, for a policy directed towards satisfying self1centered Dorwegian economic interests& Another important aspect in this programme of continued growth + safeguarding long1term% development assistance and restricting the utili-ation of 2.A to mechanisms geared to stimulating (broader economic co1operation)& 7uch utili-ation of 2.A was restricted to the allocations above the #&#& per cent of /DP which was to be used for humanitarian aid and long1term development assistance& The financial framewor, of the new mechanisms introduced was rather rigid + with the e*ception of the funds to cover losses on old e*port guarantees% which had to be covered by the state anyway& Here% safeguards were introduced against future losses& However% once new mechanism are introduced% they may well open up future avenues for economic interest groups that are well placed and e*perienced in manipulating the system& The full implications of the new mechanisms + modest as they are today in financial terms + will only be appreciated in years to come& The most stri,ing feature of Dorwegian aid policy is its continuity and the high degree of consensus1see,ing among the main political parties& 2n some issues + in particular% issues which have a bearing on self1centered% Dorwegian interests + there has been a continuous conflict along the a*is between altruism and self1 interest& Although a shift of emphasis too, place during the second half of the #95"s and early #9;"s + involving% above all% increased commerciali-ation + in most aspects% altruism has maintained the upper hand% though with modifications and variations as regards its strength over time&

StoBBe* Ola$ -8;A;0* 1,he Determinants of Aid Policies: Some Pro"ositions +merging from a %om"arati$e Analysis*4 in StoBBe* Ola$ -ed60* Western %iddle Powers and Glo"al Poverty# The &eterminants of the Aid Policies of *anada$
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&enmar)$ the .etherlands$ .orway and Sweden* ""6 .>798:* (""sala* SCeden: ,he Scandina$ian Institute of African Studies6
General *onclusions and Their Implications for the 'uture The aid policies of the five countries are e*pressions of humane internationalism& This is the main conclusion% although the policy varies somewhat from country to country and from one policy dimension to another within the same country& ) 4eneral 8o!e -o$ards Liberal Internationalism "ince t#e 8id<1D70s There is a general trend in all five countries towards liberal internationalism& This orientation started during the second half of the #95"s& The 5anadian aid policy has basically reflected humane internationalism& The features of liberal internationalism have been strongly pronounced throughout and have been growing during the #9;"s% with% increasingly% some traces of international realism% too& Predominantly humanitarian motives have been combined with a desire to promote Canadian economic interests and influences abroad& Although opinion surveys have shown that most Canadians were not willing to sacrifice development effectiveness on the altar of commercial benefits% many authors have considered the commercial interests of Canadian business of major influence in 0uestions of foreign aid policy& However% if self1interest had been the prime determinant% Canadian aid policy would have had very different features& Aid is supported% in the first place% because it is considered an international public good&>5 The balance between self1interest and altruism tips more to the latter in the Danis# case than in the Canadian& Business interests were at an early stage granted their share of the aid ca,e 4one 0uarter6 in the form of tied financial assistance& This balance has been maintained since the late #9>"s + although increasingly allowing for the use of part of the credits for local purchases& As indicated by the recently proposed action plan for .AD$.A% however% the efforts to adapt bilateral aid to .anish business interests are continued& .anish aid policy basically reflects humane internationalism& $t contains features of reform internationalism& eatures of liberal internationalism have always been present% with traces of realist internationalism& The Dutc# aid policy is basically a reflection of humane internationalism& However% features of realist internationalism are also discernible& 2.A has been used as a means to maintain good relations with former colonies and dependencies once they became independent% a patter which fits into the realist tradition& This feature was a

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dominant one during the early years of .utch aid& $t has remained throughout% but decreased in importance during the #95"s and #9;"s& .uring the mid1#95"s% .utch aid policy + under 7ocial .emocratic leadership + had features of reform internationalism% especially if assessed on the basis of declared policy& $t was adapted to demands from Third World governments for reforms in the e*isting international economic and political system& .uring these years% .utch aid policy transcended the D$32 demands by focusing on redistribution aspects of the recipients) domestic policies too% with the aim of stimulating reforms oriented towards social and economic growth& .uring the late #95"s and the #9;"s% these policy features were gradually wea,ened 4by successive Centre1Right governments6 and increasingly replaced by a trend towards liberal internationalism& %or$egian aid policy also reflects humane internationalism% with the inclusion% since the early #95"s% of elements of reform internationalism% particularly if assessed on the basis of declared policy& .uring the mid1#95"s% the Dorwegian government + together with the .utch + was most active% within the group of Western industriali-ed countries% in pressing for reforms in the international economic system in favor of the Third World& This drive was pursued into the #9;"s% when the Dorth17outh dialogue hardly appeared on the international agenda& As in the .utch case% aid policy was also oriented towards reforms at the national level% in the way the poverty orientation was defined& rom the early #95"s% a few fragments of radical internationalism have also been manifested% particularly in the support for southern African liberation movements& 7ince #95>% some dimensions of the aid policy% in particular the commerciali-ation drive% have increasingly reflected liberal internationalism& The protectionist aspects of this drive% in particular the introduction of tied aid% represents small traces of realist internationalism& The "$edis# aid pattern has been very similar to the Dorwegian% although with some differences in emphasis& Basically% the policy reflects humane internationalism& 7everal elements have% from the very start% reflected reform internationalism% especially in terms of motives for providing aid& 3lements of radical internationalism can also be identified% more strongly articulated than in the Dorwegian case and especially related to the support for African liberation movements and the selection of recipients for bilateral aid& rom the mid1#95"s% the policy has increasingly reflected liberal internationalism% too% with small traces of realist internationalism& -#e 8a*or Determinants The aid policies of the five countries reflect% for most dimensions% the dominant socio1political values of the domestic environments& These are% according to the point departure of this study% the main determinants of most dimensions of aid policy& However% systemic and private sector interests have also influenced these countries) aid policies% as have their systemic interests related to the international common good% particularly the 0uest for international peace and stability& 7ome influence has also been e*erted by international organi-ations and even by the recipients& The relative influence of these determinants varies from country to country and also% within each of the five countries% from one dimension of the aid policy to another% as noted above& $n some of the five countries% such variations have also

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been dependent on the political color of the government of the day and% in general% on the prevailing parliamentary situation& The dominant socio<political !alues referred to have had the strongest impact on the aid policy of the 7candinavian countries and the Detherlands& .ifferent values have e*erted the strongest influence on the various dimensions of aid policy& The values connected with the welfare state% in particular social justice% have been most strongly e*pressed in the Dorwegian and 7wedish aid policies and% during the mid1 #95"s% in .utch aid policy too% as assessed from the declared policies& The prime e*pression of this is the poverty orientation of the stated aid policy% involving poor countries as the main recipients% the poor as the major target group and the e*pectation of a policy of e0uity and social justice on the part of the recipient governments& Human rights concerns% including the concern for democracy% have had a more or less strong impact on the stated policy of the five countries% but have also occasionally e*erted a decisive influence on aid relations& The private sector and systemic interest in e'port promotion has had the strongest impact on the Canadian aid policy& $t has also influenced the aid policy of the other four countries% but to a lesser degree& $ts strongest impact has been on the dimensions of aid policy where business interests had the most direct sta,e& 3ven here% their influence has been circumscribed + as% in the .anish case% where procurement tying was restricted to bilateral financial assistance and% in the Dorwegian case% where the financial frames for the various mechanism designed to ensure an increased return flow were 0uite limited& >; However% the influence of the combined systemic and business interest in e*port promotion increased during the late #95"s and #9;"s& A common feature of the five countries is the strong impact of their 4systemic6 interest% as small and middle powers% in peace and international stabilit and an international system to pursue and maintain these objectives& This is e*pressed% in the first place% through their large aid contributions through the multilateral aid agencies& The five countries differ somewhat on this account% too& 7ystemic interests related to foreign polic concerns have also occasionally influenced some aspects of aid policy% in particular the selection of recipients& The more particular interests of the administrati!e structures have also had their impact% both on the main policies% such as the large multilateral aid components% and on the structure of aid% including its forms and guidelines for co1operation& $t is difficult to assess the influence which the international organi-ations have e*erted on the national policies outlined below& At an early stage% international norms certainly had some impact% in particular those established for the volume of aid& 7ince the early #95"s the four 3uropean countries have pursued aid policies ahead of these norms& $n the case of Canada% international norms have e*erted some influence both with regard to the poverty orientation and the volume of aid& 'ajor changes in the international environment have affect aid policies& The international recession% contrary to our e*pectations% had only a marginal impact on the 2.A volume performance + although some temporary setbac,s were caused& Again contrary to e*pectations% its impact on the financial terms of aid was even less& $n fact% these terms improved after #95<& However% the strained economic situation% resulting in high unemployment rates in some of the five countries%

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facilitated the increased commerciali-ation of aid which too, place in all five countries during these years& The ideological reorientation towards Aiberalist orthodo*y% which occurred during the late #95"s and early #9;"s in some of the major governments of the Western world% wor,ed in the same general direction& $t influenced several dimensions of aid policy% and spurred on the drive towards commerciali-ation of aid which had gained momentum at an earlier stage& $t also had an impact on the trend% in the late #9;"s% towards increased privati-ation of aid + including the enhanced role of D/2s as aid and development agents% although these were motivated by other concerns as well& The c#anged conditions in t#e -#ird /orld + the desperate economic crises involving soaring debt burdens% balance1of1payments deficits and low productivity as well as famine caused by politics and natural disasters + affected% in particular% the volume% the financial terms and the forms of the five countries) aid& The humanitarian response to the deteriorating economic situation of so many developing counties probably offset the negative effects on the volume and financial terms of aid% caused by the strained economic situation of the donors during the recession& $t led% too% to forms of aid% such as balance1of1payments support% which were adapted to the foreign currency needs of the recipients& However% these forms of aid were also easily adapted to the commerciali-ation drive& 5onsensus "ee2ing in t#e Domestic "etting There e*ists a stri,ingly high degree of national consensus between the major political parties of the five countries on most aid issues& This is not because aid policy is considered of minor importance in the national political arena% as is the case in several other 23C. countries& >9 Aid policy has attracted considerable attention&5" This does not necessarily imply that an aid issue has much li,elihood of toppling a government& However% it is indicative of the importance of this policy area that% in the 7candinavian setting% one major political party 4the Aiberals of 7weden6 made a strong pro1aid stance one of its top issues to profile the party in consecutive general election campaigns& Although the high degree of consensus is the predominant feature% we have also identified% at the level of national politics% several disagreements between the main political parties% save for Canada% where conflicts between the two major parties on aid issues have been fairly rare& Although positions have been shifting from one policy dimension to another% the picture that emerges contains an element of Right1 Aeft conflict% although this pattern is blurred in the 7candinavian countries by the strong pro1aid positions of the Aiberals and the Christian .emocrats& These parties% which hold a central position on a Aeft1Right a*is% have% together with the parties to the Aeft 4Aeft 7ocialistsGPeople)s 7ocialists% Communists6% outflan,ed the 7ocial .emocrats in the core issues% such as the volume of aid 4they favour an increase6 and the 0uestion of commerciali-ation 4by and large% they ta,e a more purist view6& However% participation in coalition governments + and policy adaptations in order to ma,e such alliances credible + have blurred this pattern at times% in particular when parties belonging to the political centre have found themselves in a government coalition with the Conservatives& Participation in such government coalitions + or even the intention of forming such an alliance + has also affected the policy

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positions of the Conservatives and contributed to the national consensus on aid issues& Aiberalist political parties aiming at reduced public spending and less intervention by the state 4in .enmar, and Dorway6 have attac,ed the very idea of development assistance& The major political parties have actively sought consensus on aid issues& The main motive has been to (protect) aid and to promote it as a national concern of major importance& 2ne strategy to this end has been to create domestic alliances by combining interests& This has been the case in .enmar,% where a balance was struc, between the different forces from the very start& The 2.A programme was e0ually divided between grants and development credits% in order to accommodate different interestsC the multilateral component constituted the tribute of a small state to an international system and was a way of reaching a large number of recipients: the tied bilateral credits represented a recognition of .anish business interests and an attempt to enlist its support: and the grants were a tribute to the specific .anish aid objectives in order to accommodate the altruistic friends of aid& The selection of main recipients for bilateral grant aid represents a balancing of Right1Aeft interestsC the four priority countries pursue different development policies&5# $n the Dorwegian case% a similar balancing has occurred in the selection of priority countriesC (Aeft) recipients are balanced by (Right)% that is 7ocialist Tan-ania is balanced by mar,et1economy ?enya% as is 'o-ambi0ue by 7ri Aan,a& At the regional level% $ndia was balanced by Pa,istan% and later on Bangladesh by Pa,istan + where foreign policy 4diplomatic6 considerations also had some impact& However% the consensus between the political parties has been bro,en in other cases% such as the aid programme to Dicaragua% where 3ast1West considerations have had some impact% thus reinforcing the conflict between Right and Aeft& The #9;M White Paper of the non17ocialist coalition government illustrates another type of trade1off between Conservatives% who obtained the inclusion of mechanisms supportive of e*port promotion% and the Christian .emocrats% who obtained the inclusion of a poverty orientation and the maintenance of a high 2.A volume& The main political parties% especially the 7ocial .emocrats% have actively sought consensus on aid issues& As a result% issues are seldom pressed through Parliament by a majority against strong objections from a major opposition partyC compromises are the most common outcome& The minor parties to the Right 4Aiberalists6 and the Aeft have not always ta,en part in this consensus see,ing% especially the Aiberalists&

S$endsen* Dnud +riB -8;A;0* 1Danish Aid: Old Bottles*4 in StoBBe* Ola$ -ed60* Western %iddle Powers and Glo"al
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Poverty# The &eterminants of the Aid Policies of *anada$ &enmar)$ the .etherlands$ .orway and Sweden* ""6 ;888:* (""sala* SCeden: ,he Scandina$ian Institute of African Studies6
$t is now time to attempt to draw a general conclusion on the strength of the various determinants tested in recent years with respect to the most debated aid issues in .enmar,& irst% a short list of the issues and the corresponding testsC #& )id ,b*ecti!es+ The poverty orientation has been confirmed but not legislated on& A large majority is in favor of ,eeping the compromise formulation in the Act& !& )id .olume+ After one cut in the volume and further attempts to cut it% followed by a few years of -ero growth% a political decision has been ta,en to reach a figure of # per cent of /DP by #99!% but on the basis of a slight majority& H& 8ultilateralUbilateral aid+ The <"1<" division has been confirmed% despite efforts to reduce the share of multilateral aid& M& )llocations to international organi6ations+ A free-e on contributions to BD.P has been lifted% but efforts to prevent the 33C share from growing were not successful& <& 5#oice of recipient countries+ Do change in the list of four% but political agreement on more aid for southern Africa and the 7ahel& Dicaragua is a special case& >& -ied aid+ The number of eligible countries has been e*panded by raising the limit e*pressed in terms of average income: loans to AA.Cs have been changed to grants% and it was emphasi-ed that the use of this aid is governed by the general aid objectives& 5& &!aluation acti!ities+ 7ome modest e*pansion% but far from spectacular progress&

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;& "upport for pri!ate capital transfers+ The development objectives of state1 supported joint venture have been stressed% and the reservation of aid funds for matching 4fle*ible mi*ed credits6 was prevented& The general impression is one of little change% especially when compared with what one might have e*pected or feared under the recent political and economic circumstances of .enmar,& This testifies to the resilience of the aid programme mentioned earlier& The basic features of .anish aid have been left unchanged% despite the many diverse efforts to challenge some of them& 2n some scores% the commercial interests have had some success 4the list of countries eligible for tied aid6% but% on others% they have had to note defeats 4state support for private capital transfers6& At the same time% it is obvious that the balance of forces behind the aid programme is a very fine one& This% combined with the fact that aid has become a permanent part of .anish political life% ma,es it necessary to speculate on possible changes in the aid profile% if there are changes in parliamentary power& $t should be added that in no other policy area have there been such efforts to test public support through opinion polls on a regular basis as for the aid programme& The polls were begun in #9>" and at that time they showed that M"1M< per cent were in favor& 7ince then% there has been a significant increase in this indicator% pea,ing at 5# per cent in #9;M in the midst of a massive (Hunger in Africa) fund campaign& $n #9;<% the polls showed that appro*imately two1thirds of the population 4>; per cent6 were bac,ing a # per cent target for .anish development assistance& This basic fact of steady and large support imposes% of course% certain constraints on the controversies in the political system& Future 5#anges in )idL $t has been the central argument that the aid profile reflects the distribution of political power% which has not given either the ConservativeGAiberal bloc or the 7ocial .emocrats 4and the parties to their left6 a stable majority in Parliament& This has led to basic compromises in the aid programme% which% together with the e*istence of special groups of aid supporters in almost all parties% have protected the aid programme from the influence of the economic crisis& $f the ConservativeGAiberal bloc should gain a majority of their own% without needing the support for the RI% it is not very li,ely that there would be major changes in the aid profile& This bloc would probably care more for the business interests 4e*pand the list of countries eligible for tied aid% introduce matching funds% etc&6% but the e*istence of aid1positive forces in the bloc% including a small Christian Party% would e*clude a major degradation of aid& A shift in the country priorities for .anish aid is highly unli,ely% that is the low1income countries will continue to receive top priority& The situation would be different if the 7ocial .emocrats gained a majority% together with the parties to their left& 7uch a new coalition would have to reach an agreement on a long list of issues% based on a number of compromises not tried before& $t is reasonable to e*pect that the aid programme would be a part of such a new deal% given the interest of the left1wing parties in aid% and that it would be easier for the 7ocial .emocrats to yield in this area than in other fields of policy&

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$f this reasoning is correct% one would e*pect the objectives of aid to be made more precise% possibly through a change in the legislation& urthermore% a more transparent implementation of the aid programme in accordance with the poverty orientation should also be e*pected% meaning greater emphasis on the monitoring and evaluation of aid activities& 7uch greater evaluation efforts would also be directed towards the multilateral aid% especially the funds channeled through the 33C& With regard to the choice of countries% one would e*pect a closer scrutiny of development policies and their implementation in the major recipient countries and special arrangements for aid to Dicaragua& The latter initiative might in fact be the major symbol of a new direction in the aid effort& 2therwise% one would e*pect a reduction in the present large spread of .anish aid% that is a higher degree of concentration& inally% an agreement on the gradual reduction of the share of bilateral tied aid might also be e*pected& This might% however% run into some opposition from a few trade unions& This cautious assessment of the changes in the aid programme to be e*pected from a move to the left by the .anish political forces does not point to any large1scale% radical reform& 7uch changes would have an important impact on .anish aid principles and practice% and they would meet resistance from the ConservativeGAiberal bloc% but they still could not in my view be called radical& This is not so surprising% given the present nature of the .anish aid programme and the absence of an implementable alternative to this programme& The major (alternative) in the aid debate in .enmar, in recent years has been the programme for a Dew $nternational 3conomic 2rder 4D$3.6& The problem with this approach% however% is that it does not produce an alternative aid programme& $t rather tends to reduce the importance of aid as such% ma,ing other Dorth17outh relations more important than aid& As e*perience has show that very little has come out of these efforts to change the economic world order% and as it has been necessary to ma,e a more realistic assessment of the balance of economic power in the world% the intellectual and popular appeal of the whole concept of a new order has been drastically reduced& $t may be said that the various documents describing the demands for a new economic world order also included some broad proposals for changes in foreign aid and that these issues were ta,en up later% for e*ample% by the Brandt Commission& $n this sense% the concept of a new world order does not e*clude concessional transfers of resources to the Third World& The old slogan of (trade% not aid) does not apply to this approach% which is rather (trade and aid)& These broad ideas for fundamental changes in the procedures 4and volume6 of aid transfers% that is automaticity% general financing% no conditions attached to the use of funds% etc&% have never caught on in the .anish aid debate& 2nly one small left1 wing party has argued for the (sovereign) use of .anish aid funds by the recipient countries 4which should therefore include only countries with an acceptable development policy6& The general trend in the aid debate in .enmar, has meant a stronger interest in the use of aid funds% to the poor groups received the benefits of this aid& This has again meant more thorough planning of the use of aid funds + in cooperation with the authorities of the recipient countries% but still in conformity with .anish aid

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objectives& This has promoted a broader understanding of the aid relationship as being an agreement between t$o sovereign states% and .enmar, has over the years become clearer in its dialogues with recipients about its aid objectives% as defined politically in .enmar,& This has meant stronger signals to the recipient countries about the .anish interest in assisting the poor population groups + most recently% a demonstrated concern from the .anish side for aid dimensions li,e the situation of women and the natural environment in the Third World& This (concerned participation)% as it has been called in the international aid jargon% has been e*tended from 0uestions of specific aid uses 4project identification% etc&6 to general policy issues% produced by the economic hardships in the form of fiscal crises and payments deficits in some recipient countries& Thus% in many ways% the general aid ideology in .enmar, has moved away from the aid ideas in the programme for a new economic world order% with the possible e*ception of the greater use of multi1year framewor,s for untied transfers to the major recipient countries 4the rolling five1year plans mentioned above6& Political changes in .enmar, might + as argued above + induce adjustments in the .anish aid profile% and no great political shift would be re0uired to push aid in another direction 4only <1> per cent of the votes6& But compared with the basic aid features of most other 23C. countries% the changes will not be very significant& $t is a fairly safe prediction that .anish aid will continue at a relatively high level% that the public will be concerned with its effects on poverty% that aid will be given primarily to low1income countries% with an emphasis on eastern and southern Africa% and that the international organi-ations will continue to receive a large share of .anish aid&

S$ensson* ?aBob -8;;;0* 1Aid* 2roCth and Democracy*4 in Economics and Politics* 5ol6 88* )o6 9* ""6 .>7-;>6
.oes aid wor,W Bsing the growth impact of aid as a yardstic,% our results suggest it does% but only in certain environments& $n particular we have found that the long1 run growth impact of aid is conditional on the degree of political and civil liberties& Aid has a positive impact on growth in countries with an institutionali-ed chec, on government power: that is% in more democratic countries& The data suggest% however% if this is not the case% aid will be used to satisfy the government)s own

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non1productive demands& These results suggest that promoting democracy in the developing world may not only have a value in itself% it may also increase the long1 run growth impact of foreign assistance& We also found that there are large differences across donors with respect to the allocation of foreign aid& While a few donors% conditional on other motives% have reward recipients with better than average records of civil and political liberties with more aid since the #95"s% this correlation is much wea,er in the #99"s& This result points to the importance of creating incentives within the donor organi-ations to channel aid towards environments where it can be productive 4see 7vensson% #9956& A contribution of this paper is that we have ta,en a step towards identifying such an environment&

S$ensson* ?aBob -.///a0* 1Foreign Aid and !entSeeBing*4 in Journal of International Economics* 5ol6 78* ""6 <9>-<:86
Discussion We have shown that foreign aid and windfalls are associated with higher corruption in countries more li,ely to suffer from powerful competing social groups& We believe this result is supportive of the theory& The model we have laid out is built around a standard rent1see,ing specification& Admittedly% this is a blac, bo* approach to policy formation& $t should be viewed as a reduced form of a more structural model in which organi-ed social groups can capture a large share of government income% either by means of direct appropriation% or by manipulating the political system to implement favorable transfers% regulations and other redistributive policies& $n the empirical section we use corruption as a pro*y of rent1see,ing& We believe that corruption is li,ely to be highly correlated with other forms of discretionary redistribution% and therefore able to capture more than the empirical relationship between aid% corruption and the political e0uilibrium& This assertion also finds support in the data + the empirical results are robust to other pro*ies of wasteful rent1see,ing& The ,ey insights we want to capture in the model are that Eeconomically irrationalF responses to windfalls that has been noted in the literature may be Epolitically rationalF% and that foreign aid may affect the outcome 4and the political e0uilibrium6 through a less tangible mechanism& These results rely on four general assumptions& irst% economic policy is determined jointly by a number of powerful social groups& $n the long run% the groups are better

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off if they cooperate than if the act noncooperatively& There is a large literature both in economics 4see% e&g&% 3asterly and Aevine% #995: Rodri,% #99;6 and in political science that lin,s interest G social groups with redistributive policies in developing countries& Problems of coordination and cooperation are at the heart of this literature& Thus% we believe that our reduced form model captures an important aspect of reality& 7econd% we assume that the deviating group can capture the entire government budget& An objection to this is that a slight increase in rent1see,ing by one group when all others refrain yields a very large payoff& While technically correct% this criti0ue ta,es the model)s structure too much at face value& Rent1see,ing is a composite variable of both direct cost of redistribution 4e&g&% bribes6% and indirect costs of political competition 4e&g&% resources employed to sei-e or attempt to sei-e power6& $n these dimensions% deviating from a cooperative code of conduct is li,ely to yield high short1run payoffs& Third% the larger the government budget% the larger the incentives to deviate& An objection to this assumption is that it implies that the richer the economy% the more rent1see,ing% and the type of discretionary redistribution analy-ed in the model is not associated with policies in many rich developed countries& $n response% it is important to ma,e clear that the focus in the paper is on the relationship between rent1see,ing% windfalls and foreign aid% and we have purposely assumed away other incentives to engage in rent1see,ing& #< An intuitive way to thin, about the setup is that government income ta,es two forms% a constant flow and a stochastic flow& 4Vt6 is the stochastic part% and there are pre1e*isting institutional arrangements determining the distribution of the constant flow& The constant part could vary between countries% implying that rich countries are not necessarily more prone to rent1see,ing& The focus of this paper is the conflict arising when a country receives income above the level that its pre1e*isting institutional arrangements can handle% i&e& windfalls% and how e*pectations of foreign aid influence this response& inally% we assume that the donor 4partly6 cares about the recipient)s welfare& There is plenty of empirical support for this assertion& 5oncluding (emar2s The present model has abstracted from a number of issues influencing public policy in developing countries& The analysis may therefore be biased and it would be inappropriate to draw any definite conclusions& Devertheless% some important insights emerge from the analysis& irst% we have shown that the provision of public goods does not need to increase with government income% thus providing a political1economy rationale for why large windfall gains in revenue% or large inflows of foreign aid% do not necessarily result in general welfare gains& 7econd% we have shown that e*pectations of aid in the future may suffice to increase rent dissipation and reduce the e*pected level of public goods provision& rom a policy perspective% there are four main implications of these findings& irst% the model points to the importance of studying the interaction between the political process shaping public policy and foreign aid& 7econd% concessional assistance may influence policy in the recipient country even without any resources actually being disbursed% implying that evaluations of project and sector assistance may

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overestimate the total impact of foreign aid& Third% the analysis stresses the important issue of commitment in foreign aid policy& $f the donor community can enter into a binding policy commitment% aid may mitigate the incentives for social groups to engage in rent1see,ing activities& However% such a regime shift would involve an aid policy that in the short run provides more assistance to countries in less need% and less assistance to those in most need& 3nforcing such a regime shift may be difficult 47vensson% #9956& inally% the fact that democracies seem to be less subjective to the perverse effect of aid on corruption suggests that political liberali-ation should have an important priority in the donors) policy agenda& We provide some empirical evidence supporting the mechanism we propose& oreign aid and windfalls are associated with increased corruption in countries more li,ely to suffer from competing social groups& We find a wea,ly robust negative relationship between aid and corruption in countries where these conditions are less li,ely% while there is no evidence that the donors systematically allocate aid to countries with less corruption& These results are robust to a number of statistical problems&

S$ensson* ?aBob -.///b0* 1&hen is Foreign Aid Policy %redible3 Aid De"endence and %onditionality*4 in Journal of &evelopment Economics* 5ol6 :8* ""6 :8-A<6
The present model has abstracted from a number of issues influencing the game between the donor and the recipient& The analysis may therefore be biased and it would be inappropriate to draw definite conclusions% let alone to ma,e final policy recommendations& Devertheless% some important insights emerge from the analysis& irst% it is shown that one reason for the poor aggregate record of foreign aid may be a moral ha-ard problem that adversely affects the aid recipients) incentives to underta,e structural reforms& $n principle% conditionality could partly solve the problem% but this re0uires a strong commitment ability by the altruistic donor& Contrary to conventional wisdom in the aid literature% we show that without such a commitment technology% delegation of part of the aid budget to an international agency with less aversion to poverty as well as tied project aid may improve welfare for all parties&

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S$ensson* ?aBob -.//90* 1&hy %onditional Aid Does )ot &orB and &hat %an Be Done About It34 in Journal of &evelopment Economics* 5ol6 >/* ""6 9A8./.6
Recent empirical evidence suggests that aid has a positive impact on growth under certain conditions% but that foreign aid has not been systematically channeled to countries where those conditions prevail& We argue that this finding is partly driven by a common feature in the donor agencies) incentive systemC the low opportunity costs of committed funds& As a result% there is a strong bias towards EalwaysF disbursing aid to the e* ante designated recipient% irrespective of that recipient)s performance and 4irrespective of6 the conditions in other potential aid recipient countries& This assertion finds strong support in the data& $n this paper% we have analy-ed a simple reform that may improve the outcome from the donor)s perspective& $nstead of committing a fi*ed amount of aid to each recipient e* ante% and ma,ing aid conditional on reform or outcome% the donor would commit the aggregate amount to be given to a group of countries% but where the actual amount disbursed to each individual country would depend on relative performance& 3*plicitly lin,ing the allocation and disbursement decisions has two important advantages as compared to the present practices& irst% by creating a conflict of interest between the beneficiaries of foreign assistance% the opportunity cost of aid is internali-ed% thereby giving the donor 4or country department6 stronger incentives e* post to reward good policies& 7econd% competition among recipients allows the donor to ma,e inferences about common shoc,s% which otherwise conceal the recipients) choice of action& This enables the donor to give aid more efficiently& A recent World Ban, report 4Collier and .ollar% #99;6 estimates that if aid is redirected towards poor countries with good policies% more than ;" million people could be lifted out of poverty for the same aggregate level of foreign aid& Conse0uently% there are potentially large gains of reforming current aid practices% and this paper has studied one such reform& We believe that the argument for reforming program funding also applies to project aid& Thus% under certain conditions% it might be optimal to pool the budget for different 4but similar6 projects instead of having separate budgets for each individual project& our objections against lin,ing the allocation and disbursement decisions are worth stressing& irst% it could be argued that competition between recipients introduces uncertainty about financial flows% which renders planning more difficult and ma,es

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fiscal spending too volatile& This may be true if ma,ing comparisons with how the aid system presently seems to wor,: i&e&% commitments are always disbursed& However% this is not true if we compare it with the conditionality outcome as it is supposed to wor,& $n fact% if the shoc,s facing the recipients are 4highly6 correlated% the uncertainties will be reduced by having the recipients compete in an aid tournament& 7econd% it could be argued that the degree of reform implementation depends on domestic political economy forces% rather than on conditional aid& $n fact% recent evidence suggests this to be the case 4Burnside and .ollar% !""": .ollar and 7vensson% #99;6& However% these studies analy-e the impact of conditional aid 4as it seems to wor,6% not as it was meant to wor,& Therefore% as stressed in the paper% we should not e*pect any significant correlation between aid flows and policy reform& 'ore important% the model primarily concerns the incentive structure within the donor organi-ation& 3ven if the degree of policy reform is solely determined by domestic political economy forces: i&e&% is independent of foreign assistance% lin,ing the allocation and disbursement decisions will still be useful since this provides incentives for the donor to allocateGdisburse aid to where it can be effective& Third% the time1inconsistency problem analy-ed above could be dampened in a dynamic setting& $f the donor+recipient game is repeated an indefinite number of times% this might provide incentives for the manager not to pay out all funds if he observes a negative signal% in order to build a reputation and give the proper incentives for countries to underta,e reform& But% typically managers in aid agencies regularly switch positions 4to other country des,s6& Thus% building a reputation would re0uire strong internal control and coordination over time in the donor agency% a presumption the data does not support& $n fact% the disbursement pattern does not change over time& inally% collusion among recipients undermines the e0uilibria described in 7ection M& An important assumption is thus that the recipients act non1cooperatively& We believe this to be an accurate starting point for analy-ing problems in the current aid system& Collusion may be a more important issue when it comes to lin,ing projects within a country% however& This is an important topic for future research& A 0uestion partly left unanswered is% why is it that if the lin,ing of the allocationGdisbursement decisions improves outcome% the donor community does not e*plicitly lin, these decisionsW 2ne answer is of course that the potential cost of tournament type aid schemes is perceived as being very high 4for e*ample the cost related to the political ris, of creating competition between countries6& However% the e*tent of competition between countries% and thus the potential cost% can be controlled by varying the share of aid disbursed through a tournament1type aid scheme& This also seems li,e a less important concern for project aid& A more plausible e*planation is related to the change in the e*isting power structure within the donor agencyGdonor community implied by such a regime shift& $n essence% the reform would reduce the discretionary power of many managers mainly in charge of the disbursement decisions& 'oreover% by ma,ing the opportunity cost e*plicit in the decision process% the management would be re0uired to ma,e EtougherF choices& Recipient1specific interest groups 4e&g&% domestic firms% D/2s6% and potentially the recipient government% may also oppose an institutional change that

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would imply aid flows conditional on performance% rather than e* post unconditional disbursements&

,affet* ?effrey -.//>0* 'orei!n Aid as 'orei!n Policy# The Alliance for Pro!ress in atin America* )eC MorB and London: !outledge ,aylor ' Francis 2rou"6
5onclusion+ )id to Latin )merica in 5onte't (pp. 1DF<1D7) At the start of the ?ennedy administration% the Alliance for Progress was the great hope of B&7& policyma,ers as the means to counter the rise of Communism in Aatin America& Rather than use force or coercion to influence political change% the program would encourage leaders to pursue reform& Aid from the Bnited 7tates would be a way to help Aatin American leaders help themselves create lasting economic growth and stability% and in doing so develop new% more cooperative and positive inter1American relationships& As Richard Di*on had found in #9<;% and as Castro)s success illustrated% many in the region resented B&7& power and arrogance% but ?ennedy hoped to change all this and usher in a new age of collaboration and mutual respect& The Alliance for Progress did not achieve these goals& $n an effort to establish the program% the Bnited 7tates instructed Aatin Americans on how to pursue reform& As the case studies demonstrate% they were rewarded when they cooperated and punished when they did not& The program therefore did not represent a partnership% but reinforced Aatin American ideas about the overbearing Bnited 7tates& $n developing the program% policyma,ers in the Bnited 7tates did not imagine% comprehensively or rationally% e*actly how it would wor,: the mechanisms they developed were unwieldy% impractical% inefficient% and ignored& While there was an initial desire to allow Aatin Americans an important role in determining how money was spent% blunt political considerations made that impossible& This meant that the Alliance for Progress devolved into a B&7& foreign aid program that retained little of its dramatic revolutionary content& $t became simply a way to help friends% hurt enemies% and promote a set of theories about how to best create economic stability& $t was not an alliance% and it was not even always about economic progress& $nitially% ?ennedy stressed that the Alliance for Progress would reject the notion of imperial hubris + the idea that the Bnited 7tates% as the strong and wealthy power% and with great ability to influence change% ,new what was best for Aatin America&

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?ennedy wanted Aatin Americans to believe that the Bnited 7tates wanted to help because it was the right thing to do and that he cared about their problems& $n terms of rhetoric% ?ennedy was successful& Aatin Americans saw him as a great leader% dedicated to progressive change& The reality is that% however unfortunately% his policies and those of his successors did not live up to the initial ideals& aced with political and economic instability and the threat of anti1American politicians ta,ing power% B&7& policyma,ers felt they had little choice but to use the tools available% including the Alliance for Progress% to create conditions favorable to their own interests& To e*pect them to have acted otherwise ignores the overwhelming and larger conte*t of the Cold War% which informed their understandings of the world and the reality of their power relative to Aatin Americans& The application of foreign programs as a way to manipulate foreign nations was at one level necessary and obvious% but on a second level clearly counter to the best traditions of American democracy& $n a remar,able address at the Bniversity of .enver in August #9>>% Johnson e*plained that Ethe overriding ruleF for B&7& foreign policy was that it Emust always be an e*tension of N domestic policy&F He argued% Eour safest guide to what we do abroad is always to ta,e a good loo, at what we are doing at home&F 2ne application of this EruleF in Johnson)s mind was that Ein the Bnited 7tates we do not li,e being told what to do& We li,e even less being told what to thin,&F Thus% in international relations% EThe Bnited 7tates has no mandate to interfere wherever government falls short of our specifications&F Bnfortunately% these dictums did not guide policy& Rather% B&7& policy was the e*act opposite of what Johnson professed&# Had the policy actually wor,ed effectively it would be possible to ma,e an argument that interference was a good idea% but B&7& political successes were few& $n Bra-il% B&7& foreign aid programs had minimal effect on the political orientation of the /oulart government% and were unable to influence the military government in important ways& $n Chile% the massive aid in the pre1#9>M era had little impact on rei)s victory% and thereafter served mostly as an irritant that drove Chilean leaders toward anti1American positions& 'ost dramatically% nine and one1half years after ?ennedy announced his ten1year commitment to Aatin America% 7alvador Allende won his country)s presidential election& $n the .ominican Republic the ledger may be significantly more positive& $t is unli,ely that B&7& aid programs had much impact on political changes during the first half of the decade% but they did create stability in the postintervention era& inally% in Colombia% aid may have had a marginal effect in strengthening the governments of the Dational ront: it allowed them to avoid tough decisions% and to spend% essentially% beyond their means& Bnderstanding the political logic of the Alliance for Progress helps in developing a perspective about B&7&1Aatin American relations during the #9>"s& Throughout the decade% B&7& policyma,ers continually loo,ed to the program as a catchall solution to the problems they faced& This should not suggest that the Alliance for Progress was central to every piece of the relationships% only that it was a way of manipulating them to B&7& advantage& With the notable e*ception of policy toward Cuba% decisions about economic aid programs were part of every B&7& action in the region& The B&7& government was willing to use the C$A to engage in covert actions% to use 'arine to invade the .ominican Republic% to encourage military leaders to overthrow civilians% and to use its considerable power to help B&7& businesses& But in

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each one of these cases there was a connection to economic aid in an attempt to create stability% reward friends% or ,eep threats from emerging& $n broader terms% the Alliance for Progress also helps clarify how policy toward Aatin America in the #9>"s was consistent with earlier and later periods in inter1American relations& There is little debate in the scholarly community that the major theme in the history of B&7&1Aatin American relations is the B&7& desire and ability to dominate the region&! This interest came from aspiration about increasing B&7& power% economic and otherwise% and it was usually justified by assumptions about Aatin American cultural inferiority& The Alliance for Progress demonstrates that B&7& policy in the #9>"s was% though different rhetorically from other eras% essentially similar in application& ?ennedy tal,ed about the Alliance for Progress as a partnership of e0uals and suggested that his goals were more moral and cooperative than his predecessors& The reality was more complicated& Though B&7& policyma,ers did hope to implement ?ennedy)s vision% the discrepancy in economic power% B&7& global interests% and assumptions about B&7& superiority meant that B&7& policy was not a repudiation of the past% but a continuation of it&

,ar"* Finn -ed60 -.///0* 'orei!n Aid and &evelopment# essons earnt and &irections for the 'uture* London and )eC MorB: !outledge6 ,he &hite ouse -./8/0* .ational Security Strate!y* a$ailable online: htt":EECCC6Chitehouse6go$Esit esEdefaultEfilesErssU$ieCerEnati onalUsecurityUstrategy6"df6
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E$t)s easy to forget that% when this war began% we were united% bound together by the fresh memory of a horrific attac, and by the determination to defend our homeland and the values we hold dear& $ refuse to accept the notion that we cannot summon that unity again& $ believe with every fiber of my being that we% as Americans% can still come together behind a common purpose% for our values are not simply words written into parchment& They are a creed that calls us together and that has carried us through the dar,est of storms as one nation% as one people&F YPresident Barac, 2bama% West Point% Dew Xor,% .ecember !% !""9 Y This strategy calls for a comprehensive range of national actions% and a broad conception of what constitutes our national security& Above all% it is about renewing our leadership by calling upon what is best about AmericaYour innovation and capacity: our openness and moral imagination& 7uccess will re0uire approaches that can be sustained and achieve results& 2ne of the reasons that this nation succeeded in the second half of the !"th century was its capacity to pursue policies and build institutions that endured across multiple Administrations% while also preserving the fle*ibility to endure setbac,s and to ma,e necessary adjustments& $n some instances% the Bnited 7tates has been able to carry forward this e*ample in the years since the Cold War& But there are also many open 0uestions% unfinished reforms% and deep divisionsYat home and abroadYthat constrain our ability to advance our interests and renew our leadership& To effectively craft and implement a sustainable% results1oriented national security strategy% there must be effective cooperation between the branches of government& This Administration believes that we are strong when we act in line with our laws% as the Constitution itself demands& This Administration is also committed to active consultation with Congress% and welcomes robust and effective oversight of its national security policies& We welcome Congress as a full partner in forging durable solutions to tough challenges% loo,ing beyond the headlines to ta,e a long view of America)s interests& And we encourage Congress to pursue oversight in line with the reforms that have been enacted through legislation% particularly in the years since 9G##& The e*ecutive branch must do its part by developing integrated plans and approaches that leverage the capabilities across its departments and agencies to deal with the issues we confront& Collaboration across the governmentYand with our partners at the state% local% and tribal levels of government% in industry% and abroadYmust guide our actions& This ,ind of effective cooperation will depend upon broad and bipartisan cooperation& Throughout the Cold War% even as there were intense disagreements about certain courses of action% there remained a belief that America)s political leaders shared common goals% even if they differed about how to reach them& $n today)s political environment% due to the actions of both parties that sense of common purpose is at times lac,ing in our national security dialogue& This division places the Bnited 7tates at a strategic disadvantage& $t sets bac, our ability to deal with difficult challenges and injects a sense of an*iety and polari-ation into our

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politics that can affect our policies and our posture around the world& $t must be replaced by a renewed sense of civility and a commitment to embrace our common purpose as Americans& Americans are by nature a confident and optimistic people& We would not have achieved our position of leadership in the world without the e*traordinary strength of our founding documents and the capability and courage of generations of Americans who gave life to those valuesYthrough their service% through their sacrifices% through their aspirations% and through their pursuit of a more perfect union& We see those same 0ualities today% particularly in our young men and women in uniform who have served tour after tour of duty to defend our nation in harm)s way% and their civilian counterparts& This responsibility cannot be theirs alone& And there is no 0uestion that we% as a nation% can meet our responsibility as Americans once more& 3ven in a world of enormous challenges% no threat is bigger than the American peoples) capacity to meet it% and no opportunity e*ceeds our reach& We continue to draw strength from those founding documents that established the creed that binds us together& We% too% can demonstrate the capability and courage to pursue a more perfect union andYin doing soYrenew American leadership in the world&

,hFrien* ?ean-Phili""e and )oSl* Alain -.///0* 1Political Parties and Foreign Aid*4 in American Political Science Review* 5ol6 ;<* )o6 8* ""6 8788:.6
The findings presented in this article help clarify how foreign aid is shaped by domestic politics& 2ur model confirms the primacy of welfare state socialist attributes and government social spending in the e*planation of development assistance policies& At the same time% it shows% contrary to previous 0uantitative studies of the topic% that political parties do matter% not directly and in the short run% but indirectly and over the years& 2ur findings lend support to the intuition of 0ualitative studies that have long emphasi-ed the role of partisan cleavages in the formulation of foreign aid policies& or scholars interested in parties% the model also can be useful% since it offers a new assessment of partisan effects& $t confirms the empirical relevance of cumulative scores of partisanship and shows how social1 democratic power operates through other political determinants&

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'ost international relations scholars agree that the 0uestion is no longer to determine whether domestic e*planations should be integrated with international ones% but to establish e*actly how this can be done 4'oravsci, #99H% ;6& $n our opinion% it is imperative to loo, closely at domestic conflicts and to do so with the help of the comparative politics literature& This study suggests that political parties% welfare institutions% and social spending play a significant role in the aid policy process% probably because parties and the welfare state Erender some ideas more politically influential than othersF 4Xee #99>% 9H6& As is e*plained in the theoretical model section% when parties hold power for a long period% they put forward specific conceptions of social justice that become established as central to a country)s political debates& oreign aid% in particular% appears strongly influenced by Ethe capacity of a society to accept and institutionali-e nonmar,et principles of income redistributionF 4DoPl and ThOrien #99<% <M96& The e*act processes through which this influence becomes effective and evolves can only be assessed with case studies& 2ur findings are consistent with a host of such studies% as well as with AumsdaineZs 4#99H% #596 observationC EThe parties that supported aid were those concerned with issues of e0uality and alleviation of poverty% not those concerned with the free mar,et or with military and strategic issues&F The influence of these concerns is felt mainly in the long run% as parties establish their primacy in society and as their ideas become institutionali-ed& The partisan history of 7candinavia and Britain% for instance% has shaped these countries) public debatesC EAiberalism and social democracy have been hegemonic ideological forces in the arena of political reasoning for close to a century& They have structured the political dialogue around 0uestions of liberty and e0uality% individual property rights and the central government)s power to intervene in the mar,etplace% social class and citi-enshipF 4?itschelt #99M% !><6& We agree that such public debates matter% and we argue that they matter not only for domestic politics but also for foreign policy&

,hFrien* ?ean-Phili""e -.//.0* 1Debating Foreign Aid: !ight 5ersus Left*4 in Third World Quarterly$ 5ol6 .9* )o6 9* ""6 <<;-::6
The aid regime is a comple* international institution which% over the years% has e*perienced a number of transformations& 'ost of these changes% however% can be made sense of only if they are relocated within the ideological environment that spawned them& That insight has made it possible here to e*amine foreign aid in an innovative manner% whereby its evolution has been shown to be characteri-ed by an ongoing conflict between the Right and the Aeft& Considering that the notions of

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Right and Aeft refer to a continuum rather than discrete realities and that% in addition% their meanings have varied through space and time% one could no doubt object to our interpretation on grounds of reductionism& This is a common liability of arguments developed in terms of ideal types& Bltimately% however% using the Right1 Aeft distinction as a conceptual road map to understand development assistance offers many more advantages than drawbac,s& $ndeed% the Right1Aeft division has made possible an analysis of aid that is at once systematic% solidly rooted in political reality% and less mechanical than the realist% liberal% and neo1'ar*ist interpretations that have traditionally dominated the field of international relations& Aoo,ing beyond this specific study of foreign aid% it is important% by way of conclusion% to emphasise that few international phenomena + be they economic% social% environmental or security issues + are e*empt from the Right1Aeft opposition& Xet% despite its manifest descriptive capabilities% the Right1Aeft distinction has until now received very little attention from students of international relations& $t is hoped that this omission may one day be corrected& Among the li,ely benefits that introducing the terms Right and Aeft would bring to international relations theory% three are worth underscoring& irst% these terms could help improve the dialogue between the fields of comparative politics and international relations& 7econd% they would provide a conceptual bridge lin,ing the positive and normative dimensions of the analysis of international processes& Above all% however% they would open the way to ma,ing the language of the e*perts less cryptic for the ordinary citi-en&

,horbecBe* +ricB -.///0* 1,he +$olution of the De$elo"ment Doctrine and the !ole of Foreign Aid* 8;7/-.///*4 in ,ar"* Finn -ed60* 'orei!n Aid and &evelopment# essons earnt and &irections for the 'uture* ""6 8>-<>* London and )eC MorB: !outledge6
The retrospective appraisal underta,en in this chapter revealed the close interdependence throughout the last five decades of the twentieth century among 4i6 development objectives% 4ii6 the conceptual framewor, and models% 4iii6 data

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systems and information% 4iv6 strategies and 4v6 the role of development aid& $n each period% the nature and scope of the prevailing development strategy and the role of aid were largely predetermined by the state of the art% the available data systems and the prevailing conditions at the time& Thus% for e*ample% a very limited analytical framewor, such as the totally aggregate 4one1sector6 model of the #9<"s and the predominance of a data system relying almost e*clusively on national income accounts% predetermined that the corresponding development strategy would be couched within a uni1sectoral setting& $n contrast% the multi1sectoral framewor, of the #99"s% based on a much clearer understanding of the elements and mechanisms 4some endogenous6 influencing the development process and the availability of an e*tremely disaggregated set of socio1economic data% allowed the design of a stabili-ation1cum1growth1cum1poverty alleviation strategy& The conception of the role of aid evolved in parallel with the evolution of the development doctrine& $n the #9<"s% the role of aid was seen mainly as a source of capital to trigger economic growth through higher investment& aith in the capacity of recipient governments to plan successfully and use aid efficiently was strong& $n the #9>"s% the role of foreign assistance% in the light of the two1gap models% was considered important in removing either a savings deficiency through an increased flow of foreign savings or a deficit in the current account of the balance1of1 payments by providing the necessary foreign e*change& The #95"s witnessed a major change in the role of aid% i&e& that the primary objective of foreign assistance should be to raise the standard of living of the poor largely through increased employment& The focus on poverty alleviation re0uired new types of investment and new forms of intervention& With the advent of the debt crisis and the debt overhang% in the #9;"s the role and conception of aid changed in a major way& The primary purpose of aid became twofold: as a stop gap measure to salvage the sha,y international financial system and to encourage the implementation of appropriate adjustment policies in third world countries through conditionality attached to programme lending& $n that decade% characteri-ed by pro1mar,et and anti1government rhetoric% there was a strong and lingering case of (aid fatigue) influenced by the rising fear that foreign assistance was generating aid dependency relationships in poor countries& The issue of the effectiveness of aid conditionality was also critically debated& The socio1 economic havoc created by the Asian financial crisis engendered a fundamental re1 e*amination of the role of aid and the uncritical acceptance of Bretton Woods rules of the game and the (Washington Consensus)& The World Ban,% in particular% too, the leadership in advocating poverty alleviation and improvement in human welfare as the overarching objective of development and of foreign assistance&

,ingley* Dustin -./8/0* 1Donors and Domestic Politics: Political Influences on Foreign Aid
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+ffort*4 in The Quarterly Review of Economics and 'inance* 5ol6 7/* ""6 </-<;6
A common and very robust result in the public opinion literature is that individuals who are more conservative are also less li,ely to support foreign aid& The literature on legislative voting on foreign aid in the B7 finds a similar pattern& However% the evidence based on cross1country analyses has been more mi*ed& This paper presents the first analysis that systematically e*plores the domestic political determinants of aid behavior over time and within countries& $ have argued that political and economic variables play an important role in capturing trends in foreign aid& Dotably% as governments become more conservative% the share of /.P committed to foreign aid effort declines& $nterestingly% economic ideology appears to matter more for aid to poorer developing countries and multilateral institutions than aid to wealthier developing countries& This is broadly consistent with lec, and ?ilby 4!"">6 who find that more conservative B7 governments to give more aid to trading partners% while more liberal B7 governments give more aid to countries needy countries& This also suggests that aid to richer countries could possibly be more about trade or geopolitics& These results have important implications for how we understand the economic impact of foreign aid& irst% changes in domestic political ideology through regularly occurring elections could introduce changes in aid levels% which in turn create volatility in aid& The magnitude of this volatility and its effect is of course an open empirical 0uestion& But volatility in aid is an increasingly cited cause of aid ineffectiveness 4Arellano et al&% !""9: Bulir @ Hamann% !""H: Bulir @ Aane% !""!: 3ifert @ /elb% !""<: Aensin, @ 'orrissey% !"""6& However% this literature generally has been silent on the causes of volatility& $nsofar as the policy prescriptions from this literature generally see, to limit volatility% a more thorough understanding of the sources of volatilityYfor e*ample% donor politics as outlined in this paperY seems worthwhile& Another contribution is that the analyses show that changes in donor level political variables lead to changes in aid effort that differ across particular types of aid& Hence% governments may have different strategic and economic interests depending on their ideological orientations& Constancy in the international political environment could mas, important domestic sources of change in economic and strategic interests& This could have important implications for identification strategies used in the aid effectiveness literature& The results of this paper echo a conclusion laid out by lec, and ?ilby 4!"">% p& !!"6 E4o6ur results point to an important caveat for those attempting to instrument for aid with political variablesC the political circumstances in donor countries are li,ely to affect not only the amounts of aid to developing countries% but the motivation for providing that aidY including the e*tent to which aid is focused on reaching development objectives& Thus% political variables may instrument% in part% for the purpose of aid& And the purpose of aid will li,ely influence the effects of aid on developmentF 4see also lec,

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@ ?ilby !"";: ?ilby @ .reher !""96& As a result of changes in aid motivation% the strength of instruments may change over time% as could the satisfaction of the e*clusion restriction& Treating country interests as though they are fi*ed and independent of domestic politics leads to faulty assumptions in attempts to solve endogeneity problems in the analysis of the relationship between aid and growth& While domestic ideological factors appear to influence aid effort% undoubtedly other ideological and structural factors can influence commitment decisions& or e*ample% the literature argues that there may be some e*ternali-ation of (moral) beliefs 4Aumsdaine% #99H6& While my analysis controlled for domestic welfare state policies% changes in the debate about the morality of aid might influence aid effort& or e*ample% consider the recent warming to foreign aid from conservative Republicans in the Bnited 7tates& Pundits and scholars attribute this fact to changes in moral agendas of 3vangelical Christian groups that have come to see foreign aid to poor countries as an important function of government 4Busby% !""56& /eo1political and security concerns could overwhelm otherwise salient ideological positions% as could international influence following broader consensus across donors 4Aumsdaine% #99H% p& #M"6& $t will be an interesting empirical 0uestion over the ne*t decades to see if other changes at the international level have an effect on the type of political coalitions in donor countries that support foreign aid&

,oye* ?ohn -8;;80* 1,he Aid and ,rade Pro$ision of the British O$erseas Aid Programme*4 in Bose* Anurdha and Burnell* Peter -eds60 -8;;80* +ritain2s 3verseas Aid Since 1454# +etween Idealism and SelfInterest* ""6 ;>-8.<* #anchester: #anchester (ni$ersity Press6
The ATP scheme has had a major impact on lowering the 0uality of B? aid& $deally the real1terms reductions in the aid budget in the decade after #959 could have been offset to some e*tent by raising the (0uality) of individual aid projects& Aess

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transfer of purchasing power to developing countries% but wiser spending% should mean that the developmental impact overall would not fall proportionately& This is not an ignoble prospectus& But the retention and e*pansion of the ATP scheme has meant that the leaner and fitter aid budget remains a prospectus rather than an achieved fact& ATP not only has an undesirable bias against aid for the poorest and aid that is environmentally1friendly% its s,etchier appraisals ma,e it generally more accident1 prone it its efforts to promote development& The critics of ATP have made these points before& Additionally% however% it must be understood that the commercial advantages which the B? is said to gain from the scheme are much more dubious than is generally reali-ed& The ma*imi-ation of the value of e*ports + if necessary using government subsidies + is not a self1evidently desirable national economic objective& The ATP scheme trades off developmental benefits for a policy objective which lac,s a defensible economic rationale& What is not in doubt is that ATP has created a vested interest of a classic ,ind& $t has brought together a small number of large capital goods firms with a common interest in maintaining and e*panding the scheme& The scheme itself% by adding to their profits% provides them with the wherewithal to finance the costs of their own political lobbying& 7uccessive governments have allowed themselves to be captured by this vested interest& 3ven the Thatcher government% dedicated to (fiscal discipline)% (continence) and (free trade)% never had the courage to stri,e down this wretched abuse of ta*payers) money& Were the Tory pessimists% who mused on the vanity of human wishes% right after allW

,ra$is* !icB and Nahariadis* )iBolaos -.//.0* 1A #ulti"le Streams #odel of (6S6 Foreign Aid Policy*4 in Policy Studies Journal* 5ol6 9/* )o6 <* ""6 <;778<6
Bsing and anchor1and1adjust conceptuali-ation% we offered a multiple streams model to account for interactions between domestic and e*ternal factors in e*plaining B&7& foreign aid allocations& 2ur findings have implications for the study of public policy% the future of the foreign aid program% and theoretical attempts to develop more generali-able e*planations of policy that encompass foreign and domestic issues&

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We have carried the multiple streams approach forward in three ways& irst% this is the first attempt to e*amine 0uantitatively hypotheses derived from the multiple streams approach& We have shown that the hypotheses can be tested empirically and that the results are largely consistent with the theoretical e*pectations& The effects are in many instances significant only when some factors 4problems or politics6 interact with other in the presence of open policy windows& We conclude that ?ingdon)s wor, is a good way to organi-e diverse types of information and to illustrate the interactive nature of the policy process& 7econd% we have e*tended ?ingdon)s model to incremental decision ma,ing& 2ur empirical wor, reinforces the overwhelming importance of budgetary momentum in foreign aid allocations& inally% we have e*tended the multiple streams model that was initially used to e*plain agenda setting in domestic politics to the area of decision ma,ing& 'ore important% we have used the same model to e*plore 0uestions of foreign policy& By demonstrating that this can be done with little analytical loss% we aim to encourage further research in this direction& Contrary to conventional wisdom% which currently views foreign policy as a distinct area% with its own models largely divorced from domestic policy% we maintain that the two are different sides of the same coin& The difference between them are more imagined than real& 7urely% foreign policy involves fewer constituencies and a more closed circle of political elites& But as our study shows% such characteristics are not detrimental to theoretical developments that view both policies as conceptually similar enterprises& The study aims to encourage more theoretical cross1fertili-ation between foreign and domestic policy models& urther% our study yields important insights as to the future of the foreign aid programme& or e*ample% we uncovered an aid1trade substitutability effect that was in e*istence even before the end of the Cold War& This implies that the desire of post1Cold War administrations% such as Clinton)s% to use increased trade ties as a mechanism for reducing economic aid already had a history& The substitutability relationship also suggests that as free trade on a global scale grows% aid is li,ely to diminish in amount and importance& /reater commercial ties and not ideological struggles may spell the end of the program& Additionally% we offer nuance to particular arguments on whether domestic politics ma,es a difference on foreign aid& We have found that it is not .emocratic control of the presidency that counts but rather .emocratic control of the 7enate that e*ercises a systematic negative bias on aid allocations of security funds& There is no such effect over the allocation of economic assistance& The finding that domestic politics% as represented by 7enate control% has an effect varying across programs suggests that there is much to be learned about how specific societal pressures affect foreign policy& inally% our wor, has sought to integrate multiple areas of research by analy-ing them in reference to one model& The use of a single model has done more than offer a more parsimonious way of analy-ing public policy& As globali-ation ta,es hold% old divisions between domestic and e*ternal affairs become more blurred& or political science% this has meant renewed attention to brea,ing down disciplinary barriers particularly between international relations and comparative politics 4Caporaso% #9956& .espite some promise% however% not much has been accomplished beyond the recognition that it should be done& Wor, on two1level games has provided one interesting% but limited% way to model interactions between e*ternal and domestic effects on policy 4Putnam% #9;;: 3vans% Jacobson% @ Putnam% #99H6& Two1level game models show how domestic coalitions% resources% and institutions shape the winning

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set of solutions and interact with the e*ternal environment as a way of crafting strategies to achieve success in foreign policy& The major point is that games in one level 4international6 cannot serve as inputs for games in the other 4domestic6& Policies are made by playing on two levels simultaneously& 2ur multiple streams model used a different point of departure& We have sought to overcome the single actor assumption of two1level games% which we find unrealistic% while still striving to model the interactions between e*ternal problems and domestic politics on the formulation of public policy& $n light of attempts at theoretical integration% we conclude that the use of multiple streams models to study both domestic and foreign policies is a good place to start&

,uman* ?ohn and Ayoub* Ayoub -.//<0* 1,he Determinants of ?a"anese Official De$elo"ment Assistance in Africa: A Pooled ,ime Series Analysis*4 in International Interactions* 5ol6 9/* )o6 8* ""6 <9-7>6
$n this paper% we have attempted to clarify the determinants of Japanese 2.A to Africa& The findings suggest that humanitarian considerations% as measured by real /DP per capita% human rights% democracy% and food insecurity have figured prominently in Japanese aid decisions& The model also points to the importance of trade and Japanese 2.A in Africa% although oil1e*porting countries did not receive more Japanese 2.A% on average% during the study period& Aid is given to promote certain B&7& security interests% including rewarding countries that house B&7& military personnel and in recipients that shared a border with a communist regime& 2ther B&7& economic interests were found to have little e*planatory value% however& The results of this study indicate that the humanitarian interests supported by Japanese 2.A may vary somewhat cross1regionally& Although human rights and regime type have been shown to be relatively unimportant determinants of Japanese 2.A in Aatin America and Asia 4$nu,ai% #99H: Tuman% 3mmert% and 7ter,en% !""#6% we find that human rights and democracy have had an effect on aid disbursements in Africa& or other humanitarian interests% however% there does appear to be consistency across different regions& This study% li,e previous analyses of Africa 47chraeder% Hoo,% and Taylor% #99;6% !> shows that Japanese 2.A concentrates in countries with lower per capita income& A number of other studies have found the same relationship between Japanese aid and national income in Asia

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and Aatin America 4Chan% #99!: $nu,ai% #99H: Cingranelli and /ome-% #99>: ?atada% #9956& The negative association between recipient income and 2.A throughout the world suggests that Japanese aid policyma,ers share a global concern for poverty reduction& 7imilarly% the national economic interests associated with Japanese 2.A are not consistent across different regions of the developing world& As noted% Japanese 2.A in Asia and Africa is often lin,ed to the promotion of trade with recipients 4Ri*% #99>: 7tein% #99;: 7chraeder% Hoo,% and Taylor% #99;6& Devertheless% trade and direct investment have been shown to have little influence on Japanese aid in Aatin America 4Tuman% 3mmert% and 7ter,en% !""#6& The reasons for this regional contrast are not entirely clear& Possibly% Japanese 2.A in Africa and Asia responds to a much broader range of national interests than in Aatin America because the former regions offer advantages to Japanese corporations& or e*ample% while B&7& companies account for the majority of trade and direct investment in Aatin America% they have little presence in Africa& As a result% Japanese companies involved in Africa are in a strong position relative to potential competitors% and 2.A might be used to maintain that advantage& Ai,ewise% the association between 2.A and trade in Asia might reflect Asia)s close pro*imity to Japan% its efficient and low1cost wor,force% and its natural resource base& An additional implication concerns the motives of different 23C. aid donors in Africa& As two of the largest and most politically powerful donors on the continent% the B&7& and Japan pursue remar,ably similar goals& While see,ing to use aid to improve trade with Africa% the B&7& has also lin,ed aid to containing communism% safeguarding its security interests% reducing poverty% and promoting mar,et1 oriented reform 47chraeder% Hoo,% and Taylor% #99;: 7tein% #99;6& Ai,ewise% Japanese aid in Africa has also been used to promote Japanese national economic interests% B&7& strategic interests% and idealism& The only divergence between the B&7& and Japan in Africa% as noted% has been over support of structural adjustment& /iven recent B&7& efforts to stabili-e to international system% the cooperation of Japan and the B&7& in the area of foreign assistance is potentially significant& 7ince initiating the war on terrorism% for e*ample% the B&7& has e*pected Japan and others to provide more assistance to countries that support B&7& strategic and security interests 4'inistry of oreign Affairs% !""!6& The findings of this study suggest that Japan has already promoted B&7& strategic interests in Africa for many years now& `uite possibly% then% the collaboration between the B&7& and Japan in the area of African aid can be used to build cooperation in other areas% including in West Asia and the 'iddle 3ast&!5

(SAID -.//.0* 'orei!n Aid in the .ational Interest# Promotin! 'reedoms$ Security
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and 3pportunity* &ashington* D%: (SAID6

The world has changed dramatically over the past two decades& 2f the world)s !"" countries in !""#% #!M were democraciesYthe highest number ever& Dearly >&" billion people live in mar,et economies% up from #&< billion in #9;"& /lobali-ation has integrated the world)s mar,ets for goods% services% finance% and ideas& Population growth rates are down% and in most parts of the world health and education have surpassed where the B&7& stood <" years ago& And remar,able advances in biotechnology are bringing the promise of new cures for the sic, and new seeds for the hungry& But these bright prospects also have dar, sides& 'any new democracies are fragile% others fa,e& 'any mar,et advances are reversing in stupendous losses of confidenceYas with 3nron and Argentina& 7everal billion people remain mired in povertyYand stranded across a gaping digital divide% blind to what could be free for all& Weapons of mass destruction using modern technology could unleash irreversible disasters on people and the planet& And for many people% especially Americans% the terrorist attac,s of 7eptember ##% !""#% breached the sense of security offered by geography& $n 7eptember !""! President Bush introduced his Dational 7ecurity 7trategy& or the first time development has been elevated as the third pillar of B&7& national security% along with defense and diplomacy& Bnder the leadership of 7ecretary of 7tate Powell% the B&7& development community is redefining its own strategic priorities to meet this challenge& These changes have altered the landscape for global development& Within this new landscape B&7& foreign assistance must move in new directions& To inform the debate on future assistance% the B&7& Agency for $nternational .evelopment 4B7A$.6 commissioned this analysis of the main trendsYand the related challengesYnow unfolding& This follows in the tradition established more than a decade ago by then B7A$. Administrator Alan Woods% whose similar report on development trends changed B7A$. and the debate on foreign assistance& The main message of this reportC foreign assistance will be a ,ey instrument of foreign policy in the coming decades& The report does not address all the issues of development assistance& $nstead% it focuses on si*C n Promoting democratic governance& n .riving economic growth& n $mproving people)s health& n 'itigating conflict& n Providing humanitarian aid&

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n Accounting for private foreign aid&

2f these si* issues% four articulate ,ey development concepts driving the President)s proposed 'illennium Challenge Account% a major new initiative announced by President Bush in 'arch !""!% just the third major foreign aid policy statement since the second world war& The 'illennium Challenge Account is based on the proposition that countries ruling justly% investing in their people% and encouraging economic freedom will receive more B&7& aid& Around the world one of the most pressing needs is to advance democratic governanceYno small tas,& At a superficial level the state of global democracy appears highly encouraging& 2ver the past 0uarter1century democracy has become the world)s most common regime& But swirling beneath this e*pansion is growing disenchantment with political leaders seen by their people as corrupt% self1serving% and unable or unwilling to address economic and social problems& $n many developing and postcommunist countries% people are losing confidence not just in elected officials but also in democratic institutions& 7o% promoting democratic governance must become a higher priority in B&7& foreign aid& .emocracy and good governance are re0uired to spur development and reduce poverty in poorly performing countries& $t is also vital to B&7& security& Also essential is boosting economic growth in developing countries& The Bnited 7tates can get global agriculture moving by restoring the budgets of global agricultural research centers% training scientists in basic biology and applied agriculture% and pressing to reduce the damage from industrial countries) agriculture policies& The Bnited 7tates can also promote trade and investment in developing countries by better coordinating its policies and programs& And it can help countries develop their microeconomic agendas% improving the climate for business& undamental to this growth is improving people)s health and education& Because of changing demographics% most developing countries will have larger wor,forces over the ne*t two decades& As a result more resources will be available to invest in economic endeavors& But for that to happen% wor,ers must be productiveYand to be productive% they must be healthy& .iseases that cause illness and premature death must be identified% prevented% and managedYincluding future health problems% which will be more diverse& $f foreign assistance continues to rely on long1 standing definitions of public health priorities% it may be unable to address this diversity& Responding to changing health challenges will re0uire different budget allocations and more fle*ible programs& /lobal mar,ets are also changing as developing countries shift from low1cost labor to higher1end manufacturing& That change re0uires new types of wor,ers% able to learn new s,ills and use new technologies& A primary school education is no longer enough for wor,ers to ta,e part in the global economy& 'oreover% higher degreesY academic and technicalYare needed to adapt global technology to local settings and to ,eep up with new advances& 7o education systems in developing countries must broaden their sightsYand B&7& foreign assistance must offer more support for secondary education for the global mar,etplace&

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/iven the devastation caused by conflict% the Bnited 7tates needs to do much more to mitigate itYand when that is not possible% to help manage it& Conflict is the product of deep grievances% political and economic competition% irresponsible political leaders% and wea, and unaccountable institutions& $t does not occur simply because people are unhappy or greedy% or because a country has the resources to sustain violence& Dor does it happen where all state and social institutions are wea,& $t happens when causes at multiple levels come together and reinforce each other& Preventing conflict re0uires long1term interventions that ma,e states and societies better able to manage tensions& Whatever the causes% a crucial part of the solution is encouraging innovative institutions that can deal with problemsYlocal% regional% and national& The most important principle when designing country programs is to apply a conflict lens to each major area of foreign assistanceYfrom agriculture to economic growth to democracy and governanceY and to have each area wor, in concert& $n the aftermaths of conflict and natural disaster% the Bnited 7tates must continue to provide humanitarian assistanceYbut much more effectively& The need for humanitarian assistance shows no signs of abating% and new dimensions of disasters will create new demands& Trends indicate a larger% more comple* role for humanitarian assistance in the coming decades& The Bnited 7tates% the only national power with truly global reach% has a critical role in addressing current and future trends in disaster assistance& $t must project a clear consistent message about addressing humanitarian needs in conflict settings and reducing vulnerabilities that transform natural and technological events into disasters& B&7& assistance can do much to shape the !# st century& And as the 'illennium Challenge Account ramps up% B&7& official aid is set to rise from T#" billion a year today to T#< billion in !""> and thereafter& B&7& assistance is generally measured solely as the official development assistance that the government provides through B7A$.% the Peace Corps% multilateral institutions% and programs sponsored by the 7tate .epartment and .epartment of .efense& But many nongovernment sources also provide foreign aidC foundations% corporations% private and voluntary organi-ations% colleges and universities% religious organi-ations% and individuals& All these sourcesYproviding nearly T>" billion a year% or si* times the official assistanceYmust be ta,en into account to plan aid more effectively& With private assistance predominating% B&7& official assistance will have to develop stronger partnerships with the full array of private sources& The dominant themes% then% are for foreign assistance to focus on political leadership% on policy% on people% and on partnership& Bnless a country)s leaders ma,e smart choices for national priorities and show their political will to wor, with outside donors% developmentYand development assistanceYcannot succeed& Bnless sensible policies are put in place% with the rule of law to promote good governance and individual freedom% development cannot be sustained% particularly for agriculture% the engine of growth for most poor countries& Bnless countries invest in health and education% people cannot ta,e on the demands of today)s competitive wor,place% and development cannot even start& And unless the official development community wor,s better with partners% both traditional and new% many development opportunities will be wasted& Too much is at sta,e in all this& We

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have to ensure that these themes suffuse the future of foreign assistanceYall in the national interest& < )ndre$ ". %atsios, )dministrator, :")ID

5oeten* +riB -.///0* 1%lashes in the Assembly*4 in International 3r!ani7ation* 5ol6 7<* )o6 .* ""6 8A7-.876
$n this study $ demonstrated that the underlying structure of conflict in the post+ Cold War BD/A is one1dimensional& The position of countries along this single dimension is stable across time% issue area% and importance of issues& $f global politics has become multidimensional and alliances have become ad hoc and issue based% this does not show up in the voting behavior of countries in the BD/A& This finding rejects the dealignment hypothesis& The analyses also revealed a surprising degree of stability in the voting patterns of states& 'uch of the Cold War 3ast1West conflict has carried over into the post+Cold War period& The evidence contradicts the structuralist hypothesis that Dorth17outh conflict has superseded 3ast1West conflict& The results suggest that there is some truth to the stability hypothesis that argues that besides the countries belonging to the former 7oviet bloc that are now aligning with the West% the behavioral voting alignments have changed little since the end of the Cold War& 'oreover there is some indication that 3uropean countries have moved away somewhat from the Bnited 7tates% another prediction of the stability hypothesis& However% the stability hypothesis does not tell the whole story& 7ome things have changed since the end of the Cold War& irst% $ found considerable evidence of an emerging Ecounterhegemonic voting bloc&F Whereas the Bnited 7tates and its Western allies occupy one pole of the main dimension of conflict% the other pole is occupied by a group of rising powers 4China and $ndia6 and some other countries 4for e*ample% $ra0% $ran% Aibya% and Dorth ?orea6 that challenge the neoliberal world order and have been involved in clashes with the West% particularly the Bnited 7tates& The emergence of this bloc indicates that the positions of countries along the first dimension are at least partly e*plained by their degree of opposition to B&7& hegemony% as stated by the counterhegemonic hypothesis& 7econd% the results indicate that the regime type of countries affects their voting behavior& This effect occurs independently from the effect of the level of economic development on state behavior& 'oreover% states that have become more democratic since #9;9 have started to vote more with the EWest%F even when $ e*clude 3astern 3uropean countries from the analysis& However% the effect of democracy on state behavior is not the same across issue areas& The evidence

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supports the ?antian hypothesis that democracies tend to vote with each other on issues concerning principles of political and economic liberalism& $t is somewhat inconclusive about whether regime type has any general influence on the voting behavior of countries& Third% the study clearly rejects the general claim that post+Cold War global conflict is dominated by Eclashes of civili-ations&F However% $ do find some evidence of divisions between non1Western Ecivili-ations&F $slamic countries separate from African and Aatin American countries on the less1important and less1stable second dimension of conflict& 'oreover% $ find that in comparison to the Cold War period $slamic countries have moved away from the West& $dentifying the position of countries in global conflict by their relative position on a EWestern+nonwesternF dimension is undoubtedly a simplification of global politics% but it is a simplification that e*plains voting behavior in the post+Cold War BD/A e*tremely well& The stability of the positions of countries along this dimension over time% issue area% and issue importance is truly remar,able& A one1dimensional e*planation of global politics may not be as simple1minded as perhaps it first appears& $t incorporates the emergence of a counterhegemonic bloc and the importance of levels of democracy and economic development as determinants of state behavior& 'oreover it captures some regional distinctions that are considered important in world politics& urther research should investigate whether the relative positions of countries on this EWestern+non1WesternF continuum might accurately predict clashes and cooperation outside the BD/A&

5oeten* +riB -.//<0* 1!esisting the Lonely Su"er"oCer: !es"onses of States in the (nited )ations to (6S6 Dominance*4 in The Journal of Politics* 5ol6 ::* )o6 9* ""6 >.;>7<6
The preference gap between the Bnited 7tates and the rest of the world widened considerably and at a constant rate between #99# and !""#& The increase in the gap is not a phenomenon limited to states from particular parts of the world% and there is not much evidence that some states have chosen to bandwagon with the Bnited 7tates& $t appears that B&7& hegemony has elicited almost universal resistance& 2ne might interpret these results as evidence that the widening

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preference gap is purely a structural phenomenon and thus largely unaffected by apparent temporal variations in B&7& foreign policy& We should% however% consider some caveats before settling on such a conclusion too confidently& or e*ample% $ have only investigated the responses of states% not individual citi-ens& $t may be that the more important conse0uence of unilateralist policies is that it turns world public opinion against the Bnited 7tates& This may have a lagged effect on the behavior of states through increasing domestic pressures& $t may also increase support for nongovernmental activities targeted at the Bnited 7tates& inally% the shift towards more unilateralist policies in the mid1#99"s appears to have had a substantial impact on the agenda& 7tates increasingly introduce resolutions to denounce unilateralist B&7& policies and drop resolutions supportive of B&7& purposes& This suggests a modification to the liberal1institutionalist perspective& 7tates may punish uncooperative behavior by introducing multilateral initiatives that complicate Washington)s calculations% even though they do not adjust their perceived interests to policy fluctuations& The rationale is that B&7& policies are subject to change as new Administrations 4or Congresses6 are elected& /overnments that reali-e this have little reason to adjust their policy preferences in response to policy fluctuations& By affecting the multilateral agenda they see, to affect policies more directly& Although the finding that states have negatively adjusted their preferences to B&7& dominance is robust and applies to the vast majority of states% there is considerable country1specific variation in the e*tent of the changes& The results support the hypothesis that changes in the degree to which a state respects civil and political liberties domestically e*plains shifts in foreign policy preferences& Thus% a purely structural account of post1Cold War politics is inade0uate& Just because this finding is consistent with the liberal paradigm and the previous finding better fits a realist framewor, does not imply that the two are logically inconsistent& 7tates may well be influenced in forming perceptions of their national interests both by structural pressures and liberal concerns% which is e*actly what the analysis suggests& 2n balance% the common shift away from the Bnited 7tates appears to be the most powerful force% which is mitigated only slightly by variation in domestic orientations& uture research with longer time series as well as alternative data sources should evaluate whether this main finding holds up& inally% there remains considerable variation that is left une*plained by the model% implying that other variables may also help e*plain preference change& or e*ample% future studies could test whether replacement of leaders with specific ideological or religious beliefs leads to changes in foreign policy preferences& $t would also be useful to e*plore the use of alternative data& or e*ample% the current data does not allow us to trac, movements in B&7& preferences as the B&7& votes consistently on the issues under investigation& Besides its substantive implications% the analysis also demonstrates the merit of the multilevel $RT model& The integration of a measurement model with a structural model demonstrably leads to different inferences than when different indicators of a latent construct are combined using an arbitrary aggregation mechanism that ignores measurement error and characteristics of the items 4resolutions6 under consideration& The application of the $RT model to roll1call data is attractive because of its identity with the main behavioral model of legislative behaviorC the spatial model& However% the $RT model can be used as a more general measurement model for latent constructs 4e&g&% Jac,man and Treier !""!6& /iven the prevalent use of

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fallible manifest indicators to measure latent constructs such as democracy and ideology% the multilevel $RT model holds great promise for applications in political science&

5reeland* ?ames !6 -.//<0* 1,he International and Domestic Politics of I#F Programs*4 "a"er "re"ared for the !ein$enting Bretton &oods %ommittee and &orld +conomic Forum conference on ,he Fund@s !ole in +merging #arBets: !eassessing the AdeIuacy of its !esources and Lending Facilities* Amsterdam* )o$ember 8A-8;* .//<6
-#e Influence of t#e :nited "tates Protestors against the $' are often surprised to learn that the Bnited 7tates only controls about #5 percent of the votes at the $' & This gives the B7 veto power over certain important decisions that re0uire an ;< percent majority% but it is a far cry from majority control of the und& The $' % however% does not operate according to strict voting rules& Iotes are rarely ta,en& Rather% the 'anaging .irector% who usually chairs the 3*ecutive Board meetings% ta,es action according to the Esense of the meeting&F This may open the door for a member of the 3*ecutive Board who represents small countries to influence the meeting with a carefully turned phrase% but it also means that opposition to the B7 by smaller countries cannot be e*pressed through bloc, voting but must be voiced individually& 'oreover% the 'anaging .irector has been reported to rarely act against the will of the B7% perhaps as is fitting% since the B7 has veto power over his appointment 4Aichtens-tejn and Baer #9;5% cited in Thac,er #9996&

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7cholars have therefore proposed that the B7 has the power to use the $' for political objectives& There are many anecdotes% but when dealing with only one observation at a time% it is difficult to sort out economic e*planations from political e*planations& 7trom Thac,er 4#9996 undertoo, the first systematic study of a large body of evidence on the 0uestion of B7 influence at the $' & To test whether the B7 uses the $' as a tool of foreign policy% he considered voting patterns at the Bnited Dations as a determinant of $' programs& Thac,er found that countries that voted along similar lines as the B7 were more li,ely to receive an $' program than countries that did not& 'ore specifically% countries that c#anged their voting patterns so that they became more similar to the B7 preferences were more li,ely to get an $' conditioned loan% and countries that changed their voting against the B7 were less li,ely to get a loan& At first blush% it may seem strange to consider voting at the Bnited Dations as meaningful + many votes are symbolic and most are not of great importance to the B7& But Thac,er was careful to include in his study only those votes that the B7 7tate .epartment had identified as E,ey votes&F These were votes that the B7 state department had announced that it did care about& By using statistical analysis of the e*perience of ;5 countries 4for a total of over 5"" yearly observations6% Thac,er was able to control for other factors that determine $' participation& He did find evidence that economic factors play an important role& But moving closer to the B7 in terms of voting on ,ey issues at the Bnited Dations plays a significant role as well& His variable is a straightforward measureC the change from one year to the ne*t in the correlation between a developing country)s the BD voting record and the B7 voting record on votes identified by the B7 7tate .epartment as E,eyF + where the B7 e*erted e*plicit pressure on how to vote& The variable predicts $' participation well% even after one controls for economic variables predicting participation& 4$ will employ this variable below in 7ection <&6 Thac,er concludes that the B7 uses $' loans to reward countries that move towards it and punish those that move away& 7ince Thac,er)s systematic study of B7 political influence over the $' % others have e*plored other ways of measuring and testing B7 influence& or e*ample% Randall 7tone 4!""!6 has loo,ed at the connection between B7 foreign aid and $' punishment for non1compliance with the conditions attached to $' loans& 7tone considers the amount of foreign aid that a country receives from the B7 to be a pro*y for how important the country is to the B7& $f the B7 can use the $' to pursue its political objectives% countries that receive favorable amounts of B7 foreign aid are also li,ely to receive favorable treatment by the $' & 7tone has underta,en two studies considering the effect of B7 foreign aid on $' program punishment intervals + one on the Post1Communist countries of 3astern 3urope 4!""!6 and one on Africa 4forthcoming6& Both studies confirm his hypothesisC the more B7 foreign aid a country receives% the shorter the duration of punishment for $' programs that fall into non1compliance& $n addition to the statistical studies% which include data from many countries from 3astern 3urope and Africa% 7tone also presents detailed case studies& or e*ample% he shows that Russia% a country that was considered to be of great strategic importance to the B7 after the fall of Communism% received much lighter punishments for non1compliance than Poland% which was considered to be of less importance to the B7& 7tone concludes%

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EAlthough the Bnited 7tates holds a minority of votes% it does indeed call the shots at the $' % as critics allegeF 4!""!C >!6& Dote that% in addition to the political motivations% the B7 may also influence the $' to protect financial interests& Consider the findings of two unpublished studies by Thomas 2atley and Jason Xac,ee 4!"""6 and Aawrence Bro- and 'ichael Hawes 4!""M6& 2atley and Xac,ee show that the amount of B7 ban, e*posure in a developing country is a determinant of the si-e of the $' loans the country received& Bro- and Hawes find that the total amount of B7 lending as a proportion of a developing country)s /.P is a significant predictor of both the $' agreement and the si-e of the $' loan& They ta,e this as evidence of the influence of B7 ban,s operating through B7 political channels& This point of view is different from the arguments of Thac,er and 7tone& Rather than argue that the B7 uses the $' to reward friends% Bro- and Hawes% as well as 2atley and Xac,ee% argue that the B7 uses the $' to protect B7 financial interests& This is a crucial difference with respect to conditionality because% when financial interests motivate the B7% there may be an incentive to see policy conditions enforced& 5onclusion The impact of politics on $' arrangements has important implications about $' conditionality& $n an $' agreement with a country favored by the B7% conditionality may have no bite& Xet% in countries not particularly favored by the B7 conditionality may help to push through important policies of economic reform& 7tone 4!""!6 found in 3astern 3urope that countries participating in $' programs that were not favored by the B7 + thus% where the threat of punishment for noncompliance was credible + succeeded in curtailing inflation& $' conditionality may be used in these situations% however% to push through unpopular policy changes that favor one constituency over another& 7tiglit- contendsC There isNa process of self1selection of reformsC the ruling elite has ta,en advantage of the reform process and the asymmetries of information + both between themselves and the citi-enry and between the international aid community and themselves + to push those reforms that would benefit them& Partial compliance allows countries to avoid $' punishment and to push through policies to protect elite interests while shifting the burden of austerity to labor and the poor& 7ystematic studies indicate that $' programs typically e*acerbate income ine0uality 4Pastor #9;5% /aruda !"""% Ireeland !""!% !""H6& Pastor 4#9;56 found that Ethe single most consistent effect the $' seems to have is the redistribution of income away from wor,ersF 4#9;5aC ;96& His finding has been confirmed in more recent studies with broader data and updated methods& $ndeed% of all the areas where the $' may have an impact% income distribution appears to be the one area where there is the most consensus in the literature on the effect of $' programs& Thus% we may imagine M sets of countriesC 4#6 There are countries favored by the B7 for political reasons + conditionality has no bite& 4!6 There are countries not favored by the B7 whose governments agree with the policies prescribed by the $' and face no opposition + conditionality is not needed& 4H6 There are countries not favored by the B7 whose governments use the $' agreement to favor domestic

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elite interests + conditionality is abused& 4M6 There are countries not favored by the B7 whose governments agree with conditions but face opposition + conditionality helps push through Pareto improving reforms& Whether or not $' conditionality is a good thing depends on how common situation 4M6 is& .ollar and 7vensson 4!"""6 have argued that the $' should specifically target such situations& This might be a wise move% but it may be politically unfeasible + both at the international and domestic levels& At the international level% how can the $' resist the pressure to help B7 alliesW At the domestic level% how can the $' ,now the true intentions of governmentsW Xet% unless $' conditionality is used for situation 4M6% conditions are useless at best and harmful at worst& How common is it that $' programs help to push through policies that are unpopular in the short1run but have positive effects in the long1runW Judging by the dearth of evidence of program success% this is probably not so common& 7o% perhaps the $' should scale bac, its operations% lending only during times of severe crisis and providing policy advice without imposing conditions per se& Xet% recall the argument of /ould& 7he finds that private financial institutions provide supplemental financing to countries in crisis only provided that Eban,1 friendlyF conditions are included in $' arrangements& Bsing the $' to enforce developing countries) commitments of to repay loans may be Pareto enhancing& Without the $' % private financial institutions may be unwilling to loan to countries in crisis& With the $' % however% crisis countries + who receive the loans + and private financial institutions + who receive a credible commitment of repayment + are both better off& This suggests a scaling bac, of conditions to the level of debt repayment& This is something with which the $' has been 0uite successful& $' loans% for e*ample% are almost always repaid& /overnments would still have to ma,e tough decisions about how to cut bac, domestic consumption to repay loans% but they would do so on their own terms& 7caling bac, conditionality would have little impact where the $' lends under political pressures from the B7 because conditions have never been strictly enforced in these situations& $t would have a great impact on other countries% particularly where governments have sought out $' conditions to push through unpopular policies& This would be a loss in the handful of cases where well1 intentioned governments need $' leverage to ma,e policy changes that will help the country in the long1run& But it would prevent other governments from misusing $' conditionality to push through policies that shift the burden of austerity on labor and the poor in the name of the $' &

&ade* !obert unter -.//.0* 1(S egemony and the &orld BanB: ,he Fight O$er Peo"le
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and Ideas*4 in Review of International Political Economy* 5ol6 ;* )o6 .* ""6 .87-.<96
5onclusions $ began with the tension between the hegemonic state)s substantive need for foreign policy levers% including multilateral organi-ations% on the one hand% and its need to be seen to be acting with procedural (appropriateness) in multilateral governance structures% on the other& Without the appearance of procedural appropriateness hegemony would give way to domination% and by and large hegemony is more efficient for the hegemon& But respect for procedures may mean putting up with messages coming out of multilateral organi-ations that are not consistent with the hegemon)s foreign policy objectives& Acting to ma,e the messages consistent with the hegemon)s foreign policy objectives may entail procedurally inappropriate behaviour& This is the hegemon)s dilemma in multilateral organi-ations& -#e 1an2;s autonom and dependence $n the cases considered here the B7 Treasury intervened in order to prevent the Ban, + or two highly visible people of the Ban, + from saying things that ran against its own message about how other countries should develop& The Treasury was clearly unhappy with 7tiglit-)s statements 4as was the $' 6& But it was not able to fire him directly& $t waited till it could use its 4procedurally appropriate6 veto over Wolfensohn)s second term as the means of getting rid of him% by ma,ing Wolfensohn 4who had the authority to renew or not renew 7tiglit- as chief economist6 agree to non1renewal as a covert condition of his own reappointment: and later% provo,ed by 7tiglit-)s %e$ (epublic broadside% it ensured that Wolfensohn fired him as his special advisor and removed him completely from the Ban,& The Treasury was also clearly unhappy with the January !""" draft of the W.R& Treasury)s pressure on the draft + and the president)s and managing director)s apparent acceptance of the Treasury criti0ue + was construed by ?anbur to be sufficiently potent and inappropriate as to prompt him to resign& 2n the other hand these cases show a more complicated situation than (the B7 pulls the lever and the Ban, responds)% as though the Ban, were an arm of the B7 government& irst% the B7 intervention was ,ept covert% and only ,nown for sure to the parties directly involved& By the standards of other B7 interventions in the Ban,% these cases were subtle and mild& 7ome of the 3*ecutive .irectors 4the representatives of the member states on the board of directors6 grumbled at the American role% but in a spirit of (the Americans up to their usual tric,s)& 7ome of the staff + especially the staff of the W.R + thought the American intervention offensive and their senior

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management wea,% but then they did not really count& The most damage came from the press reports% which played up the B7 role as inappropriate + hence the (siege1li,e) atmosphere in the meeting between 3*ternal Affairs and the W.R team as they considered how to e*plain ?anbur)s resignation in terms that did not involve B7 pressure& By and large% though% B7 intervention wor,ed well from the B7 standpointC it secured the objectives 47tiglit- fired% the W.R rebalanced6 with a sufficient gloss of procedurally appropriate behaviour over the covertly inappropriate behavior that the procedural pillar of B7 hegemony was minimally compromised& 7econd% the cases also show the limits of B7 influence& The B7 had a lot to do with the fact that 7tiglit- had no chance of being renewed as chief economist% but 7tiglit-)s chances were in any case low because of the disgruntlement of top managers and many of his own staff% not all of it informed by ideology& Wolfensohn then appointed him as a special advisor and gave him a ,ey role in finding a successor% which Treasury cannot have welcomed& 2nly after 7tiglit- made a flagrant attac, on the $' and the Treasury did both Treasury and $' demand that Wolfensohn fire him as special advisor + and Wolfensohn obliged% even though by then safely reappointed for a second term& ?anbur)s appointment also indicates Ban, independence% for he was guaranteed to steer the W.R on poverty in a direction that the Treasury did not li,e& ?anbur resigned as director of the W.R rather than revise the draft in line with Treasury demands% but the effect was to embarrass the senior management into committing itself to ,eep the core Civil 7ociety messages intact + precisely so that the Ban, would not be seen to be the Treasury)s lac,ey& 2n the other hand% the final version did add other core messages from the inance agenda% as the Treasury wanted% in the name of the W.R needing to be consistent with the Ban,)s central message about how to get development& The net result of the conflicting norms for 4a6 the Ban, to spea, with a single voice% and 4b6 the W.R to be independent% was substantial inconsistency or lac, of integration in the final version& But the inconsistencies and dis1integrations would be noticed only by those who read the report carefully& The inance agenda messages came particularly in the parts that would be noticed by readers in a hurry + in the standalone summary% in the first chapters% and at the beginning and end of the other chapters& The Ban,)s independence is also seen in the fact that Jeffrey 7achs was indeed invited to the Ban,)s Annual Conference on .evelopment 3conomics over 7ummers) objections 4though the posters advertising his presence were ta,en down in response to 7ummers) fulminations6& And it is seen% ironically% in the fact that 7ummers and the Treasury wanted the W.R to support the $A2)s labour standards about unions and collective bargaining% but the Ban, could not bring itself to do so& $n this respect the Ban, appeared more neo1liberal than the Treasury& M" The central tension in the ma,ing of W.R!""" + to what e*tent was it the wor, of a group of independent researchers% to what e*tent was it the voice piece of the Ban, + has run through all the W.Rs& The Ban, has never confronted the tension by ma,ing an e*plicit statement of what the World .evelopment Report is& $n practice%

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the content of each report emerges as a contest between the authors% thin,ing of themselves as independent researchers% and senior management and 3*ternal Affairs% thin,ing of it as independent so long as it says what they want it to say& The point is unwittingly clear in the Ban,)s press statement about ?anbur)s resignationC (The World Ban, is committed to both open debate and an internal process that maintains the integrity of the W.R% in which the final product reflects the best evidence and judgement of the staff% as well as the wide range of e*ternal commentary& The report will in the end be a product of the World Ban, approved by its President and by incoming Chief 3conomist Dicholas 7tern&) Ideological con!ergence We have seen that the B7 Treasury does not always get the Ban, to do what it wants& Also% the Ban, may do and say what the Treasury wants for reasons beyond the fact that Treasury wants it& Both organi-ations% after all% are committed to the same broad neo1liberal ideology and to the same notion of what constitutes good technical economics research& The .evelopment 3conomics comple* at the Ban, defends its researchers) right to reach their own results as a matter of principle& But you do not get to be a Ban, research economist without having demonstrated your commitment to the presumptions of neo1liberalism and to the analytical techni0ues of Anglo+American economics& 2nce there% you ,now that if you come up with pro1free1mar,et findings you can send off your paper to -#e &conomist or present it at an $' seminar straight away without anybody else chec,ing the results: whereas if you come up with contrary results you will be re0uired by your managers to chec, them out with a panel of colleagues who may be as,ed to underta,e independent replication while the paper is ,ept under internal wraps& The differential response sends a message to the researchers who are loo,ing for cues as to how to come along and get along in the Ban,& Dot long after the ?anbur case a reporter rang up the acting chief economist to as, him to e*plain why the .evelopment 3conomics comple* had two staff papers on its web site which seemed to contradict each other on the lin, between growth and poverty reduction& $nstead of saying% (We are a research center and we encourage people to pursue research findings where ever they lead to)% the acting chief economist said% worried% that he would loo, into it& He called a meeting of his managers and advisors% and told them that the Ban, must not be seen to be spea,ing in different voices& (/iven the vulnerability of the Ban, to public criticism)% he said% (we must be very careful) Kabout% for e*ample% what goes up on our web siteL& 'uch the same mechanisms of self1censorship are at wor, in the Treasury& The result is strong overlap of views without the Treasury e*erting direct influence& 'oreover% the longer term (game) between Treasury and the Ban, pushes in the same direction& Having been bruised by bad publicity around the 7tiglit- affair and the ?anbur affair% the Ban,)s senior managers are li,ely to be more cautious about offending the B7 in future interactions% because they ,now how offending the Treasury in one conte*t spills over into costs to the Ban, in other conte*ts& As they become more cautious about giving offence% B7 hegemony is that much less challenged&

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The antibodies wor, over the long term through both mechanisms + senior managers) concerns to limit upsets with the Treasury% and researchers) awareness that pro1free1mar,et findings are better received& Those who dispute the economic policies of the inance agenda + such as those who challenge the Ban,)s advocacy of funded pension schemes whereby individuals contribute to a pension fund which invests in securities% and they receive a pension lin,ed to the performance of the stoc, mar,et + are ,ept on the margins: those who advocate policies that fit the liberal free mar,et ideology described earlier have a better chance of reaching the commanding heights&M# -#e benefits of :" -reasur influence on /D( 2000 The 0uestion of how the B7 Treasury influences the Ban, should be ,ept separate from the 0uestion of whether its influence is substantively desirable& $n the immediate conte*t of the W.R !""" it can be argued that the W.R was indeed improved by Treasury influence to the e*tent that the W.R ended up giving more emphasis to economic growth and less emphasis to parts of the Civil 7ociety agenda& Aet me e*plain& irst% developing countries have been e*periencing a severe but little noticed long1 term growth slowdown& 3ver since #9>" average incomes in developing countries have grown more slowly than 23C. incomes in most years% and world income ine0uality has widened& $ndeed% the median rate of growth in developing countries) average incomes between #9;" and #99; was "&" percent&M! The growth crisis should be right at the forefront of the development debate% as also the steps that 23C. countries should ta,e to moderate it% including lifting B7 union1sponsored protectionism& But the swelling phallan* of mostly western1based D/2s is not li,ely to place it there% because it has given little analytical attention to economic growth in developing country conditions& MH 7econd% there is not much evidence that economic growth and productivity are raised by changes in decision1ma,ing which give greater power to local groups& The empowerment movement assumes too readily that benevolent paternalism is always wic,ed and that giving power to the poor will result in cooperative thriving rather than looting as shamelessly as the other lot& Third% the ascendancy of governance% participation and environmental protection in the development agenda has tended to eclipse the centrality of the 0uestion% (How to increase real economic rates of return in agriculture% industry and services% and how to bring scientific research to bear on this tas,W) 2ne sees the eclipse in the World Ban,)s Comprehensive .evelopment ramewor,% which shifts attention from growth towards non1income aspects of poverty and legitimates the Ban,)s retreat from hard1nosed technical subjects li,e industrial policy and irrigation investment towards soft1nosed education% health% participation% legal reform and cultural properties&MM While the Treasury role in getting the W.R!""" to give more weight to economic growth was surely useful% this is not to endorse the inance agenda that the Treasury sought to impose& 'y own preference% it will be clear% is for a real1 sectorGindustrial policyGsocial democratic agenda& 'oreover% one should relish the irony in the Treasury)s upset at the January draft)s embrace of the Civil 7ociety

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agenda& or it was the B7 Treasury% above all% that as the Cold War wound down and the B7)s need to use the Ban, for geopolitical objectives faded% most pressed the Ban, to open itself to D/2 influence + not because it particularly li,ed D/2s or their governance and environmental arguments but because it needed to build up credit with them and with the Congress in order to get their support or ac0uiescence on the things that really did matter to the Treasury% including free capital mobility& -#e benefits of multilateralism The specific case of the W.R !""" aside% the Ban, would be a better development agency if the B7 + both the B7 state and B7 D/2s + had less control over it% if people from other states% with ,nowledge of other 4social democratic% developmental state6 forms of capitalism had more influence over what the Ban, says and does% causing the Ban, to affirm a wider range of institutional ecologies& We ,now from Japan and continental 3urope that efficiency% catch1up% innovation and well1being can be promoted not only by the mar,et principle of e*itGswitchingGli0uidity but also% in some spheres% by the organi-ational principle of voiceGcommitmentGcapacity1building& $n a social democratic ideology% free mar,ets in labour are constrained by the need to protect organi-ational loyalties% corporations are managed with responsibilities to employees and other sta,eholders as well as shareholders% they are not bought and sold on the stoc, mar,et% and the public sector e*presses the principle of mutual responsibility through public supervision of health care% education and collective social insurance&M< Certainly social democratic systems are on the defensive at the start of the present century& They are under 0uestion from segments of national elites 4this being the B7)s return on generous scholarship funding for foreign students in American graduate schools6% and under pressure from capital flows out of 3urope& The B7 Treasury declares that capital will continue to flow out and the 3uro will continue to fall (unless and until 3urope shows more commitment to overhauling its restrictive labour mar,et and generous welfare systems which are seen as a barrier to growth)% in effect setting liberal free mar,et conditionalities on B7 cooperation on behalf of the 3uro& M> But political economies with social democratic characteristics clearly can be effective vehicles of late development& And the world economy would be less fragile if it contained a broader range of capitalist forms& M5 2ne test of the Ban,)s independence from B7 views would be the appointment of a chief economist and associated staff who champion these arguments& However% the only major way to moderate B7 hegemony over the Ban, is to shift its head0uarters + or some important head0uarters functions + out of the B7& Constitutionally the 3uropean states have the votes to do this& A World Ban, with important staff and head0uarters functions in% say% Berlin or Paris or An,ara 4but not Aondon6 might be suffused by the more diverse 3uropean views of political economy& M; And the Ban, might be split into separate (companies) under a holding company% li,e a Japanese 2airetsu% each company de&ned by a (results area)% each drawing help from others but operating largely independently% and placed in different centres around the world& 7hort of that% the 3uropeans and the Japanese could organi-e themselves to steer the Ban, a bit more& The Dordics have already been doing so on the (social) aspects of development by putting up millions of dollars in trust funds for Ban, wor, in this

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area + an area where the B7 Treasury is happy to let them ta,e the lead and pay the cost% because peripheral to the interests of the B7 state but central to the objectives of many B7 D/2s whom the Treasury needs to ,eep happy& The 0uestion is when the 3uropeans and Japanese will e*ercise more leadership on the economic policy issues where the B7 Treasury really does want the Ban, as its instrument% such as opening developing country capital mar,ets: and when the representatives of developing countries on the board of the Ban, will concert their actions for a change&

&all* oCard ?6 -8;;70* 1,he Allocation of Official De$elo"ment Assistance*4 in Journal of Policy %odelin!* 5ol6 8>* )o6 9* 9/>=98<6
This paper is an e*amination of the criteria by which foreign aid% or official development assistance 42.A6% flows from donor countries to recipients& $ develop a theoretical model based on donor optimi-ation and apply it to the total net 2.A allocations of three periodsC #959+;"% #9;M+;<% and #9;;+;9& The estimation indicates that per capita income and population are correlated with per capita 2.A receipts% while infant mortality and politicalGcivil rights are not& Also% the negative correlation between 2.A and per capita income rose significantly through the #9;"s& KNL The theoretical model developed performs reasonably well for the three periods e*amined& $n the allocation of 2.A% per capita income appears to be the important indicator of intercountry well1being: in #9;;1;9 the elasticity of 2.A per capita with respect to per capita /DP was &9!& There is also a strong population bias: in #9;;1 ;9% between two countries% a #"1percent difference in population meant that the larger country received% on average% a >&<1percent lower level of 2.A per person& 3ven though the e*planatory variables are essentially the same as those considered in previous studies% it is difficult to compare the results to those of previous studies because the present specification differs substantially from their ad #oc models& 2n the basis of statistical significance and on the percentage variation in 2.A per capita e*plained by the models% when compared to the present study% they provide wea, support for the hypothesis that recipients) well1being is important in the aid1 allocation process& However% they do indicate some evidence that per capita income is negatively related to 2.A supply& Also% .owling and Heimen- 4#9;<6 and 'osley 4#9;56 find evidence of a population bias whereas 'ai-els and Dissan,e 4#9;M6 does not& Done of these studies found infant mortality 4nor its close relative the

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Physical `uality of Aife $nde*6 to be statistically significant% and none of them has e*amined the role of human rights&

&ang* ,6 M6 -8;;;0* 1(6S6 Foreign Aid and (6)6 5oting: An Analysis of Im"ortant Issues*4 International Studies Quarterly* 5ol6 <9* )o6 8* ""6 8;;=.8/6
Contrary to the argument that foreign aid is an ineffective policy instrument in the pursuit of America)s global influence% the current findings suggest that the B&7& government has successfully utili-ed foreign aid programs to induce foreign policy compliance in the BD on issues that are vital to America)s national interests& 7uch policy compliance did not come as a result of how much aid a developing country has already ac0uired from the B&7& but of Washington)s manipulation of the level of foreign aid as a reward for political deference or a punishment for political defiance& Although the BD voting pattern was only one of many factors influencing B&7& foreign aid appropriations% Washington has spent considerable time during the past decade trying to establish a lin,age between aid allocations and BD voting coincidence rates& The lin,age policy established during the Reagan administration% in conjunction with subse0uent manipulation of aid allocations% has sent a strong signal to recipient countriesC vote in the BD according to B&7& positions or run the ris, of losing aid& $ndeed% the repeated cutbac,s in foreign aid in recent years may actually have made the marginal utility of each remaining dollar higher and thus would have made compliance even more li,ely& The prospect of suffering economic sanctions for political defiance on issues that are considered vital by the B&7& government may help to e*plain the association between B&7& aid and coincidence rates of important voting in the BD& This analysis also demonstrates that it is unreasonable to focus on voting coincidence rates of all BD votes when the effectiveness of B&7& foreign aid programs is assessed& 'ost BD resolutions simply are not important enough for the B&7& to apply its precious resources influencing the outcomes& As previous 0uotes from ?eohane 4#9>>6 suggest% the costs of repeatedly e*ercising pressure would be too high for marginal gains and would invite resentment and antagonism over the long run& 3mpirical evidence% as demonstrated by low voting coincidence rates on all BD resolutions% seems to suggest that leaders of recipient countries also understand this logic& They tend to be more li,ely to submit their political deference

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to American positions when issues are important to the B&7& government because they ,now that EBig BrotherF is watching& inally% the sense that domestic programs should come first during the post1Cold War era is certainly prevalent in American society in recent years& 7uch a pervasive sense places considerable limitations on the employment of foreign aid programs as a policy instrument& However% while the brea,1up of the 7oviet Bnion has indeed changed the international power structure% it has not made the B&7& a hegemon which can use its military might indiscriminately to demand political deference from all other nations& Thus Congress% the president% and the American people need to recogni-e that Eeconomic statecraftF 4Baldwin% #9;<6 is even more important in the current international system& By s,illfully manipulating the level of foreign aid% the B&7& can effectively pursue its global influence in the post1Cold War era&

&atanabe* MuBo -.//:0* What &etermines +ilateral Aid &istri"ution@ Evidence from %aCor &onors* (ndergraduate onors Pa"er* De"artment of +conomics and International Studies Program* (ni$ersity of Oregon6
The determinants of bilateral aid distribution differ greatly across donors& However% it is clear that a donor country)s own interests play at least some role& B&7& aid seems to be dictated by their global strategic concerns% which are fairly irrelevant to the recipient country)s need or their own commercial interests& 3mphasis on the improvement of education and health conditions advocated by B&7& foreign policy and B7A$. was not statistically significant& Japanese aid is largely determined by colonial ties and preference for Asia& .espite the persistent criticism of Japan)s prioriti-ing its own economic interests in aid1giving% trade volume does not affect the distribution pattern significantly in the regression model& B&?& aid is generally e*plained by colonial ties and political concerns% which is fairly consistent with the previous researches KsicL and common perceptions of the development practitioners& Canadian aid distribution is uni0ue in a way that it is primarily allocated based on the humanitarian needs of recipient countries rather than Canada)s own interests& This may be partially due to its lac, of strong historical or regional ties with developing nations&

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Although the improvement of transparency of the government and human development are strongly encouraged by major international organi-ations li,e World Ban,% such variables do not seem to have statistically significant impact on bilateral aid allocation& Iariables that directly relate to poverty reduction% such as literacy rate% infant mortality rate% and income ine0uality were not popular determinants as well& Bilateral aid distribution in general is dictated by donor interests far more than the need of recipient countries& $n order to ma*imi-e aid effectiveness and create a favorable environment for developing countries to reduce poverty and wor, toward the 'illennium .evelopment /oals% bilateral aid should be used as genuine tool for growth rather just than another foreign policy tool for developed countries&

&edel* ?anine !6 -.//70* 1(S Foreign Aid and Foreign Policy: Building Strong !elationshi"s by Doing It !ightV4* in International Studies Perspectives* 5ol6 :* ""6 97-7/6
oreign aid policies cannot be more successful than their implementation% which inherently involves people and institutions& But people have their own interests and cultural framewor,s% and institutions are inevitably grounded in culture and politics& $nattention to the agendas of individuals involved on both sides of foreign aid to Central and 3astern 3urope played a major role in its shortcomings& A recent court decision holding two Harvard university scholars guilty of defrauding the B&7& government while running a flagship project to reform the Russian economy underscores the pitfalls in outsourcing traditional functions of government to small% well1connected groups that are not fully accountable in serving the public interest& .rawing on the author)s e*perience studying informal systems and networ,s over several decades% this article illuminates the importance of foreign policy and aid relationships + how they are set up% who wins and who loses% and how their lac, of accountability can contribute to the derailment of nation1building and constructive relations among countries&

&hite* #arB

oCard and #c2illi$ray* -8;;.0* 1Descri"ti$e

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#easures of the Allocation of De$elo"ment Aid*4 Institute of Social Studies &orBing Pa"er )o6 8.7* ,he ague: Institute of Social Studies6
What do the indicators tell us about patterns of aid allocationW Because the indicators do not agree with one another% no unambiguous story emerges& However% some statements about relative donor performance and changes over time may be made& 7ome donors are fairly consistently among the top performers + notably the 7candinavian countries% the Detherlands and the B?& 2thers% especially the B7% Austria and Dew \ealand% are consistently among the poorest performers& The B?)s African lin,s 4meaning that it gives aid to a number of relatively small countries6 means that it does particularly well on measures that are based on aid per capita + for e*ample ran,ing in the regression coefficient of per capita aid on per capita income& igure 5 shows how performance has changed over time% as measured by three of the indicatorsC 'c/illivray)s Performance $nde*% the correlation coefficient 4using aid per capita6 and 7uit)s $nde*& All three are inde*ed with #9;"a#""& or the first of these a downward movement is a deterioration in performance% whilst the reverse is the case for the latter two& Based on a log linear regression% there is no significant trend 4at the #"Q level6 in either the correlation coefficient and 7uit)s $nde*& Bsing the 'P$ there has been a statistically significant worsening of performance over the period show& All three indicators agree that performance too, a dive in the second half of the seventies 4thought KsicL the timings do not coincide6 and recovered into the #9;"s& The poor performance in the latter part of the #95"s is surprising% since this is a time when donors were beginning to be more vocal about directing aid towards the poor& $t is possible that we are observing the lags involved for this policy to ma,e itself felt + though the impact does not appear terribly great& The greater attention that donors have begun to pay Africa should improve performance 4especially by those measure based on income per capita6& But against this are a number of factors that will put a downward pressure on allocative performance& These are the continued and rising use of mi*ed credits% the use of aid for debt relief and aid for 3astern 3urope and the 7oviet Bnion& 'i*ed credits 4i&e& an aid pac,age being tied to non1concessional finance% the whole lot of which is procurement tied6 were introduced during the #95"s and% despite efforts by .AC% have increased in importance ever since& The nature of such EaidF 4relatively sophisticated capital e0uipment6 means that it has a built1in bias towards middle1 income countries& The debt burden is% in volume terms% concentrated in middle income countries& This will create a tendency for aid as debt relief to have a bias towards these countries& 4This need not necessarily be so% if such aid is given

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disproportionately to low income countries6& inally% growing assistance to 3astern 3urope and the 7oviet Bnion will% despite the claims of some donors% almost inevitably eat away at developing country receipts& The /erman government has already e*plicitly stated that this is the case& Dot only has donor allocative performance not improved over the last two decades 4it may even have deteriorated6 there are worrying signs that things may go from bad to worse& .iscussion of the appropriate measure of aid impact will help draw attention to this issue& But we already have the evidence to made K sicL aid allocation a matter of concern + one that may possibly be ta,en up by pressure groups active in development issues&

&indsor* ?ennifer -.//A0* 1#ainstreaming Democracy and 2o$ernance in Foreign Assistance*4 in Picard* Louis A6* 2roelsema* !obert and Buss* ,erry F6 -eds60* 'orei!n Aid and 'orei!n Policy# essons for the .e>t =alf *entury* ""6 <8<-<.<* )eC MorB: #6 +6 Shar"e* Inc6
.ebates about the relationship between democracy and development have evolved considerably since the #9<"s& Although the 3ast Asian model + e*emplified by China + still continues to hold allure for some% a consensus has increasingly emerged that democratic regimes are li,ely to produce the governance outcomes that are necessary for sustained% successful development& The evolution of B&7& aid policy since #99" has reflected that debate% and successive administrations + .emocrat and Republican + have ta,en steps to integrate democracy into their development approaches& B7A$. has been at the forefront of aid efforts% but under the /eorge W& Bush administration% establishment of the new 'illennium Challenge Account was a significant policy development& The issue is whether and how lin,ages between democracy and development will be impacted by the fate of B7A$.% which in !""> seemed increasingly in jeopardy&

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&in"enny* ?ames ,6 -8;;80* 1+fficiency and +ffecti$eness in the O$erseas De$elo"ment Administration*4 in Bose* Anurdha and Burnell* Peter -eds60 -8;;80* +ritain2s 3verseas Aid Since 1454# +etween Idealism and SelfInterest* ""6 ;>-8.<* #anchester: #anchester (ni$ersity Press6
The concepts of efficiency and effective cannot be applied without any pretence at science to the wor, of a government department with such a complicated mission as the 2.A)s& $n judging its effectiveness one needs to be aware of the ambiguity of the 2.A)s objectives& The problem cannot be reduced to the usual form of ma*imi-ing an objective function subject to constraints% since there would be disagreement over what the objectives and constraints were% and over the measures of attainment& This chapter has argued that in the #9;"s the purposes of aid became even more complicated than before% while new constraints appeared on the 2.A)s operations& 3fficiency is an e0ually nebulous concept to apply to the 2.A)s operations& The 2.A)s wor, is unli,e that of any other B? government department% and it is dissimilar in important respects from that of other overseas aid agencies& Although the 2.A% in consort with the rest of the international community% has sought to apply performance criteria to its developing country clients% the application of analogous criteria to its own operations is still an elusive goal& $n either case% judgment% informed by an awareness of the events outlined in this chapter% is indispensable&

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&ittBo"f* +ugene !6 -8;>90* 1Foreign Aid and (nited )ations 5otes*4 in American Political Science Review* 5ol6 :>* )o6 9* ""6 A:A-AAA* American Political Science Association6
A stri,ing feature of the analysis is that the hypothesi-ed association between aid and votes was found to hold only for the Bnited 7tates% and only in that portion of the analysis using deviations from ideali-ed norms as the operational measures of aid allocations and voting agreements& Although positive associations were discerned for other donors as well% such as the 7oviet bloc in #9>M% for no aid donor other than the B&7& was the association found to be consistently strong over time& $n some respects% then% the results support ?eohane)s observation that the use of e*tra1parliamentary instruments of influence in the Bnited Dations is confined almost e*clusively to the Bnited 7tates and the 7oviet Bnion& <; This appears to be the case even though for other donor countries 4notably Britain and rance vis1c1vis their former colonies6 foreign aid is clearly part of a general dependency relationship between developed and developing nations& Apparently% then% the voting behavior of developing nations is largely irrelevant to the concerns of most foreign aid donors& 3ven in the relationship between aid allocations and voting behavior observed for the Bnited 7tates% it is unclear which of the two variables should be considered a cause and which a conse0uence& With the possible e*ception of the analyses of 7oviet bloc aid commitments% most of the results based on a lagged relationship between the variables e*amined have failed to point toward significantly different relationships between aid and votes within either of the two three1year periods analy-ed& Certainly the association between aid and votes is sufficiently strong in the case of the Bnited 7tates to warrant further research into the e*act nature of the causal ne*us + if% indeed% it e*ists at all& As suggested above% multivariate analysis would be a logical ne*t step& Alternatively% longitudinal rather than cross1national analysis of some selected subset of developing nations might be pursued& 2r one might attempt to measure the perceptions that BD participants have of the use of aid as influence& Whatever the particular strategy pursued% from the viewpoint of the student of international organi-ation the results for the Bnited 7tates do suggest

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that continued e*amination of the e*traorgani-ational lin,s between BD members may prove useful in describing and e*plaining the outcomes of the political processes in the Bnited Dations& A word of caution is in order% however& Although the results do show a statistically significant positive association% neither #" per cent nor even !< per cent covariation is sufficiently large to lead one to believe that e*traorgani-ational lin,s alone will suffice to e*plain organi-ational politics& $ndeed% another researcher viewing these results may find here a case for directing greater attention to intraorgani-ational processes and influence patterns in an effort to e*plain political outcomes& <9 There is merit in this position& 7imilarly% the foreign policy analyst could interpret the results for the Bnited 7tates as suggesting the need for continued e*amination of the impact of e*ternal variables on foreign policy outputs% for both developed and developing nations& When we move beyond the Bnited 7tates% however% the results also suggest that e*ternal variables + at least insofar as they are tapped in this study + may well be insufficient e*planations of foreign policy behavior: that we may have to e*amine role% governmental% and societal variables >" as well in order to e*plain foreign policy outcomes& "#ould there be a relationship between foreign aid and Bnited Dations votesW A dual interpretation of the findings can also be made by those interested in this normative 0uestion& Those who prefer that EappreciationF for foreign aid be reflected in the Bnited Dations will find little solace in the generally moderate levels of association between aid and votes& Conversely% those who subscribe to the opposite view may well find discomfort in the fact that there is an association whatsoever between the variables% particularly considering that the association appears to be confined almost e*clusively to the Bnited 7tates& Which perspective is adopted probably depends on one)s view of the role of foreign aid as an instrument of influence and the role of the Bnited Dations as an instrument of conflict management and resolution& 2ne perspective is represented by ?aplanZs normative position that EN the Bnited 7tates should not see, to starve a poor country into support for its foreign policy& An incentive system cannot operate in the case of every vote in the Bnited Dations or every meeting of developing nations&F ># The other perspective is represented by WestwoodC E$t seems li,ely that one of the major 0uestions for the future is whether aid should not be included within the broad process of give and ta,e on concrete issues which produces cooperation among mature% independent% and e0ual nations&[>!

&ood* Bernard -8;A.0* 1%anada and ,hird &orld De$elo"ment: ,esting #utual Interests*4 in %assen* !obert*
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?olly* !ichard* SeCell* ?ohn* and &ood* !obert -eds60 Rich *ountry Interests and Third World &evelopment* ""6 ;<8.>* London: %room elm6
'ore than most of the industriali-ed nations% Canada is visibly torn between its interests in the global status 9uo and in a basic re1ordering of the international economic system& 3ven the country)s international (identity) has sometimes seemed to be at issue in the major Dorth1 7outh debates of recent years& Because Canada)s own economy remains heavily resource1based and is dominated by foreign investment and imported technology to a greater degree than other industriali-ed states% there are special temptations to assume an identity of interest with some of the Third World)s demands for a Dew $nternational 3conomic 2rder& 2n the other hand% the cultural and ideological permeation which has accompanied Canada)s economic lin,ages and defence alliances 4particularly with the Bnited 7tates6% means that Canadian attitudes and perceived interests internationally are often too1readily identified with those of the dominant Western industrial powers& With these dual dangers of the over1simplification and misperception of Canadian interests% remar,ably little serious analysis has been carried out% even within limited areas of Dorth17outh relations 4such as international commodity trade% the surveillance and direction of transnational business activity% or the relationship between development aid and trade promotion6& 3ven more apparent% and a reflection of some of the gaps in domestic policies% is the absence of comprehensive% integrative strategies of Canada1Third World relations& Done the less% the heightened debate on issues such as (de1industriali-ation in Canada #% the need for national industrial strategies and Third World competition in both manufactured goods and resource sectors% now provide an environment in which more comprehensive perspectives may be able to ta,e root& However% under conditions of chronic economic slac, and demorali-ation 4combined with unprecedented centrifugal pressures from the increasingly aggressive provincial governments6% Canada)s mutual interests with developing countries are defined and pursued in some e*traordinary ways& $n longer1term assessment of Canada)s international and global interests% it is especially important to ta,e into account the diverse% and sometimes surprisingly narrow% approaches to mutual interests which may be ta,en by different Canadian spo,esmen& $n particular% it is essential to view these mutual interests in a much wider conte*t than that of the aid relationship which% for Canada% is fre0uently still the most direct and visible lin,& $n late #955 it was the President)s committee of the Canadian $nternational .evelopment Agency 4C$.A6 that listed (the pursuit of mutual benefits) as the first

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strategic guideline C$.A officers& The President amplified in the following terms% on this (adaptation) of the Canadian aid strategyC The recent evolution of the Canadian economy as well as its short and medium term prospects re0uire that C$.A strive to ensure that its activities maintain or generate employment and economic benefits in our own country& We must also aim at strengthening mutually beneficial bilateral relationships between our developing partners and Canada& This goal must be achieved while not neglecting our essential mandate which is international development& ! $n cognisance of the intense pressures reflected in this ,ind of statement 4and their potential impact on Canadian perceptions of (mutual interests) with developing countries6% it is important to establish more clearly where Canadian interests lie& By most of the usual indices% Canada must be considered to be among the richest and most highly1developed of nations& H $t is noteworthy that in recent years Canada has joined the Western 7ummit powers but% li,e $taly% falls just outside their inner circle& Canada is the ne*t most important Western actor to be considered when the Bnited 7tates% the 3uropean 3conomic Community 4acting as a unit6 and Japan have set their directions& $n a forum such as the 'ultilateral Trade Degotiations% Canada)s position can be important% particularly as it influences the balance among giants 4Canada is still the largest trading partner of the B76& 2n the other hand% the Canadian impact apparently can safely be ignored in setting Western policies for an 23C. (steel cartel)& While Canada)s freedom of action has always been shaped% for good or ill% by continental realities%M Canada)s breadth of vision has sometimes not only been unconstrained% but even somehow bolstered by the overwhelming B7 presence& John W& Holmes has traced the ways in which Canada has maintained a vigorous commitment to multilateralism and collective internation action% true to Aester Pearsopn)s viewC as a Canadian that our foreign policy must not be timid or fearful of commitments but activist in accepting international responsibilities To me% nationalism and internationalism were two sides of the same coin& < 2thers% however% have seen a waning of Canada)s prudential internationalism from the disproportionately energetic Canadian response to (community interests) in the post1war period& 2ne seasoned American observer has commented thatC Canadian diplomacy in recent years has in fact reflected a rather narrow conception of Canada)s problems and interests& $n multi1national meetings% Canada has been less and less li,ely to propose general solutions or to act as a middleman& $nstead% when multi1lateral proposals were made by one of the (big three) or by international secretariats% Canada would see, to differentiate itself and to see, e*ceptional treatment or inclusion of a Canadian reservations&> $n some areas% however% and for a variety of reasons% multilateralism remains a constant in Canada)s e*ternal action and promotes interaction with other countries 4many in the Third World6 whose si-e and vulnerability incline them too to see, (safety in numbers) and in a diversity of international lin,s and contacts&

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This (multilaterali-ing) imperative has found tangible e*pression in Canadian support for international trade and monetary regimes% BD peace1,eeping activity% multilateral development programmes: DAT2 membership and the search of a (Contractual Ain,)% with the 3uropean Community and in leading participation in both the Commonwealth and la Francop#onie& Canadian commitment in several of these fields promotes specific contact and sometimes commonality of interests with Third World countries& Canada has come to see the Commonwealth and Francop#onie associations% in particular% as invaluable lin,ages% cross1cutting the Dorth17outh divide& Thus it was at the Commonwealth Heads of /overnment meeting in Jamaica in #95< that the Canadian Prime 'inister sharpened his government)s perception of the demands of the Dew $nternational 3conomic 2rder and undertoo, a firm moral commitment to try to accommodate them& Although the government machinery failed to follow up this top1level commitment ade0uately% the theme remained close to the centre of Canadian foreign policy statements% at least until the disillusioning #955 outcome of the Conference on $nternational 3conomic Cooperation with Canada% as co1Chairman% had wor,ed at the than,less tas, of trying to achieve some bridging of Dorth17outh differences& Although Canada lac,s the colonial or other long1standing Third World lin,s of other industriali-ed countries% Canadian relations with the Third World have grown to substantial proportions even beside Canada)s much closer overall relationships with other Dorthern countries& $n #955% the Third World 4including oil1e*porting countries6 accounted for nearly nine per cent of total Canadian e*ports and over ## per cent of imports% while !H per cent of the stoc, of Canadian1based foreign direct investment was found in Third World countries at the end of #95<& By one significant non1 economic yardstic,% that of immigration to Canada% Canada clearly had established closer Third World connections& By #955 Third World arrivals 4at M; per cent6 almost e0ualled those from traditional 3uropean sources and the Bnited 7tates& Canadian perceptions of the Third World and the relationship% however% have been slow to change since the initial impetus given by the creation of the Colombo Plan in #9<" to assist new1independent nations of Asia& Throughout the #9<"s% development assistance continued to be the focal point of interaction: the Colombo Plan led to similar efforts for the Commonwealth Caribbean6 one region of long1 standing lin,s6 in #9<; and for Commonwealth Africa in #9>"% the same year that an 3*ternal Aid 2ffice% to be responsible for the Assistance programme% was established within the .epartment of 3*ternal Affairs& Canada)s basic outloo, towards the Third World during the #9>"s followed the pattern established in the previous decade& Dew regions were included within the development assistance programme + rancophone Africa in #9># and Aatin America in #9>M through the $nter1American .evelopment Ban,% and in #95" on a country1to1country basis& As a reflection of an increased emphasis on development assistance% a new structure% the Canadian $nternational .evelopment Agency was created to administer the programme& The #9>9 Pearson Commission report% Partners in De!elopment% aroused special interest in Canada because of the chairmanship of former Canadian Prime 'inister Aester Pearson% but its stress on (non1aid) measures to promote development failed to ma,e much impact& The (aid stereotype) built up during the #9<"s continued to predominate% and even the strengthening of the (/roup of 55) after BDCTA. $ and the enunciation of demands

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that would eventually evolve into the call for a new international economic order% failed to shift public or official perception in any decisive way& $n #95"% the beginning of a new (.evelopment .ecade) and the e*pectations held fro the still1new Trudeau /overnment gave hope to some of the most interested Canadians of a promising new era in Third World1Canada relations& As a result of the foreign policy review initiated in #9>;% the /overnment)s Foreign Polic for 5anadians was published in #95"& $t noted the trade and investment opportunities in the Third World% pinpointed some of the hard choices to be faced in (see,ing social justice for developing nations)% and recogni-ed that the (progress of the developing countries can be affected through every aspect of their relationship with the more1developed countries)& 5 This foreign policy review e*plicitly anticipated the eventual pressure for structural changes in the world economy without% however% presenting any accompanying indications of a positive Canadian response to this pressure& The review also ratified the compartmentali-ation of the (non1aid) relationships affecting developing counties outside any integrated developed assistance approach& or e*ample% the discussion of international development policy tacitly dismissed these other issues% such as trade investment and monetary relations% as those (whose primary consideration lie outside the Canadian development assistance program)&; $n the course of the #95"s the basic Canadian approach to the Third World continued to e*hibit similar characteristics& The rhetorical response from Canadian officials to the D$32 demands formulated at the 7i*th 7pecial 7ession of the BD /eneral Assembly has often been elo0uent and supportive& An e*cerpt from Prime 'inister Trudeau)s speech at the 'ansion House in Aondon in 'arch #95< perhaps best e*emplifies thisC The demands of developing countries have been carefully formulated and powerfully articulated& They reflect a sense of frustration and anger& Those countries see, no piecemeal adjustments but a comprehensive restructuring of all the components + fiscal% monetary% trade% transport and investment& The response of the industriali-ed countries can be no less well1prepared and no less comprehensive in scope& But we should be very wrong% and doing ourselves and our children a great disservice% if we regarded this process as an adversary one& We should be foolish as well% for solutions are not beyond our reach&9 With ,ind of declaration% 'r Trudeau gave recognition to a profound long1term mutuality of interests% long before the theme of (interdependence) became common international parlance& 3ven in its own principal foreign policy guidelines% however% his government continued to find it impossible to translate such wide vision into an integrated approach to Dorth17outh relations& The gap between rhetoric and policy% let alone practice% was strongly evident in the government)s five1year strategy "trateg for International De!elopment 5ooperation released in #95<&#" While the document)s first section% (Analysis)% loo,ed towards (new relationships) with the Third World and the role of (non1aid policies in development)% the operative section of (policies) was directed almost e*clusively to aid issues& As will become apparent below% subse0uent measures have also fallen far short of achieving the (comprehensive and organic approach to development) promised in the "trateg & Consistent with this continuing (aid1fi*ation) in Canadian policy% it is only in the area

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of development assistance that Canada)s record in Dorth17outh relations has been notably forthcoming&## At least until the later years of the #95"s% the government was ma,ing steady efforts to move towards the international aid1volume target of "&5 per cent of /DP and was firmly committed to putting priority on aid to the poorest countries& 3ven in the assistance field% however% Canada has remained particularly unresponsive to the need for (untying) aid procurement% resisting even the limited proposals to open up aid contracts for developing1country1bidding& 2ne Canadian initiative% however% which went beyond conventional aid measures on one important frond% and placed Canada among the most responsive donors% was the #955 decision to write off aid1related debts owed to the C$.A by some of the poorest debtor1countries& However% in relation to providing access to the Canadian mar,et for manufactured and processed goods from the Third World% the Canadian record is far from one of leadership& While Canada protects the (traditional mar,et share) of suppliers such as the Bnited 7tates% Third World imports have been heavily restricted% in spite of obligations under the /ATT and the 'ulti1 ibre Arrangement& Canada was% li,e the Bnited 7tates% tardy in its introduction of the /enerali-ed 7ystem of Preferences and failed to give any evident priority to Third World interests in 'ultilateral Trade Degotiations& $n the area of commodity trade% it is even more difficult to e*plain% the ways in which Canadian interests appear to have been defined and pursued& While there was early and lively interest% at the highest levels of the Canadian government% in the $ntegrated Program for Commodities and the Common und% Canadian negotiators have sometimes been among the (hardest1line) 23C. bargainers on these issues& Canadian resistance here has consistently been e*plained in the root opposition to interventionism and to cartels and producer1only agreements in international commodity mar,ets& Xet there was apparently official encouragement for Canadian participation in a uranium cartel in recent years% and some legislators appeared receptive at one point to going beyond present consultative arrangements to the possibility of establishing a wheat producers) cartel& To provide a basis for assessing Canada)s interests in Third World development in the #9;"s and beyond% it is important to try to understand the domestic bac,ground to this past performance and then to analy-e several aspects of Third World1Canada relations in greater depth& KNL 3ven in this brief review of some of Canadian interests involved in Third World relationships reveals a stri,ing range of possibilities& The evidence does not support the most simplistic assertions that Canada may have a generali-ed identity of interests with Third World countries% but it also demands a re1e*amination of the prevalent assumption that Canada (fits) comfortably into another group of nations whose interests lie in resistance to many Third World demands& 3ven more than most 23C. countries% Canada has solid reasons to abandon the view of Dorth17outh dialogue as a (-ero1sum game) to be handled through a strategy of obduracy and frugal philanthropy& (Aid)% indeed% can be seen to be a relatively small part of the total Canadian response to the Third World% but a critical one in its reflection of the seriousness and clarity of Canadian purpose& $t also tests% under adverse economic conditions% the

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capacity to act strategically with decency% rather than merely to capitali-e on every tactical advantage& There is competition% to be sure% between certain Canadian and Third World interests and% interestingly% even some of the competitive elements ma,e Canada 0uite distinctive& $n grouping towards a satisfactory modus !i!endi with the transnational corporation% or in attempting to secure a minimum of order in international commodity mar,ets% Canada)s perspective must be similar to that of some Third World countries% and on some points they will be formidable competitors to be rec,oned with& The competitive potential of developing countries in manufactured trade has begun to have a profound impact in Canada% but the opportunities for e*panded Canadian e*ports to these buoyant mar,ets have not yet been properly recogni-ed& With both imports and e*ports% the new impact of Third World helps e*pose fundamental changes re0uired in the Canadian economy itself + some of them long overdue and stri,ingly consistent with the emerging regional and sectoral opportunities for Canadian industrial strategy& The comple*ity of some of these relationships% however% and the imperfect and cumbersome machinery for identifying and pursuing Canadian national interests% dictates a long process of analysis% debate% bargaining and adjustment within the Canadian community& 2n the strength of the analysis here% there is clear Canadian interest in moving urgently% before the costs of change rise higher and opportunities slip away& There is also still a Canadian state in moving co1operatively% through multilateral action where possible% since the traditional Canadian commitment to collective international response is as firmly rooted as ever in the Canadian interest&

&oods* )gaire -.//70* 1,he Shifting Politics of Foreign Aid*4 in International Affairs* 5ol6 A8* )o6 .* ""6 9;9-<886
.evelopment assistance which prioriti-es the achievement of human development goals is at ris,& A rapid increase in aid has been channelled to meet new security imperatives& But with acute budgetary pressures besetting Japan% rance% /ermany and the Bnited 7tates 4among others6% it is virtually a fiscal certainty that much of the new aid flow 4generated largely to fund the (war on terror)% as defined by the Bnited 7tates6 will dry up& .evelopment agencies% with their more stable budgets% will then be urged to give priority to the development needs of countries at the front line of the (war on terror)& Parado*ically% previously rational efforts to enhance coordination and coherence among donors may now in some instances be counterproductive& The case of the 3B highlights the possibility that while greater 3uropean coordination and coherence could in t#eor direct very significant aid flows towards the shared

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commitments of the 'illennium .evelopment /oals% in practice% current institutional shifts and political pressures suggest that the common 3uropean agenda will instead be driven by foreign policy concerns& This is but one case where% in the name of coherence% a greater diversion of aid flows for geostrategic purposes may ta,e place% and increased coordination would magnify that effect& This is the global security scenario for foreign aid& An alternative scenario is one in which development agencies continue to prioriti-e human development and the achievement of the 'illennium .evelopment /oals% which include human security% leaving to other agencies preoccupations with counterterrorism and W'.& Rather than attempting greater (coordination and coherence) of foreign% aid and security policies in general% this scenario calls for a better differentiation and allocation of goals at the global level& This would re0uire a commitment by donors to use e*isting multilateral institutions rather than perpetuate the erosion of multilateralism evident at present in increasing bilateral aid budgets& $t would also re0uire some protection within donor governments of the development assistance remit% to prevent a return to the Cold War patterns of almost purely geostrategically led aid which so obstructed rather than facilitated human development& The development1led scenario re0uires two further things from donors& irst% they must rationali-e the demands they place on recipient governments& A recent study by major donors details the duplication and gaps left by donors imposing a plethora of different financial audits on recipients& 'ost damning it concludes that although the (World Ban, and $' would continue to ta,e the lead in conducting most assessments of public e*penditure management)% all other parties should have access to information and (the views of governments 4and other local sta,eholders6) should be ta,en into account& M# That finding highlights the e*tent to which donor efforts have increased auditing of their own loans% but failed to build capacity and accountability in public finances within recipient countries& The wider aid picture reveals a multiplicity of donors not only failing to strengthen governmental processes within countries% but probably even hindering their development& Amid a growing cacophony of donors% very little space is left for local agencies to build% coordinate among themselves and strengthen local governance& 7carce resources are used up strengthening and maintaining e*ternal relations with donors and underta,ing e*ternally demanded actions% some of which are contradictory& The problem is li,ely to increase as the number of goals and institutions involved in development assistance increases& At the very least what is needed here is a very focused form of coordination among groups of donorsYsuch as shared% streamlined reporting re0uirementsYso as to lessen diversion of local resources to managing donors& A second area where better coordination within the development assistance community is sorely needed concerns the timescale and predictability of aid flows& .onors need to join together in providing a long1term financial compact between themselves and recipients& Iolatile or unpredictable aid flows do little to bolster good governance% coherent government e*penditure planning% or the development of sound institutions of accountability in recipient countries& Xet aid is proving to be even more volatile than fiscal revenues in most developing countries% M! in spite of the evidence that shortfalls in aid produce poor policies& MH The new security1driven aid flows are already proving to be volatile and short1term& But in other sectors as

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well where new resources are being promisedYsuch as the global fight against H$IGA$.7Ythere is little guarantee that new flows will be sustained in the long term% or that the multiplicity of donor institutions which are supposed to disburse the assistance will not change priorities& What is needed is specific donor coordination with a view to committing long1term% predictable flows of resources& inally% a development1led foreign aid system ,ept separate from global security concerns needs to be part of an overarching mechanism which holds international agencies and governments to account for a range of shared international goals% including the downstream effects of security on development goals and vice versa& 7uch a mechanism might be led by the /;% or by a wider grouping such as the Aeaders1!" group favoured by Canada)s prime minister& $t will become all the more crucial as the international development architecture begins to straddle a greater mi*ture of security and development goals& The international development community has not yet been swept up into the war on terror% but it stands on the threshold& The international development architecture is already being transformed& .onor governments must act 0uic,ly to ensure that their development aid mission to deliver effective aid and to meet specific human development goalsYeven as they pursue other goalsYstays at the forefront of the emerging aid regime&

&oods* )gaire -.//A0* 1&hose Aid3 &hose Influence3 %hina* +merging Donors and the Silent !e$olution in De$elo"ment Assistance*4 in International Affairs* 5ol6 A<* )o6 :* ""6 8./7-8..86
A silent revolution is ta,ing place in the development assistance regime& This article has argued that the development assistance offered by established donors has become less generous and less attractive 4on its own terms6% while emerging donors) aid has become more generous and more attractive& 7ince the #9;"s most established donor aid has failed to address developing countries) demand for aid and investment which e*pands the productive parts of poor countries) economies& Recent trends seem only to have increased donor deafness to this call& urthermore% where changes in conditionality have been promised% donors seem to

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have been unable to confer promised degrees of (ownership) on aid1receiving countries& By contrast% emerging donors robustly defend sovereignty and non1intrusion in the politics of recipients of their aidYalthough in several cases there is a geopolitical conditionality that accompanies their assistance% such as re0uiring support for an emerging donor)s foreign policy& The emerging donors offer aid amid trade and investment and against a bac,ground of flourishing growth within their own economies& Alongside their aid they offer technology% advice and professional assistance that many aid1receiving countries find more useful and more appropriate to their needs than that offered by established donors& $t is no surprise% then% that emerging donors are stepping into relations with the (development partners) of established donors& This is a silent revolution because emerging donors are not overtly attempting to overturn rules or replace them& Rather% by 0uietly offering alternatives to aid1 receiving countries% they are introducing competitive pressures into the e*isting system& They are wea,ening the bargaining position of western donors in respect of aid1receiving countriesYwith a mi*ture of implications& 2n the one hand% the competition e*poses standards that are either out of date or ineffectual& $t also highlights the e*tent to which some donor (standards) are more about aspirations than reality& While .AC donors have agreed to meet standards to facilitate coordination among themselves% they have said much more than they have done& 2n untying aid 4from the re0uirement that it must be spent in the donor)s own economy6% as the head of the .AC notes% not all .AC donors have made re0uisite progress% while some non1.AC donors 4such as 'iddle 3astern funds6 already meet the benchmar,s&>5 Better standards of donorship are important but still very much in their infancy& The silent revolution is unli,ely to be manageable from within the e*isting multilateral development assistance regime& While some hold up increased donor coordination as part of a solution% this seems unli,ely& 3stablished donors are finding coordination among themselves very challenging& 'ultilateralism in the international development assistance regime is wea,ening: and there are very few incentives in the e*isting governance structure of multilateralism to give emerging donors an incentive to engage&

&right* ?ose"h and &inters* #attheC -./8/0* 1,he Politics of +ffecti$e Foreign Aid*4 in Annual Review of Political Sceince* 5ol6 89* ""6 :8-A/6
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7ince Burnside @ .ollar 4!"""6 opened the aidGgrowth floodgate a decade ago% we have seen a profusion of cross1country regression analysis trying to determine what effect% if any% foreign aid has on economic growth& $n this vast literature% scholars have changed model specifications% first1stage instruments% treatments of outliers% lag structures% definitions of aid% interaction terms% and more in attempts to find a robust lin, between aid and growth& $n this article% we have emphasi-ed that% for all that has been done already% much wor,s remains% especially in e*plicitly recogni-ing how politics enters into the aidGgrowth relationship& irst% we pointed out that international politics affects aid allocation as well as the credibility of aid conditions& $n loo,ing for a relationship between aid and growth% we need to be attentive to whether or not international politics constrains how aid money can be used and whether or not a recipient government thin,s future aid money will be forthcoming& 7econd% we discussed the ways in which governments might use an influ* of revenue% depending on the political institutions that e*ist& rom studying the politics of redistribution and the politics of rent1see,ing% political scientists have a comparative advantage in analy-ing the causal pathways through which aid might lead 4or not6 to capital investment% economic reform% and ultimately economic growth& We have stressed throughout this article that many studies in the aidGgrowth literature have come up short in specifying e*actly how aid could lead to growth& uture research must pay more attention to what happens to the money once it enters a country)s national budget& This becomes more pressing if aid agencies do not even ,now where their aid money goes% much less how it is spent 4Ravishan,ar et al& !""96& 7ome scholars have thought a lot about how aid affects the governing institutions and politics of recipient countries& This wor, is and will continue to be a crucial part of studying aid and growth& oreign aid is not only e*ogenously affected by political institutions but alsoYparticularly in countries with a si-eable aid1to1/.P ratioY endogenously determines the form of those institutions&

Mounas* ?a$ed -.//A0* 1#oti$ation for Bilateral Aid Allocation: Altruism or ,rade Benefits*4 in European Journal of Political Economy* 5ol6 .<* )o6 9* ""6 ::8=:><* +lse$ier6
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This paper argues that bilateral aid from developed 23C. countries is disproportionately allocated to recipient nations who have a greater tendency to import goods in which donor nations have a comparative advantage in production& We first develop a theoretical model to derive simultaneous optimi-ation decisions of donors& To verify the predictions in the theoretical model% we empirically estimate the determinants of aid allocation by simultaneously controlling for altruistic and self1interest motives of donors& This approach aims to correct the ad #oc econometric treatment and to appropriately assess the determinants of aid allocation& The empirical results largely confirm the theoretical predictions in our model& The estimations indicate that a substantially larger amount of bilateral aid per capita is provided to the recipients who import capital goods% while imports by other individual category groups have no significant effects& /iven that developed donor nations are major producers and e*porters of capital goods% this result at least partially supports their trade benefits motive& 2n the other hand% aid may also be given as a reward to the recipient nations for promoting imports of capital goods and removing trade restrictions& The recipient nations also gain because greater imports of machinery and transportation e0uipment help increasing their production 4and subse0uently consumption6% and in turn% they receive more aid& 2n the flip side% poor countries lac,ing resources% both private and public% to import capital goods get penali-ed in two waysC irst% their production capacity remains low without importing those goods and% second% they receive a lower amount of aid& 2ur findings also suggest that donors are more concerned about alleviating physical miseries 4infant mortality6 and rewarding good human rights conditions% but they are less focused on reducing economic hardships 4low income per capita6& This implies that residents of the recipient nations with bad human rights conditions endure sufferings both at the hands of their rulers who deny them basic freedoms% and also by donors who curtail aid& 2ur study also indicates that economic and political self1interests of donor countries dominate their stated objectives for reducing poverty and promoting development through aid in developing countries& This also provides some insight into the fact that why the majority of the authors seem to agree that aid has no significant effect on growth& This study does not delve into the political economy aspects of trade and aid allocation% however% this can be an interesting area for future research&

Nahariadis* )iBolaos* ,ra$is* !icB and &ard* ?ames B6 -.///0* 1(6S6 Food Aid to SubSaharan Africa: Politics or Philanthro"y34 in Social
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Science Quarterly* 5ol6A8* )o6.* ""6::9=>:* Austin: (ni$ersity of ,eKas Press6

We have e*amined the impact of two motives% politics and philanthropy% on two food aid programs in 7ub17aharan Africa% e*pecting differences to be pronounced as each serves different objectives& We have found this to be the case& ood under Title $ KPA M;"% Title # focus is &conomic )ssistance and Food "ecurit L is more subject to political or philanthropic motives than under Title $$ KPA M;"% Title ! focus is &mergenc and Pri!ate )ssistance Programs L& ood power and recipient need are most influential in determining whether% rather than how much% a state will receive in food aid& 'oreover% different administrations treat Title $ aid differently& 2ur findings lend partial support to but also refine both the food power and basic human needs perspectives& Three points are of particular significance& The first is that allocation decisions differ by program& Both perspectives tend to ma,e sweeping generali-ations about food aid% but our analysis reveals a more complicated picture& What ma,es allocations more sensitive either to food power or to recipient need is the ability of the B&7& government to e*ert direct influence on the recipient& Title $ disbursements% which consist of mostly direct government1to1 government aid% are more sensitive to political manipulation& Title $$ aid% on the other hand% which consists primarily of food given to and distributed by private organi-ations% was supposed to put food aid above politics& 2ur findings confirm it has succeeded& .emocracy plays a role in Title $$ disbursements& 'aintaining a democratic polity brings positive rewards in the form of higher levels of emergency relief because private organi-ations are able to function more efficiently and effectively in more politically open environments& The point remains that the study of food aid should be nuanced& The second point is that predictions by either perspective must be 0ualified by reference to time period and administration& ood aid allocations can be e*plained on the basis of both perspectives but not e0ually well in the short term& 2ur analysis of Title $ disbursements found variation between administrations% illustrating the point that presidents respond to different stimuli depending partly on their ideological predilection and partly on conte*tual factors% such as the occurrence of famines& $n the long term% however% assistance under Title $ appears amenable to both e*planations& The third point refers to the spheres of influence effect& B&7& policy ma,ers e*pect patrons with colonial lin,s to 7ub17aharan African countries to be large food aid donors& As a result% Washington ties its contributions to that of other countries& 7uch a finding in Title $$ but not Title $ aid is significant& Although B&7& policy ma,ers do respond to African disasters consistently% they loosely divide the continent into spheres of influence depending on the manipulability of the program& Washington uses food aid effectively by funding programs susceptible to donor interests% irrespective of what others are doing& $n contrast% the level of American

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humanitarian response is tempered not only by the si-e of the disaster and the intensity of need% but also by colonial ties and the level of aid offered by others& Concerning the policy implications of our study% it is unfair to accuse aid of not achieving objectives it is not disbursed to achieve& Current Republican hostility to aid stems from the charge that it does not promote B&7& interests& 7uch assertions are based on the assumption that food aid is allocated primarily with this objective in mind& We tested for this and found it to be partially untrue% and in the case of Title $$ aid% inaccurate& ood aid may not promote B&7& interests because it is not always allocated to do so& What matters is not the program itself but the willingness of politicians to use it to such ends& Regan)s early years in office illustrate this willingness and contrast nicely with Carter)s unwillingness& 2ur focus on Africa illustrates most vividly the apparent parado* of food aid& The decision to disburse Title $ aid in response to B&7& interests and recipients needs in a continent where need is greatest would lead one to suspect that food aid has come of age as a program that balances both political and philanthropic motives& Xet% with the waning of the Cold War% the ability to use food aid as a foreign policy tool seems to have ceased& rom #99M to #99;% Title $$ aid allocations remained constant while Title $$$ allocations fell from T!H" million to TH" million& or Title $$ aid% this is an indication that food aid has been placed above politics& or Title $$ aid% which is the successor to Title $ in terms of government1to1government aid% the recent cuts show that there will be little opportunity to use it to pursue political goals& The factor that propelled food aid to success has also brought its failure because it undermined the rationale for continued heavy B&7& involvement abroad& $t is precisely the inability of critics to formulate concrete interests around the globe in the post1Cold War era that has seriously wea,ened the rationale to pursue such interests through food shipments& 7imilarly% advocates of need have been unable to convince an introverted and ta*1leery American public that meeting recipient needs abroad is a humanitarian goal worthy of a few pennies from their ta* dollars& 7o% parado*ically% in these times of budget cuts% the programs to be saved are not the ones that fulfill their mandates most successfully but those that can simply justify their e*istence&

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African Forum and )etCorB on Debt and De$elo"ment -AF!ODAD0 -.//A0* #a""ing %hinese De$elo"ment Assistance in Africa: A Synthesis Analysis of Angola* #ozambiIue* Nambia and NimbabCe - D!AF,* arare: AF!ODAD6 ,pportunities and 5#allenges or some of the studied countries% foreign debt portfolio is improving& The significant improvement in the ratio of Angola)s e*ternal debt stoc, is e*plained in part by high oil prices and China)s ever increasing consumption& China and \ambia signed a protocol on remitting partial debt in !""# with the aim of supporting \ambia)s efforts in developing its national economy and reducing the debt burden& However% a substantial amount of Chinese loans to \ambia still re0uire reconciliation& 2bservers suggest that China has encroached the traditional domain of influence and control of the African economies by $ $s through their less stringent lending terms& The traditional control of domestic policy and affairs of the debtor nations is undermined by fle*ible Chinese loaning terms& This is both a challenge and an opportunity& 2n the one hand it ma,es Chinese aid more attractive and beneficial in the short term to the huge infrastructural needs of the continent% even creating a renewed interest in African mar,ets but on the other hand can threaten the sustainability of these developments within regimes that repress fundamental freedoms and human rights& Chinese capital in the continent% especially the financial assistance% is an important opportunity for topping up resources and financing poverty reduction strategies% especially infrastructure projects& The 3*port Credit arrangement under the mutual benefit approach ostensibly allows recipient countries to e*ploit untapped resources thereby accelerating growth& To benefit from opportunities pushed by Chinese capital emergence% countries re0uire clear programmatic visions and strategy for Chinese financing& Dew standards pertaining to labour and employment conditions% ta* regulations% environmental standards% and e*port standards are re0uired& These would also re0uire increased collaboration between inter1governmental agencies 4i&e& finance% planning% standards% procurement6 to reduce incidences of corruption and improve implementation modalities&

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Another challenge relates to the need for more analysis% information disclosure and transparency on Chinese development assistance and its impact on the African continent& But also African governments have the opportunity to underta,e further research around China)s engagement with their respective economies and regions so that they can ma*imise their benefits& 'ore information should be shared amongst the governments on their relations with China to facilitate beneficial relations& This framewor, can be driven by a continental interlocutor such as the D3PA. secretariat& $f well implemented% this would result in greater development impact from China)s involvement in African economies& This can also be a recommendation& 5onclusions and (ecommendations Chinese involvement in Africa seems to be of major benefit to the continent& 2n a positive note% it appears to have led to huge investments with some good impacts& China is assisting African countries to rebuild their infrastructure and provide support to sectors li,e agriculture% water% health and education& $ncreased e*ports of raw materials to China have also earned them much needed foreign e*change revenue& However% the Chinese windfall has ignored necessary reforms in administrative and governance systems of African countries that would enhance policy ma,ing autonomy and better oversight over development assistance& Although important distinctions e*ist in Chinese model of foreign investment and infrastructure loans lauded as a model of development that ta,es seriously developing state aspirations ignored by the West% African countries have failed to e*ploit this apparent alternative& China is perceived as different in that it provides some investments of direct benefit beyond elite circles 4such as access to a broad range of cheaper consumer goods6: does not insist that Africa)s political economy steer a re0uired course: and contributes to Africa)s talent pool rather draining it& China)s assistance to Africa is lin,ed to commodity production: mostly raw materials and minerals li,e oil and diamonds& The concessional loans also provide opportunities to Chinese companies and immigrant labor& The Chinese have also entered high value1added sectors li,e telecommunications 4networ,s% e0uipments and e*ploration6% and also capital e0uipment for the electricity sector and for hospitals& $n return for those commodities% China shares its ,nowledge in the areas of infrastructure% construction% and public wor,s& The political and diplomatic relations between Africa and the People)s Republic of China date bac, to the days of the liberation struggles in the continent& This history ma,es the People)s Republic of China a natural alternative in the face of conditionality laden development financing by Western Countries& China boasts that its relationship with Africa is based on a win1win formula% gained on an e0ual partnership and reinforced with its historical solidarity with the continent in the common struggle against colonialism& $n return% Africa)s trade with China has increased tremendously although the balance of trade still favours China& There remain reasonable doubts that Chinese aid offers meaningful% widespread and long term benefits to ordinary citi-ens of recipient countries& African trading partners with China must still ma,e the necessary institutional and governance

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reforms to transform Chinese investments into ma*imum benefits for their countries& $n actual sense% China)s trade benefits in Africa do not give it the incentive to go against the liberal international order% especially the overall system dense with multilateral rules and institutions& According to $,enberry 4!"";6% not only is China on its way to becoming a formidable global power% it is also aware that integrating into the globalised capitalist system: WT2 and other multilateral economic institutions% is healthy for its prosperity& As such% it also wants the protections that the system)s rules and institutions provide 4$bidC H!6 This view dilutes the fears e*pressed by many scholars whose main 0uestion about Chinese ties to Africa is whether it is meant to overthrow the e*isting western dominated world order& $n other words% if the rise of China is e0uivalent to a declining hegemony to the western order% represented by Bnited 7tates and other multilateral economic institutions li,e the World Ban, and $' that have been very active in African economies& This is hopeless and short1sighted& Although China has been using its growing influence to reshape certain rules and institutions that run African governments% the ascendance of 7ino1African relations% if managed properly% should assist in the development of the countries involved without any hostile opposition to the relative balance in global power system& China)s engagement of the continent can be leveraged positively to offer significant development opportunities for the uplifting of African economies& However the African countries need a coherent understanding of the main determinants of China)s strategies& China)s investment in the countries in this study ta,es care of China)s foreign commercial policy projection& African countries should therefore ma,e necessary policy responses and regulatory framewor,s comparable to the People)s Republic of China foreign commercial policies in these states& These should be ,ey to enabling environment in terms of local private sector growth and s,ills and technology transfer that will contribute to long term benefit for those countries& This will ma*imi-e and reinforce more broad based benefits for engagement& Chinese rise should find room for more African countries at the table of ,ey global economic and political institutions% bringing emerging countries into the governance of the international order& 3ven if it is not the four countries discussed in this study% \imbabwe% Angola% \ambia and 'o-ambi0ue% African countries such as 7outh Africa and Digeria can together play substantive roles in these international institutions than is presently the case& Aess formal bodies% including the /1!" can provide alternative avenues for this representation& $n conclusion% China has offered a number of African countries an alternative from the Paris Club& However% it is not obvious that China recogni-es that her medium term interest may not be in the best interests of African countries in terms of stability and sustainability& Devertheless% it is also imperative that these countries maintain strategies for other sources of development financing even as they secure new aid from China& But the strength of China)s position with respect to many of its African partners + even those that can b considered as pariah states + is a reality and an opportunity& $t can still balance its defensive insistence on solidarity with these countries with greater role as a bro,er between them and the international community for sustained international understanding and development&

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Alden* %hris -.//70* 1%hina in Africa*4 in Survival* 5ol6 <>* )o6 9* ""6 8<>8:<6 At a time when the world seems preoccupied by events in the 'iddle 3ast and the (global war on terror)% China)s growing engagement with Africa has gone little noticed in the West& Xet in a span of less than a decade trade between the two regions has increased from B7T#" billion in !""" to B7T!;bn in !""<& China has e*pended significant resources in foreign assistance towards African states% has started negotiations towards a regional economic free trade area with the 7outhern African Customs Bnion% and has embar,ed on an unprecedented peace,eeping mission in Aiberia& These activities are all bolstered by a steady stream of high1 profile diplomatic and commercial missions& or most analysts% the drive to secure energy resources is behind Beijing)s renewed engagement with Africa&# This certainly captures an important dimension of Chinese interests in the continent% but it would be a mista,e to ascribe a single motive to the relationship& Conversely% the impetus for Africa)s embrace of China has not been ade0uately e*amined& 5#ina;s Interests in )frica .uring then1President Jiang \emin)s tour of Africa in 'ay #99>% he presented a ( ive Points Proposal) establishing the terms of a new relationship with Africa% centring around a reliable friendship% sovereign e0uality% non1intervention% mutually beneficial development and international cooperation& Jiang)s position was a deliberate contrast to the period between #9>H and #95>% when ideological considerations shaped China)s Africa policy& There was now a shift towards (diversity of form and mutual benefit) accompanying the economic reforms of the post1'ao era6! The one continuity% to be sure% is Beijing)s insistence on a (one China) recognition policy% which has led a number of African states to cut off diplomatic relations with Taiwan6H our factors in particular shape Beijing)s contemporary approach to the African continentC China)s drive for resource security% new mar,ets and investment opportunities% symbolic diplomacy and development cooperation% and forging strategic partnerships& KNL )frica;s Interests in 5#ina Africa)s interests in China complement much of the agenda being promoted by Beijing& /overning and business elites within Africa see new opportunities in ChinaC trade and investment opportunities% ways to bolster regime stability% and strategically significant partnerships& The steady deterioration in foreign direct investment 4 .$6 in Africa% especially when compared to Asia% is widely perceived to be a major factor in Africa)s persistent low level of development&H" With a dramatic fall in foreign assistance after the end of the Cold War% the introduction of Chinese .$ is welcome& There is genuine enthusiasm on the part of African governments for providing the re0uisite licensing for Chinese entrepreneurs investing in their countries and the opening of new businesses in heretofore neglected areas& H# KNL

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Asche* elmut and SchWller* #argot -.//A0* *hina2s En!a!ement in Africa ( 3pportunities and Ris)s for &evelopment * +schborn: Deutsche 2esellschaft fWr ,echnische Nusammernarbeit -2,N0 2mb 6 Description of t#e "ituation The People)s Republic of China)s 4PRC6 interest in obtaining su""lies of energy and raC materials is the driving force behind China)s rapid economic e*pansion on the African continent which is accompanied by a wholes series of political initiatives& The e*ponential growth in foreign trade% direct investment and development cooperation 4.C6 between China and Africa since the end of the #99"s has shoc,ed the Western public& Although the bloc, of Western industrialised countries as a whole will remain Africa)s most important trading "artners in the medium term and will retain a ,ey position as foreign investors% China is gaining ground 0uic,ly and is thus increasing the intensity of global competition% including in Africa& 7ince #99; foreign trade between the African countries and China has grown tenfold% reaching an all1time high of T<< billion in !"">& Realistic forecasts assume that foreign trade will continue to grow% to about T#"" billion by !"#"& Almost three10uarters of all of China)s imports from the region are accounted for by crude oil& $n mid1!"">% China obtained one third of its oil imports from Africa& China has built very close economic ties with virtually all significant oil1producing countries in Africa& A number of them still have large untapped reserves% even though Chinese companies are rarely granted access to the best oil fields& %hina@s oil di"lomacy has been highly successful in terms of diversifying its supplier countries% but its tolerance of human rights violations and poor governance in these countries has increasingly attracted criticism from Western industrialised countries& Direct in$estment by Chinese state1owned energy and commodity corporations as well as private enterprises in the manufacturing industry% the construction sector and the services sector has risen rapidly over recent years& /overnment support programmes with low1cost loans reduce mar,et development costs for Chinese companies% thus distorting the mar,et& 7tate ban,s% currently the 3*port1$mport Ban, of China 43V$'6 but in future also the China .evelopment Ban, 4C.B6% play a ,ey role in the e*pansion of enterprises and financing development cooperation& There are fears that project financing by Western development ban,s and private commercial ban,s could be crowded out& %hinese de$elo"ment coo"eration has increased mar,edly in terms of both volume and the number of countries supported since the Tiananmen incident& The Chinese state1owned 3V$' Ban, in particular offers interesting alternatives to $nternational inancial $nstitutions 4$ $6 and bilateral Western loans& Because of limited transparency% however% the 0uantity and 0uality of cooperation cannot be compared on an international basis and are difficult to determine conclusively& $n !"">% the Chinese government announced ambitious targets for e*panding .C with a doubling of financial inputs and an increase in low1interest loans through the ban,s& The priority areas for .C are infrastructure% health care% agriculture and the

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education sector& China)s advance in Africa follows a characteristic basic pattern 4see bo*6& Four "illars = four characteristics The four pillars on which the upsurge in Chinese1African relations rests are the intensification of a6 trade% b6 investment% c6 development cooperation% and d6 immigration& $n combination% these e*hibit the following four characteristicsC #& A distinct underlying sectoral pattern with 4a6 the focus on securing resources 4oil% mining% timber% agricultural commodities6 plus 4b6 a large variety of economic interests in almost all African industries and countries& !& 7eamless complementarity of trade% direct investment% .C tied to supplies from China% and immigration or the deployment of migrant wor,ers& H& Coordinated effort by Chinese state1owned corporations as trailbla-ers for private enterprises& M& Huge deployment of state financial promotion instruments with fluid boundaries between preferential and commercial loans& $t is this broad sectoral approach and the systematic economic lin,ages that give the Chinese economic offensive its strength& The im"act on groCth and "o$erty of the various factors of the China boom is ambiguous and difficult to analyse: on the whole it is presumably positive for Africa% but there are major regional and sectoral differences& Chinese engagement in Africa)s teKtile and clothing sector has a double1edged effect& Whereas Chinese e*ports to African countries have greatly increased% despite the dismantling of trade barriers these countries have not been able to consolidate their position in global value creation in this sector on a sustainable footing& The te*tile sector% leather goods and footwear manufacture and other consumer goods industries in Africa are acutely threatened by both preference erosion in the 3BGB7A and Chinese imports to Africa& 3ven Chinese companies in Africa are suffering economically& This presents challenges for the trade and structural "olicies of African governments and their partners in industrialised countries& Degative impacts of the Chinese presence are also discernible in the construction sector& Admittedly% Chinese enterprises have contributed to swift improvements in infrastructure and hence to economic growth in Africa% generally acting in the conte*t of projects negotiated at an intergovernmental level& There is a ris,% however% of domestic construction companies being crowded out% and there are si-able shortfalls in the transfer of ,now1how and employment of local wor,ers& China is criticised internationally for wide1ranging violations of anti1corruption% environmental% labour and social standards in Africa& $n particular well1 documented illegal logging by Chinese companies in various countries has predictably critical implications for tropical forests in Africa and hence also for global climate change& This overe*ploitation of African forests is probably by far the most serious harmful effect on the environment arising from the involvement of

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Chinese companies in Africa& $n general% however% Chinese violations of Corporate 7ocial Responsibility 4C7R6 standards are not comprehensively documented& This ma,es the promotion of transparency in oil and mining revenues% particularly in the conte*t of the +Ktracti$e Industries ,rans"arency Initiati$e 43$T$6% all the more significant: China)s limited willingness to enter into cooperation within the framewor, of the 3$T$ must be utilised& 7upporting African governments in their management of the effects of .utch .isease is e0ually important& China is willing to become more closely integrated into the )+PAD "rocess& $f this is successful% however% it is hardly li,ely to occur without a shift of emphasis in the D3PA. agenda + upgrading infrastructure problems and downgrading governance issues& China is criticised for undermining improvements of governance through its involvement in Angola* Sudan and NimbabCe& The criticism is basically justified% but it must not be used to conceal crucial wea,nesses in Western policy vis1c1vis Angola% \imbabwe and other African countries& China)s unconditional loans and development assistance are mostly welcomed in Africa as they are often regarded as a 1second liberation4 from Western dictates& The 2rganisation for 3conomic Cooperation and .evelopment 423C.6 member countries are thus faced with the challenge of both improving the presentation of their Africa policy and further enhancing its content and forms& /rowing contradictions in the public perception of China in Africa offer an opportunity for rational% unprejudiced dialogue& aced with the choice between a confrontational strategy and a more dialogue1 oriented approach% the study argues clearly in favour of a critical% yet constructi$e integration of China into various processes and structures of a common Africa policy& Among the potential "latforms for constructive e*change% possible forums within the trilateral 3B1China1Africa dialogue are ran,ed particularly high& The ederal Republic of /ermany can be assigned the role of intermediary in ,ey areas on account of its relative lac, of political and economic self1interest in Africa& (ecommendations for )ction $n bilateral and multilateral cooperation with China% interfaces emerge in relation to China)s Africa policy% for which a series of recommendations for action are presented at general* multilateral and bilateral le$els 4see 7ection M6& The main areas of focus are directed at the fields of trade policy% industrial policy and development cooperation& Their common denominator isC #& /reater efforts to build the capacities of African partners to master the EChinese challengeF& !& Patient endeavours to integrate the coordination and consultation processes& Chinese partners into joint

H& 7ystematic elimination of political shortcomings that place the West in a difficult position in the trilateral debate with China and Africa% above all in the field of trade and agricultural policy and in dealing with regimes in Africa suffering from poor governance& M& $mprovement of basic information sources&

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Asche* elmut -.//A0* 1%ontours of %hina@s 1Africa #ode4 and &ho #ay Benefit*4 in *hina A)tuell* 5ol6 9* ""6 8:7-8A/6 WesternG3uropean policy learning with regard to the multipolar challenge posed by China in Africa is% on average% painfully slow& As a rule of thumb% Western attempts to integrate China into pre1established schemes and fora such as 23C..AC% .7 % Joint Country Assistance 7trategies etc& will hardly be successful in the foreseeable future& At lower levels% many recent studies contain proposals on triangular modes of cooperation% and some of them are actually gaining ground in technical cooperation projects + not the least by a fle*ibility of Chinese authorities that caught some by surprise& This is the good news% in a longer story where it is not yet altogether clear if it brings good news& What else can be said of Chinese development aid in AfricaW 2n average% China)s aid is 0uic,% ine*pensive% and highly visible + three attributes not normally associated with established Western development co1operation& However% speed% low price and visibility may come at the e*pense of other criteriaC 0uality% participation% sustainability% and lasting poverty reduction& $n this sense% comprehensive evaluations of the effectiveness of China)s aid to Africa are rare and do not comprise this decade)s events& Therefore% for both reasons + structure and effect + it once again remains unclear Ewho benefitsF in aggregate terms and how much Western donors have to re1adapt their recently built Enew aid architectureF% which turned out to be a comple* edifice with cumbersome procedures& Also% in terms of tying aid to Chinese deliveries and e*ecution by own contract labourers% China)s aid is rather below 23C. standards% and Western co1operation has little to learn from this& Altogether% a considerable amount of further research is needed to establish more firmly what increased Chinese aid% trade% investment% and migration achieved in Africa% while the overall positive China effect on /.P growth is beyond doubt& Ai,ewise% what is e*ecution of a strategic design and what is left to mar,et forces in China)s EAfrica modeF% remains to be investigated further& 2ur conclusion is therefore a word of caution to Western politicians and some academic criticsC As long as the total socio1economic effect of China in African countries is un,nown% and the e*act degree of control Chinese authorities e*ert over operations in Africa is not ,nown either% observers and politicians should be warned against coming up with short1sighted accusations of the damage China allegedly does to African economies and should rather e*plore all avenues of effective triangular cooperation on the ground&

BrQutigam* Deborah A6 and ,ang* Tiaoyang -.//;0* 1%hina@s +ngagement in African Agriculture: 1DoCn to the %ountryside4*4 in The *hina Quarterly* 5ol6 8;;* ""6 :A:->/:6 Chinese images of their involvement in rural Africa contrast sharply with images increasingly prevalent in the media outside China% both in Africa and around the

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world& 2n the Chinese side% engagement in rural Africa has been presented primarily as the acts of a socialist brother or a capitalist friend 4depending on the era6& The outside world sees much more threat% as symboli-ed by a growing number of news articles and blogs focused on the Eland grabF theme& At the same time% very little research has been done on this issue% and there are as many myths as realities in stories about China)s current engagement in rural Africa& As with oil% Chinese interest in African land Epushes buttonsF for many people% particularly in a region where the alienation of land to outsiders has long been controversial& The Chinese government)s efforts to ma,e diplomacy1based aid more sustainable by incorporating incentives for Chinese businesses may have political ramifications% as some Chinese analysts have already warned& The differences between rural China and rural Africa are vast% and this creates areas for misunderstanding& Bsed to intensive agriculture% some Chinese misinterpret the situation in rural areas of some African countries% where shifting cultivation depends on fallow systems that ma,e it appear as though vast e*panses of land are empty and available& EAand is plenty in this country%F a Chinese technician in 7ierra Aeone told one of the authorsC EDo one uses it]F $n reality% land scarcities were already putting pressure on local fallow systems in 7ierra Aeone long before the civil war& As the 'agbass e*perience shows% land has many ,inds of use and ownership claims% and a straight purchase or lease under a formal legal system is liable to violate many other traditional uses for the land% and traditional rights& /overnments may assure Chinese investors that they can allocate land to them freely% but e*perience shows that without proper safeguards% this ,ind of eminent domain land ta,eover is ris,y for local people% who may easily be left worse off& There are three other areas of sensitivityC competition between Chinese and African growers in African mar,ets% cash crops as competition with subsistence crops% and the li,elihood that large1scale production could push people off their own land% using them as seasonal wor,ers& Competition is already a feature of local African mar,ets& The growing presence of Chinese investors with imported s,ills and technology should yield the benefits of competitionC an e*pansion of local supplies while providing e*amples of imported s,ills and cheaper technologies that can be copied by profit1oriented African farmers& An e*pansion of cash crops can increase the ris,s of disruption in the traditional gender division of labour where% in many areas% women are responsible for food while men grow crops for the mar,et& While these disturbances may be part of the evolution of farming systems in Africa from subsistence to mar,et1orientation% there is little evidence that Chinese e*perts are even aware of these cultural production issues% or that they ta,e any steps to ameliorate their impact&>; The time is not far off when China will run out of farmland to maintain a 9< per cent self1sufficiency in food supply& As Japan% ?orea and other land1scarce Asian countries are already doing% the Chinese will produce greater 0uantities of food abroad& The unhappy e*perience with land alienation in much of Africa 4and Asia and Aatin America can be added to this6 suggests that any efforts by foreigners% including the Chinese% to produce on a large scale are li,ely to continue to be controversial& 7ystems of outgrowing% where farmers maintain control over their own land but have incentives to produce under contract to a central company% could be a middle ground& A Chinese company with an unhappy e*perience trying to produce on a large scale in Aaos has planned to introduce hybrid rice into Tan-ania

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using just such a system of outgrowers& >9 China)s Tian-e tobacco company% a subsidiary of state1owned China Dational Tobacco $mport and 3*port /roup% uses #<" \imbabwean farmers to produce tobacco for shipment to China& Tian-e provides tractors% fertili-er% agro1chemicals and generators to the farmers% and guarantees purchase of their crop&5" 2utgrowers bear more ris, than farm labourers% but also have the potential for more reward& Today the Chinese government uses training opportunities in China to promote understanding of China)s model& $n agriculture% there is a vast gulf between Chinese and African systems& These one1way trainings will do little to close that gulf for Chinese e*perts or investors& Bltimately% the Chinese government could do more to help its companies and individual investors move up the learning curve by sponsoring deeper understanding of Africa)s challenging rural realities + culture% society and history + and not simply e*tolling its potential for profit&

BrQutigam* D6 -.//;0* ,he Dragon@s 2ift: ,he !eal Story of %hina in Africa* OKford: OKford (ni$ersity Press6 5onclusion+ &ngaging 5#ina (pp. C07<C12) $s China a Erogue donor%F as pundit 'oisOs Daum argued in the pages of the %e$ Por2 -imesW $ do not believe so& China)s rise in Africa is a cause for some concern% but it need not evo,e the level of fear and alarm raised by some who have condemned China)s aid and engagement as destabili-ing% bad for governance% and unli,ely to help Africa to end poverty& 'any of the fears about Chinese aid and engagement are misinformed% the alarm out of proportion& irst of all% China)s aid is not huge: the traditional donors give far more aid to Africa& China)s e*port credits are much larger than its aid% but not as large as commonly believed& Their novel approach in Angola% the Congo% and elsewhere applies the system China learned from JapanC using very large credits% at competitive mar,et rates% tied to Chinese machinery% e0uipment% and construction services% with repayment in oil or other resources& This is the essence of the Ewin1winF approach& These credits are by no means ris,1free& .ebt sustainability is an issue% a concern that deepened as the global financial crisis washed over Africa& The credits are tied to Chinese goods and services% reducing choice& Although in Angola at least three Chinese firms bid on each project% it is not clear how transparent bidding will be elsewhere& 7till% this approach provides a new opening for the construction of badly needed infrastructure& Chinese ban,s can act as Eagencies of restraintF for African leaders beset by patronage demands& This is a practical way to address the Enatural resource curseF that plagues so many African countries& The Chinese sayC Eto end poverty% build a road&F The E our 'oderni-ationsF China launched in the #95"s emphasi-ed infrastructure& They built roads% ports% and rural power plants% moderni-ed agriculture% invited in factories& They e*perimented with different approachesC special economic -ones% for e*ample& China)s EBeijing ConsensusF may simply be about embracing e*perimentation 4what wor,sW6 and avoiding easy certainties& The deals they offer Africa are based on similar deals Japan and the West offered China decades ago% and which the post1'ao Chinese

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accepted in the belief that they could also win from an approach that was not about aid% but business& Where the West regularly changes its development advice% programs% and approach in Africa 4integrated rural development in the #95"s% policy reform in the #9;"s% governance in the #99"s% and so on6 China does not claim to ,now what Africa must do to develop& China has argued that it was wrong to impose political and economic conditionality in e*change for aid% and that countries should be free to find their own pathway out of poverty& 'ainstream economists in the West today are also 0uestioning the value of many of the conditions imposed on aid over the past few decades& 3*changing view% rather than lecture% on lessons learned and approaches to aid and cooperation could lead to more useful engagement between China and the West& Concerns about Chinese e*ports crushing African manufacturing are very real& Although Africa still represents only M percent of China)s overall trade% this is M percent of an economic juggernaut& African wa* print fabric industries in Digeria% many based on an import substitution model with outmoded e0uipment and hampered by poor roads and EepilepticF electricity supplies% are rapidly going out of business& Xet some industries in some countries + leather% shoes and plastics% consumer appliances% for e*ample + seem to be competing with Chinese imports& $ndeed% these are the industries now attracting investment from China% even in Digeria& The overseas economic -ones Chinese firms are building in Digeria and elsewhere in Africa are intended to foster Chinese investment in African manufacturing% enabling China)s mature industries to move offshore in groups& Contrary to popular belief% they are creating employment for Africans& There has been almost no attention in the West to the role African countries might play in attracting investment from these Chinese firms& China)s early aid to African industry and agriculture was not sustainable& /etting Chinese companies involved to consolidate the projects helped sustain the benefits in some instances% but not in others& The new Ewin1winF initiatives are only just starting% but we can see that Chinese companies have already served as industrial catalysts for some African firms% just as Japanese and ?orean firms have done so for decades in 7outh and 7outheast Asia& The flying geese model has a long way to go% but it has proven its potential% in the EmiracleF environment of 'auritius% and even in the tough conditions of Digeria& 2n agriculture% $ am less sanguine& African lands may seem empty% but signing over large tracts of land to foreign concessionaries without the informed consent of local communities is a strategy unli,ely to end poverty in Africa% even if it does boost domestic food production& Patented hybrid seeds as the entry point for Chinese seed companies may help more modern farmers% but present ris,s to the subsistence farmers e,ing out a precarious e*istence in rural Africa& Bsing smallholders as voluntary outgrowers% as Chong0ing 7eed Company is doing in Tan-ania% may be a socially and economically sustainable compromise& At the same time% however% outgrower systems shift many of the ris,s of farming directly onto the contract farmers& China)s own rural development strategy focused first on land reform% then incomes for rural farmers% only much% much later opening up to foreign investment in agribusiness& Were more African countries to shift toward the land ine0ualities of 7outh Africa% \imbabwe% or even Bra-il% it would be a tragedy&

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As $ was researching and writing this boo,% China was already changing rapidly% with Chinese leaders moving from old alliances 4'ugabe in \imbabwe6 and stepping into an unaccustomed new role as a mediator in 7udan& Chinese naval patrols were rescuing 3uropean ships in the pirate1infested waters of the coast of 7omalia& Dew domestic pressures for corporate social responsibility and environmental and social protections were growing inside China& Dew laws were put in place for labor rights in China% new guidelines published outlining the environmental and social responsibilities of ban,s and forestry companies overseas& This is a practical move% even if these norms are not yet ta,en to heart& As China)s state1owned companies move to develop global reputations% they are learning that corporate social responsibility will help them avoid e*pensive reputational ris,s& The Chinese are many things in AfricaC touring presidents delivering grand promises for partnerships% provincial companies with very long names% huge global corporations% resource1hungry and profit1motivated& They are factory managers demanding long hours of wor,% tough businesswomen% scrap metal buyers% traders& They offer fran, deals that they e*pect to wor, well for China% but also for AfricaC roads% broadband% land lines% high1tech seeds& They bring aid wor,ersC vocational teachers% agricultural specialists% water engineers% youth volunteers% and others who have come% as so many from the West have done% out of curiosity% a sense of adventure% or a desire to help the por& And they have not just arrived on the scene& 7ome Chinese families came to Africa in the #;!"& 7ino1Africans + 3ugenia Chang% Jean Ping% Jean Ah1Chuen% 'anual Chang% ay ?ing Chung% and others + have served African governments as parliamentarians% finance ministers% and ministers of foreign affairs& Their long history in post1independence Africa gives China legitimacy and credibility among many Africans& Arriving after independence% they never really left& The West simply did not notice the Chinese teams laboring upcountry building small hydropower stations and bridges% repairing irrigation systems% managing state1 owned factories% all usually without the ,ind of billboards other donors favored to advertise their presence& Today% Africa fits into the strategy of Egoing global%F not simply for its natural resources% but for opportunities in trade% construction% industryC business& The Chinese are lin,ing business and aid in innovative ways& Aid subsidi-es Chinese companies to set up agro1technical demonstration stations% or economic cooperation and development centers& The Chinese are e*perimenting% hoping that the profit motive will ma,e these efforts sustainable% releasing the Chinese government from having to return again and again to resuscitate its aid projects& They will continue to change% and grow% and learn from these e*periments% and we would do well to follow this progress and learn from it too& By Western standards% China is secretive about its aid and e*port credits& This lac, of transparency understandably raises suspicion and concern& Beijing could easily address this by using reporting standards adopted long ago by the 23C.& But% on the other hand% private ban,s and corporations in the West have long maintained secrecy about their deals with African leaders& Transparency is good% by the West should lead the way& $t would be unrealistic to e*pect Chinese corporations to be the first to publish their own business contracts& The Bnited 7tates% 3urope and Japan should continue to engage China as a Eresponsible sta,eholderF in Africa% while recogni-ing that the traditional donor

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countries have their own credibility gaps as development partners& Aid pledges made by Western leaders go unfunded by Western parliaments& Promises to untie aid are hedged by simply not counting some areas + technical assistance% for e*ample& As the Center for /lobal .evelopment points out in its annual Commitment to .evelopment inde*% several 23C. countries 4 rance% the B?% the B7% Belgium6 continue to profit from arms sales to undemocratic% militaristic governments& A shared commitment to improve in all these areas would do much to ma,e similar demands of China more credible& China is now a powerful force in Africa% and the Chinese are not going away& Their embrace of the continent is strategic% planned% long1term% and still unfolding& The global economic recession created a pause in this engagement% but the Chinese government still lived up to the pledges they made in Beijing in Dovember !"">C to double aid% to set up agro1technical stations and special economic -ones& Ambitious Chinese companies used that pause to buy assets at bargain prices% as they first began to do in the #99"s& Bltimately% it is up to African governments to shape this encounter in ways that will benefit their people& 'any will not grasp this opportunity% but some will& The West can help by gaining a more realistic picture of China)s engagement% avoiding sensationalism and paranoia% admitting our own shortcomings% and perhaps e*ploring the notion that China)s model of consistent non1intervention may be preferable to a China that regularly intervenes in other countries) domestic affairs% or uses military force to foster political change& At the end of the day% we should remember thisC China)s own e*periments have raised hundreds of millions of Chinese out of poverty% largely without foreign aid& They believe in investment% trade% and technology as levers for development% and they are applying these same tools in their African engagement% not out of altruism but because of what they learned at home& They learned that their own natural resources could be assets for moderni-ation and prosperity& They learned that a central government commitment to capitalist business development could rapidly reduce poverty& They learned that special -ones could attract clusters of mature industries from the West and Japan% providing jobs and technologies& These lessons emphasi-e not aid% but e*periments: not paternalism% but the Ecreative destructionF of competition and the green shoots of new opportunities& This may be the dragon)s ultimate% ambiguous gift&

Broadman* arry 26 -.//>0* Africa2s Sil) Road# *hina and India2s .ew Economic 'rontier* &ashington D%: ,he &orld BanB6 ,!er!ie$ (pp. 1<H0) 5onclusions and Polic Implications 'ar,et opportunities for trade and investment in the world economy will no doubt continue to grow for the countries of 7ub17aharan Africa& However% as the international economy continues to globali-e% mar,et competition from other regionsYespecially those in the 7outhYwill only become stronger& This poses a

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challenge to African policy ma,ers to ma,e better use of international trade and investment as levers for growth& China and $ndia)s rapidly growing commerce with the African continent presents to its people a major opportunity& $n particular% the intense interest by these two Asian economic giants to pursue commercial relations with Africa could lead to greater diversification of Africa)s e*ports away from e*cessive reliance on a few commodities and toward increased production of labor1intensive light manufactured goods and services& $t could also enable Africa to build on the strength of its endowment of natural resources and develop bac,ward and forward lin,ages to e*tract more value from processing% and in some cases participate in modern global production1sharing networ,s& This intense interest could also lead to enhanced efficiency of African businesses through their being more e*posed to foreign competition% advances in technology% and modern labor s,ills: and to greater international integration% not only with other regions of the world% but perhaps most important $it#in Africa itself% where most domestic mar,ets are too shallow and small to allow for the scale needed to produce e*ports that are internationally competitive& To be sure% there are major imbalances in the current commercial relationships that Africa has with China and $ndia& or e*ample% whereas China and $ndia are emerging as increasingly important destination mar,ets for African e*ports% from the perspective of these Asian countries% imports from Africa represent only a very small fraction of their global imports& At the same time% .$ inflows to Africa from China and $ndia% although still small in an absolute sense% are growing rapidly& But both the level and growth rate of African .$ going to China and $ndia remains e*tremely limited& Absent certain policy reforms% the opportunities presented by China and $ndia)s interest in Africa may not be fully reali-ed% while the e*isting imbalances could continue for the foreseeable future& All other things e0ual% ta,en together% these could reduce the li,elihood of a boost in Africa)s prospects for economic growth and prosperity& The reform e*perience in Africa% as well as in other regions of the world% shows that reform success in such an environment re0uires a combination of actions& $n particular% the lessons from these e*periences are that it is not only important to implement sound% mar,et1based% at1the1border trade and investment policies% but also to ta,e actions that deal with the impediments to trade and investment that e*ist behind the border as well as between the borders& $ndeed% these e*periences suggest that% if anything% behind1the1border and between1the1border reforms actually provide for trade to have greater leverage on growth than do at1the1border formal trade and investment policies& 'oreover% the evidence suggests that these reforms should be designed in such a way as to e*ploit the growth1enhancing complementarities between trade and investment& The study of which this ,!er!ie$ is a part discusses such policy implications based on the empirical findings presented& Below% the principal policy implications that deserve priority attention are summari-ed& A Edivision of laborF for the responsibilities of the various sta,eholders with policyma,ing roles in furthering Africa1Asian trade and investment is also suggested&

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$t is important to emphasi-e that% because of the significant heterogeneity among the M5 countries of 7ub17aharan Africa% the enunciated policy reforms should not be interpreted as being Eone1si-e1fits1allF actions& $ndeed% in practice% the reforms must be designed to ta,e into account country1specific circumstances& These circumstances will affect not only the actual contours of actions to be ta,en% but also the speed and se0uencing of their implementation& KNL

5#apter 2+ Performance and Patterns of )frican<)sian trade and In!estment Flo$s (pp. FD<12G) Africa)s trade with China and $ndia has grown rapidly in both directions& This is based on high demand for natural resources by China and $ndia and their industrial advantage in manufactured products against African countries& This reflects complementarities between African countries and China and $ndia based on factor endowment of natural resources in Africa versus s,illed labor in China and $ndia& Africa)s e*ports to China and $ndia have not directly contributed to its e*port diversification in terms of products and trading partners& 3ven though the boom of natural resource e*ports to China and $ndia may provide short1term benefits% African countries need long1term strategies to leverage the current e*port1boom revenue to create opportunities for long1term economic benefits through e*port diversification& Three types of complementarities between Africa and China and $ndia are emergingC 4i6 vertical complementarities along the cotton1te*tile1apparel value chain: 4ii6 e*ports based on endowed natural resources with greater processing wor, 4aluminum% for e*ample6 done locally: and 4iii6 increased intraindustry trade with emerging African industrial hubs such as 7outh Africa and Digeria& These complementarities provide opportunities for African countries to increase and diversify their e*ports by focusing on policies and activities 4i6 to increase participation in global networ, trade% 4ii6 to develop diversified value1added local industries through forward and bac,ward lin,ages to resource1based products% and 4iii6 to enhance subregional economic integration and to ma*imi-e its benefit& $n addition to trading in goods% Africa1China1$ndia economic relations are deepening in service trade and .$& Asian .$ in Africa targets various trading opportunities using Africa as the production base: e*amples include natural resources for overseas mar,ets and construction services for local mar,ets% as well as trade1 facilitation service providers& This implies the e*istence of a strong synergy among trade in goods% trade in services% and .$% which in turn enhances economic relations between Africa and China and $ndia& Through 0uantitatively analy-ing bilateral trade flows between Asian and African countries% the evidence presented strongly suggests that% while formal trade policies matter in promoting Africa)s e*ports to Asia 4as well as elsewhere6% behind1 the1border and between1the1border constraints are every bit as% if not more% critical& This means that% if African countries are to enhance their trade performance in Asia% it will ta,e far more than simply liberali-ing trade policies to reach that objective& $ndeed% the deeper% more comple*% and longer1run challenge is to confront the

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behind1the1border and between1the1border constraints& $mproving trade policies is necessary but not sufficient& KNL

5#apter C+ 5#allenges =)t t#e 1order>+ )frica and )sia;s -rade and In!estment Policies (pp. 12D<1G3) Tariff structures of African countries as well as China and $ndia still have some unfavorable elements that constrain mutual trade& 7ome Asian tariff rates are high for many of African countries) leading e*portsYthose that account for about two1 thirds of total African e*ports to Asia& Product1specific analysis of tariffs on African e*ports to Chinese and $ndian mar,ets suggests that in certain cases tariff escalation in these mar,ets has been discouraging the e*port of higher value1added processed products from Africa& However% China is a relatively liberali-ed mar,et% with -ero or close to -ero tariffs on M< percent of its imports& China also has plans to further lower its tariffs and bring about lower dispersion in the structure of tariffs by the end of !""5& Although African tariff barriers have been lowered significantly recently% Asian products still face relatively high tariff barriers on the African continent& $n fact% some high tariffs on intermediate inputs into African countries constrain African manufacturing e*ports& This bias against e*ports is an obvious target for reform& Dontariff barriers% such as inappropriate use of technical standards in African e*port1destination mar,ets in China and $ndia pose special challenges to African e*ports& At the same time% most countries in Africa lac, the institutional capacity as well as the resources to fully implement or effectively enforce internationally recogni-ed standards& This limits the ability of domestic producers to penetrate certain e*port mar,ets% not only in more developed countries% but also in Asia% especially China and $ndia& While e*port and investment incentives% such as 3*port Processing \ones 43P\s6% to date have been successful in China and $ndia% their potential to stimulate e*ports has not materiali-ed in African countries% with a few e*ceptions& The preceding analysis suggests that the ineffectiveness of these incentives in African countries is due in part to significant implementation and enforcement challenges in the face of generally wea, institutional capacities% as well as the lac, of the re0uisite infrastructure and labor s,ills& 3*port incentives in African countries have also had mi*ed results in creating bac,ward production lin,ages& The proliferation of regional and bilateral trade and investment agreements in recent years on the African continent comprises not only reciprocal agreements among other countries in the 7outh% including those in Asia 4China and $ndia among them6% but also preferential arrangements provided by developed countries in the Dorth to facilitate mar,et access for e*ports from Africa& The si-e of the benefits derived from such preferential treatment diminishes significantly when mar,et barriers for other competitors are lowered& Trade diversion from such regimes challenges their desirability and sustainability& Do bilateral free trade agreements are currently in effect between Asian and African countries% with the e*ception of a few unilateral preferential treatments of limited scale&

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R$As on the African continent are still very much nascent and have yet to significantly foster regional trade& To Chinese and $ndian investors% they are not seen as particularly trade1 or investment1facilitating& 7ome Chinese and $ndian businesses already operating in Africa complain that these agreements) spaghetti1 li,e character actually inhibits rather than promotes international commerce& $n addition to formal international agreements% African1Asian trade and investment flows are also influencedYin varying degreesYby other instruments& $nvestment Promotion Agencies 4$PAs6 and public1private investors councils in African and Asian countries play an important role in facilitating international commerce between the two regions& China and $ndia have also established various other mechanisms in the hopes of stimulating trade and investment with Africa& 2ne of the more recentYand certainly most notableYinitiatives is the January !""> release in Beijing of EChina)s Africa Policy%F a white paper that identifies a large set of economic issues over which China proposes to cooperate with Africa% including trade and investment& KNL

5#apter H+ =1e#ind<t#e<1order> 5onstraints on )frican<)sian -rade and In!estment Flo$s (pp. 1G7<2CH) The basic diagnostics of behind1the1border conditions% based on the WBAAT$ survey data% find that surveyed larger firms outperform surveyed smaller firms both in productivity and e*ports& Among the surveyed firms% e*port propensity is lower for domestically owned firms than for Chinese or $ndian firms& An assessment of the sources of competition in these African mar,ets at the country level suggests that% not only do imports play an important role% but so do low domestic entry and e*it barriers% the incidence of .$ in the mar,et% and access and integration into global production networ,s& Dot surprisingly% firm turnover is found to be more prevalent among smaller businesses% while larger firms enjoy longer tenure and higher mar,et shares& Again% this is true regardless of firm nationality& The data suggest that entry via .$ is an important channel through which competition is introduced into these surveyed African mar,ets% a finding consistent with research on other regions of the world& $nternational integration into production networ,sYthe focus of chapter >Yparticularly upstream in the value chain% appears to stimulate competition among the surveyed firms& The evidence from the degree of competition among different nationalities of firms indicates a clear role played by Chinese and $ndian investors in fostering domestic competition in African mar,ets& $n fact% a mutually reinforcing effect is foundC African firms that face more competitive mar,ets at home have greater involvement with Chinese and $ndian capital% while the African mar,ets where Chinese and $ndian investors are most prevalent tend to be the most competitive& The analysis also shows that the major source of the competition engendered in the African mar,ets by the presence of Chinese and $ndian investors is competition from importsYindeed imports from China and $ndia themselves& Chinese and $ndian investment also provides opportunities for indigenous African firms to form joint ventures or bac,ward1forward lin,ages with such investment& The 0uestion is whether s,ills and technology are effectively transferred from such business relations&

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African countries continue to face high business transactions costs due to poor infrastructure 0uality% inefficient and insufficient factor mar,ets such as shortages in credit access and s,illed labor% labor mar,et rigidity% and heavy regulatory burdens and wea, governance and judiciary systems& As is the case elsewhere in the world% the analysis suggests why such factors constitute integral roles in Chinese and $ndian 4as well as other6 investors) location choices in Africa& To be sure% there have been visible efforts made by several African governments in reforming their domestic business environments& But African countries overall still lag other regions with whom they are competing% both in terms of attracting investment and e*porting to foreign mar,ets& KNL

5#apter F+ =1et$een<t#e<1order> Factors in )frican<)sian -rade and In!estment (pp. 2CF<2GG) This chapter assessed various between1the1border factors that facilitate trade and investment% particularly in the conte*t of Africa)s trade and investment ties with China and $ndia& irst% foreign mar,et information on potential demand and investment opportunities is essential in facilitating trade and investment& /iven the imperfect information flows now in e*istence for trade and investment with African countries% public information services% run by both the government or by private firms% have proven to be very important& While they also may wor, as a barrier to trade 4chapter H6% standards and accreditation schemes may also reduce difficulties in assessing the 0uality of a product by enhancing the availability of reliable% accessible information on aspects considered important by e*porters% importers% and consumers& Also% although they run the danger of restricting domestic competition by segmenting mar,ets 4chapter M6% ethnic networ,s that operate across national borders can help overcome between1the1border barriers by providing efficient circulation of mar,et information within the networ,s that lin, African countries and $ndia and China& Also presented was how flows of technology and people between Africa and Asia facilitate the formation of business lin,s that lead to trade and .$ flows% and how the latter two enhance technology transfers and migration simultaneously& The WBAAT$ survey as well as business case studies clearly suggest such two1way lin,s in the conte*t of China and $ndia)s trade and investment ties with African countries& or e*ample% Chinese investors operating in Africa tend to bring their wor,force from China& Also% e*porting firms tend to rely more on foreign wor,ers% whose s,ills and ,nowledge help firms to lin, themselves with overseas mar,ets& The complementary relationship among people flows% trade% and capital flows suggests that any removal of between1the1border barriers should facilitate all of these flows& $ncreases in these three flows are li,ely to accelerate the pace of technological diffusion throughout Africa and Asia& However% local technological transfer or s,ills transfer is also somewhat compromised when foreign s,illed wor,ers are simply brought in with foreign capital without effective s,ills transfer to local wor,ers either through subcontracts or employment opportunities& urthermore% the emerging agenda for African firms is how to effectively capture opportunities for ac0uisition of technology and s,ills through participating in the international production networ, as discussed in

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chapter >& At the same time% this chapter also showed how Chinese and $ndian governments have increasingly invested their resources in providing technical cooperation to African countries to foster technological transfer to African countries& The ability to enhance trade facilitation could offer significant opportunities to reduce direct and indirect costs in Africa& African% Chinese% and $ndian firms have been hampered by inade0uate and costly transport and logistics services in Africa& African firms continue to e*perience difficulty in accessing necessary trade financing tools% which is a particularly acute issue among small and medium enterprises& At the same time% it was found that investment by Chinese and $ndian firms in Africa has been significantly aided by public trade finance programs by the 3*port1$mport Ban,s of those two countries& KNL

5#apter 3+ In!estment<-rade Lin2ages in )frican<)sian Integration, and Production %et$or2s (pp. 2GD<C30)

5ommerce+

"cale,

irms in AfricaYboth domestic and foreign ownedYhave had international operations and trading relationships for decades& But in recent years the world)s mar,etplace has witnessed the formation of new global1scale economic systems that are tightly integrated% and the rise of trade in intermediate goods constitutes a fundamental shift in the structure of the global trading system& These transformations pose a major challenge for African policy ma,ers in their understanding of how their countries fit into today)s international division of labor& Bnder traditional notions of international trade% the direction of trade 4that is% which countries produce what goods for e*port6 was determined by the principle of Ecomparative advantageF and a country speciali-ed in the production and e*port of the good 4or goods6 for which its relative productivity advantage e*ceeded that of foreign countries& $t is clear% however% that a radically different notion of comparative advantage has now emerged due to the significant role that intermediate goods play in overall international trade% giving rise to intraindustr trade& This is true whether the trade is done $it#in firms as a result of .$ or through more arms1length transactions% such as through subcontracting& <9 $n this environment% it is hard to imagine that the future of Africa)s economic development can be isolated from these systems& "ummar of 8ain Findings $t is in this conte*t that a ,ey issue facing the countries of 7ub17aharan Africa is how they can successfully leverage the newfound investment and trade interest of China and $ndia so that the continent can become a more proactive player in modern global networ, trade& 2ver the last #< years% Asia has already been Africa)s fastest1growing e*port mar,et and is much more open to trade than are 3urope and America& And there is no evidence to suggest that this trend will not continue& Xet% in spite of the many opportunities offered by trade in global supply chains% few African countries have been able to ma,e the leap and e*ploit these opportunities& As the preceding analysis suggests% investment and trade activities by China and $ndia with Africa can facilitate the continent)s ability to avail itself of such opportunities&

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3vidence presented in this chapter from new firm1level survey data and original business case studies developed in the field provides strong support for the notion that% as is happening elsewhere in the world% in Africa% trade flows and .$ are complementary activities% rather than substitutes& 4This finding at the firm level parallels that presented at the country level in chapter !6& The data clearly point to the fact that Chinese and $ndian firms operating in Africa have been playing a significant role in facilitating this complementarity& or one thing% Chinese and $ndian businesses tend to achieve larger1si-ed operations than do their African counterparts within the same sectors% and this appears to allow them to reali-e economies of scale& $t is not surprising% then% that the evidence shows that% all other things e0ual% Chinese and $ndian firms have significantly greater e*port intensity than do African firms& 'oreover% the e*ports from Africa produced by Chinese and $ndian businesses are considerably more diversified and higher up the value chain than e*ports sold by domestic firms& The corporate structures of Chinese and $ndian firms also differ from those of African businessesC the former tend to have more e*tensive participation in group enterprises or holding companies 4with head0uarters in their home countries6& At the same time% relative to their African counterparts% Chinese and $ndian firms engage more e*tensively in regional integration on the continent& They also e*hibit more e*tensive integration into a greater variety of third countries outside of Africa than do African businesses& And Chinese and $ndian firms tend to be vehicles for the transmission of advances in technology and new e0uipment to the African continent& But the data also suggest that there are significant differences between Chinese and $ndian firms operating in Africa& Chinese businesses in Africa tend to have a different ris,1aversion profile than $ndian firms% as reflected in their foreign investment entry decisions% their degree of vertical integration% the origin of source mar,ets for their inputs% and the strength of affiliation with state 4as opposed to private6 entities in conducting transactions% among other attributes& Chinese businesses in Africa pursue business strategies that yield them greater control up and down the production line% resulting in enclave types of corporate profiles% with somewhat limited spillover effects& $ndian firms% conversely% pursue African investment strategies that result in greater integration into domestic mar,ets and operate e*tensively through informal channels% indeed even into facets of the local political economy% surely a result of the fact that there is a longer tradition of $ndian ethnic ties to Africa& That global value chains offer real opportunities for African countries to use Chinese and $ndian investment and trade activities to increase the volume% diversity% and value1added of e*ports from the continent is corroborated by the evidence presented& $ndeed% as has happened elsewhere in the world% even landloc,ed countries in AfricaYwith the right mi* of policiesYmay well be able to engage in networ, trade& Ialue1chain analysis of particular industry cases in Africa shows that certain factors are li,ely to be especially critical in successful networ, trade& These include implementing a pricing scheme that fully ta,es into account mar,et conditions% such as production and distribution costs% the strength of competition% and so forth: enhancing product 0uality: organi-ing the business to be fle*ible and responsive to changes in mar,et conditions: enhancing labor productivity: and developing the capacity to ma*imi-e speed to mar,et& As the analysis shows% there

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are several industries in Africa that have either already engaged in or have strong prospects to engage in buyer1driven networ, trade% including food% fresh1cut flowers% apparel% and fisheries% among others& These are all products where African e*ports face far tougher competition in international mar,ets than the continent)s traditional raw commodities% and they must meet world1class standards& However% there are also e*amples where Africa can e*ploit its endowment of natural resources and climb the value chain& The prospects for African industries to engage in producer1driven networ, trade in the short1 to medium1run% apart from some sectors in 7outh Africa% such as automotive assembly and parts and components% are far more limitedYwithout attracting substantial .$ by firms plugged into such networ,s& $ncreasingly% as the chapter suggests% Chinese and $ndian firms have these attributes& 7till% the barriers to entry to global production sharing are significant& inally% there is evidence that African services e*ports can engender significant supply1chain spillover effects domestically& 7ome countries already are doing so% such as /hana% 7enegal% and Tan-ania in bac,1office services& A second concrete opportunity for growth in services e*ports is tourism& With rising middle classes in China and $ndia loo,ing to spend a significant part of their increased disposable incomes on holidays% there is clear potential for Africa to reap the benefits& Through positioning itself as a relatively close and attractive holiday destination% the gain for 7ub17aharan Africa would not just be direct 4in tourism services% hotels% restaurants% and the li,e6 but also indirectC the fact that more and more flights arrive in African airports ma,es transport cheaper and Asian mar,ets more readily accessible for African goods and services&

%ha"onniXre* ?6 !6 -.//;0* 1%hinese Aid to Africa: Origins* Forms and Issues*4 in $an DiHB* #6 P6 -ed60* The .ew Presence of *hina in Africa * ""6 77-A.* Amsterdam (ni$ersity Press6 5onclusion+ 5on!ergence or Di!ergenceL China)s aid to Africa has a long history& $n the early #9>"s% the first overviews of the subjectH! displayed the same surprise that we see today% though sometimes for different reasons& After decades of turmoil% China was a poor country% where the e*cesses of the /reat Aeap orward caused a famine and millions of deaths in the late #9<"s& $t was much poorer than the 'aghreb countries with which it signed its first aid agreements and than 7ub17aharan Africa% to which it started providing aid in #9>"& China% just emerging from the embargo caused by the ?orean War% e*ported very little& $ts aid to Africa was greater than its trade with Africa% and it made no investments& Today% trade with Africa is larger than aid and investment& $n ebruary !""5% President Hu Jintao announced that trade between China and Africa would amount to #"" billion B7T in !"#" and% than,s to the surge in raw material prices% bilateral trade has e*ceeded this objective in !"";& This trade may diminish in value as prices have tumbled% but nevertheless China will probably become the largest trade partner of Africa% and one could e*pect that this will be followed by more investment and that investment will outstrip aid&

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At the !""< /leneagles summit% the /; countries gave a commitment to double their aid to Africa% and China made the same promise in Beijing in Dovember !"">& Three years later% it appears that 23C. countries are not on trac, to meet their targets& As they are confronted with the severest crisis since #9!9% 23C. countries would need to ma,e unprecedented budgetary efforts to reach their objective since debt cancellations% which account for nearly half of the aid% come to an end& While 23C. will not achieve their target% China will probably encounter less difficulty in achieving its objective% even though China may e*perience a hard landing in !""9& The fall of raw material prices will directly impact trade relations between China and Africa&HH Devertheless% as China will continue to grow and 23C. economies will contract% the share of China in African e*ports will increase in volume while in value it will diminish& Thus the bilateral trade may intensify at a lower level& The world recession has not changed the Chinese view on the strategic importance of Africa& 3conomic and social problems in China have not prevented Hu Jintao from underta,ing a fourth trip in Africa in ebruary where he visited 'ali% 7enegal% Tan-ania and 'auritius& His choice illustrates a sense of continuity 4\hou 3n Aai visited 'ali and Tan-ania in the si*ties6 and by choosing to visit countries that are not primary commodities e*porters% he showed that Chinese interest goes beyond the procurement of raw materials& Chinese are preparing for the ne*t 7ino1African summit to be held in Cairo in Dovember !""9% and% on this occasion% Beijing will promise to double its aid to Africa between !""9 and !"#!& Thus at the end of the present decade% China will eventually be the largest donor to Africa& China emphasi-es the fact that its relations with Africa are distinct and substantively different from those of the West& Devertheless% the nature of its trade relations with Africa is Dorth17outh and this may lead Beijing to adopt Western practices instead of maintaining a friendship between most une0ual e0uals& HM Will China position itself as an alternative to the 23C. or will Western efforts aimed at sociali-ing China as a EresponsibleF power in Africa influence currently prevailing standards 4Alden% !"";6W There is clearly a debate in China between those who thin, that 3uropean aid to Africa has failed and that there is nothing to be learned from the .AC countries) e*perience and those who ta,e a less blac,1and1white view both of the Western e*perience and of the overall results of Chinese aid to Africa& The probable outcome is a trend towards convergence between Chinese and Western practice& World Ban, and bilateral donors are discussing '2B with 3*$m ban,s and some have started to cooperate in joint projects with China& This trend will benefit from changes in Chinese practices& 2n the issue of social and environmental responsibility% for e*ample% an official of the People)s Congress stated in January !""5 that Chinese firms could face sanctions if they committed abuses abroad& $n 'arch !""5% the Dational .evelopment and Reform Commission 4D.RC6 removed 7udan from the latest list of countries with preferred trade status and China will no longer provide financial incentives to Chinese firms investing in 7udan 4/ill et al&% !""56& The pace of convergence will depend on the 0uality of the dialogue established between China and the traditional donors& Chinese embassies have already begun to attend donor round1tables& This dialogue could be improved if all parties made their objectives clear& The Chinese are accused of having a hidden agenda in their Emarch to AfricaF and of assisting African countries only to better strip them of their resources% whereas Western aid is held to be directed e*clusively to the well1being

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of the people& The Chinese ma,e the same criticism in return& $f China has an agenda in Africa% so do the Bnited 7tates and 3uropean Bnion% whether that agenda concerns security of supply or migration& Ac,nowledging these agendas and discussing them would be a first step towards dialogue and cooperation&

%han-Fishel* #ichelle -.//>0* 1+n$ironmental Im"act: #ore of the Same34 in #anHi* F6 ' #arBs* S6 -eds60* African Perspectives on *hina in Africa * OKford: Fahamu6 While conventional wisdom posits that Chinese multinationals treat their wor,ers and the environment more poorly than their Western counterparts% not enough research has been done to actually prove this hypothesis& What is clear% however% is that Chinese companies are 0uic,ly generating the same ,inds of environmental damage and community opposition that Western companies have spawned around the world& or communities adversely affected by these mega1projects 4regardless of the corporate sponsor6% the 0uestion isC first% do they give their free% prior and informed consent to the investmentW $f the answer is (yes) then the challenge becomes% (How can communities and governments negotiate with the sponsor to receive the best deal possible% in terms of economic benefits sharing% human rights% sustained livelihoods% environmental 0uality% and cultural and community integrityW) 3valuated this way it is evident that in some cases% what private companies can provide through (corporate social responsibility) + e&g& health clinics that may or may not be furnished with medicines% boo,s for local schools + pales in comparison with the deals that Chinese state1owned companies can offer 4e&g& debt relief% concessional lending6& urthermore% African leaders and policy ma,ers are faced with additional 0uestion when it comes to Chinese investmentC $s the Chinese model of development% which admittedly has been characterised by spectacular economic growth% worth emulatingW Based on the unlimited e*traction of natural resources% ultra low1wage manufacturing% and the e*port of cheap goods 4due especially to (throwaway) societies in the West6% this paradigm + which is in essence one of corporate globalisation% not of China alone + is simply not sustainable& This low1price development model actually comes at a very high cost + to societies% both inside and outside China% as well as to the environment& The untold story of China)s rapid economic growth is one characterised by vast levels of income disparity% unfair treatment of wor,ers and lost livelihoods% especially in the rural areas& These problems are so acute that they threaten political stability& 3nvironmental problems are similarly acuteC breathing the air in China)s most polluted cities is the e0uivalent of smo,ing two pac,ets of cigarettes a day& 2n an international level% meanwhile% the effects of corporate globalisation 4particularly Western consumption6 are leading to the destruction of the ecological support systems on which all life depends&

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$t is tempting for African leaders to simply want to play Western and Chinese e*traction companies off against each other in an effort to (get a better deal)% and doggedly follow China)s path of economic growth& $ndeed% it is important for them to carefully conceive e*traction projects in order to secure the best possible deal for their people& But ultimately% it will be important to realise that this low1priceGhigh1 cost economic model will not wor,C not for Africa% nor for China% nor for the rest of the world&

%heng* ?ose"h M6 S6 and Shi* uanggao -.//;0* 1%hina@s African Policy in the Post-%old &ar +ra*4 in Journal of *ontemporary Asia* 5ol6 9;* )o6 8* ""6 A>-8876 'ultipolarity has become a significant goal of China)s foreign policy in the post1Cold War era& Chinese leaders have adopted this as a long1term objective: and% given the dominant position of the B7A% China strives to maintain good relations with America% avoiding any sharp deterioration in the bilateral relationship& The Chinese government has established various strategic partnerships with other major powers% emphasising the promotion of common interests% while abandoning the 'aoist united front strategy 4Cheng and \hang% !""!6& 'eanwhile% China see,s to maintain a peaceful international environment and concentrate on its moderni-ation programme% while building its comprehensive national power& $n many ways% China has been pursuing a modernisation diplomacy in the era of economic reforms and opening to the outside world since the end of #95; 4Cheng% #9;96: and developed countries play a more important role than developing countries in terms of mar,ets as well as sources of investment% advanced management and technology% and so on& $deology and revolution + the main 'aoist objectives + now have a limited role in this modernisation diplomacy& 7anctions from Western governments in the aftermath of the Tiananmen protests and violent crac,down reminded Chinese leaders of the significance of the Third World% especially African countries& This was reinforced by the depreciation of China)s strategic weight in the eyes of the Western world% with the disappearance of the Estrategic triangleF in the conte*t of the brea, up of the 7oviet Bnion and the dramatic changes in 3astern 3urope& .iplomatic support from the African countries has thus become indispensable when China comes under criticisms for its human rights record in international organisations% and when it chooses to e*ert pressure on Taiwan& The cultivation of a networ, of friendly supporters on the African continent therefore becomes a significant tas, in China)s diplomacy& The strategic cooperation relationship with 3gypt% the strategic partnerships with Digeria and 7outh Africa% and the orum on China1Africa Co1operation are landmar,s in the building of this networ,& As China)s economy continues its impressive growth% it wants to e*pand its mar,ets and secure reliable supplies of resources in support of its economic development& Resource diplomacy% therefore% becomes a prominent feature of its modernisation diplomacy& China)s rising economic status also means that it has more resources at its disposal to ensure success in its African policy& $n turn% many African countries perceive political and economic ties with China to be an important asset% which

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strengthens their international bargaining power% especially with Western governments& These new features of 7ino1African ties have attracted the attention of the Bush administration and the international media& Their criticisms are against the Chinese authorities) intention to present China as a responsible major power in the international community and to enhance its soft power in the Third World% while neglecting co1operation and co1ordination with Western governments in its approach to Africa& $n view of the substantial resources spent in support of Beijing)s African policy% the Chinese leadership% China)s foreign policy thin,1tan,s and the official media tend to present Africa as a lucrative mar,et and an important source of badly needed raw materials& African countries are also depicted as reliable political and economic partners& $n fact% however% a large part of the continent still suffers from domestic instability% poverty% A$.7% rampant corruption and a range of other developmental problems% so optimism regarding Africa)s peace and development in the near future may be misplaced& 'any small African countries have been switching diplomatic recognition between Taipei and Beijing% playing the two off against each other for economic assistance% and so they are obviously not reliable political partners& Regime changes ta,e place often in some African countries% too& Hence% setbac,s for China)s African policy will not be surprising& Chinese leaders would li,e to avoid engaging in open and ongoing diplomatic and strategic confrontation with the B7A and the 3uropean Bnion in Africa% but they certainly want to push for multipolarity and to ensure a reliable supply of resources from Africa in support of domestic economic development& Whether China can achieve this balance remains a fundamental dilemma of its African policy% which e*acerbates the ris,s of its foreign policy and commercial initiatives in Africa&

%ornelissen* Scarlett and ,aylor* Ian -.///0* 1,he Political +conomy of %hina and ?a"an@s !elationshi" Cith Africa: A %om"arati$e Pers"ecti$e*4 in The Pacific Review* 5ol6 89* )o6 <* ""6 :87-:996 Though both China and Japan)s primary focus is naturally on the 3ast Asian region% both countries in the #99"s conducted a relatively active African policy& or both% Africa is a strategic ally% albeit in different means% and to the attainment of different policy objectives& By vigorously supporting the theme of non1interference in domestic affairs and promoting a cultural relativist notion of human rights% China has been able to secure its own position in the international system and% at the same time% appeal to African elites mindful of the West)s pressure on their own governments& $n addition% China)s emphasis on economic lin,ages with Africa has appealed to those elites who have consciously embraced the dictates of the hegemonic neoliberal model& By offering itself up as a possible model of a country that has moved from a command economy to that of a mar,et1driven one 4however incomplete6% China has further been able to project itself on the continent& As a result% China maintains its commercial and political lin,s with Africa as a tool by which Beijing hopes to foster economic interaction and by which China may have a reserve pool of friends and sympathi-ers from which it can draw moral and political support from within in the

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international system& $n an attempt to offset the West)s position vis1c1vis China and promote its own independence 4despite the negative effects globali-ation has had and continues to have on any notion of (real) sovereignty6% Beijing has and will continue to see, improved relations with non1Western powers& Africa has not been a e*ception to this policy and this is li,ely to continue& Japan)s involvement in Africa has distinctly different bases to these of China% but notably cognate ends& Where Japan fostered selective commercial and aid lin,ages with viable African recipients in the early post1independence era% its entanglements with the continent have become broad1ranging in the contemporary era& $t has also become decidedly more political& As Japan)s application of its 2.A Charter shows% the country is more willing to utili-e aid as an overt diplomatic instrument& This is no new feature of Japan)s aid1giving in Africa: indeed Japan)s earlier aid programme in the continent was e*tensively 4though subtly6 built on diplomatic ties& What is different is that the 2.A Charter is seen as a more legitimate instrument of diplomatic coercion% as the principles which it enshrines + human rights% democrati-ation% military non1proliferation + are 4supposedly6 (universal)& But this is also where the discrepancy in Japan)s policy towards Africa is evidentC by being a prominent power in Africa% the continent does provide Japan with a means to heighten is international political prestige& Japan thus ,eenly ta,es the lead in multilateral fora on African economic and political development& $t does so% however% through an odd ju*taposition of purported 4Western6 universal principles% and Asian paths of growth& $f one considers that Japan)s dual posing as a developed and a non1Western power has increased its appeal in the continent% one could construe that this policy aims towards a similar end as Japan)s earlier multilateral diplomacy in Africa + to service its BD ambitions& To this e*tent% Japan)s political agenda in Africa converges with that of China& To amplify supplication for this agenda Japan thus invo,es a widely diffused aid programme& However% Japan is also driving a more concentrated economic cooperation programme in Africa% -oning in on 7outhern Africa& Whilst% as in the case of China% these lin,ages are essentially commercial and (apolitical)% these ironically dovetail with the e*plicit political and economic agendas of both in the continent& The fact that this is% as we have noted% encumbered with inconsistencies ma,es it uncertain whether China and Japan)s enhanced involvement in Africa in the #99"s will as a conse0uence contribute to the true placing of Africa as a participant in the international system% or help to foster the entrenchment of the continent as a spectator&

Dalhe use* #artine and #uyaBCa* Ste"hen L6 -.//A0* *hina in Africa# endin!$ Policy Space and Governance * )orCegian %am"aign for Debt %ancellation* )orCegian %ouncil for Africa6 The report findings show that Chinese lending is generally welcome in Africa& The loans that China provides often contribute to financing infrastructure and other projects that African countries need& However% it is of concern that China is lending to countries that already have large debts outstanding& $t is not the lending per se that is problematic% since it seems that China)s lending occurs in resource rich countries& What ma,es China a ris, to debt sustainability in poor countries is the

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lac, of transparency in loan contraction processes& Aoan contracts between China and African countries are not open to public scrutiny& This leaves a lot of power in the hands of a few African leaders& As our case study from \ambia shows% loan contracts are often made at the highest political level% and because of the lac, of transparency% the agreements are not available to parliament% civil society or media& The lac, of transparency ma,es it difficult to assess how much debt is being contracted and on what terms& $t also increases the ris, that funds will not be used for the intended purposes and might turn out to be cases of illegitimate debt in the future& The report concludes that in order to prevent irresponsible loan contraction% there is a need for responsible lending practices to be put in place& The report also aims to show that China)s presence as a lender in Africa provides an alternative to the traditional donors within the development paradigm& China)s non1 interference policy implies that China does not have any conditions attached to loans apart from the re0uirement to support the one1China principle and to reject the legitimacy of Taiwan as a country& Traditional donors on the other hand% have applied conditionality aiming to change African countries) economic policy& ollowing the recent debt relief initiatives% traditional creditors such as the World Ban, and the $' have less resources to draw on% and their leverage in Afri can countries is diminishing as countries have benefited from debt relief and graduated from debt relief programs monitored by these institutions& The presence of new lenders% including China as an alternative on the creditor arena% is also increasing the leverage that African countries have when dealing with traditional creditors& $n many countries policy space has increased as a result of China)s presence as an alternative to creditors that apply policy conditionality& While the non1interference policy might be positively affecting countries because it opens up policy space% it also has negative conse0uences& China seems to be less concerned with human rights standards and environmental safeguards than other creditors& China)s presence in states that oppress the population is also very controversial% and China has been criticised for playing the role of a bystander in conte*ts where the international community have urged Beijing to use its leverage to influence oppressive regimes to improve their conduct& Although it is too soon to conclude% so far it would seem that China is li,ely to have a negative impact on debt sustainability and perhaps contribute to debt crisis in countries where governance is wee,& Aac, of transparency and accountability to the inhabitants does not seem to stand in the way of Chinese lending if a country is able to use natural resources as collateral for loans& The development of responsible financing and framewor, for implementation of such is therefore paramount to ensure the rights of future generations to freedom from vicious circles of indebtedness& Recent Chinese lending underlines the urgent need to establish internationally recognised legal standards for responsible lending& The need for transparency% accountability and inclusiveness in loan contraction processes should be recognised by international society& 2ur case study from \ambia concludes that the \ambian public should have a right to ,now about and 0uestion borrowing% from new and old lenders% before loan agreements are signed& $t also recommends that oversight and

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watchdog institutions such as the parliament% the auditor1general and the attorney general must have clear mandatory authority over the loan contraction process&

Da$ies* #artyn* +dinger* annah* ,ay* )astasya and )aidu* Sanusha -.//A0* =ow *hina &elivers &evelopment Assistance to Africa * %entre for %hinese Studies* (ni$ersity of Stellenbosch6 The Centre for Chinese 7tudies at 7tellenbosch Bniversity embar,ed on this research project to gather information and gain insight into China)s aid policies vis1 c1vis Africa& The research is intended to inform both Chinese and traditional donor efforts toward the continent& China)s Enew forayF into Africa is attracting much international attention and contentious debate& China is seemingly engaging Africa on new terms + terms that are not shaped by traditional powers% nor perhaps even by Africans themselves& $t represents a new approach to the continent that the authors have termed China)s Ecoalition engagementsF in Africa + a collaborative state1business approach to foreign policy& China)s foreign aid forms an integral component of this paradigm& Chinese foreign policy towards Africa at the turn of the century underwent a dramatic shift& As EChina $nc&F started to internationalise after #99;% Africa became a strategic focus for Chinese outward1bound companies% especially in the e*tractive industries& Beijing accorded Africa renewed importance& This resulted in the conceptualisation and creation of a new vehicle% the orum for China1Africa Cooperation 4 2CAC6 housed within the 'inistry of oreign Affairs% to coordinate Chinese foreign policy objectives toward Africa& Through 2CAC% China)s 'inistries of oreign Affairs and Commerce are starting to align their respective responsibilities toward more effective coordination and implementation of a Chinese foreign and aid policy toward Africa& This attempt at formulating a coherent foreign policy between two government departments is playing out in Africa but this joint departmental coordination is being made more difficult by the dramatic increase in aid spending by Beijing& The government of the People)s Republic of China has a broad and% at times% vague definition of what constitutes foreign aid& While there may be gradual alignment of Chinese aid with the 23C.1.AC)s definition of the constitution of EaidF over the medium term% some uni0ue components of China)s approach will remain& The monitoring of its aid commitments and their implementation is proving difficult% even for the 'inistry of Commerce% as well as government thin,1tan,s& China)s approach has been one of mutual respect% also awarding small African countries with relatively little economic or political significance% with aid and investment support& However% it is li,ely that resource1rich countries such as Angola% 7udan% Digeria and \ambia% as well as more politically strategic countries% such as 7outh Africa% 3thiopia and 3gypt% are priority countries in China)s broader African engagement&

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igures on China)s aid disbursements to Africa remain vague& $n absence of a central aid agency% the lac, of general time series data on aid flows and the non1 transparent nature of Chinese loans complicate the process of defining% calculating and monitoring China)s development assistance to the continent& The Chinese /overnment delivers bilateral aid in terms of grants% interest1free loans and concessional loans and the aid policy formulation process for these is outlined and discussed in this report& China 3V$' Ban,% one of China)s three policy ban,s and the sole provider of concessional financing% had financed over H"" projects in Africa by mid1!""5% constituting almost M" percent of its loan boo,& The Ban,)s lending practices are often lin,ed to China)s foreign aid policy providing concessional loans mostly to infrastructure development& The recent '2B between China 3V$' Ban, and the World Ban, holds out the promise of donor collaboration between both institutions in African infrastructure programmes of which the first potential project for cooperation is said to the 'phanda D,uwa .am in 'o-ambi0ue& 3*tending financing on commercial terms is China .evelopment Ban,& The Ban,% in 'ay !""5% was designated to manage the T< billion China1Africa .evelopment und announced at the 2CAC !""> 7ummit& 3ven though it is termed a EdevelopmentF fund% it has been put in place to finance the mar,et entry of Chinese firms into the African economy& Part of China)s strategic industrial plan toward Africa is to establish five preferential trade and industrial -ones for Chinese business entry in Africa& Aocated in \ambia% 'auritius% 3gypt% Digeria% and possibly Tan-ania% this initiative emanated from the Beijing Action Plan announced at 2CAC !"">& A financing and infrastructure component of these -ones will be categori-ed as foreign aid by the 'inistry of Commerce at the ne*t 2CAC summit to be held in late !""9 in Cairo& The research incorporated in1mar,et visits to 3thiopia% /hana and \ambia& $n 3thiopia% China is providing assistance across various fields and has become an important development partner for the country& Whilst Chinese engagement in 3thiopia initially emerged in the construction sector% controlling <"1>" percent of road construction% China has made commercial inroads into the manufacturing industry& Compared to 3thiopia% /hana has been awarded several loan agreements across the construction and infrastructure sectors& The construction of the Bui .am% financed by China 3V$' Ban,% is the single largest Chinese financial commitment to /hana to date and will have a significant impact on the power generation capacity of the country& $n \ambia% Chinese companies have been involved in more than H< aid projects in agriculture and infrastructure development& This has included the construction of the /overnment Comple* and more recently the construction of the first Chinese 7pecial 3conomic \one in Africa% in the Chambishi copper belt& While it is a challenging tas, to evaluate the aid policy and practice of the Chinese /overnment to Africa% the authors outline the main drivers of this process% with emphasis on 7outh17outh Cooperation% a focus on the intersection of the aid and commercial incentives% political drivers and Asian competition% as well as the issue of conditionality&

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$n conclusion% the authors provide recommendations to relevant sta,eholders that are engaged in the aid process& Recommendations for African countries include developing a better understanding of the Chinese approach to aid: facilitating regional coordination: avoiding poor coordination which may lead to Chinese aid fatigue: avoiding the division of traditional and emerging donors: strengthening the African voice: improving the reporting mechanisms within recipient countries as well as aid monitoring: and improving debt reporting& or the PRC /overnment% recommendations are structured around managing aid policy efficiently: cooperation with traditional donors: greater transparency in the aid system: broadening the 2CAC constituency: and engaging African institutions& Traditional donors are encouraged to wor, towards constructive partnerships: to avoid political suspicion: as well as to coordinate and pursue dialogue around harmonisation to build a partnership for Africa to meet the './s& The turn of the millennium mar,ed the prioritisation of Africa in Chinese foreign policy thin,ing& The continent has not received attention from China to this e*tent since the #95"s& This strategic shift in international relations between China and Africa is attracting a great deal of interest and commentary& $t is imperative that this engagement be channelled toward the development of Africa economies and societies& This% however% is as much the responsibility of Africans themselves as it is the Chinese&

Da$ies* Penny -.//>0* %hina and the +nd of Po$erty in Africa = ,oCards #utual Benefit3* Sundbyberg: DiaBonia6 1. Introduction $n Dovember !""> China hosted the Third 'inisterial Conference of the orum on China1Africa Cooperation 4 2CAC6 attended by M; African countries& This unprecedented high level meeting manifested the increased cooperation between China and Africa in recent years& Bndisputedly% Chinese policies% including trade and investments and its role as a donor and creditor% will have an important impact on the future of developing countries in Africa and the joint global challenge to combat poverty& The purpose of this report is to contribute to an increased ,nowledge and understanding of China)s role in Africa& The target group is foremost Civil 7ociety 2rganisations 4C72s6 across the world engaged in various types of development wor,& The focus of the report is Chinese development assistance policies% i&e& China)s role as a donor to Africa% an area not so much written on in comparison with trade and investments& The report e*plores Chinese views on China)s role as an important player in development policies and what responses China has to concerns e*pressed by e*ternal sta,eholders about the increased Chinese cooperation with Africa&

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The report builds on des, studies between 'arch and July !""5% as well as !5 interviews with foremost Chinese decision ma,ers% institutions% organisations and researchers but also donors to both China and Africa% carried out in Beijing 'arch + April !""5& 2. 5#ina goes into )frica S an o!er!ie$ of 5#ina;s increased engagement !""> mar,ed a historic year in China1Africa relations& The 2CAC 7ummit witnessed the birth of Ethe establishment of a new type of strategic partnership between China and Africa featuring political e0uality and mutual trust% economic win1win cooperation and cultural e*changes&F $n the Action Plan for !""5v!""9 adopted at the meeting% China has made a number of concrete pledges& The same year China adopted a specific African Policy drawing up the principles and areas for future cooperation& China is moving rapidly ahead forging ties with African countries manifested in increasing trade and investment figures& $n !""> trade surged to B7T<< billion and is set to reach B7T#"" billion by !"#"& China has become Africa)s third largest trade partner& The share of Africa in total Chinese outward .$ has been marginal up till now% but is increasing rapidly& $n 'ay !""5 China announced that it will provide about B7T!" billion in infrastructure and trade financing to Africa over the ne*t three years& China)s so called Emarch into AfricaF is to a large e*tent lin,ed to its growing economy& Access to raw materials and oil in particular is a ,ey motive for China)s engagement in Africa& There are also more politically motivated drivers stressed by Chinese scholars& Africa is important for China)s foreign policy agenda and the building of alliances& $n much of the debate in a western conte*t on China)s role in Africa% China is often viewed as a threat and competitor to industrialised countries for access to Africa)s natural resources& This disregards the fact that much of the resources imported into China are re1e*ported in the form of value added inputs or products to uphold consumption in industrialised countries& China also has a legitimate claim to develop and lift its population out of poverty for which it will need resources& While China is responsible for its actions in Africa% these two aspects pose challenges not only for China and Africa relations% but for rich countries whose consumption and production patterns are unsustainable& There is an evolving international debate about the benefits and drawbac,s for Africa of this new strategic partnership& 'ost analyses point to the fact that the picture is not blac, and white& A ,ey 0uestion is how African countries are to ma,e the most of the possibilities and address the challenges which China brings for poverty reduction and development at large& This has implications for domestic policies in Africa% for negotiations between Africa and China% and for traditional donors who need to attune their policies towards Africa and China and find a new role as the 7ino1African cooperation grows stronger& C. 5#ina S a de!eloping countr and an emerging donor

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China has an interesting dual role as both donor and recipient country& China has achieved remar,able success in lifting hundreds of millions of people out of poverty& Devertheless% China is facing a number of challenges% many of them similar to those facing African countries& China has been the largest aid recipient for much of the past !" years but has recently slipped behind& 2.A to China reached B7T#&5<5 billion in !""< according to 23C.& /iven China)s successful economic performance% donors have had discussions whether to phase out aid or not& 'ost donors will probably stay engaged% but from !""; China)s net 2.A will fall sharply& The aid levels are small in comparison with the si-e of the population and there is no significant direct impact on poverty through the provision of funding& However% according to both donors to China and Chinese scholars% aid is very important in terms of the e*change of ideas& This is also stressed by the 7tate Council Aeading /roup 2ffice of Poverty Alleviation and .evelopment 4A/2P6 suggesting a triangular e*change of ideas where China could learn from developed countries and at the same time share e*periences with developing countries on China)s success in lifting large parts of its population out of poverty& Chinese scholars stress that China and African countries share similar challenges and e*periences as developing countries& 2n another level% it has been said that China)s development model offers an alternative to African countries to the structural adjustment policies prescribed by the World Ban, and the $' & $nitiatives are underway for e*perience sharing& H. -#e e!olution of 5#ina;s assistance to and cooperation $it# )frica !""> mar,ed the <"th anniversary of diplomatic ties between China and African countries& China)s African policy has in modern history gone through roughly three phasesC A first phase% during which China)s policy was primarily politically and ideologically driven in supporting African people in their struggle for national independence& A second phase with a move away from ideology to a focus on economic cooperation& This meant a decrease in Chinese aid to and trade with African countries& A third phase% when China again intensified its cooperation with African countries&

7ince the 9"s China)s African policy has had both a political and economic focus% and other forms of cooperation% including cultural% have been added to this& The present strategy is thus described as more inclusive and holistic in its approach% which is manifested in the 2CAC& Chinese scholars put emphasis on the continuity of relations with African countries& The eight principles for providing aid to foreign countries% first laid out by Premier \hou 3nlai in the >"s% are still relevant principles that continue to guide policies& There has however been a move towards more specific commitments and pledges&

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A fundamental principle% enshrined in China)s !""> African Policy% is to provide assistance with Eno political strings attachedF 4see further below6& Another of the eight principles dating from the >"s% is the principle of Ee0uality and mutual benefitF& Aid is carried out within the framewor, of 7outh17outh cooperation as one of several forms of cooperation& China does not use the language of donor and recipients when giving aid% but mutual benefit& F. 5#inese de!elopment assistance to )frica The following are the main institutions involved in assistance to African countriesC -#e "tate 5ouncil is the highest e*ecutive organ as well as the highest organ of 7tate administration% above the government ministries& -#e 8inistr of 5ommerce (8,F5,8) is the main government body in charge of Chinese aid and coordinates aid policies with foremost the 'inistry of oreign Affairs% but also with other government ministries and bodies involved& -#e 8inistr of Foreign )ffairs has an advisory role on aid and economic cooperation and is in charge of diplomatic contacts and of coordinating concrete policies in the bilateral underta,ings& -#e Finance 8inistr is in charge of the budget as well as multilateral aid& -#e 5#inese &mbassies monitor the implementation of projects and report on their progress to the Chinese government& -#e &'port<Import 1an2 of 5#ina (5#ina &'im 1an2) is in charge of Chinese government concessional loans&

There are also other government ministries involved in channelling aid and ban,s which play a role in the Chinese government)s Egoing out strategyF& Chinese development assistance processes are complicated with many actors involved& China has no development cooperation agency to coordinate the policies% but there have been tal,s of setting one up& -#e F,5)5 process has however resulted in an institutionalised coordination process of cooperation with African countries in general& China has made a commitment to double its !""> assistance to Africa by !""9& However% China does not disclose how much aid it gives to foreign countries and it is un,nown what the doubling will mean in actual figures& $n !"">% Premier Wen Jiabao% for the first time according to Chinese scholars% gave a figure when in a statement he said that China from #9M9 to date has spent MM&M billion yuan 4appro*imately B7T<&> billion6 assisting African countries& This figure is however thought to be too low according to Chinese scholars& The China 3*im Ban, stated in ebruary !""5 that it has e*tended concessional loans to Africa with a total outstanding balance of appro*imately B7T;v9 billion& $n the absence of officially reported annual aid flows% various estimates have been made based on press reports and pieces of information from official government

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speeches& Regardless of the e*act figure it is clear that China will continue to substantially increase its aid to African countries& 2ne set of reasons given why China does not disclose its aid figures relate to cautiousness or lac, of will on the part of the government to report the volume& A second set of reasons relate to government constraints and that the government itself might not ,now the e*act figure& China has no clear criteria for how aid is calculated& The government is according to '2 C2' currently loo,ing into what could be defined as aid& There is a strong case for developing and disclosing both criteria for and volume of Chinese aid& There are three forms of assistanceC 4rants + in ,ind not in cash% provided by '2 C2': Interest free loans + often converted into debt cancellations% provided by '2 C2': 5oncessional loans + introduced in #99< and provided by the China 3*im Ban,&

Debt relief+ The Chinese government has announced three pac,ages of debt relief: in !"""% !""< and !"">& As of April #5 !""5% the first pac,age had been delivered to a value of #"&9 billion R'B 4appro*imately B7T#&H; billion6 to H# African countries& China)s assistance is e*clusively project based& Projects are mostly part of bigger pac,age deals which include other types of cooperation with the recipient countries& 2ver the past <" years China has% according to '2 C2'% assisted African countries with #HH infrastructure projects% H; hospitals and has dispatched #> """ medical personnel to Africa& China does not concentrate on specific countries: the recipients include all <H African countries& Top recipients% according to Chinese scholars% are Angola% 7udan% Tan-ania% \ambia and 3thiopia& $t is difficult to get aggregated information of the compilation of loans and grants% to which countries and what projects China directs its assistance& China)s development assistance is mostly bilateral& China channels some aid via multilateral institutions including BD agencies% the A.B and the Af.B% and will do so increasingly& China adheres to the principle of multilateralism in its general political priorities& $n particular China stresses the need to promote the interest of developing countries in the international arena& 3. )id effecti!eness Aid effectiveness has become a ,ey word in discussions around development finance& C72s have long highlighted the need for not just more but better aid& 3*ternal analyses state that little is ,nown about the 0uality and impact of Chinese assistance to Africa and of how Chinese authorities assess such issues&

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A common answer to the 0uestion what aid effectiveness means for China% was that Chinese aid is effective as it is concrete: it is providing Africa with concrete things they can use% li,e buildings and roads& According to '2 C2' an evaluation is done for each project and there is an institutionali-ed process for this& A Chinese scholar however stated that there are only rough evaluations of the social benefits of aid& 2n the issue of the ris, of corruption% scholars and '2 C2' said that the fact that China does not give aid in cash but in ,ind 4material% roads% hospitals etc&6 means there is less ris, of corruption& 2fficials and scholars stated that China in general is interested in learning from other donors with a longer e*perience of providing aid: at the same time there is strong confidence in the Chinese model& China has signed up to the Paris .eclaration on Aid 3ffectiveness thereby committing to its five principles including ownership% alignment and harmonisation& According to donors to China% China probably signed up in its capacity as a recipient rather than as a donor country& China is said to put a lot of emphasis on ownership of recipients and aligns its aid to national priorities% but through other mechanisms than that of traditional donors& The Chinese way of aligning aid and its concept of ownership are however focused on governments as opposed to a model of broad based participation when setting national priorities& Concerns raised by e*ternal actors are China)s use of tied aid and that Chinese projects are carried out with Chinese labour% inhibiting local employment% capacity building etc& The Chinese government has said it has no preference per se for Chinese labour& Pledges have been made to prioritise local capacity building and technical support is given to prepare local people to ta,e over and run projects& Whether these measures are sufficient or not% needs to be studied in the respective African countries& .onors to China and Africa try to engage China in joint discussions on Africa and development& The BD was stated to be China)s first choice if engaging in joint donor initiatives& China participates in donor meetings in African countries if the recipient country governments invite them% but they do not want to be associated with donor driven initiatives& A ,ey challenge ahead in terms of aid effectiveness is the fact that annual aid figures are not disclosed& There is a need for independent and transparent audit and reporting processes% involving the African countries at the receiving end& $n terms of donor cooperation% a main challenge will be to overcome the barriers of suspicion which seem to e*ist& African countries and their citi-ens are ,ey in this% as they in the first place are the ones to define what aid effectiveness means in their respective conte*ts and what ,ind of assistance donors could provide& 7. %o political strings attac#ed According to China)s African Policy% China will provide assistance Ewith no political strings attachedF& The one political condition China does have for the establishment

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of its relations with African countries is the one China principle% i&e& not to give formal recognition to Taiwan& However% China does give assistance to all <H African countries% not just the M; it has formal diplomatic ties with& Albeit China does not push for reforms in recipient countries% tied aid is a type of condition China has% as stated above& The no political strings attached policy has raised much debate and reactions from e*ternal actors& According to C72s there is a ris, that the Chinese policy willC #6 strengthen repressive regimesGelites that are not wor,ing in the interest of poor people or development at large !6 wea,en social and environmental standards and not benefit poor people and the environment H6 wea,en efforts to combat corruption and promote good governance& 2ther donors to Africa have e*pressed concern and lashed out with fierce criticism& There is clear evidence that there are grounds for the concerns e*pressed by C72s and donors to Africa% although more impact analyses are needed& Three general motivations for the principle were given by Chinese sta,eholdersC irst% the non1interference policy is deeply rooted in China)s historical e*perience of western interference and China is therefore careful not to interfere in African countries& 7econd% the Chinese government is careful not to interfere as it sees its political problems in Taiwan and Tibet as internal affairs& Third% the principle is based on China)s own e*perience of being able to develop according to its national conte*t without facing conditionalities& A general view among Chinese scholars is that China is willing to learn from both positive and negative e*periences% and find a middle way if dilemmas arise& $f African countries raise issues of environmental and social concerns China will listen% more so than if western countries raise them& Regarding the concern that China supports regimes li,e those in \imbabwe and 7udan% which western donors have shunned due to their human rights violations% China)s way is said to be to conduct 0uiet diplomacy in support of African regional organisations for them to solve their own problems& 7everal scholars stated that China)s attitude in 7udan has changed% illustrating that China is not immune to criti0ue raised by the international community& This is not to say that the initiatives are sufficient& According to Chinese scholars the government is very aware of environmental and social concerns in relation to Chinese companies) activities abroad and is ma,ing efforts to address these& This is said to be a priority issue as China realises the ris,s of negative images of its companies& The Chinese view is that Chinese aid is less afflicted by corruption as the aid is given in ,ind not in cash& However% the problem of corruption as such has been ac,nowledged by the Chinese government and initiatives have been ta,en to address this& The view is that solving the problem of corruption by using aid money to pressure for change% will not wor,& Aoo,ing ahead% although some measures have been ta,en to deal with the issue of social and environmental standards it is clear that this remains a huge challenge for the successful implementation of China)s African Policy& 2n the one hand it reflects

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the comple*ity of several different driving forces and conflicting interests involved& 2n the other hand% it reflects some of the challenges China is facing and grappling with on a domestic level& The ,ey 0uestion is whether China)s no political strings attached policy will benefit African people and the environment& $t is clear that the notion of sovereignty of the nation state is valued very highly by China& Therefore% whether the no political strings attached policy will be beneficial or not is left in the hands of the governments in place& The 0uestion is what happens in cases where governments either lac, the will or capacity to protect and wor, for the benefit of people and the environment& This is where the non interference policy will leave poor people and the environment short& 7ome analyses suggest that as China)s presence in Africa e*pands it will be more difficult to stay out of domestic policies& The non interference is more and more difficult to reconcile with China)s other objective of being a responsible international sta,eholder& There is a need for a global agreement between new and old donor countries and recipients on responsible financing standards& G. Debt sustainabilit The substantial increase of loans from China has generated a concern among development institutions that new non1concessional or low concessionality loans will threaten the debt sustainability of poor borrowing countries and thereby trigger a new debt crisis& This would undermine the debt cancellations granted so far& A common response from Chinese scholars to the 0uestion of the ris, of a debt build up is that China does not e*pect African countries to pay bac, if it is a government to government loan and the recipient is facing pay bac, difficulties& China has provided debt relief to H# African countries to the amount of #"&9 billion R'B 4appro*imately B7T#&H; billion6 and has made further pledges& Another common answer to the concern raised is that Chinese lending is still small& Chinese sta,eholders also point out that Western countries are responsible for the debt crisis& As China steps up its lending to African countries% the 0uestion of how the potential debt distress is assessed by China is still very relevant& Dew lending pledges indicate that China in the near future will no longer be Ea small provider of loansF& According to the 3*im Ban,% China deals with debt sustainability in the lending agreements in three waysC They ensure project returns will be robust: they will consult with the local $' office to discuss the loan in the conte*t of the debt sustainability framewor,: they ensure that the project is part of the country)s development plans& According to the President of the Af.B% China)s view of debt sustainability differs from that of traditional donors& The Chinese% he has said% loo, at the potential of African countries in the long term% rather than assessing their immediate ability to repay loans&

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As there is little transparency on the e*act terms of Chinese loans and to which countries what loans are given% it is difficult to ,now if Chinese lending is a threat to the debt sustainability of poor countries% and if so how big a problem it is& The concern is however not difficult to motivate& ailed e*port credit lending was behind much of the previous debts of African countries and China is rapidly moving ahead in providing such loans& The reactions of traditional lenders have been critici-ed by C72s and others% who at the same time share the concern for the debt sustainability of African countries& $n particular the $.AGWorld Ban, so called Efree rider policyF% which punishes poor borrowing countries who ta,e on new more e*pensive loans% is seen as counterproductive& $t is clear that China as a new lender has accelerated the debate on responsible lending practices among traditional donors& $n the best case scenario% this could result in traditional donors stepping up their commitments and reforming some of the e*isting mechanisms which fall short of providing a long term solution to the debt crisis% as well as result in an agreement with China on debt sustainability and other aspects of responsible lending& 'utual understanding and dialogue are needed between new and old lenders and borrowing countries& D. 5onclusions and possible $a s for$ard The last chapter identifies a number of conclusions and possible ways forward that might be of relevance for different sta,eholdersC C72s in western countries% in Africa and China% and governmentsC the Chinese% African and western& The headings are listed belowC #& China)s assistance to and cooperation with Africa are changing the rules of the game and threaten to leave governments% institutions and organisations that do not act strategically by the wayside: !& Triangular dialogue approaches are needed: H& Western governments should practise what they preach: M& The Chinese government should convert words into action + from a narrow non1interference to a broad based Enon1indifferenceF: <& China)s growing role as a lender and donor to Africa challenges current development paradigms + towards joint standards for responsible lending and effective aid: >& China)s economic rise and so called Emarch into AfricaF challenges unsustainable consumption and production patterns + towards global cooperation for sustainability&

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de aan* ArHan -.//;0* 1&ill %hina %hange International De$elo"ment as &e DnoC It34 ISS Wor)in! Paper .o, ;5D* Den aag: Institute of Social Studies6 The answer to the 0uestion whether China will change international development is both no and yes& The newness of the different e*periences that China presents should not be over1stated& $ts development record is almost unparalleled% but the e*planations may not be as uni0ue as sometimes suggestedC its land reform% strategies of industrialisation% e*port1promotion% newly emerging global financial and soft power% can all be described without having to refer to necessarily uni0ue characteristics& And% as Chinese academics would be first to emphasise% the development model has created many of its own problems% notably domestic ine0uality% environmental degradation% and global financial instability& What ma,es China fairly uni0ue + but its e*planations not e*ceptional + is the commitment and ability to address e*isting and emerging development problems& But there are lessons that can be drawn from China)s development success% and $ believe the international community is rightly playing a growing role in promoting such lessons% and can do much to ensure this becomes less supply1led than is currently the case& There are lessons from China)s records in reducing poverty% providing food security% promoting alternative industrial models% how it has provided and funded infrastructure% etc& Perhaps notably + though much less easy to EreplicateF + there is great significance in understanding China)s processes of policy reforms% the e*perimental and incremental nature of addressing development problems& China)s e*perience needs to be better understood globally% and needs to be articulated in a way that ma,es it understandable to an international audience% while retaining the EChinese characteristicsF of the narrative& $n any case% China growing economic and political role% increasing confidence% and intentions to ta,e its deserved position in the international community% all are already changing international development as we ,now it& $ts approach to aid will have a growing influence in Africa% whatever the views of the old donors& $t is too early to assess what that impact will be% as Chinese approaches are evolving very rapidly% and it is not impossible that a whole new different aid structure will emerge 4though that is certainly not a current priority6& As with all new forces% the impacts will be varied% and better mutual understanding arguably can help to ma,e international development efforts of all parties more effective&

de aan* ArHan -./8/0* 1&ill +merging PoCers %hange International %oo"eration3 Im"lications of %hina@s Foreign Aid for Dutch and Other Donors*4 #imeo* submitted to The .etherlands Eear"oo) on International *ooperation, $ would ha-ard a guess that it will not be very long before China)s global role is no longer seen as e*ceptional as it is at the moment& A main reason for that would be that China itself does not want to be seen as e*ceptionalC it wants to reclaim its rightful global role and status% but it does not have an interest in standing out too much% and the recent e*perience suggests that if it does% it is li,ely to increase

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e*pectations to levels that prove unhelpful 4and some people have suggested that it is also a lesson it learned from 7outh ?orea6& There are clear signs that China is becoming an ever1more important part of the international fora& When it does this it will both modify and adapt to the mode of discourse + in all its diversity including within Africa where serious engagement with and analysis of China)s role is rapidly emerging + and to some e*tent its practices& 'aintaining distinctiveness should not be too problematic% given for e*ample enormous differences within the community of old donors& 7ome would argue that it is ta,ing long before China is ta,ing place at the tables of the old donor% but in ten to twenty years we will probably loo, bac, at an ama-ingly rapid transition of China)s role as aid recipient to that of a donor& 'any of the international agencies have been proactive in wor,ing with China% including the World Ban,% BD.P% the .AC% . $. etc& .uring the January !"#" 4in The Hague6 conference of .utch Ambassadors in Africa there was + besides a growing wealth of e*perience and diversity of e*perience regarding China)s role + also an enormous amount of interest in finding out how to engage with China& Those having wor,ed in Beijing on this issue have realised that currently there is more pressure from the old donors for this collaboration% than demand from Chinese agencies% which by comparison are enormously under1staffed% thus limiting the mere capacity to respond to calls for collaboration& But most people agree that the interest for collaboration is mutual% and this should not stop international agencies to e*plore new venues of collaboration& or each country venues for collaboration will be different% and a discussion on possible collaboration with China on international development could very well reinvigorate the post1WRR discussion on needs for specialisation and professionalisation& $n the process% there is much to learn for the old donors% about China)s own development model% and how it is ma,ing thus almost1uni0ue transition from being an aid recipient to an aid donor& The international community could for e*ample play a role in facilitating the process of learning from China)s own development successes and challenges + about which less is ,nown within the international community than about other emerging economies + or at least stop articulating mista,en notions about China& At least% the old donors + and indeed China itself + could draw on lessons from aid provided to China to understand the conditions under which aid can wor,% thus also countering criti0ues aid has been a complete failure&

Dollar* Da$id -.//A0* 1Lessons from %hina for Africa*4 Policy Research Wor)in! Paper ;D:1* &orld BanB6 3ach developing country faces uni0ue challenges and has to find its own way forward& Countries% however% can learn from each other and adapt lessons ta,en from other e*periences& China)s success with growth and poverty reduction over a 0uarter century provides many interesting lessons& 2n the positive side $ have focused on the sound investment climate% openness to foreign trade and direct investment% cost recovery as a basis of infrastructure e*pansion% and support to agriculture combined with rural1urban migration as interesting areas that other developing countries might want to study further&

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The way in which China has approached reform also provides interesting lessons& Chinese reform is sometimes characteri-ed as gradual% but $ do not thin, that this is an accurate characteri-ation& The actual change in institutions and policies in China over a !< year period is one of the most remar,able transformations in history& $t is hard to find other e*amples in which there has been so much change in such a short period of time& Rather than gradual% $ would call Chinese reform pragmatic and e*perience1based& China is a large and diverse country& $n many sectors there has been a process of pilot testing reform% evaluating results% and scaling up good ideas& 7ometimes this has been top1down and deliberateC foreign trade and investment were initially liberali-ed in special economic -ones% and as good results were achieved the trade and investment reforms were then e*tended to more and more locations& But the e*perimenting has often been bottom1up as well& 'uch of the enterprise reform% privati-ation% and creation of a sound investment climate has been the result of e*perimentation at a local level& Aocalities were given the objective of growth and the freedom to e*periment& Competition among cities has then led good ideas to disseminate broadly& $f there is a lesson here for other developing countries% it is to be pragmatic about reform& Try out new ideas% evaluate results% and then e*pand ones that wor,& There is also a useful lesson here for development agencies such as the World Ban,& The World Ban, has never had a particularly important financial role in China% but it has financed pilots and innovations in a broad range of sectors& $n the early days of reform World Ban, projects supported the development of grain mar,ets% the power tariff reforms discussed above% the use of tolls to finance road construction and management% commerciali-ation of rail and ports& 'ore recently the focus of the program has shifted to environmental and social issues& World Ban,1financed projects today support renewable energy technologies 4wind% biomass6% waste water treatment and clean1up of la,es and rivers% aforestation% urban transport management% rural health and education reform% and programs to help rural migrants integrate into urban employment& China uses the World Ban, to help it introduce% evaluate% and disseminate innovations% providing a good model for how the Ban, can help in successful middle1income countries&

+isenman* ?oshua and DurlantzicB* ?oshua -.//:0* Strategy*4 in *urrent =istory* #ay .//:* ""6 .8;-..<6 5ompeting .alues

1%hina@s

Africa

Bltimately% Africa will provide a test of whether Beijing can be a successful great power% e*erting influence far from its borders& $n some respects% China)s influence may prove benign% as China shares burdens in Africa with other nations li,e the Bnited 7tates% becomes a greater source of investment in the continent% and funds much1needed aid programs& 3ven as the Bnited 7tates has largely ignored African nations in BD forums% China has supported a range of proposals favored by African countries on BD 7ecurity Council reform% peace,eeping% and debt relief& $n so doing% Chinese officials often portray Beijing as a champion of the developing world that listens to other countries% drawing an implicit contrast with the Bnited 7tates% which China portrays

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as uninterested in developing nations) needs& As Chinese Prime 'inister Wen Jiabao put it% EAs a permanent member of the BD 7ecurity Council% China will always stand side by side with developing countries in Africa and other parts of the world&F Xet Beijing)s influence must be weighed in light of the fact that China% at least for now% does not share American values of democrati-ation and good governanceYin Africa or anywhere else& Because China)s influence might constrain the e*isting powers in Africa% including the Bnited 7tates and rance% the temptation may be to match some of China)s efforts on the continent in order to win resources& But it is more important that the Bnited 7tates leverage its values% which are still more appealing to average Africans& or the Bnited 7tates% China)s growing role in Africa should be a wa,eup call& Washington needs to convince both average Africans and their leaders that their future is better served% over the long term% by wor,ing more closely with the Bnited 7tates% the 3uropean Bnion% and international financial institutions& After all% a Chinese victory on the continent could come bac, to haunt the struggling residents of 'aputo and other African capitals&

Foster* 5i$ien* Butterfield* &illiam* %hen* %huan and PushaB* )ataliya -.//A0* 1Building Bridges: %hina@s 2roCing !ole as Infrastructure Financier for Sub-Saharan Africa*4 Trends and Policy 3ptions* )o6 7* &ashington* D%: ,he &orld BanB6 This study documents the emergence of China as a major new financier of infrastructure in 7ub17aharan Africa& Chinese financing commitments rose from less than B7T# billion per year in the early !"""s to e*ceed B7T5 billion in !"">% which was China)s official EXear of Africa&F 7uch indirect evidence as e*ists on the financing terms of these loans suggests that they are more favorable than the private capital mar,ets% though not as soft as 2.A& Thus% Chinese loans were found to have an average grant element of H> percent compared with >> percent for 2.A& China is not the only non123C. financier to be playing a major role in Africa& $ndian finance for African infrastructure projects is not far behind% with commitments averaging B7T! billion per year over the period !""< to !"">& Chinese and $ndian finance share many common characteristics: including their channeling through the respective countries) e*1im ban,s and their focus on countries that are becoming major petroleum trading partners% such as Digeria and 7udan& $n addition to China and $ndia% the Arab donors are also playing a significant role in African infrastructure finance% with their resources being channeled primarily in the form of soft loans through development funds focusing on roads and other social infrastructure projects& China)s approach to its intergovernmental financial cooperation forms part of a broader phenomenon of south1south economic cooperation between developing nations& The principles underlying this support are therefore ones of mutual benefit% reciprocity and complementarity& Bnli,e traditional 2.A% financing is not channeled through a development agency% but rather through the 3*1$m Ban, with its e*plicit mission to promote trade& /iven the e*port promotion rationale% the tying of

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financial support to the participation of contractors from the financing country is a typical feature& A similar approach is currently being ta,en by the $ndia 3*1$m Ban,% and has in the past been used by e*port credit agencies of other countries& 3ven compared to other developing regions% 7ub17aharan Africa faces a serious infrastructure deficit that is currently prejudicing growth and competitiveness& The estimated infrastructure financing needs are on the order of B7T!! billion per year with an associated funding gap of over B7T#" billion per year& Against this conte*t% the growth of Chinese 4and other emerging6 finance presents itself as an encouraging trend for the region% and can potentially ma,e a material contribution to closing the deficit& $n the power sector% for e*ample% the si* hydropower plants currently under construction amount to >%""" 'W of capacity and when completed would represent a H" percent increase over and above e*isting hydro capacity in the region& To put these findings in perspective% the combined contribution of China and the other emerging financiers at more than B7T; billion for !""> is broadly comparable to PP$ and e*ceeds the combined official development assistance of the 23C. countries that topped B7T< billion in the same year& The analysis shows a significant degree of complementarity in the sectoral and geographic focus of traditional and emerging finance& Don123C. donors tend to focus on productive infrastructures% mainly power 4in particular hydroelectric schemes6 and railways% and direct their resources primarily to major petroleum trading partners& Traditional donors tend to focus on public goods such as roads% water% sanitation% and electrification and spread their support more evenly% reaching non1resource1 e*porting countries to a greater e*tent& The advent of China and other non123C. players as major financiers presents itself as a hopeful trend for Africa% given the magnitude of its infrastructure deficit& The aid provided by these emerging financiers is unprecedented in scale and in its focus on large scale infrastructure projects& With new actors and new modalities% there is a learning process ahead for borrowers and financiers ali,e& The ,ey challenge for African governments will be how to ma,e the best strategic use of all e*ternal sources of infrastructure funding% including those of emerging financiers&

2ill* Bill* uang* %hin-hao and #orrison* ?6 Ste"hen -.//>0* *hina2s E>pandin! Role in Africa# Implications for the 6nited States * &ashington D%: %enter for Strategic International Studies6 China% in its 0uest for a closer strategic partnership with Africa% has increasingly dynamic economic% political% and diplomatic activities on the continent& As demonstrated in the third orum on China and Africa Cooperation 4 2CAC6 in Dovember !"">% the high1profile summit mar,ed a historic moment in China1Africa relations& China)s highest leadership actively espoused the summit)s ambitious vision% which was enthusiastically embraced by a broad range of African leaders& orty1eight African countries were present% including MH heads of state& The Chinese push forward in Africa raises the promise of achieving future gains that benefit Africa in significant% constructive ways% raising hopes that China will seriously turn its attention to long1neglected areas such as infrastructure development and that

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its strategic approach will raise Africa)s status globally% intensify political and mar,et competition% create promising new choices in e*ternal partnerships% strengthen African capacities to combat malaria and H$IGA$.7% and propel the continent)s economic growth% enabling African countries to better integrate with the global economy& This report identifies si* ,ey factors that significantly undergird the Chinese approachC #& China)s 0uest to build a strategic partnership with Africa fits s0uarely within Beijing)s global foreign policy strategy and its vision of the evolving international system& !& Chinese leaders and strategists believe China)s historical e*perience and development model resonate powerfully with African counterparts% thereby creating a comparative advantage vis1c1vis the West& H& China)s history of friendly% respectful% and helpful political lin,ages with Africa is thought to provide a durable foundation for a future strategic partnership& M& China believes Africa is on the verge of a developmental ta,eoff& <& China)s policyma,ers are confident that a state1centric approach to Africa will build strategically on Beijing)s core strengths and align with the stated preferences of African countries& >& Policyma,ers believe it is in China)s interest to engage third parties on Africa% but cautiously% slowly% and with serious reservations& .rawing momentum and confidence from the si* ,ey factors above% China)s e*pansive presence in Africa has been erected on an array of political% economic% and cultural e*changes that have proliferated in recent years& These activities visibly confirm China)s growing interest in Africa: they also visibly signal the continent)s emergent importance to China)s burgeoning economy and rising political stature& While China)s more ambitious and comple* Africa policy of today may in due course bring financial and political payoffs% alter the playing field in Africa% and create pressures for changes in B&7& policy approaches% multiple ris,s also attend China)s strategy& $n particular% Beijing faces nine core challenges in translating its vision of a strategic partnership with Africa into a sustainable realityC #& China will need to wor, assiduously to overcome obstacles tied to language% culture% religion% and racial bias& !& Although the 2CAC Beijing Action Plan calls for increased e*changes between African and Chinese media% and for the two sides to facilitate the placement of resident correspondents in China and in African countries% Chinese media and popular culture have only very limited entry into African mar,ets thus far& ?nowledge and e*pertise about Africa in China)s policy advisory and thin, tan, communities is thin and lac,ing in up1to1date% on1the1 ground e*perience&

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H& 3volving African popular opinionYthe EAfrican streetFYis not currently factored systematically into Beijing)s thin,ing& M& The Chinese approach is neither familiar nor well e0uipped to engage with the emergent and increasingly vocal and influential nongovernmental groups in Africa& <& Adhering to a formal policy of noninterference and putting it into consistent practice will be difficult and li,ely clash over time with deepening Chinese interests& >& $n the future% China will be under increasing pressure to define how it will direct and coordinate internally the comple* bundle of ambitious policy and programmatic initiatives it is advancing& 5& The Chinese diaspora business community poses special Ereputational ris,sF related to bribery and counterfeiting% among other controversial practices& ;& Pressures will mount for China to do more to harmoni-e its donor activity in Africa with ongoing international assistance% especially with respect to debt& 9& Pressures will mount on Beijing to manage its relations better with its most important bilateral partner% the Bnited 7tates% vis1c1vis Africa& China)s e*pansive engagement in Africa inherently carries significant implications for B&7& interests in Africa and around the world% as well as for B&7&1China relations& Ai,e China% the Bnited 7tates is in the midst of an e*pansive phase of ever1greater engagement in Africa& B&7& foreign assistance levels to Africa have more than tripled during the Bush administration& 7ignature White House initiatives have been launched that have had a predominant focus on AfricaC the five1year% T#<1billion President)s 3mergency A$.7 Relief Plan 4P3P AR6: the B&7& 'alaria $nitiative: and the 'illennium Challenge Corporation% which see,s to reward states that are well governed and performing well economically with substantial new aid compacts that will accelerated economic growth& Private1sector engagement is steadily rising% concentrated in the energy field% and annual two1way trade reached T>"&> billion in !""<% up H>&5 percent from !""M& $t is now widely ac,nowledged that B&7& national interests in Africa have burgeoned to include substantial global energy sta,es% counterterrorism concerns% public health% and intensifying competition with China% $ndia% 7outh ?orea% and other Asian countries that have significantly enlarged their engagement in Africa& Bp to now% the Bnited 7tates and China have been largely absorbed in their separate% respective spheres% enlarging their presence and investment in Africa% with little systematic or substantive reference to the other& 7ome initial thin, tan, research% as well as multiple media reports in the Bnited 7tates% has raised concerns about China1Africa relations% often framed in apprehensive or censorious terms& The Bnited 7tates and China did endorse in principle in !""< a B&7&1China subregional Africa dialogue% as part of the larger B&7&1China strategic dialogue% but since that point there has been very little progress in building real content into that commitment&

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China)s e*pansive engagement in Africa is a comple* new reality that we only partially graspYfast moving% multidimensional% and long1range in its various impactsYand it calls for greater attention and action in Washington& As such% critical wor, needs to be done to generate new% longer1range thin,ing and greater intellectual content to help create effective B&7& policies to engage China productively in Africa% if a costly B&7&1China clash in Africa is to be avoided& A strategic approach can build on the reality that% broadly spea,ing% the Bnited 7tates and China share a range of common interests in see,ing a more collaborative and constructive bilateral relationship& The relationship between the two countries is in a period of relative stability and constructive dialogue% presenting a window of opportunity to ma,e further gains in e*panding their common ground& 'ost obviously% the two sides have become deeply intertwined economically and share a joint interest in managing their political and security relationship in a way that assures continued bilateral economic benefits& $ntegral to any such approach% however% will be the e*pectation thatYowing to the wea, state institutions% high incidence of conflict% and relative economic fragility in most African countriesYdevelopments in Africa% independent of B&7&1China relations% will repeatedly test B&7& and Chinese approaches and their resolve to wor, collaboratively& $t will be no less important to anticipate that enduring philosophical% ideological% and programmatic differences% mutual suspicions and misunderstandings% and competitive tensions will sustain the ris, of a clash of B&7&1 China interests in Africa& Hence the special need to anticipate flash points in approaches to Africa and manage them preemptivelyC most important% at this point% are crisis cases such as .arfur% sensitive assistance issues such as debt and harmoni-ation of donor approaches% and access to energy resources& With urgent foreign and security policy concerns elsewhere around the world% and with several major and growing B&7& diplomatic% humanitarian% developmental% and security initiatives in process in Africa already% there is a ris, that B&7& policyma,ers will be unwilling or unable to give China)s e*pansive presence in Africa the priority time and policy energy it re0uires& This would be a mista,e& The opportunities and interests present themselves now to assess China)s approach to Africa more accurately% engage China more effectively% and wor, to shape outcomes in Africa that are beneficial to Africans% as well as Chinese and Americans& 'ore specifically% this report finds several promising options for B&7&1China1Africa collaboration at the multilateral% government1to1government% business% and civil society levels& 8ultilateral Le!el /ive high priority to multilateral organi-ationsYsuch as the BD 7ecurity Council% BD operational agencies% the African Bnion% and African subregional bodiesYas principal mechanisms for gaining Chinese support for B&7&1China1 Africa collaborations in political and security spheres& 3ncourage deeper engagement among China% the Bnited 7tates% and other international donors on the issues of development assistance% poverty alleviation programs% multilateral development ban,s lending% and African debt sustainability&

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3ncourage engagement of China at the /1; summit in /ermany in !""5% especially as it relates to the /1;)s priority focus in !""5 on African development& 3ngage China to ta,e part in the 3*tractive $ndustries Transparency $nitiative 43$T$6& China and its African partners% under the 2CAC umbrella% should establish a permanent secretariat or other high1level coordinating body to guide and implement their deepening partnership&

1ilateral 4o!ernment<to<4o!ernment (elations Accelerate the development of a more substantive agenda for B&7&1China cooperation in Africa% recogni-ing inherent limitations& $ncrease ongoing bilateral consultations addressing immediate and emergent challenges% especially regarding developments in the Diger .elta and in the arc stretching from the coastal Horn of Africa and inlandC 7omalia% 3thiopia% 7udan% and Chad& Ramp up military1to1military consultations regarding Africa between China and other ,ey players% including the African Bnion% 3uropean countries% and the Bnited 7tates& $ntensify collaboration on health1 and education1related issues in Africa&

1usiness, &conomic, and -rade )cti!ities 3*pect increased Chinese interest in business partnerships& 3ncourage Chinese public1private partnerships in Africa& 7ee, trilateral ways to wor, with African authorities to assure that the massive increases in B&7& and Chinese development and trade assistance complement one another&

5i!il "ociet and %ongo!ernmental ,rgani6ations acilitate interaction among Chinese% African% and international civil society organi-ations to meet on issues of common research interest% including observation of grass1roots elections% cooperative activities to support environmental protection or wor,er safety% and other civil society activity related to good governance% religious practice% community health% and rights of women and girls& acilitate interaction between B&7& and Chinese Africanists to deepen the level of Chinese scholarly understanding of contemporary Africa&

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2oldstein* Andrea* Pinaud* )icoloas* !eisen* elmut and %hen* Tiaobao -.//:0* 1%hina and India: &hat@s in it for Africa 34 Paris: O+%D De$elo"ment %entre Studies6 China and $ndia have fuelled the demand for African natural resources& Through their high rates of growth% e*port surpluses and reserve accumulation reinvested in B7 treasury bonds% they have contributed to dampen world inflation pressures% lower global interest rates% raise raw material prices and improve Africa)s terms of trade& This is however no reason to remain complacent& With the proceeds of that demand% the future of labour1rich and s,ill1friendly activities may be compromised% ine0ualities deepened and rent1see,ing get more pervasive& /overnments should also avoid policies that crowd out other industrial activities% particularly policies that support an appreciating currency& They should also see, to utilise increased ta* revenues from primary product e*ports to fund pro1poor initiatives& There are a number of potential conduits through which African growth prospects might be affected by the rise of the Asian .rivers& 2ne conduit of change lies in trading relationships& China and $ndia are mar,ets for African goods as well as competitors% especially in the e*port1oriented clothing and te*tile mar,ets in which 0uotas to protect African e*porters were removed in January !""<& 2n the other hand% African consumers gain from cheap consumer goods sourced from the Asian .rivers and African investors from cheap and appropriate capital goods& Another conduit is investment& China and $ndian firms are increasingly outward1oriented and resource1hungry& Authorities will have to use the opportunity of higher Asian corporate presence in Africa to turn them into a source of technology% s,ill formation and world mar,et access% apart from foreign finance that come with the investment& African countries will have to define how to fit into ChinaG$ndia1centred global value chains that are ta,ing shape and not be confined to the role of primary products suppliers& Resource rich Africa will have to balance the need to match the promotion of job1 creating sectors 4agro1business% te*tile% tradable services% etc&6 with the desire to capitalise on a windfall gain generated by higher commodity prices& 'onetary authorities might have to pursue a monetary policy that guards against the appreciation of the currency to the detriment of industries competing with imports and e*porters outside the resource sector& iscal authorities are re0uired to limit public spending on services and construction in order to limit real e*change rate appreciation& Prudent investment of windfall gains from e*haustible raw materials will also be needed% either to close financing gaps in reaching national 'illennium .evelopment /oals% through investment abroad or the reduction of domestic public debt& $ncreasing net assets will ensure higher consumption levels beyond the windfall period& While a range of industries will face a real fight for survival over the ne*t decades partly due to unit labour cost competition from China and $ndia% there is a list of industries that are either complementary to the rise of Asian .rivers or relatively secure from competition% such as food production& Catering for the demand originating from China and $ndia re0uires that Africa generate investment% technical s,ills and capacity in the field of agriculture% a tremendous tas, which in turn needs assistance from donors& /overnments should also see, to ensure that smallholders are able to participate in new e*port mar,ets&

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.onors need to consider whether to adapt e*isting policies 4e&g& mar,et preferential access6 aimed at reducing poverty and diversifying local economies in the light of China and $ndia)s e*pansion& Policies% such as emphasising the e*pansion of labour1 intensive manufactured e*ports as a means of poverty reduction% may need to be fine tuned% in light of the increasing competition and falling prices for many such products 4e&g& te*tile in a post1' Aconte*t6% while vertical integration in resource1 based industries will have to be supported increasingly& China)s and $ndia)s competition also ma,e it imperative for donors to stem the process of trade preference erosion% improve the effectiveness of e*isting trade preference schemes targeted at Africa% and thereby uphold African preferential access to developed countries) mar,ets&

2oldstein* #orris and Lardy* )icholas* !6 -.//70* 1%hina@s !ole in the !e$i$ed Bretton &oods System: A %ase of #istaBen Identity*4 Institute for International Economics Wor)in! Paper .um"er WP 0D-8* &ashington D6%6 BW! has attracted considerable attention because it offers a relatively parsimonious e*planation both for recent e*change rate policy in a number of Asian countries and for recent e*change rate and interest rate behavior in the Bnited 7tates& However% the BW! model is at variance with Chinese reality at many important points& $t suggests that China should focus e*clusively on undervaluing its e*change rate vis1c1vis the dollar% but more than half of China)s e*ports go to mar,ets other than the Bnited 7tates or to countries with currencies not pegged to the dollar& The e*change rate that matters most for China)s competitiveness and for employment in the e*port sectorYnamely the real trade1weighted e*change rateYe*hibited a nearly H" percent appreciation between #99M and early !""!& That is not consistent with the view that ,eeping the real trade1 weighted e*change rate undervalued has been an integral part of China)s development strategy& BW! implies that China)s currency has been significantly undervalued for about a decade whereas significant undervaluation of the renminbi is% in our judgment% a phenomenon that dates from early !""!& BW!)s argument that an important benefit of undervaluation is a large% efficient .$1financed capital stoc, ignores the fact that foreign investment in China has financed under < percent of fi*ed asset investment over the past few yearsYfar too small a share to offset the misallocation of investment financed through China)s wea, domestic ban,ing system& China also appears not to conform to the . / hypothesis that undervaluation will bias domestic indigenous investment strongly in favor of tradable goods% thus adding further to the superior foreign1financed capital stoc,& /oods that

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are e*ported from China% and thus meet what . / call the acid test of efficiency% are produced with only about > percent of the stoc, of fi*ed assets% of which only about half is purely indigenously owned& Without the capital stoc, argument% BW! is just another employment1oriented case for e*change rate undervaluation& BW! underestimates the costs of sterili-ation% particularly those associated with financial repression& ocusing on the low interest rate for central ban, paper is misleading because such instruments are placed primarily with the four largest state1owned ban,sYnot sold on a competitive% auction mar,et& Also% rates of interest on sterili-ation bonds and bills should include potentially large capital losses on China)s reserves associated with a revaluation of the renminbi against reserve currencies& And everything suggests that in the absence of e*change rate action% sterili-ation costs would rise appreciably if% as seems li,ely% both B7 current account deficit and China)s reserve accumulation became much larger in the future& The argument that supranormal profits generated by foreign firms e*porting from China will provide them with both the incentive and the resources to lobby to maintain trade openness in the Bnited 7tates appears to misunderstand several dimensions of reality in China& The profits of direct investors in China are modest% at best& And B7 firms investing in China for the most part are interested in selling on the domestic mar,et and do little e*porting bac, to the Bnited 7tates and thus have no direct sta,e in maintaining the openness of the B7 mar,et& $n contrast% Taiwanese and Hong ?ong firms producing in China% which do earn somewhat higher profits% are most dependent on the B7 mar,et& But they appear to ma,e no attempt to influence B7 trade policy& inally% BW! sets out a faulty development strategy for China over the coming decade& Rather than see,ing to promote an enclave economy based on a significantly undervalued e*change rate and on domestic financial repression% China needs to accelerate the pace of financialYparticularly ban,ingYreform: liberali-e interest rates and reduce reliance on administrative controls and window guidance: and move toward greater fle*ibility in the e*change rate over the medium terms% including an immediate #< to !< percent appreciation of the renminbi relative to a currency bas,et 4Aardy #99;% /oldstein !""M6& This is what we have called a Etwo1stage currency reformF 4/oldstein and Aardy !""Ha% !""Hb6& These policies will promote domestic financial stability% improve the allocation of China)s savings to their most productive use% provide the policy instruments necessary to manage the macroeconomy% enhance employment growth in the tradable and nontradable sectors% and are most li,ely to continue good access for China)s e*ports in world mar,ets&

ardus* Sarah -.//;0* *hina in Africa# *onseFuences for Traditional &onor Aid, A *ase Study of the Possi"le Influence of *hinese Economic Aid on

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Traditional &onor *onditionality in Gam"ia * #aster@s ,hesis* (ni$ersity of Amsterdam6 7ince the end of the Cold War% traditional donors have had a dominant position in Africa and conditional% traditional donor aid has been Africa)s main source of foreign finance& However% over the last years China has re1emerged as a donor in the continent% offering a different type of aid that consists of a combination of grants% loans and investments& $n this thesis% $ loo,ed at the possible conse0uences of the availability of Chinese aid for traditional donor aid and more specifically the conditions attached to it& ,utline of t#e researc# $n the first part of this thesis% $ discussed my theoretical framewor,% the conte*t in which my research was conducted and the way in which it was operationali-ed& The theory behind my research is based upon the different factors that influence aid conditionalityC the negotiating power of the recipient country% donor country interests and the composition of the donor community% which is the focal point of this thesis& 7everal scholars argue that the diversification of the donor community increases donor competition and the bargaining power of the recipient government% resulting in a decrease in conditionality& $n this thesis% $ assessed the e*tent to which this theory applies to the case of \ambia and tried to answer the following research 0uestionC (To what e*tent is traditional donor conditionality towards \ambia changing or e*pected to change because of Chinese economic aid to \ambiaW)& The empirical data that were outlined in this thesis% were gathered during fieldwor, in \ambia)s capital% Ausa,a between ebruary and 'ay !""9& \ambia is one of the poorest countries in Africa and has historically been highly dependent on donor aid& 'oreover% China and \ambia have a long1standing relationship that goes bac, to the #9>"s& Because \ambia has recently been receiving substantial amounts of Chinese aid again% it provided a good case to investigate the possible impact of Chinese aid on traditional donor conditionality in Africa& 'ost of my research data were collected through unstructured and semi1structured interviews with \ambian government institutions% traditional donor agencies and Chinese organi-ations& 'oreover% $ spo,e to different Western and \ambian organi-ations and several academics and consultants with ,nowledge on my research topic& Through my interviews% $ tried to grasp my informant)s perceptions of Chinese and traditional donor aid% the possible diversification of \ambia)s donor community% and the changes that might result from it& Another research method that $ used was discourse analysis& By loo,ing at different policy documents and two of \ambia)s popular newspapers% $ tried to collect additional information that could be contrasted with the data that were gathered during my interviews& )nal sis of t#e findings $ presented my empirical data in five chapters% which loo,ed at different parts of my analytical framewor,& $n chapter four% $ discussed my informant)s perceptions of traditional donor aid to \ambia& $ found that the current perceptions of my \ambian informants are still influenced by their negative e*periences% induced by 7APs and the withdrawal of traditional donor aid in the past& Although they value recent

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changes in traditional donor aid% they argue that too much aid goes to the social sector% compared to infrastructure% and that traditional donor aid is still insufficiently harmoni-ed& 'y informant)s perceptions of traditional donor conditionality vary to a great e*tent& While most \ambian informants argue that there is still a lot of (old1style) conditionality attached to traditional donor aid% several people within the 'o DP and the donors themselves% claim that there is no (real) conditionality anymore& According to them% donor re0uests that are aligned with \ambia)s national priorities% address a good cause or are inevitable% cannot be considered as conditionality& $n chapter five% $ loo,ed at Chinese economic aid& $n contrast to the history of the traditional donors% China)s history in \ambia is loo,ed bac, upon in a positive way& $ found that my informants use different definitions of Chinese economic aid% which influence their perception of the volume of Chinese aid and the range of activities that China is involved in& The traditional donors and most government officials use a narrow definition% which only includes grants and loans& Because of this% they argue that the amount of Chinese aid is negligible compared to traditional donor aid and China is only doing some small1scale projects& 'ost \ambians% however use a broader definition that also includes investment& Bsing this definition% the volume of Chinese aid comes close to the amount of traditional donor aid and Chinese aid flows into a broad range of sectors& All my informants agree that China attaches fewer conditions than the traditional donors and does not loo, at the political conte*t and governance issues in the recipient country& However% Chinese aid is not unconditional since \ambia cannot recogni-e Taiwan and there are several commercial conditions attached to it& China however provides easy aid% thereby ensuring continued access to \ambia)s natural resources and political support for the foreseeable future& $n chapter si*% $ assessed to what e*tent the availability of Chinese aid leads to diversification of \ambia)s donor community& $ showed that Chinese and traditional donor aid are different in their historical bac,ground% their aid policy and on the content% volume% activities and conditions attached to it& The two types of aid are also being portrayed in a different way in \ambia)s popular newspapers& Whereas China is put forward as a friendly country providing aid% the traditional donors are often represented in a paternalistic way& $ concluded that China gives a different type of aid than the traditional donors& Although there have been several initiatives for cooperation between China and the traditional donors% China is still operating outside the traditional donor framewor,s in \ambia& Because of this% \ambia)s donor community is diversifying& 'y theoretical framewor, predicts several changes that would result from the diversification of \ambia)s donor communityC donor competition% an increase in the bargaining power of the \ambian government% and a resulting decrease in conditionality& $n chapter seven and eight% $ discussed the e*tent to which my informants thin, these changes are becoming reality in \ambia& $ found that many \ambian informants agree with the se0uence of events% as predicted by the theory& The traditional donors and most officials in the 'o DP% however argue that these changes are unli,ely to occur& The difference of opinion between my informants% can be traced bac, to their different perceptions of Chinese and traditional donor aid& 'ost \ambian informants argue that traditional donor aid is still highly conditional& Because of this% they thin, that the government is loo,ing for a less

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conditional alternative% which it finds in China& 'oreover% because they see investments as a form of Chinese aid% it is argued that China)s aid is substantial enough to compete with traditional donor aid& The traditional donors and officials in the 'o DP% however claim that the government does not have a problem with current conditionality and is not loo,ing for less conditional aid& urthermore% they use a narrow definition of Chinese aid and argue that the volume of Chinese aid is too small to compete with traditional donor aid& According to them% Chinese aid is an additional instead of a competitive source of finance& The people that see competition between China and the traditional donors% argue that the availability of Chinese economic aid gives the \ambian government more policy space% since it enables the government to finance projects that the traditional donors are unable or unwilling to fund& 'oreover% they claim that the government no longer has to meet all the conditions that the traditional donors put forward& 'ost people however argue that the government is unable to use this policy space in order to increase its bargaining power towards the traditional donors& As discussed in my theoretical framewor,% ne*t to the composition of the donor community% there are several national factors that influence the negotiating power of the recipient government& Because of \ambia)s high dependence on donor aid and a lac, of capacity% the government is said to be unable to negotiate the aid it is being offered% let alone play off donors in order to get more desirable aid& urthermore% the traditional donors are said to have penetrated \ambia)s policy ma,ing process% which allows them to influence \ambia)s choice of donors& Possible changes in donor competition and the bargaining power of the \ambian government% are also thought to be influenced by the amount of interests that traditional donors have in \ambia& The theory argues that donors are more li,ely to compete and be responsive to re0uests of the recipient country if they have national interests to protect& Although some \ambian informants argue that the traditional donors have more or less direct interests in \ambia% most people say that the traditional donors have few strategic interests in \ambia& This reduces the li,eliness of competition between China and the traditional donors and an increase in the bargaining power of the \ambian government& 3ven though there are several factors that limit the probability of a decrease in traditional donor conditionality because of Chinese economic aid to \ambia% in chapter eight% $ loo,ed at my informant)s perceptions of changes in past% current and future donor conditions to \ambia& Although they cannot come up with any specific cases% some \ambian informants argue that the traditional donors have adjusted their conditions& 'ost people however claim that traditional donor conditionality has not changed and is unli,ely to change in the future& 7everal informants state that current donor conditions are based on deep beliefs% which the donors see as a prere0uisite for development& Because of this% they cannot do away with them& 2ther informants ta,e a realist perspective and argue that the donors will not lower conditions because they do not have any interests in \ambia% for which they will stay and compete& The donors have a general interest in having a good relationship with \ambia% in order to ,eep \ambia)s support in international institutions& This is however unli,ely to be enough for the donors to change their conditions& They are therefore more li,ely to refuse to ma,e a deal or withdraw than compete by lowering conditionality& This might however be different in African

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countries that have strategically important natural resources or are less stable% thereby creating a possible threat for international security& Based on current perceptions% $ conclude that traditional donor conditionality towards \ambia is not changing and is also unli,ely to change in the future because of Chinese economic aid to \ambia& The perceptions of my \ambian informants that argue the opposite% seem to be based on wishful thin,ing& Because of negative e*periences with traditional donor aid in the past% many \ambians still long for an alternative% which they hope to find in China& Their e*pectation is reinforced by \ambia)s popular media% which fre0uently reports on Chinese aid to \ambia and portrays China as an attractive alternative for traditional donor aid& urthermore% the 'o DP and the traditional donors% who are the main actors involved in negotiations over donor conditionality% say conditionalities will not change because of Chinese aid& 7ince they are the ones ma,ing the decisions% their perceptions carry more weight than the perceptions of my \ambian informants% who do e*pect changes in traditional donor conditionality& inally% traditional donor conditions are unli,ely to change in the future% because the \ambian government cannot influence all the factors that limit the li,eliness of adjustments in conditionality& $t can try to increase its capacity and reduce its dependence on donor aid% but it cannot influence the national conte*t within the donor countries or change the interests that the donors have in \ambia& "ome t#eoretical reflections $n order to be applicable to the \ambian case% my theoretical framewor, needs several adjustments& All informants agree that Chinese economic aid leads to diversification of the donor community& Dot everybody however thin,s that this diversification will result in lower conditionality& $n order to e*plain this difference of opinion% the theory should ta,e into account the various definitions of traditional donor conditionality and Chinese economic aid that are being used% since these influence informant)s perceptions of possible changes in donor competition& 'oreover% the theory should consider that ne*t to the composition of the donor community% there are different national factors that influence a country)s bargaining power% such as its donor dependence and the capacity within the government& inally% my theoretical framewor, is based on the Cold War period% in which African countries were of strategic geopolitical importance& According to the theory% donors need to have a certain amount of self1interest in order to stay% compete and adjust their conditionalities& The theory should however ta,e into account that several African countries have long lost their strategic importance& 'ost traditional donors do not have any major political or economic strategic interests in \ambia at the moment& Because they do not have any interests to protect% they are unli,ely to adjust their conditions in order to be able to compete with Chinese less conditional aid& $t will however be important to do further research on the possible conse0uences of Chinese economic aid for traditional donor aid and the conditions attached to it% both in \ambia and in other countries& urther research in \ambia is important because China has only recently re1entered \ambia)s donor community and its aid is increasing rapidly& As $ discussed before% it is still 0uite soon to see any real changes& 'oreover% changes in the \ambian presidency and the end of the financial crisis% can be e*pected to alter the current situation& $t will therefore be important to

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do more research in a later stage& 7ince no empirical research has been done on the conse0uences of Chinese economic aid for traditional donor aid% it not yet possible to compare my findings with other research data and assess the e*tent to which my data can be generali-ed& $t is therefore important to conduct similar research in other African countries& $n my research% $ outlined different variables% which ma,e it unli,ely that traditional donors will adjust their conditionalities in \ambia& $n order to be able to verify my findings% it is important to do comparable research in countries with different circumstances% especially countries that are of strategic importance to the traditional donors% li,e Angola% Digeria% 7udan and \imbabwe& $f my argument is correct% the donors will be more inclined to change their aid conditions in countries that are less aid dependent% have more government capacity and are of strategic importance to the donors& 7ince my research too, place in an early stage% it would have been impossible to lin, possible changes in traditional donor conditionality to China)s presence in \ambia& $n future research% it might however be relevant to (measure) conditionalities in aid contracts and 'oBs between the traditional donors and African countries% which appeared after China)s re1entrance into the donor1 community& 'oreover% the method of C.A has much to offer and could in further research be used more thoroughly& $t would be worthy to e*plore the difference between reality and perception more in depth% since perceptions seem to carry a lot of weight when loo,ing at the donor1recipient relationship& De*t to this% because research on traditional donor conditionality deals with the policy level% it is hard to go beyond the public discourse that is being put forward& $f possible% future research should therefore try to collect data through participant observation in discussions amongst the donors% and during negotiations between the donors and the recipient government& urthermore% it would be useful to do interviews at the donor)s head offices% since this is where the strategic policy towards China in Africa is decided upon& inally% it is also important to do research on topics that are related to my research& As $ discussed in chapter five% there are several ris,s attached to Chinese aid& Although my research focused on the opportunities and did not deal with the possible negative conse0uences of Chinese aid in depth% research on this topic is important% since it might hinder development in African countries& As $ stated in the beginning of this thesis% over the years% traditional donor conditionality has become highly intrusive on the policies of African states& $n my research% $ found that many \ambian informants thin, traditional donor conditionality is over1ambitious and time1consuming% which can have damaging conse0uences for the recipient country& Because of this% they e*press the hope that something will change because of Chinese economic aid to their country& $n this thesis% $ however concluded that traditional donor conditions are not changing at the moment and the traditional donors are also unli,ely to adjust their conditions in the future& $f the government uses its increased policy space in a wise way% China)s re1entrance into \ambia% can however still allow \ambia to discard conditions that are damaging% ineffective% or out of date% thereby giving it more space to try new development paths&

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e* &en"ing -.//>0* 1,he Balancing Act of %hina@s Africa Policy*4 in *hina Security* 5ol6 9* )o6 9* ""6 .9-</6 KNL 7elping )frica 7elp Itself Perhaps the most salient feature of the 7ino1African relationship is that it is progressive and forward1thin,ing& China is loo,ing to further cooperation with Africa both hori-ontally and vertically + to increase interaction between China and Africa at a multitude of political% social and cultural levels while also e*panding economic cooperation beyond traditional sectors to all areas of commerce% industry and technology&H" Released by the Chinese government in !"">% China)s first white paper regarding its relations with Africa% 5#ina;s )frican Polic % elaborates a detailed plan for future relations with Africa including political cooperation 4on international affairs and between political parties and political organi-ations6% economic cooperation 4resource e*ploration and financial dealings6% and cooperation in the fields of education% science% culture% health and social wor,% as well as peace and security&H# While 5#ina;s )frican Polic is a blueprint for future relations% 2CAC is the vehicle to e*plore and implement effective methods to reali-e the goals of the white paper& This forum is the culmination of a half1century of China)s active diplomacy on the African continent& 3stablished in 2ctober !"""% it is also the first multilateral% consultative mechanism between China and Africa& 7ince the Cold War% there is an increasing awareness among African countries of the need to unite to increase their power by Espea,ing with one voiceF to the outside world in order to effectively pursue goals of self1development and independent conflict resolution& The estab1 lishment of the African Bnion reflects a deep desire to achieve this& A collective multilateral mechanism% such as 2CAC% provides Africa with a platform to ta,e action and strengthen its position through integrated and strategic policy formulation on a comprehensive range of African issues& Aastly% it reduces re1 dundancy and increases efficiency in diplomatic interaction% no small cost1saving when considering the number of sovereign nations in Africa& Bnli,e the many EclubsF around the world that allegedly provide assistance for development in Africa% 2CAC does not attempt to e*hibit its wor, li,e a showcase for acts of benevolence& Rather it is a low ,ey% concrete% stable and yet very important platform to build relations between China and African countries& Bac, in !""<% the /roup of 3ight countries made an historic decision to forgive T<" billion in debt to #; of the poorest countries in the world 4#M of them in Africa6 and to vastly increase their aid to Africa& H! Xet% to date% these promises have not been honored& China% on the other hand has ta,en action toward debt reduction and other commitments over its) past si* years of aid e*pansion in Africa& Bp to #<> debts totaling T#&M billion from H# poor and heavily1indebted African countries have been reduced andGor e*empted by China& urthermore% appro*imately !"" commodities from the least developed countries in Africa have been given tariff1free status in Chinese mar,ets&HH China and Africa continue to e*plore new ways to effectively combine 2CAC)s action plans with EThe Dew Partnership for Africa)s .evelopment%FHM which is set to inject new impetus into future cooperation& China must continue to focus on its growing relationship with Africa + not only to rectify current criticism and doubt from the international community% but in an

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effort to carry out its promises and commitments& The 7ino1African relationship is deepening in an array of political% economic% foreign policy% social development and environmental areas% all of which are important for domestic stability in both China and African nations% their bilateral relations and the broader international community& While China faces an e*tremely difficult tas, to follow through on its commitments to Africa% there is no doubt that China will not only fulfill such promises% and also do so with a degree of integrity that will produce effective% high1 0uality outcomes&

o* Peter -.//;0* 1Beyond De$elo"ment OrthodoKy: %hinese Lessons in Pragmatism and Institutional %hange*4 in Dremer* #oniIue* $an Lieshout* Peter and &ent* !obert -eds60* &oin! Good or &oin! +etter# &evelopment Policies in a Glo"ali7in! World* ""6 8>>-.8/* Amsterdam (ni$ersity Press6 Implications of 5#inese De!elopment+ "ome 5oncluding ,bser!ations The effects of China)s development are visible everywhereC international mar,ets are increasingly interwoven with the Chinese mar,et and vice versa& China has become the wor,shop of the world% and not only the proverbial (sweatshop) for cheap te*tiles% shoes and toys& 2n the contrary% in recent years China has shifted to the production of hi1tech electronics% cars and computers& This shift is testimony to China)s growing economic% scientific and innovative power for decades to come& The Chinese economy generates a huge capital surplus and% in turn% attracts even greater flows of investments& As the enormous capital surplus see,s its way out of the country% the world is entering a new era of Eglobali-ation with Chinese characteristicsF& Xet% just a couple of decades ago China was still a developing country& How did this rapid development come about% and what might the development sector learn from itW 'any scholars see the Chinese state as decisive in fostering development and tal, about Estate1led developmentF and the EChinese developmental stateF 47o !""#: White #9;;6& 2thers draw attention to China)s rapid industriali-ation and the Elocal corporatist stateF + an efficient partnership between local government and rural industries 42i #99<6& Xet% these e*planations neglect to e*plore #o$ the state channels development& $n this regard% ,nowledge about the change of institutions is critical& We have little information about the choices of institutional change that Chinese policyma,ers facedC what form institutions should ta,e: whether new institutions should be established: and if so% when they should be introduced& At a certain point in time% any national government that has started down the development road is confronted with the 0uestion of what position informal institutions% such as customary and communal land use arrangements% should be accorded relative to formal% statutory institutions& 7hould the state actively intervene in communal% agrarian society by setting up new institutions% or should informal institutions be simply incorporated into the national regulatory framewor,W 7hould traditional% informal sectors be left alone% or should they be restructured to fit the commercial demands of national and international mar,etsW The Chinese case proves these 0uestions to be a non1issue& The debate should not be about the desired level of formality or informality of institutions% their re0uired

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level of privati-ation or communality% but about their current level of credibility& 2nly by loo,ing at the e*tent to which institutions are supported or contested by social actors can states ultimately assess their viability& There is nothing to gain by spending huge amounts of time% energy and financial resources on the establishment of institutions that a few years later simply prove to be (empty institutions)& The development sector might have much to learn in this respect% whether we tal, about large1scale land titling projects% irrigation and rural development schemes% civil society building projects or economic restructuring programs& 2ne of the core institutions that moved forward China)s development is the Household Contract Responsibility 7ystem& $t is the institutional successor of a communist% bureaucratic 'oloch + the People)s Communes& But different than the commune system% the agricultural lease system manages to provide a stable livelihood to the majority of the population while enabling rural industriali-ation% the transfer of agricultural surplus labour% and the overall diversification and moderni-ation of agriculture& $t is becoming increasingly clear that China)s agricultural lease system is converging towards tenure systems elsewhere in the world& <; or instance% it bears a stri,ing resemblance to the system of long lease in some parts of the Detherlands under which municipal governments own land% but lease it to individuals for << or 5< years& 2ne might also say it is similar to the British system of Crown land that entitles tenants to a (freehold) + a lease as secure as the civil law definition of absolute ownership&<9 There was% however% never an institutional plan or blueprint by the Chinese state to move the nation towards such a tenure system& $t is the result of institutional evolution& The main reason why the state was successful in channelling such evolution is the result of the main features of Chinese developmentC credibility and gradualism& 2n institutional change% 7tiglit- once remar,edC ETypically% institutions 4N6 develop an internal coherency that is not too dissonant with the e*ternal environment they must face& When it becomes too dissonant% then institutions must changeF 4!"""C >M6& China proves him right about the internal coherency& The credibility that the Household Contract Responsibility 7ystem has enjoyed throughout the reforms is all about internal coherency& $t is the reason why China)s lease system + contrary to what a*ioms of neo1classical theory predict and postulate + has succeeded in coupling stable% sustained development with a high degree of insecurity% informality% and communality& 2n the other hand% whether institutions must change if their internal coherency gets out of syncopation with the environment is by no means evident& $n fact% if the Chinese case proves one thing beyond any doubt% it is that institutional innovation is no tas, for the state& Contrarily% institutional innovation was initiated at the rural grassroots& Was China)s agricultural lease system then a fully fledged% autonomous peasant movementW As a Chinese scholar described with passionC EA spontaneous% unorgani-ed% leaderless% nonideological% apolitical movement% and it is rapidly sweeping away everything in its path& 4N6 The farmers of China are changing China this time around + not the leaders% not the bureaucrats% not the cadres% not the intellectuals but the farmers themselvesF 4\hou #99>C #1M6&

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Appealing as it may seem% such a romantici-ed idea misreads China)s institutional dynamics& The evolution of credible institutions is not a matter of one or the other + state versus society% dependent versus independent variable% cause versus effect + it is a matter of interaction& Thus% while China)s institutional innovation started at the grassroots% it was the state that allowed it to happen% protected it when it was contested% and codified and upscaled it once it had proven effective& .oing this regardless of an institution)s form or function + formal or informal% secure or insecure% private or common + touches on the core of credibility& 2ne can only concur with /rabel that Ecredibility is always secured endogenously 4N6% rather than e*ogenously by virtue of the epistemological status of the theory that promotes itF 4/rabel !"""C !1H6& While credibility is one crucial component in Chinese development% gradualism is certainly the crucial other& 2nly if we allow for the elapse of time can we truly see how state and society interact in the shaping of institutions& $ronically% precisely this fact tends to be neglected now that the Household Contract Responsibility 7ystem has proven itself& 2nce more% similar to the #9;"s and #99"s% there are forceful voices that call for the commerciali-ation% privati-ation and formali-ation of land tenure& .uring the drafting of the !""5 Property Aaw% many scholars and congress members felt that the state should no longer postpone mar,et liberali-ation% but push forward the commerciali-ation of rural land tenure& >" They see the recent sprouts of a rudimentary land mar,et around the cities as substantiating their argument&># These proponents forget that it was gradualism that facilitated the Ecapitalist mar,et e*perimentsF within a conte*t of state1upheld institutional ambiguity% and that it too, two decades of local e*perimentation before they were finally legali-ed& 'ore importantly% the fact that in some regions the Household Contract Responsibility 7ystem seems to be changing in nature does not preclude that it still functions as a social welfare net for the rural populace in most parts of China& The continued support of the majority of the farmers for an egalitarian land distribution points in this direction& China)s tremendous development has effectively split the nation in twoC a largely agrarian society with the main part of the population still under1employed on small1 scale% fragmented family farms versus an industrialising% urbani-ing society with a rising middle class eager to buy their own cars and houses and chose their own political representation& Carefully balancing the hugely different institutional constellations of these two worlds is the daunting challenge that confronts the Chinese state& As the villages around the cities are integrated into the urban and global economy% the central state starts to ponder how the institutional change of the evolving lease system can be channeled& $t does so by loo,ing outside China in the hope of finding institutional histories with converging trajectories& China)s 0uest for institutional parallels means that we have come full circleC at e*actly this point% opportunities for a new ,ind of development cooperation are opened up& Contrary to the popular belief that China is no longer a developing country% the Chinese state still faces fundamental choices of institutional design% 0uite different from those faced by governments in% for instance% Western 3urope and Dorth America& Dowhere is this more obvious than around the institutional governance of land& $mportant 0uestions that China see,s to answer in this respect areC What are the possible drawbac,s of a land lease systemW 2r% can land lease sufficiently ensure social actors) confidence in the value of property rights even if ownership is not theirsW The .utch system for instance of long lease has e*isted since as early as the

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#<th and #>th century& Bnderstanding why this institution has survived for so long is critical for the Chinese authorities and can aid them in better facilitating their own institutional e*periments& And it is important for them to ,now the historical and cultural reasons that caused some cities such as Amsterdam and The Hague to adopt long lease% while others adopted private ownership 4?oerts !"">C #!6& or one thing% China lac,s a cadastre in the countryside% and the rights of ownership and individual lease still need to be titled and registered& A basic institution in society that facilitates economic transfers% such as a cadastre% ta,es many decades to evolve and is strongly dependent on country1specific circumstances& The .utch cadastre% today renowned for its efficiency% transparency and accuracy% >! dates bac, almost two centuries to #;H!& .uring this long time span the .utch have made certain institutional choices% for instance% to protect the truthful owner rather than the buyer of the property&>H 2nly after a verdict of the 7upreme Court in #;H; was this regulation formally established& or a country li,e China where the urban sprawl has caused the forced evictions of millions of farmers and homeowners% the protection of the true owner rather than the buyer might thus have important legal conse0uences&>M China no longer needs conventional aid such as for poverty alleviation% literacy programs% or the building of schools% roads and hospitals& But there is a heartfelt need for new ways of development cooperation in the form of international e*change% action research and pilot projects on institutional change& 7uch development cooperation embraces (country1drivenness) and (bottom1up development) as we are dealing with a state that drives its own development% while ,nowing how to facilitate rather than to intervene in bottom1up innovation& or China% new development cooperation can help to grasp the opportunities and constraints of its own institutional architecture& or us% China)s successful divergence from widely accepted theorems is well worth studying in greater detail& $t might have profound implications for our conceptuali-ation of development& The balance between state and society% informality and formality% private and common% intervention and a Ehands1offF approach% needs serious reconsideration& As China)s institutional constellation step1by1step consolidates in one way or the other + a British system of Crown land or the Amsterdam system of long lease + it will prompt us to rethin, theory and pra*is of development% and shift to new (rules of developmental engagement)& $t all comes down to gradualism and credibility% or what the Chinese call pragmatism&

Information Office of the State %ouncil of the Peo"leJs !e"ublic of %hina -.//70* *hina2s Peaceful &evelopment Road6 I. Peaceful De!elopment Is t#e Ine!itable /a for 5#ina;s 8oderni6ation BRE II. Promoting /orld Peace and De!elopment $it# 5#ina;s ,$n 4ro$t# Peace is the foundation for development while development is fundamental for peace& or years% the Chinese government and people have made unremitting efforts to create a peaceful international environment& They cherish dearly the peaceful international environment jointly created by the peace1loving and

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progress1see,ing countries and peoples% concentrate on their own construction and whole1heartedly see, development% and strive constantly to ma,e positive contributions to world peace and development with their own growth% and promote human civili-ation and progress& ChinaZs development needs a peaceful international environment& 7ince #95;% when the policies of reform and opening1up were adopted% China has endeavored to develop itself within a peaceful international environment& $ts /.P has increased from H>!&M billion yuan 4about B7T!#<&H billion if converted directly from Renminbi into B7 dollar at the average e*change rate of that year6 to #<%9;5&; billion yuan 4about B7T#9H#&5 billion if converted directly from Renminbi into B7 dollar at the average e*change rate of that year6 in !""M% an average growth rate of over 9 percent per annum% calculated according to constant price& $ts per1capita /.P has risen from less than B7TH"" to more than B7T#%M""& China has also made new progress in its building of political civili-ation% with its democratic system being improved continuously% the freedom and rights of citi-ens being protected and guaranteed by law% and its people e*ercising their rights of democratic election% decision1ma,ing% administration and supervision in accordance with the law& A legal system centered on the Constitution has ta,en initial shape% and the basic strategy of ruling the country by law has been implemented& Rapid progress has been scored in its education% science and technology% culture% health% sports and other underta,ings% and the increasing spiritual and cultural needs of the people have been constantly satisfied& The construction of a harmonious society has been reinforced% and the state is wor,ing hard to reali-e and safeguard social fairness and justice% increase creativity of the whole society% beef up social construction and administration% and maintain social stability and harmonious relations between man and Dature& ChinaZs development is an important component of global development& China has promoted world peace with its own development and made contributions to the progress of man,ind& China has made contributions to the sustained development of human society& Based on previous e*perience and the fruits of modern civili-ation of man,ind% it has adopted the scientific outloo, on development to transform its concepts% create new modes for growth and enhance the 0uality of development& 2ver the years% China has persisted in e*ploring a new road to industriali-ation% featuring high scientific and technological content% good economic returns% low resources consumption% little environmental pollution and a full display of advantages in human resources% and striven to steer the entire society along a road of sustained development of civili-ation% with advanced production% affluent life and favorable ecological conditions& ChinaZs success in population control has retarded the e*pansion of the population of the world as a whole& China emphasi-es energy saving% and has adopted various measures in this regard& .uring the period #9;"1 !"""% its /.P 0uadrupled% but the annual consumption of energy only doubled& .ue to ChinaZs intensified efforts at environmental protection% its dust discharge has remained the same as in #9;" despite a big increase in installed thermal1power capacity& $ts energy consumption of per #"%"""1yuan /.P in !""M dropped by M< percent compared to #99"& China has made medium1 and long1term plans for energy conservation% aiming to ,eep an annual energy1saving rate of H percent by !"!"% to save #&M billion tons of standard coal&

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China has made contributions to reducing human poverty and improving the 0uality of life& $t has created a miracle by feeding nearly !! percent of the worldZs population on less than #" percent of the worldZs arable land& The living standards of its #&H billion people are constantly improving& The Chinese government has lifted !!" million people out of poverty% and provided minimum living allowances to !!&"< million urban residents and aid to >" million disabled people& The life e*pectancy of the Chinese has been e*tended from H< years before Dew China was founded in #9M9 to 5#&9< years today% close to that of moderately developed countries& China has made contributions to safeguarding world peace and promoting international cooperation& 2n the basis of the ive Principles of Peaceful Coe*istence% China has developed friendly% cooperative relations with other countries and promoted peaceful coe*istence and e0ual treatment among countries& China has always adhered to the principle of being a friendly neighbor: and has constantly developed good and cooperative relationships with surrounding countries and other Asian countries and e*panded common interests with them& China has established various cooperative relationships with major powers% and unremittingly augmented mutual dialogues% e*changes and cooperation& China has also e*pedited cooperation with a vast number of developing countries% to see, common development by drawing on one anotherZs advantages within the 7outh1 7outh cooperation framewor,& Active in the settlement of serious international and regional problems% China shoulders broad international obligations% and plays a responsible and constructive role& China has made contributions to world economic development& $n recent years% despite increasingly severe global economic fluctuations% ChinaZs economy has maintained a stable and relatively fast growth% bringing hope and a new driving force to world economic development& 7tatistics released by the World Ban, show that ChinaZs economic growth contributed on average #H percent to world economic growth from !""" to !""M& $n !""M% the world economy reported the swiftest growth in H" years% while ChinaZs economy grew by 9&< percent and became a ,ey driving force for the former& Also in !""M% ChinaZs import and e*port figure doubled that of three years previously% reaching B7T#%#<M&; billion% and its import figure nearly doubled that of three years previously% reaching B7T<>#&M billion& By the end of !""M% China had made use of B7T5M<&H billion paid1in foreign capital% and approved more than <""%""" foreign1funded enterprises& China has made contributions to the stable development of surrounding areas& China has more than !" neighbors that either border on its territory or lie across the nearby seas& ChinaZs sustained economic growth% social stability and its peopleZs peaceful life also benefit its neighboring countries& The Asia1Pacific economy ,ept a >1percent growth between #999 and !""M& To ensure a stable environment for the continuous development of its surrounding areas% China overcame arduous difficulties at the time of the #995 Asian financial crisis% and stuc, to the principle of ,eeping the value of the Renminbi stable while e*panding domestic demand% and helped to the best of its ability the victim countries to weather the crisis& China played its role in finally overcoming the crisis& $n the case of the !""H sudden outbrea, of 7AR7% the Chinese government too, decisive steps% and cooperated with its neighbors in effectively curbing it& Bpon the occurrence of the $ndian 2cean tsunami in late !""M% the Chinese government and its people offered timely and sincere aid 1 the largest e*ternal aid in the history of Dew China 1 to the suffering

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countries in their rescue and re1construction effort& The Chinese also e*pressed great sympathy and e*tended assistance when 7outh Asia was struc, by massive earth0ua,es in 2ctober !""<& .espite gigantic achievements% China still remains the largest developing country in the world% with a formidable tas, of development lying ahead& According to the latest statistics released by the World Ban, and statistics recently released by China% in !""M% ChinaZs aggregate economic volume accounted only for #>&> percent of that of the B7% and its per1capita /.P was merely H&> percent that of the B7 and M&" percent of Japan% ran,ing #!9th among !"; countries and regions around the world& By the end of !""M% !>&# million rural Chinese still lived under the poverty line% more than #"" million farmers have to be provided with jobs elsewhere% and the government is obliged to create jobs for nearly !M million urban and rural residents every year& There is still a long way to go for China to reach the level of the moderately developed countries and achieve common prosperity for the whole country& China still needs to ma,e persistent efforts to strive for a peaceful international environment for its own development% and promote world peace and development with its own growth& This is particularly significant for both China and the world as a whole&

III. De!eloping b (el ing on Its ,$n "trengt#, (eform and Inno!ation BRE I.. "ee2ing 8utual 1enefit and 5ommon De!elopment $it# ,t#er 5ountries China cannot develop independently without the rest of the world& Ai,ewise% the world needs China if it is to attain prosperity& ollowing the trend of economic globali-ation% China is participating in international economic and technological cooperation on an ever larger scale% in wider areas and at higher levels in an effort to push economic globali-ation towards the direction of common prosperity for all countries& Today% the mainstream of international trade is to share successes% with all as winners& China adheres to its opening1up strategy for mutual benefit& or this% it has made conforming to ChinaZs own interests while promoting common development a basic principle guiding its foreign economic and trade wor,% develops its economic and trade relations with other countries on the basis of e0uality% mutual benefit and reciprocity% and ma,es constant contributions to the sustained growth of global trade& China has e*erted itself to push forward multilateral economic and trade relations and regional economic cooperation% actively participated in the formulation and e*ecution of international economic and trade rules% and joined various other countries in settling disputes and problems emerging in their cooperation% so as to promote the balanced and orderly development of the world economy& China has been an active supporter of and participant in multilateral trade system& 7ince its accession to the WT2 in .ecember !""#% China has strictly ,ept its commitments to create more favorable conditions for international economic and technological cooperation& China has sorted out and revised some H%""" laws% regulations and department rules% continually improved its foreign1related economic legal system% and enhanced the transparency of its trade policies& China has cut its customs tariffs step by step% as promised% and by !""< its average tariffs had been

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reduced to 9&9 percent% and most non1tariff measures had been cancelled& Ban,ing% insurance% securities% distribution and other service trade sectors have opened wider to the outside world& 2f the #>"1odd service trade sectors listed by the WT2% China has opened more than #""% or >!&< percent% a level close to that of the developed countries& China has actively pushed ahead with a new round of multilateral trade negotiations% participated in tal,s on various topics% especially on agriculture% mar,et access of non1farm products and the service trades% and played a constructive role in helping developing and developed members reduce disputes through tal,s& China% together with other WT2 members% has done a lot of wor, to spur substantial progress to reach early agreement among the negotiators& China has continuously stepped up participation in regional economic cooperation& The building of the China1A73AD ree Trade Area is going full steam ahead& ollowing the practice of -ero tariffs on farm products under the [3arly Harvest Program%[ the Agreements on Trade in /oods and the .ispute 7ettlement 'echanism Agreement were formally signed in Dovember !""M% and in July !""< the free trade area launched its tariff concession program% clearing the way for reali-ing its goals& At present% the building of the 7hanghai Cooperation 2rgani-ation is proceeding with comprehensive and pragmatic cooperation% and its process to facilitate trade investment has been launched in an all1round way& China has also initiated negotiations on such free trade areas as the China17outhern African .evelopment Community% China1/ulf Cooperation Council% and China1Dew \ealand% China1Chile% China1Australia and China1Pa,istan% and signed relevant agreements with its partners& China is also an active and pragmatic participant in the activities of the Asia1Pacific 3conomic Cooperation% orum on China1Africa Cooperation% 7ino1Arab Cooperation orum% Asia13urope 'eeting and /reater 'e,ong 7ubregion 3conomic Cooperation Program& China advocates the liberali-ation and facilitation of investment in bilateral trade% and has signed bilateral trade agreements or protocols with more than #<" countries and regions% bilateral investment protection agreements with more than ##" countries% and agreements with over ;" countries on the avoidance of double tariffs& China stic,s to the principle of mutual benefit and win1win cooperation% tries to find proper settlement of trade conflicts and promotes common development with other countries& Trade conflicts are 0uite natural in international economic e*changes& ollowing international practice and WT2 rules% China has tried to resolve such conflicts through dialogue on an e0ual footing and through the WT2 dispute settlement mechanism& When promulgating and implementing domestic economic policies% it tries to ta,e international factors and influences into account as well as the impacts its own economic growth imposes on the outside world& Based on its reform and development% China is serious in judging the effects its e*change rate reform may bring to surrounding countries and regions% and the global economy and finance& $t has thus advanced the reform in a steady way% adopted a managed floating e*change rate regime based on mar,et supply and demand% and lin,ed and adjusted it according to a bas,et of currencies% so that the Renminbi e*change rate will remain stable at a reasonable and balanced level& China has intensified its protection of intellectual property rights% improved the relevant legal system% and tightened up law enforcement to crac, down on all ,inds of violations& /rowing China is active in international economic and technological cooperation% and provides good opportunities and a huge mar,et for the rest of the world& All

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countries% the developed countries in particular% have reaped lucrative benefits from investment in and service trade with China& ChinaZs active involvement in the international division of labor and cooperation is conducive to the reasonable and effective distribution of global resources& As the largest developing country in the world% China boasts an abundant labor force% the 0uality of which has been constantly improving& $t is a natural advantage of China in developing labor1intensive industries and some technology1intensive ones& Along with economic and social progress% as well as the improvement of the living standards of its people% ChinaZs demand for capital1% technology1 and ,nowledge1 intensive products ,eeps increasing% offering great opportunities for foreign products% technologies and services% as the country has now evolved into an internationally ac,nowledged big mar,et& ChinaZs foreign trade is mutually supplementary with many countries& About 5" percent of ChinaZs e*ports to the B7% Japan and the 3urope Bnion 43B6 are labor1intensive% while ;" percent of its imports from the three are capital1% technology1 and ,nowledge1intensive& $n the new structure of international labor division% the country has become a ,ey lin, in the global industrial chain& By importing cheap but good10uality products made in China% the importing countries can reduce their e*penditure and pressure caused by inflation while satisfying the demands and enhancing the welfare of their consumers& ChinaZs labor1intensive products enjoy uni0ue comparative advantages in the global mar,et& 7ince #995% B7 consumers have saved billions of dollars every year by buying Chinese commodities 1 B7T>"" billion in the past decade and nearly B7T#"" billion in !""M alone& The e*pansion of ChinaZs reciprocal economic and trade relations with other countries has benefited both in a tremendous way& ChinaZs imports have ,ept growing by a yearly #> percent since #95;% and the country imported commodities worth B7T#%!5" billion in the three transitional years following its WT2 accession& $n !""M% China became the worldZs third largest importer% ne*t only to the B7 and /ermany% with B7T#M;&M5 billion of increased imports or 9 percent of the worldZs total growth of imports& Also in !""M% ChinaZs trade volume with the 3B% the B7 and Japan totaled B7T#55&H billion% B7T#>9&> billion and B7T#>5&; billion% respectively% ma,ing them ChinaZs top three trade partners and main sources of foreign investment& $n the same year% ChinaZs trade volume with Asian countries and regions amounted to B7T>>M&9 billion% HM&! percent up over that of the previous year& This figure accounted for <5&> percent of ChinaZs total foreign trade value& $n addition% China has become the fourth largest trading partner of and a fast1growing mar,et for A73AD& The huge mar,et of China offers such great opportunities for international capital that investors around the world have benefited from ChinaZs rapid economic growth& rom #99" to !""M% foreign investors repatriated B7T!<"&> billion in profits from China& $n !""M% B71funded enterprises in China generated B7T5< billion in sales revenue in China% and their products earned another B7T5< billion elsewhere& A !""< survey by the American Chamber of Commerce1PeopleZs Republic of China shows that 5" percent of American firms are ma,ing profits in China% and about M! percent report a higher profit rate than their global average&

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ChinaZs growing investment abroad has also fueled the economies of the destination countries& At the end of !""M% ChinaZs net non1ban,ing direct investment abroad amounted to B7TMM&; billion% spreading to #M9 countries and regions& Among which% B7THH&M billion% or 5< percent% went to Asia& ChinaZs foreign economic and trade cooperation has tremendous potential and boosts bright prospects& $n the post1WT2 era% China imported B7T<"" billion worth of commodities annually during the period from .ecember !""# to 7eptember !""<% which meant #" million jobs for the countries and regions concerned& $n the ne*t few years% it will import B7T>"" billion worth of goods annually% and the amount will e*ceed B7T#%""" billion by !"#"& By !"!"% the scale and total demand of the Chinese mar,et will 0uadruple that in !"""& .uring the process% the rest of the world will find development and business opportunities in their reciprocal cooperation with China% which will greatly accelerate the growth of the global economy&

.. 1uilding a 7armonious /orld of "ustained Peace and 5ommon Prosperit 'an,ind has only one home 1 the 3arth& Building a harmonious world of sustained peace and common prosperity is a common wish of the people throughout the world as well as the lofty goal of China in ta,ing the road of peaceful development& China holds that the harmonious world should be democratic% harmonious% just% and tolerant& - ("holding democracy and eIuality to achie$e coordination and coo"eration6 All countries should% on the basis of the BD Charter and the ive Principles of Peaceful Coe*istence% promote democracy in international relations through dialogue% communication and cooperation& The internal affairs of a country should be decided by its people% international affairs should be discussed and solved by all countries on an e0ual footing% and developing countries ought to enjoy the e0ual right to participate in and ma,e decisions on international affairs& All countries should respect each other and treat each other e0ually& Do country is entitled to impose its own will upon others% or maintain its security and development at the price of the interests of others& The international community should oppose unilateralism% advocate and promote multilateralism% and ma,e the BD and its 7ecurity Council play a more active role in international affairs& When dealing with international relations% it is necessary to persist in proceeding from the common interests of all the people throughout the world% ma,e efforts to e*pand common interests% enhance understanding through communication% strengthen cooperation through understanding and create a win1win situation through cooperation& - ("holding harmony and mutual trust to realize common security6 All countries should join hands to respond to threats against world security& We should abandon the Cold War mentality% cultivate a new security concept featuring mutual trust% mutual benefit% e0uality and coordination% build a fair and effective collective security mechanism aimed at jointly preventing conflict and war% and cooperate to eliminate or reduce as much as possible threats from such non1traditional security problems as terrorist activities% financial crises and natural disasters% so as to

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safeguard world peace% security and stability& We should persist in settling international disputes and conflicts peacefully through consultations and negotiations on the basis of e0uality% wor, together to oppose acts of encroachment on the sovereignty of other countries% interference in the internal affairs of other countries% and willful use or threat of use of military force& We should step up cooperation in a resolute fight against terrorism% stamp out both the symptoms and root causes of the problem of terrorism% with special emphasis on eliminating the root cause of the menace& We should achieve effective disarmament and arms control in a fair% rational% comprehensive and balanced fashion% prevent the proliferation of weapons of mass destruction% vigorously promote the international nuclear disarmament process% and maintain global strategic stability& - ("holding fairness and mutual benefit to achie$e common de$elo"ment6 $n the process of economic globali-ation% we should stic, to the principle of fairness% achieve balanced and orderly development% and benefit all countries% developing countries in particular% instead of further widening of the gap between 7outh and Dorth& We should propel economic globali-ation towards the direction of common prosperity& The developed countries should shoulder greater responsibility for a universal% coordinated and balanced development of the world% while the developing countries should ma,e full use of their own advantages to achieve development& We should actively further trade and investment liberali-ation and facilitation% remove all ,inds of trade barriers% increase mar,et access% ease restrictions on technology e*port% so as to establish an international multilateral trading system that is public% fair% rational% transparent% open and nondiscriminatory% and construct a good trading environment conducive to orderly global economic development& We should further improve the international financial system to create a stable and highly efficient financial environment conducive to global economic growth& We should step up worldwide dialogue and cooperation on energy% and jointly maintain energy security and energy mar,et stability& We should actively promote and guarantee human rights to ensure that everyone enjoys e0ual opportunities and right to pursue overall development& We should ma,e innovations in the mode of development% promote the harmonious development of man and Dature% and ta,e the road of sustainable development& - ("holding tolerance and o"ening to achie$e dialogue among ci$ilizations6 .iversity of civili-ations is a basic feature of human society% and an important driving force for the progress of man,ind& All countries should respect other countryZs right to independently choose their own social systems and paths of development% learn from one another and draw on the strong points of others to ma,e up for their own wea, points% thus achieving rejuvenation and development in line with their own national conditions& .ialogues and e*changes among civili-ations should be encouraged with the aim of doing away with misgivings and estrangement e*isting between civili-ations% and develop together by see,ing common ground while putting aside differences% so as to ma,e man,ind more harmonious and the world more colorful& We should endeavor to preserve the diversity of civili-ations and development patterns% and jointly build a harmonious world where all civili-ations coe*ist and accommodate one another& 2ver the years% China has persisted in the policies of peace% development and cooperation% and pursued an independent foreign policy of peace& $n the spirit of democracy% harmony% justice and tolerance% China has been playing a constructive

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role% and ma,ing efforts to attain the lofty goal of building a harmonious world together with all other countries& China is wor,ing hard to bring about a just and rational new international political and economic order% and stands for greater democracy in international relations& China adheres to the purpose and principles of the BD Charter% attaches great importance to the BDZs role in international affairs as the core of the international multilateral mechanism% vigorously promotes multilateral cooperation to settle regional conflicts and development problems% and actively supports the BD to play a greater role in international affairs& China bac,s up BD reform% and firmly helps safeguard its long1term interests and the common interests of its members& China has joined more than #H" inter1governmental international organi-ations% including the $nternational Atomic 3nergy Agency 4$A3A6% is committed to !>5 international multilateral treaties such as the Treaty on the Don1Proliferation of Duclear Weapons% and actively participates in international cooperation in such fields as anti1terrorism% arms control% non1proliferation% peace,eeping% economy and trade% development% human rights% law1enforcement% and the environment& China ta,es practical steps to establish fraternal relations with surrounding regions and promote cooperation in maintaining regional security& $n line with the generally ac,nowledged principles of international law and in the spirit of consultation on the basis of e0uality% mutual understanding and mutual accommodation% China has made efforts to properly resolve boundary issues with neighboring countries% settle disputes and promote stability& 7o far% than,s to joint efforts with various countries% China has signed boundary treaties with #! continental neighbors% settling boundary issues left over from history& The boundary issues with $ndia and Bhutan are in the process of being settled& China actively promotes dialogue and cooperation on regional security% and plays a positive and constructive role in such regional mechanisms as A73AD l China% A73AD l China% Japan and the R2?% 7hanghai Cooperation 2rgani-ation% Asia Pacific 3conomic Cooperation% A73AD Regional orum% and Asian Cooperation .ialogue& China has joined the Treaty of Amity and Cooperation in 7outheast Asia% lending new vitality to the peaceful and friendly relationship between China and A73AD members& China plays a constructive role in resolving weighty international and regional issues for common security& With respect to the nuclear issue on the ?orean Peninsula% China has wor,ed tirelessly with the other relevant parties% and succeeded in convening and hosting first the Three1Party Tal,s 4China% Dorth ?orea and the Bnited 7tates6 and then the 7i*1Party Tal,s 4China% Dorth ?orea% the Bnited 7tates% the Republic of ?orea% Russia and Japan6& China was instrumental in getting the participants to issue a joint statement% thus mitigating tension on the peninsula% and contributing constructively to peace and stability in Dortheast Asia& Regarding the 'iddle 3ast issue% China encourages the parties involved to resume tal,s and start a new peace process based on relevant BD resolutions and the principle of [Aand for Peace&[ As for the $ra0 issue% China advocates see,ing a political solution within the BD framewor,% and is ma,ing great efforts in this regard& 2n the $ran nuclear issue% China has tried several approaches to persuade the parties involved to engage in dialogue and find a proper and peaceful settlement within the $A3A framewor,& 'oreover% China is e*panding its participation in BD peace,eeping efforts% having sent military personnel% police and civil officers on #M BD peace,eeping missions% to the number of H%"""&

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or many years% China has provided assistance within its capacity to other developing countries to help them build the capacity for self1development as well as engage in common development& 7o far% China has provided assistance to more than ##" countries and regional organi-ations for over !%""" projects& China has reduced or canceled #9; debts totaling #>&> billion yuan owed to it by MM developing countries& $n 'ay !""<% the $nternational Poverty1Reduction Center in China was formally set up in Beijing& $n 7eptember !""<% at the High1Aevel 'eeting on inancing for .evelopment% on the occasion of the >"th Anniversary of the Bnited Dations% President Hu Jintao announced the new measures China would adopt to increase assistance to other developing countriesC China will give -ero tariff treatment for certain products to all the H9 Aeast1.eveloped Countries 4A.Cs6 having diplomatic relations with China% covering most commodities e*ported by these countries to China: further e*pand aid to Heavily $ndebted Poor Countries 4H$PCs6 and A.Cs: through bilateral channels% e*empt or cancel in other ways within the ne*t two years of all the outstanding interest1free and low1interest government loans due as of the end of !""M owed by all the H$PCs having diplomatic relations with China: within the ne*t three years% provide B7T#" billion in preferential loans and preferential e*port buyerZs credit to developing countries to help them strengthen the construction of infrastructure% promote enterprises of both sides to carry out joint venture cooperation: within the ne*t three years% increase aid to developing countries% particularly aid to African countries in related areas% provide to them medicines including effective drugs to prevent malaria% help them build and improve medical facilities and train medical personnel: and train H"%""" persons of various professions from the developing countries within the ne*t three years% and help relevant countries e*pedite the training of talented people& China continuously enhances e*changes and dialogues with other civili-ations to promote mutual tolerance& 2pening% tolerance and all1embracing are important features of Chinese civili-ation& As the trend of economic globali-ation develops in depth% China% all the more aware of the significance of e*changes and dialogues among different civili-ations% is wor,ing harder to get the rest of the world to understand China% while absorbing and drawing on the useful fruits of other civili-ations& $n recent years% China has cooperated with numerous countries in holding Culture Wee,s% Culture Tours% Culture estivals and Culture Xears% thus helping promote e*changes and understanding between the Chinese people and other peoples% and creating new forms for e0ual dialogue between civili-ations&

5onclusion China is the largest developing country in the world& The #&H billion Chinese people% ta,ing the road of peaceful development% undoubtedly play a critical and positive role in the lofty pursuit of the peace and development of man,ind& The Chinese government and people are well aware that China is still a developing country facing a lot of difficulties and problems on its road of development% and therefore it still has a long way to go before moderni-ation is achieved& The road of peaceful development accords with the fundamental interests of the Chinese people: it also conforms to the objective re0uirements of social development and progress of man,ind& China is now ta,ing the road of peaceful development% and

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will continue to do so when it gets stronger in the future& The resolve of the Chinese government and the Chinese people to stic, to the road of peaceful development is unsha,able& The Chinese government and people also see clearly that peace and development% the two overriding issues facing the world% have not yet been fundamentally achieved& Aocal wars and conflicts arising from various causes ,eep erupting& Problems and conflicts in some regions remain complicated and thorny& Traditional and non1traditional factors threatening security are intertwined& The wealth gap between Dorth and 7outh continues to widen& People in some countries are still being denied the basic right to subsistence% and even survival& All this has made the road leading to a harmonious world characteri-ed by sustained peace and common prosperity a bumpy and challenging one% and reaching the goal demands long and unremitting efforts by the people throughout the world& The !#st century has opened up bright prospects% and human society is developing at an unprecedented rate& China has identified its goal for the first !" years of this century& That is% to build a moderately well1off society in an all1round way that benefits over one billion people% further develop ChinaZs economy% improve democracy% advance science and education% enrich culture% foster greater social harmony and upgrade the 0uality of life of the Chinese people& China is certain to ma,e more contributions to the lofty cause of peace and development of man,ind&

Da"linsBy* !a"hael* #c%ormicB* Dorothy and #orris* #iBe -.//>0* 1,he Im"act of %hina on Sub-Saharan Africa*4 I&S Wor)in! Paper 841* Brighton: Institute of De$elo"ment Studies6 -#e 5#allenge+ 8a'imi6ing ,pportunities and 8inimi6ing -#reats Although 77A)s trade with China is relatively small in comparison to its trade with the industrialised countries% it has grown very rapidly% especially since !""#& There is a danger of overestimating the historic and present impact% and underestimating the potential future impact of China on 77A& #& At a general level% China)s impact on 77AC $nvolves three primary types of lin,s + trade% productionG .$ and aid: $s in some cases complementary to growth and poverty alleviation% in other cases it is competitive: $s both direct 4in bilateral lin,s between individual countries and China6 and indirect 4with the impact being felt in third1country mar,ets6: Reflects a mi* of strategic% political and economic factors% and involves a range of sta,eholders% both within China and in 77A&

7ince these varied impacts are unevenly felt within and between countries% it is important to maintain a comprehensive perspective if the opportunities are to be

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ma*imised and the threats minimised in such a way as to sustain poverty alleviation and to enhance income distribution& !& 'ore specifically% with regard to the trade channelC China has predominantly imported a limited number of products + mostly oil and hard commodities + from a limited number of 77A economies& $n return% it predominantly e*ports manufactures% mostly final consumption goods& 'ost is ,nown about the direct trade lin,s% in which China now has a growing trade surplus with 77A& These direct trade lin,s combine complementary impacts 4notably enhancing consumer welfare through cheap goods6% and competitive impacts where there is evidence that domestic manufacturers are in some countries being s0uee-ed by China1sourced imports& The indirect trade lin,s% arising through Chinese participation in global mar,ets% are more difficult to assess& $n general% it would appear that 77A economies gain from these indirect lin,s% since the price of many of 77A)s imports are falling due to growing Chinese competitiveness% and China)s imports of commodities are pushing up the prices of 77A e*ports& However% in some sectors% notably clothing and furniture% there is persuasive evidence that China)s growing competitiveness in global mar,ets is having a very harmful impact on poor 77A e*porting economies& Aesotho% 7wa-iland% 'adagascar and ?enya have all been badly hit% and there have been particularly damaging impacts on 7outh Africa& 3mployment loss has been high% with very severe distributional and poverty impacts&

H& With regard to the .$% production and aid vectorsC The Chinese presence in 77A appears to be driven primarily by the strategic search for raw materials rather than for final mar,ets or for low1cost production platforms& Chinese firms wor, to longer time hori-ons than Western and Japanese firms% in part because many are state1owned and do not appear to be subject to the same short1term profit1ma*imising imperatives% and in part because of their access to low1cost capital& There is increasing Chinese participation in the energy and resource sectors% particularly in fragile states such as the 7udan% Angola and the .RC& This is lin,ed to attempts by some fragile states to evade pressures by western donors and D/2s to promote more transparent and better governance& 2ther realms of activity are in infrastructure development 4Chinese firms appear to have costs which are one10uarter to one1half less than Western and 7outh African firms6: in small enterprises in some countries 4for e*ample 7ierra Aeone6: in trading 4for e*ample% Damibia6: and in farming 4for e*ample% as is emerging in 'o-ambi0ue6&

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Chinese aid is growing throughout the region% particularly in recent years% and appears to be carefully targeted to complement its commercial activities% including in fragile states&

/#at /e Don;t Ino$ Whilst these major policy challenges are clear% important ,ey ,nowledge gaps e*ist which need to be filled if policy responses are to be appropriately nuanced for individual country circumstances& The major ,nowledge gaps are with regard toC The need for baseline studies to assess the changing future impact of China on 77A: Analyses of the determinants of 77A competitiveness and the steps re0uired to enhance productivity 4for e*ample% in clothing% te*tiles% footwear and furniture% as well as in e*port1oriented food crops6: A more thorough assessment of indirect impacts of China)s trade on 77A% facilitating the development of appropriate policies for providing special and differential treatment to low income 77A economies in global mar,ets: .etermining the impact of China on consumer welfare% income distribution and absolute poverty levels in 77A% through an analysis of the consumer benefits derived from cheaper imports% and the distributional implications of a switch in specialisation away from labour1intensive manufactures to capital intensive commodities: .istinguishing generic from sub1regional and country1specific impacts% aiding the classification of different types of 77A economies: $dentifying li,ely future areas of threat and opportunity: .etermining the drivers of China)s strategic engagement with 77A and their impact on transparent and better governance on the continent&

5onclusion This growing Chinese presence raises si* major policy challenges for 77A if the manifold opportunities are to be grasped and the threats minimisedC #& $t poses particular threats to the manufacturing sector& Here the outloo, is not entirely blea,% but 77A countries need to ta,e e*plicit steps to counter act the dangers posed to e*isting and future capabilities in industry& !& Although the commodity boom favours some 77A economies% it poses very severe problems of economic management& Poorly1handled% a resourceboom can easily become a resource1curse& 'uch can be learned from the e*perience of other countries 4including in 77A6 in handling these resourcebooms& H& Dotwithstanding the welfare gains to the poor from lower import prices% the e*pansion of capital1intensive mineral production and the decline of labour1

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intensive manufactures pose severe challenges for poverty1alleviation and income distribution& There is% moreover% the additional problem that resource1 production is closely associated with violence% corruption and fragile states& Policies to ameliorate these potential adverse poverty1related impacts need to be addressed& M& Ain,ed to this% China has actively forged closer lin,s with fragile states and this has undermined attempts by the global community to enhance transparency and better governance& There is also emerging evidence that attempts to foster better corporate and environmental governance are also being undermined by China)s presence in some 77A countries& <& African economies are being pulled in different directions with regard to their lin,ages with other economies& 2ne pressure is to sustain historical lin,s with the 3B and Dorth America% cemented by various preferential trading agreements& Another pressure is to strengthen lin,s with other 77A economies% particularly in southern Africa& A third pressure is to enhance lin,s with Asia in general% and China in particular& 7carce administrative and strategic capabilities may re0uire 77A economies to choose how they respond to these various pulls& There are strong arguments for a concerted (loo, 3ast) policy& >& The ,ey capability which 77A economies re0uire is the development of dynamic capabilities to scan changing environments% to develop appropriate strategic responses and to implement these strategies effectively& Bnless these capabilities are built + in government% in the corporate and farming sectors% and in civil society + the opportunities offered by Chinese growth may be overwhelmed by the threats which are raised& This applies particularly to emerging sectors of Chinese demand 4for e*ample% imports of food products6& All of this poses severe challenges for a variety of sta,eholdersC for governments% firms% farms and civil society within 77A: for Chinese sta,eholders who may be insufficiently aware of their impact on 77A: for . $. and other bi1 and multi1lateral agencies who have much to offer in helping to build appropriate 4dynamic6 capabilities% and to mediate between different governments and sta,eholders&

Da"linsBy* !a"hael* #c%ormicB* Dorothy and #orris* #iBe -.//A0* 1%hina and Sub Saharan Africa: Im"acts and %hallenges of a 2roCing !elationshi"*4 School of Advanced International Studies Wor)in! Papers in African Studies 0D-09* &ashington* D%: ,he ?ohn o"Bins (ni$ersity6 The detailed analysis presented in this paper has supported the growing reali-ation that China)s present and potential impact on 77A is both far1reaching and comple*&

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The synthetic framewor, proposed in 7ection ! has been helpful in disentangling the impact channels and their various effects% but even this systematic approach has produced only a partial picture of China)s impact on 77A& This is at least partly because of gaps in our ,nowledge& 7ome of these gaps result from lac, of data% but others arise because the organi-ation of Chinese society means that the channels are intertwined in ways not immediately obvious to outsiders& This appears to be especially true of the production and aid channels% but may also apply to trade& The result is that some potentially important areas of impact may be misunderstood or missed altogether& China)s public pronouncements convey a desire for a relationship of 7outh17outh cooperation% of one developing country helping another 4?ing !"">6& 7uch a two1 way relationship can only be fruitful if both parties respect one another and are ready to listen and learn from each other)s e*perience& The relationship also needs to be underpinned by an understanding of how the actions of one are li,ely to affect the life of the other& 2nly then will genuine partnerships be possible&

Ding* Denneth -.//:0 1Aid &ithin the &ider %hina-Africa Partnershi": A 5ieC from the BeiHing Summit*4 #imeo6 5oncluding 5omments on )id in t#e /ider Partners#ip $t is important to locate the specifically aid dimension of the 7ummit within the wider Partnership perspective& By the time the final .eclaration of the Beijing 7ummit had been read out% not by China alone% but in sections by China)s president% the 3thiopian premier who is Co1Chair of 2CAC% and by the 3gyptian president who will become Co1Chair through to the ne*t summit in Cairo% references to aid or development assistance were much less in evidence& $nterestingly% (development assistance) was only used once in the Beijing 7ummit .eclaration% and was reserved for the attention of the developed economies% along with a single mention of the './s and poverty reductionC We call on the international community to encourage and support Africa)s efforts to pursue peace and development& $n particular% we urge developed countries to increase official development assistance and honour their commitment to opening mar,ets and debt relief to enhance Africa)s capacity in poverty and disaster reduction and prevention and control of desertification% and help Africa realise the BD 'illennium .evelopment /oals& 4 2CAC .eclaration in 5#ina Dail % >&##& !"">6 What had appeared as specific assistance commitments in President Hu)s eight points had been rewor,ed within 2CAC)s preferred language of (political e0uality and mutual trust% economic win1win cooperation and cultural e*changes)& The commitments now appeared in a much more comprehensive statement of two1way cooperationC .eepen and broaden mutually beneficial cooperation and give top priority to cooperation in agriculture% infrastructure% industry% fishing% $T% public health and personnel training to draw on each other)s strengths& 4 2CAC% ibid&6

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The greater detail of the Action Plan from the Beijing 7ummit% M> of course% still contains the specific pledges of President Hu% on hospitals% anti1malaria centres and rural schools% and goes beyond his speech to mention Confucius $nstitutes to help meet local needs in Africa for Chinese language& But as is traditional in these cooperative 2CAC agreements% the priority is first given to political relations% then to economic cooperation% then international affairs% and only then to social development& And within social development% the agreements typically cut across what we have called the aidGnon1aid boundary& Thus% two1way cultural and media e*changes% twinning% and people1to1people agreements all fall within this category% as does the granting of Approved .estination 7tatus for tourism& M5 7o do the more one1way agreements on scholarships% schools and hospitals 4 2CAC Action Plan in 5#ina Dail % >&##&!"">6& As far as coverage in the immediate aftermath of the 7ummit is concerned% the African presidents who stayed on for a time% such as 'be,i of 7outh Africa% and Boutefli,a of Algeria have continued a strong emphasis on their bilateral ties and on bilateral agreements with China% across a wide range of cooperative endeavours& 'eanwhile% the opening of the African Commodities 3*position in Beijing)s $nternational Conference Centre on the day after the 7ummit strongly reinforced the two1way trade focus of the larger orum& Do less than #5" firms from !H African countries have ta,en advantage to display at the 3*position& We shall loo,% finally% at what may prove influential from this 7ummit& $t would seem successfully to have married intensive bilateral cooperation in a wide and inclusive% collective framewor,% apparently without a prescriptive tone: Two1way trade and business opportunities have been very visibly associated with the 7ummit and new business instruments set up to maintain the momentum: A series of new development assistance initiatives have been promised in education% health% preferential loans% mar,et access and debt cancellation: Possibly% as influential as anything over the period of almost a wee, surrounding the 7ummit has been the positive engagement with Africa in innumerable articles% interviews% pictures% films% hoardings and posters& With presidents and premiers% with students and researchers% with business people and traders% with ambassadors and with school1children& Dot to mention Africa in dance% song% music% cuisine% dress and art& The theme of (Ama-ing Africa) has been a welcome change from the s,eletal Africa of starving% staring children% H$I A$.7 and refugee camps&

Will the images lastW The 7ummit has offered no Beijing 'odel% or Beijing ConsensusM; Rather& KsicL it has confirmed a strategic partnership that does not depend on a donor to deliver but on African countries) efforts independently to resolve African problems& $t has disseminated the Chinese notion of (win1win) for both China and Africa: and has preferred to propose the goal of (prosperity for all) to the goal of (ma,ing poverty history)&

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Donings* Piet -.//>0* 1%hina and Africa: Building a Strategic Partnershi"*4 in Journal of &evelopin! Societies* 5ol6 .9* )o6 9* ""6 9<8-9:>6 China has had a long involvement with Africa mar,ed by ups and downs% and continuities and shifts in policy& While China and Africa have often had mutual interests in various forms of cooperation% their relations have not always been without friction and tensions& China)s initial interest in Africa was primarily motivated by Cold War ideological and strategic considerations& $ts main objectives during the Cold War era were to compete with western and 7oviet influences on the continent and to shore up votes for the eventual rejection of Taiwan)s credentials at the BD& China)s anti1western% anti17oviet and anti1Taiwan thrust% combined with its self1identification with Third World struggles% has shaped its foreign aid activities in Africa& China initially lac,ed the resources of the Cold War superpowers% but still invested significant energy in the reali-ation of its objectives& $t dispatched technicians to Africa to provide modest social and economic assistance% as well as military training and to build infrastructural monuments to China1Africa solidarity% including the first railway to lin, Tan-ania and landloc,ed \ambia during the period of opposition to 7outh Africa)s regional hegemony during apartheid& $ts financial and military support to (revolutionary) dissident groups and liberation movements resulted in fre0uent conflicts with African rulers& The era of liberation wars in the #95"s saw China choose sides and patroni-e its favoured forces + an activity aimed at thwarting the 7oviet Bnion)s influence on the continent even though it was not always in the best interests of Africa& Chinese interest in Africa receded in the #9;"s as development efforts were diverted inwards and Chinese leaders were forced to see, assistance from the West for the necessary moderni-ation of its economy& With its emergence as a significant world player in the era of neoliberal globali-ation% China has returned to Africa on a larger scale than ever before and with the ideological and financial resources to compete for political and economic influence& 7ome of the factors for China)s renewed interest in Africa were similar to those prevailing during the Cold War era& China continued to present itself as the leader of the Third World in its efforts to forge an alliance with African states% an alliance that would enable it to better contest the perceived western hegemony in multilateral organi-ations& China also still needed African political support for its attempt to minimi-e% and preferably eliminate% Taiwan)s presence on the continent& Devertheless% renewed Chinese interest in Africa was primarily economically motivated& With the enormous e*pansion of its domestic economy% China was in search of natural resources% new mar,ets% and investment opportunities& China)s trade with Africa has subse0uently risen sharply& $n its endeavours for economic and political influence% China has a competitive advantage over the West in some areas& China provides a discourse that effectively legitimi-es human rights abuses and undemocratic practices in the guise of state sovereignty and attempts to combat western hegemony% which strongly appeals to many African leaders& This stance is then coupled with an opportunistic policy regarding arms sales to all and sundry in Africa% including widely reviled dictators 4Alden% !""<: Taylor% !""<6& Chinese arms sales to Africa have actually increased since the !""" Beijing .eclaration of the orum on China1Africa Cooperation% in

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which China promised to cooperate in attempts to stop the illegal production and traffic,ing in small arms and light weapons in Africa 4Committee on $nternational Relations% !""<: Pan% !"">6& Bnli,e their political leaders% who appreciate the establishment of strategic partnerships between Africa and China in economic and political affairs% several African scholars and civil1society organi-ations have displayed a more ambivalent attitude towards China)s growing presence in Africa& 'oeletsi 'be,i% deputy chairman of the 7outh African $nstitute of $nternational Affairs% for instance% declared recently that China (is both a tantali-ing opportunity and a terrifying threat to 7outh Africa)& 2n the one hand% he said that China was (just the tonic) that mineral1rich but economically ailing 7outh Africa needed& But he added that e*ports from China and Hong ?ong to his country are double those from Africa% and almost double what 7outh Africa e*ports to China& He called the trade relations between 7outh Africa and China (a replay of the old story of 7outh Africa)s trade with 3urope) as evidenced by the fact that (we sell them raw materials and they sell us manufactured goods with a predictable result + an unfavourable trade balance against 7outh Africa)& He went on to accuse Chinese companies of flooding the 7outh African mar,et with cheap products% underbidding local firms% and not hiring African labour& As a result% the largest 7outh African trade union federation% the Congress of 7outh African Trade Bnions 4C27ATB6% has called for a restriction on Chinese imports and demanded that at least 5< per cent of retailers) stoc, be locally made goods 4'ooney% !""<6& And finally% there are growing internal and e*ternal pressures on African leaders to introduce good governance and democracy& The long1standing Chinese principle of non1interference in state sovereignty is being increasingly contested in Africa& The AB)s constitution allows the organi-ation to intervene in a member state should it find that there are gross violations of human rights% or for other humanitarian reasons& The peer review mechanism of D3PA. is structured around an independent review process of an African country)s adherence to good governance criteria& This represents another step towards the institutionali-ation of norms derived from contemporary neoliberal concerns& As a result of these developments% China)s diplomacy towards Africa% which is aimed at cementing a strategic partnership and maintaining sovereign protection against the corrosive influence of the West% will have to find new ways to engage the continent + approaches that are not predicated on securing the compliance of the African political elite alone& 2therwise% it will run the danger of being portrayed + as has been the case in 7udan + as a friend of a military regime set on committing violations against African people in the name of the crudest form of self1interest 4Alden% !""<6&

DurlantzicB* ?oshua -.//:0* 1BeiHing@s Safari: %hina@s #o$e into Africa and Its Im"lications for Aid* De$elo"ment* and 2o$ernance*4 in Policy 3utloo)$ )o$ember .//:* &ashington* D%: %arnegie +ndoCment for International Peace6 "uccess and Failure

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'any African nations have welcomed China)s new safari& $n !""<% China1Africa trade reached TM" billion% up H< percent year1on1year from !""M& China offers a vast new mar,et for Africa: the volume of African e*ports to Asia rose by !" percent in the past five years% and China)s trade deficit with Central Africa% the most strife1torn part of the continent% grew to nearly ;" percent of China1Central Africa trade& Bnli,e nations in 7outheast Asia% African states% e*cept for te*tile e*porters li,e 7outh Africa and Aesotho% have little e*port overlap with ChinaC Bganda)s overlap is ; percent% 3thiopia)s M percent% and Digeria)s #&5 percent& China plans to further triple trade with the continent by !"#"% putting it in the league of the Bnited 7tates and 3urope as a trading partner& China also has become the second1largest consumer of African resources% signing massive new oil and gas deals in Digeria% Angola% and other countries& African elites and publics often have welcomed China)s presenceC Program on $nternational Policy Attitudes polls show% for e*ample% that >! percent of 7outh Africans believe China is having a positive influence on the world& 7ome African elites perceive China as different from Western donors and investors: Beijing is not lin,ed to the neoliberal economic model and its past structural adjustment programs& 3ven the head of the African .evelopment Ban, has announced that% EWe can learn from Kthe ChineseL how N to move from low to middle income status&F But in some respects% China)s engagement with Africa is 0ualitatively different from the engagement of other powers and financial institutions& Western powers are hardly blameless in relations with AfricaYthey have bac,ed dictators from 'obutu 7ese 7e,o to Xoweri 'useveni& Xet today% most traditional donors have agreed that governance is vital to development% and the Bnited 7tates has created the 'illennium Challenge Corporation% which rewards well1governed poor nations& The 'CC thus far has a mi*ed trac, record% but it at least creates a model that other donors can build upon& At the same moment% for the first time in decades Africa has entered the radar screen of international corporations and Western governments& $n a world facing a potential pea, in production from major 'iddle 3astern oil fields% Africa)s oil and gas prove even more attractive& 'uch of Africa is posting its strongest growth rates since independence& The continent seems ready to settle long1running civil conflicts in countries li,e Congo% and has begun to climb the ran,ings of the World Ban,)s inde* of environments for doing business& China)s involvement could threaten this African renaissance& /rowing Chinese loans to Africa% especially at high commercial rates% could threaten billions in recent forgiveness by the World Ban, and $' )s Heavily $ndebted Poor Countries $nitiative% since China also loans to these nations& $f China uses aid tied to investment to win major oil and gas deals% it could convince other emerging powers in Africa% li,e $ndia% to follow suit% potentially undermining governance and spar,ing conflict for resources& Chinese arms sales continue to fuel conflict in Africa: China publishes no information about its arms transfers overseas% and a recent Amnesty $nternational report found #5 percent of small arms collected by peace,eepers in the Congo were of Chinese design&

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Chinese investment could contribute to unchec,ed environmental destruction and poor labor standards% since Chinese firms have little e*perience with green policies and unions at home% and some African nations have powerful union movements& $n /abon% illegal timber e*ports to China comprise roughly 5" percent of all timber e*ports& $n \ambia% wor,ers in a Chinese1run mine have erupted in violent protest against safety standards and low wages% which they believe led to an accident last year in which M9 miners died& $n the recent \ambian election% opposition candidate 'ichael 7ata played on this anger% accusing Chinese companies of e*ploiting local wor,ers& Though 7ata lost% his supporters then rioted in the \ambian capital% targeting Chinese businesses& 'ore generally% the state1led business model China offers could prove problematic& Chinese firms with state lin,s often have poor standards of corporate governance within China& 7till% in China% the rule of law is wea, but does e*ist: the Chinese government has managed to prosecute the most corrupt officials& $n Africa)s wea,est states% where the rule of law often simply does not e*ist and economic policy ma,ers do not enjoy the same ,ind of independence from politicians as in China% this state1led business model could simply be a disasterYan invitation for rapacious governments& Worse% if China offers aid without any conditions% it will allow itself to serve as a wedge between it and other donors& This has already begun to occur% and not only in Angola& $n recent wee,s% Chad has announced that it may evict two oil companies% Chevron Corp and 'alaysia)s Petronas% from a project bac,ed by the World Ban,% which had insisted that some oil profits in Chad be spent on improving social welfare& 3ventually% Chad may replace the oil firms with Chinese companies% since while it was considering ,ic,ing out Chevron and Petronas it was brea,ing relations with Taiwan and establishing relations with China% which already had e*plored oil investments in Chad& 7imilarly% in ?enya Chinese aid has helped the government avoid $' and World Ban, criticism of its failure to implement a comprehensive anti1corruption strategy& $n \imbabwe and 7udan% Chinese bac,ing has allowed governments to resist pressure from democratic African states to open a dialogue with the \imbabwean opposition and to halt the genocide in .arfur& 7ome leading Chinese officials understand that% despite Beijing)s positive image today% it faces significant downside ris,s in Africa& Ai,e the Western powers before it% Beijing could ma,e potentially useless investments in the continent to woo strategic African nations& By relying on state1lin,ed companies for investment in Africa% China will be forced to boost its financial support for these firms% which tend to be worse managed than truly private Chinese companies& Just as important% China will face a choice in its future relations with Africa and other developing regionsYa choice that will help determine how the world views a more active China& $t can consolidate ties to the leadership of a few regimes% li,e Angola and 7udan% potentially alienating large segments of the public and leading to instability that threatens Chinese interests& Already% besides the attac,s in \ambia% militants in the Diger .elta have warned Chinese companies from operating there& $n the longer run% if nations li,e 7udan or \imbabwe ever transitioned to freer governments% average people might ta,e revenge on Chinese businesses and citi-ens& acing these potential pitfalls% China could alter its African strategyC $t could build a broader type of influence based on Beijing)s popularity among average Africans%

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rather than solely relying on lin,s to authoritarian regimes& Building this popularity will mean wor,ing with established initiatives designed to promote African stability and development& $t may surprise many Western policy ma,ers that China now has more peace,eepers operating under the BD flag than any other permanent member of the 7ecurity Council& China has begun wor,ing with African nations on malaria interventions: Beijing also rhetorically supports the Dew Partnership for African .evelopment% an African1led program to promote better governance& 'ost importantly% China has begun considering how it can moderni-e its aid programs& 2n the ground% China has begun to participate in donor coordination groups: though it does not always follow coordination groups) strategies% just participating is a major step forward& Beijing has begun establishing mechanisms to review how its aid is used by recipient nations& Though China does not yet have a permanent aid bureaucracy li,e B7A$.% there are signs it wants to create oneC $t has 0uietly developed a partnership with Britain)s .epartment for $nternational .evelopment and sent officials to the Bnited 7tates to study how the Bnited 7tates structured B7A$. and the new 'illennium Challenge Corporation& $f the Bnited 7tates% 3urope% and the international financial institutions want China to change its behavior% they must offer Beijing another optionYand do it now% while Chinese officials are still creating a global foreign policy& 7tarting with former .eputy 7ecretary of 7tate Robert \oellic,)s speech last 7eptember% the Bnited 7tates has called for China to become a Eresponsible sta,eholderF in the world% including presumably in Africa& But besides as,ing China to become a sta,eholder% traditional powers must offer China a sta,e& $f Beijing fails to respond to this opportunity% then Western nations can justly critici-e China)s presence in Africa& 2ffering a sta,e would give China a chance to conceive its interests in the developing world broadlyYmediating conflict% promoting development% tac,ling non1traditional security threatsYrather than focusing on its own narrowest interests& To incorporate China into e*isting framewor,s of overseas development assistance% other nations should aggressively solicit participation from Chinese officials in donor coordination groups within individual African countries& 2ther donors can wor, with Chinese embassy staff on the ground to ensure Chinese participation in donor groups% help improve Beijing)s capacity for managing its aid% and prevent China from destroying donor coherence& 2ffering a sta,e also would involve providing China a larger say in the international financial institutions& This could entail ma,ing China a larger shareholder in the Ban, and the $nternational 'onetary und& $t would also involve major donor countries throwing their aid programs open to China and allowing Chinese officials to study them if Beijing opens its aid programs in return& 2ther donors also could allow China to play a larger role in setting the health policy agenda on Africa& 2ne initial possibility is to allow China to ta,e the lead on one important disease issue% such as malaria& There is a precedent& China seems interested in playing a leading role on avian influen-aYBeijing hosted a January donor conference on avian influen-a% which forced the Chinese government to pay closer attention to flu issues and raised nearly T! billion in pledges&

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2utside aid% developed nations could engage China around resources in Africa& China% the Bnited 7tates% and Japan could create a ,ind of Econsumers cartelF to combat the major oil producers and prevent African producers li,e Angola or Digeria from playing consumers off of each other& As 7enator Richard Augar has suggested% this would entail more formal cooperation between Washington% To,yo% and Beijing on energy security% and even% in the future% joint e*ploration efforts in an attempt to boost oil supplies& The Bnited 7tates and international financial institutions also could help China reform Beijing)s own tools of influence% and could help prevent China from offering commercial loans to nations facing high debt burdens& Wor,ing with China to create a permanent Chinese aid organi-ation could reduce the influence of the 'inistry of Commerce% which is more li,ely to tie aid to investment& $t also could empower Chinese officials who want to ma,e China)s aid more transparent% just as having a permanent Chinese environmental administration at least provides a permanent place at the policy table for China)s environmental regulators& Bnfortunately% the Bnited 7tates and other powers seem to be ta,ing the opposite approach& Rather than accepting China into the /; group of industrial nations% where it clearly belongs% the group has allowed complaints by Japan and Russia to ,eep China out& $nstead of offering Beijing a bigger seat at the aid table% many major donor organi-ations do not even ,now which Chinese officials are responsible for aid disbursement& Rather than wor,ing with China while continuing to uphold promises for better governance% the Bnited 7tates and Japan have wooed the continent)s biggest oil producers% and most autocratic states% li,e 30uatorial /uinea& $n the longer term% these policies are not sustainable% and one day China)s policies will be so well established that it will be impossible for other actors to influence them& Today% if the Bnited 7tates wants China to ta,e responsibility on the continent% it must become more responsible as well&

Lancaster* %arol -.//>b0* The *hinese Aid System* &ashington* D%: %enter for 2lobal De$elo"ment* -htt":EECCC6cgde$6orgEcontentE"ublicationsEdetailE89;79E06 5#anges )foot in 5#inese )id Chinese officials involved in aid give the impression that they are overwhelmed with the increasing engagement of their government in aid1giving and the rapidly e*panding wor,load& 4$ was told there are only 5" professionals in '2 C2' dealing with Chinese aid at this point&6 $ can understand why& $n my conversations over the past several years% Chinese officials have also given the impression that they were trying to decide how to shape their aid program and to what e*tent they wanted to engage with Western aid donors& They clearly do not want to be identified as just one more member of the rich countries) aid clubs& or political reasons they want to project their own distinctive image in Asia% Africa and Aatin AmericaYone of 7outh17outh cooperation% of a special understanding and sympathy that comes from sharing problems of poverty: one of having emerged rapidly 4but not yet completely6 from those problems: and one that will provide

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them with a separate and privileged relationship with the governments they are helping and cultivating& And% as noted above% there are the tensions within the Chinese government that are evident in Washington% Paris and To,yo as well about who controls the aid program and for what purposes& Dot surprisingly then% the Chinese government has begun a process of reconsidering how it should organi-e and manage its aid& $ understand that creating a separate% dedicated aid agency is one of the options under study& $ understand also that the $nstitute for 3uropean 7tudies of the Chinese Academy of 7ocial 7cience 4and perhaps other elements of the government% as well as thin, tan,s and universities6 have been as,ed to do a report on how the Chinese should reform their aid in time for the #5th Communist Party Congress in the fall of !""5 or for the new government to be installed in !"";& $t may be that reforms in the organi-ation of Chinese aid will be announced at that time or that this stirring may be only the beginning of a longer process of rethin,ing on the part of the government about how it runs its aid programs& $n Beijing% as elsewhere% many vested interests are involved in the e*isting aid system which is one reason why such systems throughout the world have usually proven hard to change in fundamental ways& The Chinese government has also begun to engage directly with foreign aid agencies to learn from their arrangements and processes and tentatively% to collaborate with them& They have sent teams to visit Aondon and 7toc,holm to learn how these governments manage their aid& The have developed a considerable dialogue with the British .epartment for $nternational .evelopment on international aid and development issues& They have begun to collaborate with the Canadian government on technical assistance activities in developing countries& They have signed a memorandum of understanding with the $nternational inance Corporation about collaboration on environmentally sustainable projects in emerging mar,ets& And they have joined or e*pressed interest in joining donor coordination groups in a number of African countries& 4$ understand% however% that there has been little substantive contact between Chinese aid officials and B&7& aid officials& $f true% that may reflect the sensitivities in Beijing% as well as in Washington% of China)s engaging with the B&7& government: it may also reflect the fact that the Bnited 7tates has not been an aid donor to China and so% does not have an aid presence in Beijing% and so% may lac, the understanding of the Chinese government)s aid system and the relationships with ,ey government officials that a presence over time can bringYall of which are essential in the Chinese conte*t for real communication and cooperation&6 China is the most dynamic country in the world with growth and change occurring at an absolutely di--ying pace& The e*citement and stresses of rapid change are palpable in Beijing% in 7hanghai% in EsmallF cities li,e ?unming 4populationC only < million6& They are also increasingly evident in China)s aid program% the structure and management of which we are just beginning to get a picture& The challenge for the aid1giving governments of 3urope% Dorth American and Japan is to e*pand lines of communication and% to the e*tent possible% collaboration with the Chinese who are clearly set to play a major role in aid1giving worldwide&

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Li* Anshan -.//>0* 1%hina and Africa: Policy and %hallenges*4 in *hina Security* 5ol6 96 )o6 9* ""6 :;-;96

#anning* !ichard -.//:0* 1&ill P+merging Donors@ %hange the Face of International %o-O"eration3*4 in &evelopment Policy Review* 5ol6 .<* )o6 <* ""6 9>8-9A76 7o let us finally return to the 0uestion at the outset of this articleC will the emergence of new donors change the landscape of the international development effort and will it undercut some of the important approaches put in place over the years to improve the 0uality of aidW $ hope $ have shown that the term (new) or (emerging) donors may be convenient shorthand% but that 4as with that other shorthand term (fragile states)6 shorthand is of limited use& We should recognise that most donors outside the .AC have a history as donors and many of them have a good deal of e*perience& We should pay attention not just to their aid policies in the narrow sense but to the overall impact that they have on poor countries& $ hope that $ have shown that the view that we are approaching a radical decline in the .AC share of aid is li,ely to be mista,en% while at the same time recognising that% in a world of rising aid% developing countries will have the benefit of more choices& And $ hope that $ have also shown that there are in practice standards of donor behaviour among .AC members and the multilaterals which can and should be maintained& At the same time% $ have recognised that in at least three respects there are grounds for concern about the + otherwise welcome + prospect of additional aid flows from beyond the .AC% and emphasised the importance of better dialogue among all providers of international co1operation& The increases in aid from both the .AC and other donors will ma,e it all the more important for developing countries to manage their total use of donor resources effectively& They will find this easier to achieve the more all donors accept sustainable development and reduction of poverty% as measured by the 'illennium .evelopment /oals% as central objectives not only of development aid% but also of their wider policies that impact on poor developing countries& $n that way% we could see a new development community that is not just more multipolar but also a real multiplier&

#c%ormicB* Dorothy -.//A0* 1%hina ' India as Africa@s )eC Donors: ,he Im"act of Aid on De$elo"ment*4 in Review of African Political Economy* 5ol6 97* )o6 887* ""6 >9-;.6 This paper)s analysis shows clearly that the potential impact of Chinese and $ndian aid on Africa is significant& Both China and $ndia have stated Africa policies% which they are now beginning to actualise& Both countries stand to benefit from increasing involvement with Africa% not only economically% but also politically in terms of their aspirations to be regional and eventually global leaders& Both are able to become donors% though China will probably achieve this more 0uic,ly than $ndia& China has the economic strength to provide grants as well as concessional loans% trade

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preferences% and technical assistance& $ndia is economically wea,er% but in certain areas such as $CT is in a position to offer increased technical assistance that Africa sorely needs& The actual impact of these emerging donors will% however% depend on a variety of internal and e*ternal factors that we tried to capture in our model& The e*ample used in this paper + the impact of aid on the manufacturing sector + shows how comple* the interactions among these factors can be& Aid can affect manufacturing both directly and indirectly% and through manufacturing it can influence growth% distribution% governance% and the environment& Aid in the form of direct investment in plant and e0uipment is more li,ely to come from China than from $ndia% because of the nature of the industrial sector in the two countries& $n the case of China% aid and .$ are intertwined% ma,ing it difficult to disentangle the two& Possible indirect impacts of aid on manufacturing are many& $n fact% the most important is probably the support that China gives for infrastructure development& 2f the other indirect forms of assistance to manufacturing% the most common are the academic and technical training offered by both China and $ndia% and the tariff e*emptions that China is now e*perimenting with& Deither the benefits nor the negative impacts are automatic% however% as we have seen from some of the specific e*amples& They depend on the si-e% structure% and location of the manufacturing sector in each country% as well as on the policy environment within which the sector operates& These comple*ities underscore the need for detailed empirical research& 3mpirical research on the impact of aid is much less advanced than research on the impacts of Chinese and $ndian trade and .$& There is need for studies in different places using different methodologies that will capture the variables and relationships identified here as well as others that may have been missed& A starting point is a set of broad research 0uestions that can be further refined for specific countries and sectors& At least seven such 0uestions can be identified& #& To what e*tent does aid from China or $ndia that flows directly into manufacturing plant and e0uipment in sub17aharan Africa allow it to produce more andGor higher 0uality goodsW !& To what e*tent does aid from China or $ndia aimed at improving physical infrastructure result in better manufacturing performanceW H& To what e*tent does aid in the form of access to Chinese or $ndian technical or academic training programmes result in better manufacturing performanceW M& To what e*tent do tariff e*emptions by China and $ndia promote investment in manufacturingW <& To what e*tent does Chinese or $ndian aid to other sectors of the economy result in increased demand for locally manufactured productsW >& To what e*tent has debt relief by China or $ndia resulted in investments that have had positive spill1over effects on manufacturingW 5& To what e*tent has Chinese or $ndian aid enabled African governments to pursue their own industrial development policies and programmesW

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3ach of these broad 0uestions gives rise to a number of subsidiary 0uestions aimed at establishing the basic facts around the 0uestion% e*amining direct and indirect relationships and their effects on growth% distribution% governance% andGor the environment% as well as establishing the lin,s to policy outcomes& $deally studies would involve collection of data in China and $ndia as well as Africa% and would be designed as collaborative efforts between African and Asian researchers or research institutions& inally% it goes without saying that China and $ndia are changing rapidly& This means that studies must be designed to capture the dynamics of change as well as the situation at any one point in time&

#inistry of Foreign Affairs of the Peo"le@s !e"ublic of %hina -.//:0* *hina2s African Policy* BeiHing: #inistry of Foreign Affairs of the Peo"le@s !e"ublic of %hina* retrie$ed on .9rd August ./8/ from www&fmprc&gov&cnGengG-***Gt!H">#<&htm_6 Fore$ord The first few years of the new century witness a continuation of comple* and profound changes in the international situation and further advance of globali-ation& Peace and development remain the main themes of our times& 7afeguarding peace% promoting development and enhancing cooperation% which is the common desire of all peoples% represents the irresistible historical trend& 2n the other hand% destabili-ing factors and uncertainties in the international situation are on the rise& 7ecurity issues of various ,inds are interwoven& Peace remains evasive and development more pressing& China% the largest developing country in the world% follows the path of peaceful development and pursues an independent foreign policy of peace& China stands ready to develop friendly relations and cooperation with all countries on the basis of the ive Principles of Peaceful Coe*istence so as to contribute to peace% stability and common prosperity around the world& The African continent% which encompasses the largest number of developing countries% is an important force for world peace and development& China1Africa traditional friendly relations face fresh opportunities under the new circumstances& By this African Policy Paper% the Chinese /overnment wishes to present to the world the objectives of ChinaZs policy towards Africa and the measures to achieve them% and its proposals for cooperation in various fields in the coming years% with a view to promoting the steady growth of China1Africa relations in the long term and bringing the mutually1beneficial cooperation to a new stage& KNL 5#ina;s (elations $it# )frica China1Africa friendship is embedded in the long history of interchange& 7haring similar historical e*perience% China and Africa have all along sympathi-ed with and supported each other in the struggle for national liberation and forged a profound friendship&

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The founding of the PeopleZs Republic of China and the independence of African countries ushered in a new era in China1Africa relations& or over half a century% the two sides have enjoyed close political ties and fre0uent e*change of high1level visits and people1to1people contacts& 2ur bilateral trade and economic cooperation have grown rapidly: cooperation in other fields has yielded good results: and consultation and coordination in international affairs have been intensified& China has provided assistance to the best of its ability to African countries% while African countries have also rendered strong support to China on many occasions& 7incerity% e0uality and mutual benefit% solidarity and common development1these are the principles guiding China1Africa e*change and cooperation and the driving force to lasting China1Africa relations& KNL 5#ina;s )frican Polic 3nhancing solidarity and cooperation with African countries has always been an important component of ChinaZs independent foreign policy of peace& China will unswervingly carry forward the tradition of China1Africa friendship% and% proceeding from the fundamental interests of both the Chinese and African peoples% establish and develop a new type of strategic partnership with Africa% featuring political e0uality and mutual trust% economic win1win cooperation and cultural e*change& The general principles and objectives of ChinaZs African policy are as followsC 1 7incerity% friendship and e0uality& China adheres to the ive Principles of Peaceful Coe*istence% respects African countries) independent choice of the road of development and supports African countriesZ efforts to grow stronger through unity& 1 'utual benefit% reciprocity and common prosperity& China supports African countries) endeavor for economic development and nation building% carries out cooperation in various forms in the economic and social development% and promotes common prosperity of China and Africa& 1 'utual support and close coordination& China will strengthen cooperation with Africa in the BD and other multilateral systems by supporting each other)s just demand and reasonable propositions and continue to appeal to the international community to give more attention to 0uestions concerning peace and development in Africa& 1 Aearning from each other and see,ing common development& China and Africa will learn from and draw upon each otherZs e*perience in governance and development% strengthen e*change and cooperation in education% science% culture and health& 7upporting African countriesZ efforts to enhance capacity building% China will wor, together with Africa in the e*ploration of the road of sustainable development& The one China principle is the political foundation for the establishment and development of China)s relations with African countries and regional organi-ations& The Chinese /overnment appreciates the fact that the overwhelming majority of African countries abide by the one China principle% refuse to have official relations and contacts with Taiwan and support China)s great cause of reunification& China stands ready to establish and develop state1to1state relations with countries that have not yet established diplomatic ties with China on the basis of the one China principle&

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&n#ancing )ll<(ound 5ooperation 1et$een 5#ina and )frica #& The Political ield a& High1level visits KNL b& 3*changes between legislative bodies KNL c& 3*changes between political parties KNL d& Consultation mechanisms KNL e& Cooperation in international affairs KNL f& 3*changes between local governments KNL !& The 3conomic ield a& Trade KNL b& $nvestment KNL c& inancial cooperation KNL

d& Agricultural cooperation KNL e& $nfrastructure KNL f& Resources cooperation KNL g& Tourism cooperation KNL h& .ebt reduction and relief KNL i& j& 3conomic assistance KNL 'ultilateral cooperation KNL

H& 3ducation% science% culture% health and social aspects a& Cooperation in human resources development and education KNL b& 7cience and technology cooperation KNL c& Cultural e*changes KNL d& 'edical and health cooperation KNL e& 'edia cooperation KNL f& Administrative cooperation KNL g& Consular cooperation KNL h& People1to1people e*change KNL

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i& j&

3nvironmental cooperation KNL .isaster reduction% relief and humanitarian assistance KNL

M& Peace and 7ecurity a& 'ilitary cooperation KNL b& Conflict settlement and peace,eeping operations KNL c& Judicial and police cooperation KNL d& Don1traditional security areas KNL Forum on 5#ina<)frica 5ooperation and Its Follo$<up )ctions Aaunched in !"""% the orum on China1Africa Cooperation has become an effective mechanism for the collective dialogue and multilateral cooperation between China and Africa and put in place an important framewor, and platform for a new type of China1Africa partnership featuring long1term stability% e0uality and mutual benefit& China attaches importance to the positive role of the orum on China1Africa Cooperation in strengthening political consultation and pragmatic cooperation between China and Africa% and stands ready to wor, with African countries to conscientiously implement the Beijing .eclaration of the orum on China1Africa Cooperation% the Program for China1Africa Cooperation in 3conomic and 7ocial .evelopment and the orum on China1Africa Cooperation1Addis Ababa Action Plan 4!""M1!"">6 and its follow1up action plans& China will wor, with African countries within the framewor, of the orum to e*plore new ways to enhance mutual political trust% promote the comprehensive development of pragmatic cooperation% further improve the mechanism of the forum% and try to find the best way for furthering cooperation between the orum and the D3PA.& 5#ina;s (elations $it# )frican (egional ,rgani6ations China appreciates the significant role of the AB in safeguarding peace and stability in the region and promoting African solidarity and development& China values its friendly cooperation with the AB in all fields% supports its positive role in regional and international affairs and stands ready to provide the AB assistance to the best of its capacity& China appreciates and supports the positive role of AfricaZs sub1regional organi-ations in promoting political stability% economic development and integration in their own regions and stands ready to enhance its amicable cooperation with those organi-ations&

#ohan* 2iles and PoCer* #arcus -.//A0* 1)eC African %hoice3 ,he Politics of %hinese +ngagement*4 in Review of African Political Economy * 5ol6 97* )o6 887* ""6 .9-<.6

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To conclude we want to open up a series of broader issues around the longer term implications of whether China)s involvement will enhance development prospects and political accountability in Africa or undermine them& We do this through a series of research 0uestions for the future and a s,eletal methodology& All agree that China is in Africa to stay and so monitoring the unfolding of these relationships is an obvious conclusion from this review& 2ne medium to long term issue which conditions any foreign policy initiatives by China is its domestic ine0uality& /iven huge and growing urban1rural ine0uality% debate is emerging around whether China can continue to fund aid and investment at current levels% when pressures are coming for domestic redistribution rather than international aid 4Daidu% !""56& We suggested that China)s involvement will not fundamentally alter Africa)s place in the global division of labour& $t simply adds a new and significant mar,et without challenging the continent)s e*traversion& History suggests that in some states this will entrench rentier states% concentrate ownership in a few hands% and deliver limited multipliers to marginalised Africans& The more upbeat ta,e amongst policyma,ers 4Wild and 'epham% !"">% Tjonneland et al& !"">6 is that if Africans can (control) the benefits of Chinese involvement then Africa will benefit& This re0uires strengthening civil society 42biorah% !""56 and opening up development to democratic debate to see how redistribution might wor,& $nternational donors% then% will not do things much differently and encourage the types of governance reforms already in place while ensuring (dialogues) with the Chinese& However% civil society strengthening has been limited thus far and so it remains to be seen whether more of the same actually wor,s& A related debate% with historical parallels% is whether China will be forced to get more involved in multilateral governance as well as building governance capacity at the national level& 7o far China has% as we have seen% ta,en the view publicly that internal political matters are not its concern& This echoes earlier merchants and imperialists% who insisted their interests were largely commercial% but who ended up becoming more and more mired in internal institutional building and policing& Thus% as China)s Africa strategy comes to rely on a growing number of bureaucratic principles and corporate agents% contradictions will increase& Beijing is relying on an increasingly comple* set of government oversight agencies to accomplish its Africa policy which are ever harder to manage% because these agencies do not enjoy direct lines of authority over Chinese corporations overseasC )s it deepens, t#e 5#inese go!ernment $ill more li2el find itself #amstrung b R an increasing set of tensions and contradictions bet$een t#e interests and aims of go!ernment principals S t#e bureaucracies based in 1ei*ing tas2ed $it# ad!ancing 5#ina;s o!erall national interests S and t#e aims and interests of ostensible agents S t#e companies and businesspersons operating on t#e ground in )frica 4/ill and Reilly% !""5CH;6& And as these relationships grow and the institutional tendrils become more enmeshed we see possible problems of African people% in western fears% being loc,ed into China for many years to come but e0ually the Chinese are (loc,ed) into Africa% which brings its own ris,s& Aeading on from this is that China see,s% as do all investors% a stable and secure investment environment& $n line with other superpowers China supplies arms and

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military training in an attempt to secure resource access& 7o a possible scenario involves greater superpower conflict in which as a result of arms sales% rent see,ing% and growing ine0uality African states are destabilised even more and pull farther apart& The result in terms of securing access to resources may be that China% and others% end up dealing with a myriad of (non1state) institutional players such as warlords% guerillas% and secessionist movements% not unli,e the situation in the contemporary Diger .elta& $n all these areas% though% there is a need for rigorous research and we finish with some ,ey research 0uestions and a methodology& 2n issues of economic change and class composition we feel there are 0uestions around ownership% wealth distribution% race and organised politicsC $n what ways do the patterns of Chinese trade% aid and investment reinforce e*isting macro1economic reforms or does it wor, against themW How has Chinese (aid) and investment transformed the ownership of businesses in African countriesW How does Chinese involvement affect the well being and security of different class groups in AfricaW How do different classes of Africans perceive China)s growing role in trade and investmentW What is the racial composition of these changing class groupingsW .oes the changing class and gender composition have implications for organised civil society based politics 4e&g& Trade unions% business lobbies6W

Aeading from the last 0uestion is formal political society and the ways in which political parties and incumbent regimes use China)s presenceC How do African politicians and political parties play (the China card)W To what e*tent does China)s involvement strengthen the hold of regimes in powerW How do African regimes use Chinese aid and China)s development path as a means to push through different ,inds of political changeW

inally% Chinese aid% in all its comple*ity% and the relations between donors is li,ely to have long1term repercussions across AfricaC $n what ways does China deliver aid and how it is different and distanced from (western) aidW How are different discourses of sovereignty% cooperation and development mobilised in these practicesW How are Chinese aid and investment projects decided upon and allocatedW What forms of conditionality e*ist in Chinese aidW What effects does this have on policy autonomy in AfricaW What tensions e*ist on the ground over donor coordinationW Are western donors at the country level see,ing to include China more and in other waysW

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These 0uestions urge a detailed empirical response& There are already too many generalised analyses of China and (Africa) (as if there were relationships between two countries instead of between one and fifty1three) 4Chan% !""5C!6& $nstead what are needed are detailed case studies of China1Africa relations% which establish baseline conditions and that are capable of differentiating generic impacts from country specific ones& $n the past year we have seen more case studies emerging including Angola% 7udan% Damibia% Tan-ania% \imbabwe and Benin 4in le Pere% !""5 and 'anji and 'ar,s% !""56% but these are mostly descriptive and use poor 0uality public data and newspaper accounts& $t is vital for critically engaged scholars% activists and policy ma,ers to properly analyse these unfolding relationships in order to guide action rather than continually rely on half truths and impressions&

#ueBalia* Domingos ?ardo -.//<0* 1Africa and Partnershi"*4 African Security !e$ieC 89* 8 : 7=886

%hina@s

Strategic

While the practical implementation of this programme is an open 0uestion% there is no doubt that it represents a forward1loo,ing% bold and comprehensive initiative inspired by a long1term strategic vision& The events following 9G## have certainly affected the momentum of this initiative& However% the trade volume has increased and the foundation for this co1operation has solidified& The second China1Africa orum conference too, place in Addis Ababa from #<+#5 .ecember !""H& The conference reviewed the implementation of the two documents adopted at the first meeting and e*plored new initiatives and measures to move forward& Premier Wen delivered a speech at the opening ceremony ma,ing a positive assessment of the past three years& He pointed out that two1way trade had increased by !"Q% ##5 new China1invested enterprises were up and running in Africa% 5%""" African personnel were trained in a wide variety of professions% and that bilateral cooperation in energy development and high1tech was getting off the ground& Premier Wen went on to say that the people of the world share aspirations for peace% stability and development% but Ehegemonism is raising its ugly headF& #! China)s geopolitical benefits from this cooperation include the affirmation of the 2ne China Policy% increased support for its world vision of multi1polarity and the ability to compete for mar,ets% alternative energy sources and strategic space against e0ually increasing B7 engagement& By positioning itself at the helm of a coalition of African developing countries China will leverage its position on the BD 7ecurity Council and improve its bargaining power in other international institutions& The constant references to the need to create a new% e0uitable political and economic order reflect China)s competitive instinct against the B7 in the international arena& As far as energy is concerned China% according to the C7$7 report% is e*pected to depend on imports for M<Q of its oil consumption in !"#"& To cope with this growing demand it needs to secure such sources% and the volatility of the 'iddle 3ast security situation increases Africa)s importance in this regard& $n addition% EChina is poor in natural resources and raw materials are well1abundant in AfricaF& #H China)s Iice1'inister of oreign Affairs% Ai \hao*ing% announced on !; 7eptember !""! that EChina will ma,e agricultural co1operation with Africa a ,ey area of co1

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operation in the coming yearsF&#M There is no doubt that Chinese technologies in this field will help increase productivity in Africa% reduce hunger and create jobs& However% for China this is not a mere commercial venture& According to China .evelopment /ateway% Emany Chinese officials and farmers thought of investing in Africa when they consider ways to cope with the challenges brought by the WT2 entryF&#< /overnment sponsored seminars have been held in different provinces of China to brief farmers about conditions in Africa and related government incentive policies for investment& $n addition% factories% roads% warehouses and the moderni-ation of transportation ta,e up land& Rapid industrialisation is already ta,ing a toll% as grain area has dropped from 9"&; million hectares in #99" to an estimated ;<&5 million hectares in #99M& This annual drop of #&MQ is li,ely to endure as long as rapid economic growth continues& #> This loss of cropland against the unavoidable population growth means that China will have to rely heavily on grain imports in the future& China)s current grain yield per hectare is already considered 0uite high by international standards% ruling out its increase& As China pursues its global strategy% Chinese military leaders are li,ely to increase relations with their counterparts on the continent& As reported by China $nformation Centre in late !"""C To e*press the common aspirations of the China and African peoples for peace% the marine fleet of the Chinese People)s Aiberation Army 4PAA6 paid a friendly visit to Tan-ania on !;+!9 July !"""% the first of its ,ind since #9M9& #5 $n other words% since the founding of the People)s Republic of China this was the first time that a PAA fleet called on an African port& A global military vision would be flawed if China overloo,s Africa as a strategic space& China has some advantages over the B7 including its identity as a developing country% its centralised political systemYwhich ma,es decisions easier to ta,e without regard to social or political considerationsYthe growing economy% low1cost technology and the willingness of its people to wor, in inhospitable places& $t certainly also has disadvantages% but we will not go into those here& 2n their part% African leaders seem to welcome economic aid not attached to political conditions or transparency re0uirements& China1Africa co1operation will surely go through highs and lows% but it would not be far1fetched to conclude that China is engaging Africa in a long1term strategic partnership for international leadership% mar,ets% energy and space&

O+%D -.//A0* 1%hina: +ncouraging !es"onsible Business %onduct*4 3E*& Investment Policy Reviews* France: O+%D Publishing6 5#ina;s regulator 2003 frame$or2 for in!estment #as been de!eloped furt#er since

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The 23C. reviews the five landmar, laws and sets of regulations promulgated since the publication of the !""> ,&5D In!estment Polic (e!ie$ of 5#ina& $t finds that these changes improve the ta* and competition elements of the regulatory environment within which businesses% including foreign1owned enterprises 4 $3s6% operate in China% but tighten restrictions on inward direct investment% including cross1border mergers and ac0uisitions& The review also ta,es stoc, of developments in China)s inward and outward .$ statistics methodology& 5#ina;s increasing out$ard in!estment is prompting calls for responsible be#a!ior China has been rapidly becoming an important source of outward foreign direct investment 42 .$6 in recent years& /overnment policy was initially the main determinant of 2 .$% but it is now increasingly driven by commercial motivations& $n the conte*t of China)s growing role as an investor in Africa in particular% concerns over China)s investment behaviour are being raised and Chinese enterprises are under increasing pressure to be more responsible global players& 5#ina is adopting policies to encourage responsible business conduct ((15) The 23C. supports the Chinese government)s efforts to promote high standards of corporate behaviour and develop further the framewor, conditions that enable responsible business conduct 4RBC6& The Chinese authorities are striving to ensure corporate compliance with laws relating to RBC and are also promoting RBC in overseas operations of Chinese enterprises& China has signed and ratified international agreements relevant to promoting RBC& Chinese companies are see,ing to learn about RBC standards& 8ore can be done to encourage (15 While the Chinese government has made efforts to encourage responsible business conduct% many Chinese enterprises are still largely unaware of what RBC entails and have not organised themselves to promote it& The lac, of coordination of government agencies) approaches hinders communication of the government)s e*pectations to Chinese companies& The 23C. offers policy options to help implement at local level legislation and regulations establishing framewor, conditions for responsible business conduct& 5#ina #as made progress, but still faces c#allenges, in encouraging en!ironmental (15 China)s rapid economic growth has been accompanied by negative environmental impacts& The Chinese government has accelerated its efforts to develop the legal framewor, and standards for environmental protection& The 23C. offers policy options to meet the formidable challenges faced by the Chinese authorities in enforcing and implementing these&

Perret* %hristo"he and Bosshard* Laurent -.//:0* 1Africa and %hina*4 in Atlas on Re!ional Inte!ration* +%O&AS-S&A%EO+%D6

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2il and cotton will remain ,ey issues at the core of 7ino1African relations in the coming decades& However% they will not be the only issues at play& $t is already possible to discern tension on the world steel and aluminium 4bau*ite6 mar,et& 'ore generally% the African continent will undoubtedly remain an attractive mar,et showing constant growth 4if only in demographic terms6 for Chinese manufactured products& The ris, of a growing EinvasionF of competing imports or imports preventing the development of local industry should therefore be ta,en into account& To balance this% two factors could encourage Chinese investors to finance West African industryC firstly% the increase in sea transportation costs should progressively favour the creation of primary processing units in particular 4iron% bau*ite6& 7econdly% the prospect of the 3conomic Partnership Agreements 43PAs6 between African regions and the 3uropean Bnion should encourage Chinese industrialists 4but also $ndian% Bra-ilian% etc&6 to produce within these regions in order to gain access to the 3uropean mar,et& The 3C2WA7 -one is% from this perspective% particularly well1positioned as it offers three advantagesC geographic pro*imity to 3urope% availability of raw materials 4cotton% iron% bau*ite% etc&6 and a more available% abundant and low1cost wor,force than in Dorth Africa% for e*ample& $f this hypothesis is proven% it is probable that countries with non1convertible currency 4/hana% Digeria% etc&6 will be more attractive than countries in the francGeuro -one where production costs are higher& Political and geo1strategic considerations will undoubtedly continue to have an impact and will probably partly compensate for this bias& Whatever happens% many African leaders see the Chinese irruption on their continent as an economic opportunity + Ewhat if development came from the 3astWF1% doubled by a political opportunity + EWhat if Africa became a strategic issue% it could leave the era of submission to go forward into the era of negotiation&F

!a$allion* #artin -.//A0* 1Are ,here Lessons for Africa from %hina@s Success Against Po$erty34 Policy Research Wor)in! Paper ;;/:* &ashington D%: De$elo"ment !esearch 2rou"* &orld BanB6 Polic Lesson from 5#ina;s "uccess While successful reforms need not conform closely to orthodo* Eneo1liberalF recommendations% China)s success against poverty illustrates well the generic point that freer mar,ets can serve the interests of poor people& China)s farmers responded dramatically to mar,et incentives when the institutional reforms gave them the chance to do so& African farmers are not li,ely to be any different in this respect&H! But China)s success was not just a matter of letting mar,ets do their wor,& That success would not have been possible without strong state institutions implementing supportive policies and public investments& China has had a tradition of building and maintaining the administrative capacities of government at all levels% including in countless villages that were the front line for implementing the crucial rural reforms that started in the late #95"s& 4$ndeed% the tradition of a strong public administration goes bac, so far that China should probably get credit for invented the idea&6 The leadership of a township or administrative village in rural

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China is typically accountable to higher levels of government and its own citi-ens for economic development within its borders& By contrast% political scientists have pointed to the persistent incapacities of Africa)s state institutions 4Herbst% !""": Clapham% !""#: van de Walle% !""#6& /ranted% some Enormal statesF 4as Clapham% !""#% calls them6 have emerged&HH However% judged by almost any standards% but certainly when assessed against China)s tradition of strong state institutions% Africa is clearly lagging in this repect KsicL& The capacity to implement policies is necessary for success% but that capacity must be developed& 2f course% state capacity must be used to implement good policies% and to avoid or drop bad ones& An obvious% though nonetheless important% lesson that is well illustrated by China)s e*perience is the need for governments to avoid doing harm to poor people& 2ne way is to reduce the 4e*plicit and implicit6 ta*es they face& $n China)s case% the government operated 4for many years6 an e*tensive foodgrain1 procurement system that effectively ta*ed farmers by setting 0uotas and fi*ing procurement prices below mar,et levels 4to assure cheap food for far less poor urban consumers6& This gave the government a powerful anti1poverty lever in the short1term% by raising the procurement price as happened in the mid1#99"s% helping to bring both poverty and ine0uality down& Again% this reform is rather specific to China& But it would be a safe bet that every country in 77A can find its own e*amples of ta*es and regulations that are biased against the poor& Research on Africa has pointed to ways in which past policies have placed a heavy burden on the poor% notably through urban biases in e*change rate and spendingGta*ing policies& HM Another robust lesson concerns macroeconomic stabili-ation policy& China)s e*perience suggests that avoiding inflationary shoc,s has been good for poverty reduction& Higher inflation meant higher poverty& H< 4The reversals for China)s poor during the late #9;"s evident in igure # reflect in part the macroeconomic instability of that time& Aow rural economic growth was another factor&6 The importance of macroeconomic stability to sustained poverty reduction in China echoes findings in other developing countries& H> /reater internal mar,et integration has played a role in China)s success% although this is not a policy area in which China made particularly rapid progress& The impediments to migration within China have been noted already& There have also been frictions to internal trade% though declining in importance over time& However% there is nothing comparable in China today% or even !" years ago $ suspect% to the impediments to internal mar,et integration faced in 77A& or e*ample% you still canZt drive a vehicle between some important commercial cities of Africa Y large cities in relatively close pro*imity but in different countries 4such as .ouala% the commercial capital and largest city of Cameroon% and Aagos% the commercial capital of neighboring Digeria% and most populous city in 77A6& Poor internal integration means that the typical African country faces a tiny domestic mar,et compared to the typical Chinese province& An important lesson from China)s e*perience is that growth1promoting economic reforms are not sufficient for rapid and sustained poverty reduction& Persistent ine0ualities in ,ey assets and access to essential infrastructure impede the prospects for poor people to share in the economic gains spurred by reforms& 2n brea,ing up the collective farms it was possible to assure that land within communes was fairly e0ually allocated& 4Although mar,ed inter1commune ine0uality

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remained% given that mobility was restricted&6 With a relatively e0ual allocation of land holdingsYland1use rights rather than ownershipYthe agricultural growth unleashed by the rural economic reforms of the early #9;"s could bring the rapid poverty reduction seen in igure #& 7imilarly% a positive legacy of socialism and the Confucion ethic was the relatively low ine0uality in health and schooling at the outset of the reform period& The low ine0uality in education attainments is li,ely to have helped in assuring that farm and non1farm growth was poverty reducing& The importance of the pattern of growth to China)s progress against poverty carries a lesson for Africa& When so much of a country)s poverty is found in its rural areas it is not surprising that agricultural growth plays an important role in poverty reduction& /ranted% the past efficacy of agricultural growth in reducing poverty in China reflects 4at least in part6 an unusual historical circumstance% namely the relatively e0uitable land allocation that could be achieved at the time of brea,ing up the collectives& However% China)s e*perience is consistent with the view that promoting agricultural and rural development is crucial to pro1poor growth% particularly at the early stages% given the potential for small1holder farming to rapidly absorb uns,illed labor& The need to give higher priority to agricultural growth rather than industriali-ation at the early stages of economic development echoes longstanding arguments 4and debates6 in the literature&H5 By this view% only when agricultural output has risen sufficiently will it be possible to release labor from agriculture for the infant non1 farm sectors& $n a relatively closed economy 4or one in which the foodstaples are largely non1tradable6 higher domestic food output will also entail lower food prices and hence allow new manufacturing enterprises to pay low wages% further stimulating growth in the non1farm economy& China)s success in labor1intensive manufacturing clearly rested in part at least on the availability of cheap wage goods& There is also evidence for China that the agricultural sector is an important generator of positive e*ternalities favoring non1farm development& Bsing farm1 household level panel data from four provinces of post1reform rural China% Ravallion 4!""<6 finds evidence of strong geographic e*ternalities% stemming from spillover effects of the level and composition of local economic activity and private returns to local human and physical infrastructure endowments& This suggests an e*planation for rural underdevelopment arising from under1investment in certain e*ternality1 generating activities% of which agricultural development emerges as the most important& .eveloping countries ,een to industriali-e have tried often to accelerate the process& $ndeed% even China may well have switched its sectoral attention out of agriculture too 0uic,ly& $t seems that after attaining a degree of food security% and higher incomes for the peasant class% the political economy demanded higher living standards for the relatively better off middle1 and upper1income groups& The associated shift in the sectoral and geographic pattern of China)s growth fuelled rising ine0uality and dulled the impact of subse0uent growth on aggregate poverty incidence& 4$n this respect% Africa might actually learn more from Iietnam% which appears to have maintained its sectoral emphasis on agriculture and rural development for a longer period than China did at a comparable point in time&6

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This lesson appears to be highly relevant to 77A today& Christianson and .emery 4!""56 have argued convincingly that development strategy for Africa that is firmly grounded in agricultural and rural development can bring a larger and more sustained impact on poverty&H; Just as has happened in China% there will be a time when the emphasis in Africa will naturally shift to secondary and tertiary sectors& But with the levels of poverty prevailing in 77A today% and the sub1continent)s 4still6 relatively abundant supply of 4not too une0ually distributed6 land% an agriculture1 based strategy must for now be at the center of any effective route out of poverty% just as it was in China during the early #9;"s& Achieving that growth will not be easy& H9 $t will re0uire investments in agricultural research and development 4R @ .6% tailored to African 4often rain1fed6 conditions% and efforts to bring research results to African farmers& China would seem to be in a good position to help African countries build up their agricultural research and e*tension systems& 477A)s total public spending on agricultural R @ . increased by barely !"Q in real terms over #9;#1!""": over the same period it increased three fold in China: 7ee World Ban,% !""5% Table 5&#&6 Higher agricultural growth will also re0uire investments in rural infrastructure% which is worse now in many African countries than it was around #9;" in China% when the rural reforms began& M" Provided that Africa ma,es the right investments in supporting agricultural growth there should be no difficulty finding the mar,et for its produce% including in China% which is now more open to agricultural imports 4after its entry into the WT26& African observers of China)s success might be tempted to conclude that rising ine0uality is the inevitable price of lower absolute poverty& Aoo,ing forward% that would be worrying in Africa% where ine0uality is already rather high% with many countries having levels of ine0uality reaching 4and in a few cases e*ceeding6 the levels found in Aatin American% where ine0uality measures tend to be the highest of any region of the world&M# However% it should not be presumed that poor countries necessarily face an aggregate growth1e0uity trade off& Bpward pressures on ine0uality can certainly be generated by the growth process% such as stemming from s,ill shortages and higher returns to schooling in the labor mar,et& 2n the other hand% to the e*tent that the growth comes from rela*ing the constraints facing poor people in access to ,ey mar,ets% it may help put downward pressure on ine0uality& The net outcome is an empirical issue% and will vary from country to country% as is indeed found to be the case in cross1country comparisons of growth rates and changes in ine0uality 4Ravallion% !""56& 7o Africa should be wary of drawing the lesson from China that rising ine0uality is the inevitable price of higher growth and less poverty& $ndeed% as noted above% China)s e*perience actually provides countere*amples 4in some time periods and some provinces6 to the view that rising ine0uality is the unavoidable by1product of sustained economic growth in a poor country& /#at are t#e Ie 8essages for )fricaL Africa has seen a significant political change in recent times with the rise in more democratic forms of central government& This has ushered in a period of greater stability and peace% and started to create the sorts of institutional constraints on the

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abuse of power by leaders that one ta,es for granted elsewhere& However% it is unli,ely that the implied shift in the empowerment of Africa)s poor that can be achieved through such political changes will be sufficient to reach the pro1poor Ehigh e0uilibriumF of the political economy without two additional ingredientsC significant changes in economic policies and greater efficacy of state institutions for implementing those policies& A number of policy messages worth thin,ing about in an African conte*t emerge from the literature on how China was so successful in the fight against poverty& A partial list would include widespread access to sound basic education and health care% lower dependency rates through lower fertility% greater internal mar,et integration% and greater e*ternal openness to foreign investment and trade% consistent with a country)s comparative advantage& There are some tentative signs of progress in Africa on most of these areas% though there is still much do be done& An important% but all too often neglected% issue concerns the sectoral priorities for development when one is starting in a situation in which the vast bul, of the poor remain in rural areas& aced with this reality% China)s growth1promoting reforms starting in the late #95"s sensibly started in the rural economy% where the e*tent of poverty was as high as one would have found almost anywhere in the world at that time& The initial economic agents of change were countless smallholders increasing their output in response to newly unleashed mar,et incentives& $n due course% the policy emphasis naturally switched to the non1farm and urban economy% and the subse0uent rural labor absorption was clearly important to continuing progress against poverty& /ranted% one can 0uestion whether even China got the timing of this switch in sectoral priorities right& However% the ,ey lesson for 7ub17aharan Africa is that to replicate China)s success against poverty in the longer term a much high priority must be given to agriculture and rural development in the near term& The problem is that many low1income% primarily rural% developing countries 4including in Africa6 thin, they can essentially ignore their agricultural sectors and leave the whole tas, of poverty reduction to labor absorption from non1agricultural sectors& Worse still% they sometimes try to jump1start their economies by rapidly developing a modern% relatively capital1intensive% manufacturing sector& The problems with this development path are magnified in countries with high initial ine0uality in human resource development% such that there are relatively few rural wor,ersYand very few amongst the poorYwho can get these jobs% or even get the relatively less s,illed jobs re0uired by a more labor1intensive manufacturing sector& This sort of approach will do little to reduce rural poverty directly and may even harm the rural poor through the financing methods 4notable the heavy ta*ation of agriculture6 and price distortions that are needed& Poor% primarily rural% economies cannot reasonably hope to by1pass the ,ey steps in promoting agricultural and rural development that China too, from the early stages of its reform process& That is an important message for much of Africa today& 2f course% Africa does not have the same failed collective1farming systems to dismantle as did China& But the generic point on sectoral priorities is still relevant& African countries will have to find their own% tailor1made% versions of the rural reforms and public investments that will be needed to raise the productivity of smallholdersYto find Africa)s home1grown version of China)s rural policies early #9;"s& .rawing on the literature on Africa% one can point to the importance of

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physical and human infrastructure development in rural areas and the pressing need for an effective support system for the rapid adoption of ,nown and improved farming technologies: this will re0uire a combination of research% advisory services and financial support for inputs& While raising agricultural productivity in Africa is hardly going to be sufficient for eliminating poverty in the longer term% it is arguably the most important problem to address at the outset% and may even prove to be necessary for sustained progress in other areas of economic and social policy& Alas% the problem of low farm productivity remains& And research has been scant on the underlying 4social and political% as well as economic6 reasons for Africa)s 4large and widening6 gap in agricultural productivity relative to China and most of Asia& Another li,ely pre1condition for long1term progress in Africa is more effective state institutions& As this paper has emphasi-ed% China)s e*perience points to the importance of combining pragmatic% evidence1based% policy ma,ing with capable public institutions and a strong leadership that is committed to poverty reduction& Without these conditions% and the right policies% it is difficult to see how any country can ma,e the significant changes that are needed to get out of an e0uilibrium in which large numbers of poor and powerless people suffer under policies that perpetuate their poverty& Relative to Africa% history and geography have made for stronger state institutions in China% and it has no doubt helped that China did not ma,e the mista,e of believing that freer mar,ets called for wea,ening those institutions& Public administrative and decision1ma,ing processes were also crucial to assuring that the state was an effective tool for fighting poverty& 3vidence1based policy ma,ing has played an important role since the late #95"s& China learnt much from the successes and failures of diverse local initiatives: in effect% the center transmitted the policy lessons from one place to another% bac,ed up by credible research on what was happening on the ground& $t is plain that the combination of sound policy ma,ing practices with strong state institutions was a ,ey factor in China)s success against poverty& And it is also clear that the two ingredients are complements% not substitutes& Aess ideology helps little if state institutions are wea,& China)s lesson for Africa on the importance of Esearching for truth from factsF in policy ma,ing will bear little fruit if Africa)s state institutions remain wea,& But it must not be forgotten that Africa is M; countries not one& There is no African central government to transmit policy lessons from one place to another& Here the international community% including China% can play an important role&

Sautman* Barry and Man* airong -.//>0* 1Friends and Interests: %hina@s Distincti$e LinBs Cith Africa*4 in African Studies Review* 5ol6 7/* )o6 9* ""6 >7-88<6 $n !""< a PRC official wor,ing on WT2 affairs% Wu Jiahuang% made a presentation to the Bnited Dations $ndustrial .evelopment 2rgani-ation on industriali-ation% trade% and poverty alleviation through 7outh+7outh cooperation 4Wu !""<6& He argued that China)s high growth rate was fueled by Chinese savings 4on average MM percent of

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their income6 and encouragement of foreign direct investment 4half from Hong ?ong and Taiwan6% which contributed !; percent of value added to industry in !""M& He said that PRC industrial and trade growth are related% with over half of industrial e*ports produced by foreign investors& Wu noted that the PRC does not overprotect domestic industryC average PRC tariffs dropped from MH percent in #99! to #" percent in !""<% lower than those of its trading partners& H9 Primary agricultural products and te*tile tariffs averaged #<&< percent and #!&9 percent% respectively% while those of China)s trading partners averaged !M&< percent and #5&5 percent& China provides world1class resources and Ethe cheapest domestic labor%F so its businesses can mar,et the world)s most competitive products% leading to greater incomes% state revenue% and social welfare& Wu called on the WT2 to remove trade1 distorting subsidies to farmers in the Dorth to enable farmers in the 7outh to sell their products at a higher price& He e*plained that Chinese farms are very small% averaging &5 hectares of land% compared to 3uropeans) !" ha and B&7& farmers) !"" ha& Wu noted that PRC agricultural tariffs averaged #<&; percent% compared to !H percent in the B&7& and 5H percent in 3urope& 'eanwhile% state support for China)s farmers was only #&< percent of their income% while in the B&7& it was #; percent and in the 3&B& it was HH percent& China and other developing states were thus in the same boat in terms of needing cuts in developed world agricultural subsidies& Wu)s presentation summed up a commonly held perception of PRC practices that relates to distinct China+Africa lin,sC China provides a model for developing states based on rapid industriali-ation fueled by a high level of investment and concentration on e*ports and% unli,e the West% its low1tariff% low1subsidy regime allows other developing countries to e*port freely to China and compete with China in world mar,ets& The official thus essentially argued that PRC policyma,ers are more consistent economic liberals than those of the West and that this greater openness fulfills the common needs of Chinese and citi-ens of other developing countries& Wu did not e*plain how China)s e*traordinary savings rate and its .$ inflow mainly from co1ethnics on its periphery can be duplicated by most developing states& Dor did he recogni-e that these states are scarcely in a position to ta,e advantage of China)s economic liberal policies by competing with PRC producers% either in their domestic mar,et or the world& 7till% one point was doubtless convincingC that China% unli,e Western states% is not obstructing development in the world)s poorer countries& That point% whether it relates to the Beijing Consensus or aid and migration% epitomi-es the distinctiveness of the China+Africa lin, for many Africans& The practices of Western states associated with past colonialism or present imperialism ma,e PRC practices appear particularly distinctive to Africans& 'ost prominent among these Western practices are 4#6 impositions of neoliberal 7APs that have resulted in diminished growth% huge debt% declining incomes% and curtailed social welfare: 4!6 the use of aid to compel compliance with 7APs and the foreign policies of Western powers: 4H6 protectionism 4despite free1trade rhetoric6 in developed states that inhibits African e*ports: and 4M6 support for authoritarian leaders 4despite tal, of democracy and human rights6 to secure resources and combat Eradicals&F $n addition% Western disparagement of Africa% through an unremitting negative discourse overlaid with strong implications of African incompetence% remains prevalent 4Araya !""56& M" The ideas that on balance colonialism benefited Ethe natives%F and that Africa)s troubles have all been

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postcolonial% are popular among elites of the former colonial powers 47autman @ Xan !""5: Dyang !""<6& A positive image of China e*ists despite the prevalence among the Chinese of racist attitudes% which have been e*perienced both by Africans in China and Africans wor,ing alongside Chinese residents in Africa 47egal !"">6& M# The PRC government% with its ideology of 7ocial .arwinism 4i&e&% the richer% the fitter6 and characteristic representations of Africa as uniformly poor bears some responsibility for these attitudes& 7till% the PRC is careful to identify Africa)s problems as the legacy of colonialism 41usiness Da !""Mb: Ai Ving !""H6& PRC leaders have never termed Africa a Ehopeless continentF 4&conomist !"""6& They would never state% as a B&7& House 7ub1committee on Africa member did to a Rwandan human rights activist during the #99M genocide% that EAmerica has no friends in Africa% only interests% and it has no interests in RwandaF 4E/hosts of RwandaF !""<6& PRC leaders% officially at least% celebrate Africa)s culture and achievements% and China)s si*ty1five cultural agreements with forty1si* African states have led to hundreds of e*changes 4Peoples Dail !""M: Dail -rust !"">b6& As one scholar has observed% while Africa% to the West% is a Ehaven for terrorists%F the Ecradle of H$IGA$.7%F and a Esource of instability%F for China it is a Estrategically significant regionF and place of opportunity 4/u !"">6& China% moreover% ac,nowledges its political indebtedness to Africa for her support of China)s entry into the B&D& and continued bac,ing in international forums& That contrasts with Western states) failure to ac,nowledge their indebtedness to Africa for its contributions to the West)s industriali-ation and cultural development 4see $ni,ori !""!6& Bnli,e during the 'ao era% China today suggests no radical solutions to Africa)s predicament& The PRC avails itself of the historically determined disadvantages of Africa in trade 4Holslag !"">6% but much of what it sells to Africa is useful to developing manufacturing and providing affordable consumer goods 47oderbom @ Teal !""M6& 7ome of China)s investment in Africa% though apparently directed to non1oil sectors% is nevertheless imbricated with the continent)s harsh labor regimens in places li,e \ambia)s Copperbelt 4Aungu @ 'ulenga !""<: -imes of Nambia !"">6& But China is still perceived as different in that it provides some investments of direct benefit beyond elite circles% does not insist that Africa)s political economy steer a re0uired course% and contributes to Africa)s talent pool rather than draining it& $t is not clear whether the differences outlined here will persist over the long term& Among major powers at any given time% there are always differences in approach to subaltern states& The very process of differentiating superordinate and subordinate states and dominant and subaltern peoples tends over time% however% to ma,e the conduct of great powers and their elites more similar than different& $n a decade or two we should be able to determine whether that will be the case as well with China in Africa&

Sautman* Barry and Man* airong -.//A0* 1,he Forest for the ,rees: ,rade* In$estment and the %hina-in-Africa Discourse*4 in Pacific Affairs* 5ol6 A8* )o6 8* ""6 ;-.;6

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The modalities of trade e*amined for development implications commonly involve the import and e*port of goods& However% there is also trade in money and people& Western% but not PRC% ban,s have traded secrecy and interest to the e*porters of M" percent of Africa)s private wealth& ##! Western states trade citi-enship for the s,ills of professionals% especially doctors and nurses% trained in% but now largely lost to Africa&##H These forms of trade li,ely impinge as much as commodity e*change on Africans) right to development& The main problem with the China1in1Africa discourse is not empirical inaccuracies about Chinese activities in Africa% ##M but rather the deconte*tuali-ation of criticisms for ideological reasons& 7ome analyses positively cast Western actions in Africa compared to China)s activities: others lac, comparative perspective in discussing negative aspects of China)s presence% so that discourse consumers see a few trees% but are not given a view of the whole forest& 7uch analysis reflects Western elite perception of national interests or moral superiority as these impinge on Estrategic competitionF with China&##< 'any analysts scarcely 0uestion Western rhetoric of Eaiding African developmentF and Epromoting African democracy%F yet are 0uic, to sei-e on e*amples of e*ploitation or oppression by Chinese interests& ##> To comprehensively interrogate Chinese and Western activities in Africa is to 0uestion a global system that has in many respects de1developed Africa and into which China is increasingly integrated& ailing that% one is left with little more than a binary between a Western1promoted new Ecivili-ing missionF on behalf of Africans% and the activities of the EamoralF Chinese% who refuse to fully endorse that mission by not adopting trade and investment practices wholly compliant with neo1 liberalism& China% after all% can and does throw this binary bac, in the face of its proponents by portraying the West as see,ing a new tutelage for Africans and China as eschewing the role of intermeddler% while promoting Ewin1winF trade and investment& 7o too do many Africans& ##5 The popularity of features of China)s presence in Africa% compared with that of the main Western states% goes well beyond elites&##; The !""5 Pew /lobal Attitudes 7urvey as,ed Africans in ten countries to compare the influences of China and the B7 in their own countries& $n nine of the ten countries% by margins of ># to 9# percent% African respondents said the Chinese influence was good& These percentages substantially e*ceeded those for the B7&##9 2ne important implication of the Chinese presence in Africa then is that Western states and firms may need to engage in greater self1reflection about their own presence in the continent& The China1in1Africa discourse can be e*pected to become increasingly heated% especially with regard to the effects of PRC trade and investment on development% as its audiences weigh competing claims& Those who follow the discourse as it is played out in Africa itself can already detect that many Africans are wary of attempts to cast it in 'anichean terms& 'any Africans moreover are now rejecting any effort to use the discourse to distract from the reality of Africa)s continued subordination within a world system that builds in e*ploitation and other systematic violations of rights&

Sautman* Barry and Man* airong -.//;0* 1African Pers"ecti$es on %hinaAfrica LinBages*4 in The *hina Quarterly* 5ol6 8;;* ""6 >.A->7;6

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$n early !""5% when few surveys of how Africans see China+Africa lin,s were available% a B7 newspaper carried an article on Africans) negative views of those lin,s& $t 0uoted 'ichael 7ata% who said E\ambia is becoming a province + no% a district + of China%F and an Africa specialist% who stated Eamong ordinary KAfricansL% a very strong resentment% bordering on racism% is emerging against the Chinese& $t)s because the Chinese are seen as bac,ing KAfricanL governments in oppressing their own people&F### 7ata)s statement was part of his mobili-ation strategy and probably ta,en as such by non1partisans& The article)s author% however% was not necessarily non1partisanC he chose 7ata from among legions of African politicians& The scholar)s statement was li,ely to have been a synecdoche% ta,ing a part for the whole% reflecting what he observed among part of the populace in one or two African states& 7urvey research does not bear out claims of strong African resentment& 3ven in states where politicians play the China card% there is more appreciation than not of China)s role in Africa and China fares well compared to the West& $t is also not clear that most Africans distinguish oppressive pro1China ruling elites and China1critical people)s paladins% as do Western media& 7urveys thus also tell us something of how the media interpret and see, to mould African perspectivesC the media hesitate to ac,nowledge that Africans may see Chinese practices as more advantageous than those of the West% and imply that if Africans do see it that way% it is due to collusion and obfuscation by Ethe ChineseF and their African clients& There are reasons why most Africans may be positive about China+Africa lin,s& As a !""; World Ban, report details% China cheaply and efficiently builds much of Africa)s infrastructure&##! Chinese retailers also sell the Africans goods that many could not previously afford& A scholar has notedC EAfrican consumers benefit from cheap products offered by Chinese firms& or instance% Chinese plastic sandals con0uered the whole African continent in the last years& That changed the daily life of African women and children enormously in that way that going shoeless is KinL the past in poor African countries&F ##H Additional reasons why Africans may favour lin,s with China e*ist and can be adumbrated from responses to our open survey 0uestions& There is a boom in primary product e*ports to China from some African states% while earlier evident harm from Chinese competition with African e*ports to third countries has largely dissipated&##M China presents for some Africans an e*ample of development fostered by encouraging domestic savings% the factor most li,ely to sustain growth& ##< $n contrast to Western aid% China)s is not politically conditioned and% contrary to the prevailing discourse% its non1intervention policy may ma,e China more% rather than less% popular among common Africans% as it obviates political obstacles to the speedy delivery of infrastructure& ##> China has no history of colonialism and has not recently invaded other states& $t has supported developing country attempts to redress grievances such as subsidies that impair their e*ports& ##5 Whether such understandings of Chinese practices are accurate is less significant than their being plausible enough to be found among many Africans we interviewed during seven research trips to nine African countries between !""< and !"";& $t remains to be seen whether positive African perceptions of China+Africa lin,s persist& Playing the China card has not proved sufficient to smooth a road to power for oppositions% as the \ambia case illustrates& $n the future% playing it may not even

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be feasible% as the fruits of Chinese infrastructure building are reali-ed% fewer Chinese and more Africans retail made1in1China goods% Chinese foster industrial enterprises% and China)s leaders accept that arms sales are a reputational ris,& Western media influences in Africa may also decline as other sources gain acceptance& Research on African perspectives on China+Africa lin,s should ta,e in a wider range of countries and as, more about grassroots concerns% such as contributions to development& Because China+Africa interactions are rapidly evolving% it would be useful to have panel data% with multiple dimensions over time& ?laus 7chwab% the World 3conomic orum founder% has said Ethe world needs Africa as much as Africa needs the world%F but a Chinese scholar observed that Ewhile Africa needs China% China needs Africa more&F##; ?nowing African perspectives on China+Africa lin,s has thus become essential to understanding China)s place in the world&

,aylor* Ian -8;;A0* 1%hina@s Foreign Policy ,oCards Africa in the 8;;/s*4 in Journal of %odern African Studies* 5ol6 9:* )o6 9* ""6 <<9=:/6 Whilst Beijing has recognised that Western investment and technology is vital for China to maintain and develop its moderni-ation programme% the PRC has been determined to strengthen its position !is<M<!is the West& With the 7oviet Bnion now no longer e*tant% China has felt vulnerable to the perceived threat of the one remaining superpower% the B7A% and so has assiduously courted lin,ages with Africa to counter1balance the discerned menace from a dominating West& Though ChinaZs primary focus is naturally on the 3ast Asia region% by vigorously supporting the theme of non1interference in domestic affairs and promoting a cultural relativist notion of human rights% China has been able to secure its own position and% at the same time% appeal to African leaders mindful of the WestZs pressure on their own governments& This helps e*plain the fourteen African votes 4out of twenty1si*6 against the proposed condemnation of ChinaZs human rights record in /eneva in April #99>& 7uch motions by the Bnited Dations are seen by many African leaders as unwarranted interference in the internal affairs of developing countries& Daturally% China puts a lot of effort into encouraging this attitude& $n addition% ChinaZs emphasis on economic lin,ages with Africa is appealing and has enabled Beijing to further project itself on the continent& As a result% China maintains its commercial and political lin,s with Africa as a tool by which Beijing hopes to foster economic interaction and by which China may maintain a reserve pool of friends and sympathisers from which it can draw moral and political support from within the international system in times of conflict with the West& A Chinese maga-ine article made this theory 0uite e*plicit when it revealingly statedC (KTheL vast number of Third World countries KwillL surely unite with and stand behind China li,e numerous EantsF ,eeping the EelephantF from harm)s way&) >; $n this conceptualisation% the (elephant) of China + a dominant and central figure + is protected by the little countries against outside threat and coercion& As a nation attempting to regain its (rightful place) in the international system% Beijing has been acutely aware of the perceived dangers of only one superpower and the threat that this presents to China& Iiewing the global situation as increasingly comple*% and

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with fierce economic competition and growing nationalisms dominating state1to1 state interaction% China has asserted a doggedly realist posture that wa hierarchy of powerxe*ists within which the more powerful nations dominate the wea,)& >9 Thus% in an attempt to offset the WestZs position !is<M<!is China in the international system% Beijing has and will continue to see, improved relations with non1Western powers& Africa has been no e*ception to this policy and this is li,ely to continue& .etermined to be free of the overt influence of any one power% mindful of past domination by outsiders% and aiming to (regain) its position of eminence in the international system% Beijing since the end of the Cold War has continuously courted Africa and the developing world as a means by which China may project its prestige and influence outside the narrow confines of 3ast Asia and thus further its claims to the status of a (great power)& As a result% China)s post1Tiananmen foreign policy has further established the developing world)s importance in the overall framewor, of the PRCZs foreign policy and Africa has played an important role in this construction& The competition with Taiwan for recognition has also been a feature of this policy% though with 7outh Africa now recognising Beijing% Taipei is left with a rump of small and impoverished African nations in its camp& or reasons discussed above% it is unli,ely that the R2C will improve greatly on this situation& Xet% the visit by Prime 'inister Ai Peng to seven African nations in 7eptember #995% 5" once again illustrated and underscored the point that China remains committed to Africa and is li,ely to retain a political and economic presence on the continent for the foreseeable future&

,HYnneland* +lling6 )6* BrandtzZg* BHYrn* DolGs* [schild ' le Pere* 2arth -.//:0* *hina in Africa Implications for .orwe!ian 'orei!n and &evelopment Policies* Bergen: %hr6 #ichelsen Institute6 Purpose The new Chinese Africa policy has major implications for development on the continent& The purpose of this report commissioned by the Dorwegian 'inistry of oreign Affairs and D2RA. is to present and review the new Chinese engagement in Africa and to identify and discuss implications for Dorwegian foreign and development policies& Chapter # provides an introduction to Chinese foreign policy% the motives and interests behind the policy goals% and how Chinese foreign policy is manifesting itself in relation to the developing world and in the multilateral arena& Chapter ! offers an overview of Chinese engagement in Africa while Chapter H gives an assessment of the implications for Africa% the dynamics of China1Africa interaction and the challenges ahead& Chapter M offers a more detailed presentation and analysis of the Chinese engagement in the petroleum sector in Africa and its implications& The concluding Chapter < outlines Dorwegian objectives and provides a number of suggestions for Dorwegian Africa policy% bilateral co1operation with China% and multilateral engagement& Anne* # and ! provides additional data and bac,ground information on Chinese foreign policy and the dynamics of China1Africa relations&

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5#inese Foreign Polic China)s advance from economic periphery into the core group of the world)s leading industrial powers has already begun to leave its traces on the geopolitical map& $n view of its economic dynamism% China)s foreign policy has no choice but to assume a greater role in shaping the course of current world events& We are witnessing a shift to a much more fle*ible% differentiated and proactive foreign policy& $t is evident in China)s more diverse spectrum of interests and in China)s more mar,ed engagement in regional and global arrangements as well as in its generally broader geographic focus& China is increasingly being forced to assert its interest in regions in which it has traditionally had little strategic interest& This applies above all to Aatin America% the 'iddle 3ast and Africa& 2ne crucial foreign policy goal is to service the needs of China)s economic modernisation and the economy)s growing hunger for natural resources and access to e*port mar,ets& 3nergy security% in particular% has emerged as a basic parameter of Chinese foreign policy& China has launched an active diplomatic programme on oil& $t is increasingly sceptical about the prospects of satisfying its soaring energy demands in the international energy mar,et& $nstead% it has set its sights on establishing stable bilateral relations with the world)s most important oil1producing countries& Based on Estrategic oil partnershipsF% China see,s to secure long1term supply agreements with the world)s leading oil producers% and ac0uisitions of concessions and capital sta,es in relevant energy corporations& B7 hegemony and how to manage it has remained an over1riding concern for the Chinese& China is resigned to the fact that B7 domination is a cold reality that it has to live and contend with& China has come to see globalisation as a way of transforming great power politics and to establish more co1operative forms of interstate competition that can increase the prospects for China)s peaceful rise& This has led to a situation where China% while recognising the dominance of the B7% see,s to limit B7 dominance through the BD and other international organisations% and by using its resources to forge stable relations with other countries and regions& China see,s to portray itself as an attractive partner for the developing countries and emphasi-es strongly the need for 7outh17outh co1operation& China builds on its traditional third world ideology and long1standing political relationships but now see,s to become attractive as a trade partner% an investor% a technology supplier% a provider of credit and development assistance% and as a political friend based on the Chinese principle of Enon1interferenceF in internal affairs& $n financial terms% by far the most significant dimension of Chinese engagement in developing countries is the multi1billion dollar agreements it has concluded in the energy sector% especially in Africa& 2ther economic activities and assistance pale in comparison& The new Chinese engagement with developing countries is also and increasingly very visible in the multilateral arena& $ts leadership is reflected in the E/roup of 55 plus ChinaF 4which brings together more than #H" developing countries6 where it has sought to focus on addressing the adverse effects of economic globalisation% improving 7outh17outh partnerships and bridging the Dorth17outh divide& 7ince

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joining the WT2 in !""#% China has become active in confronting the trade asymmetries that e*ist between developing and developed countries& At the BD and at other multilateral institutions% China has increasingly become a vocal spo,esperson for the 7outh and it has become a strong supporter of the 'illennium .evelopment /oals& At the multilateral level% Chinese engagement on development issues has been most intense in the field of trade& China has so far been a more marginal player in relation to global efforts to increase development assistance and provide debt relief& China has its own development assistance programme% but it has several distinctive features& 'ost Chinese aid is bilateral% it is in most cases delivered as project assistance% and it is strongly tied to Chinese trade and investment interests& 'ost aid is also provided as commodity and technical assistance& Chinese aid is also often used in conjunction with various e*port credit schemes lin,ed to the purchase of Chinese goods and services& 7ignificantly% Chinese aid is also distinguished by a strong emphasis on providing assistance with no political conditionalities or strings attached& 5#ina in )frica Africa occupies an increasingly dominant space in China)s foreign policy& $n January !"">% China released its first major policy document on its relations with the continent& $t lists H" initiatives in the political field: in the economic field: in education% science% culture% health and social aspects: and in peace and security& The document reaffirms overriding Chinese priorities and the need for accessing African raw materials and commodities% but is also strong in emphasising political cooperation and in responding to African concerns& There is also a much stronger emphasis in this document on Chinese support for peace and security on the continent& The document also emphasises co1operation in the multilateral system% calls for a strengthening of the BD and appeals to the international community to give more attention to Africa and to peace and development on the continent& Chinese support to African regional organisations is also highlighted& China initiated a permanent orum on China + Africa Co1operation 4 2CAC6 in the year !"""& $t has emerged as the chief instrument and mechanism for dialogue and co1operation between Africa and China& 2il% Trade and $nvestment $n financial terms% Chinese Eoil diplomacyF has been most visible& China and the Chinese state1owned oil companies have struc, a number of multi1billion dollar deals in African oil e*porting countries& $n the first half of !"">% H!Q of Chinese oil imports came from Africa% with Angola emerging as China)s biggest oil supplier 4ahead of 7audi Arabia and $ran6& This major trade e*pansion between China and Africa is largely accounted for by the African e*port of oil and other raw materials 4mining products and timber in particular6& Chinese e*ports to Africa are also growing rapidly% mainly lin,ed to the e*port of cheaper manufactured products and consumer goods& Chinese investments outside the oil sector and other e*tractive industries are limited% but growing& There are% however% a much larger number of Chinese

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companies present% many lin,ed to the delivery of Chinese goods and services facilitated by Chinese e*port credits& This is most visible in the construction industry& The Chinese state has been very active in promoting trade and investment and has also used the 2CAC mechanism very actively for this purpose& This has included the use of e*port credits and tied aid& $t has trade agreements and e*port credit arrangements with most African countries& China has also ta,en on board a number of African concerns& This has included -ero1rating tariffs on a number of products from African countries as well as voluntary e*port restraints& .evelopment Assistance China is also emerging as a significant donor to Africa& The aid programme is closely lin,ed with Chinese trade and investment policies& There also appears to be a considerable element of tied aid through the provision of Chinese commodity and technical assistance% with the focus firmly on project assistance& The Chinese development assistance has evolved relatively independent of the traditional donor community& 3volving and changing Chinese aid policies have reflected changing domestic needs in China% but they are also reflecting changes in African recipient countries& Chinese assistance is often used in conjunction with various investment promotion projects and the provision of e*port credits& $t can also be closely lin,ed to securing access to major resources 4lin,ed to Chinese oil interests% for e*ample6& Chinese aid is also distinguished by its near complete absence of political conditionalities: China)s aid policy is firmly anchored in the principle of EnoninterferenceF in internal affairs& Chinese assistance is channelled to a variety of sectors and areas& There is an emphasis on various projects to promote trade and investment with a strong focus on the provision of physical infrastructure% but also on agriculture& A second significant area is capacity building and the social sector% especially as related to science% health and education& This is mainly focused on training of individuals but there is growing focus also on providing assistance to strengthen management and institutional capacities& The section covering social issues in the Chinese Africa policy paper also lists co1 operation related to the environment 4climate changes% water% biodiversity% and so on6% disaster and humanitarian assistance 4emphasising the role of D/2s6% and media co1cooperation& Activities and projects funded in this area appear% so far% to be limited& A third and very visible feature is Chinese funding for the construction of high profile buildings + stadiums% state houses and buildings housing parliaments% oreign Affairs ministries% and so on& 7uch projects have a long tradition in Chinese support to Africa% but have e*panded significantly in recent years& China has cancelled a significant portion of African debt to China& $n !""H% it announced that it would cancel nearly B7. #&H billion owed by H# African countries&

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'igration 'igration has become a very visible manifestation of Chinese engagement& The number of Chinese migrants has e*panded significantly in the past decade& The determinants of emigration from China and the move to Africa appear to be largely independent from the Chinese state% but there are many lin,ages between the migrants and Chinese companies in Africa and their Chinese wor,ers& The Chinese migration is also highly entrepreneurial& Retail trade has been a dominant sector for most of these migrants& $n many towns and cities throughout the continent they have 0uic,ly become the dominant traders% based on their supply of cheaper Chinese products& There is also a growing number of Chinese active in restaurants and in certain professional occupations& The number of Chinese migrants is not ,nown& The majority are located in 7outh Africa 4an estimated #"" """6 and in $ndian 2cean $slands 4'auritius and 'adagascar6% but they are visible in virtually every African country 1 from the <""" in Aesotho and the M""" in \ambia to the small community of M"" in Cape Ierde& Dotably% there is also a strong presence of Chinese migrants in countries emerging from violence and civil war + from 7udan to .R Congo and Angola& Peace and 7ecurity Peace and security has emerged as an increasingly important dimension of 7ino1 African relations& Bnder the 2CAC initiative the Chinese have made a number of commitments to support African efforts to promote peace and development and to assist the BD in its peace,eeping operations& The strongest manifestation of this has been Chinese participation in BD peace,eeping operations in Africa& Currently% they provide #H#" peace,eepers to si* BD operations in Africa& China)s direct financial contribution to the AB in this area remains limited& Through its Africa policy paper% China has% however% made strong commitments to engage more with Africa and the AB on these issues& This also includes a range of areas beyond peace,eeping + from small arms to drug traffic,ing and organised crime& China is a small% but significant arms e*porter to Africa& $t is estimated to amount to about >15Q of total arms deliveries to the continent& 'any of these deliveries% however% are going to conflict -ones& $t is reported that several of these supplies have been in e*change for lucrative contracts 4such as mining concessions in .R Congo and timber in Aiberia6& China has been passive in multilateral institutions discussing disarmament issues affecting Africa& Dor has it signed the 2ttawa declaration on landmines& Implications for )frica The implications for Africa of this new Chinese Africa policy are e*pected to be significant% but we do not yet ,now how and in what way& There is no conclusive evidence% many challenges and opportunities + and many imponderables& Trade statistics tell us that the traditional trade pattern between Africa and the world will be reinforced by the Chinese& Africa)s role as an e*porter of raw materials will be reinforced and it will be more challenging to diversify away from traditional e*ports&

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There is also decreasing scope for Africa to compete with China in labour1intensive manufacturing + in Africa and in third mar,ets& All of this reinforces familiar challengesC the need to ensure a sustainable e*ploitation of natural resources and to have a strong regulatory framewor, and management mechanisms in place& How do we ensure that billions poured into the continent for the e*ploration and production of petroleum and other resources are benefiting also Africa and its peoplesW 3conomic .evelopment The impact of the Chinese companies is also mi*ed& $n some cases they have definitely contributed to a lowering of costs 4particularly in construction6% although there are also e*amples where Africa has been forced to pay more for Chinese goods and services& Critical 0uestions are also being raised at the procurement policies of Chinese companies& There is limited local outsourcing with most goods being imported from China& 3mployment of local labour is also limited and efforts to provide a transfer of s,ills and human resource development through their business operations are limited& Ai,ewise% Chinese companies have paid limited attention to Ecorporate social responsibilityF or environmental implications& There are also disturbing e*amples of the illegal e*ploitation of natural resources& There are e*amples from% for e*ample% the fishing industry% but the strongest evidence appears to relate to the Chinese importing of African timber& There are% however% wide variations between countries and between sectors in relation to the use of both local inputs and local labour& $t appears as if Chinese companies adapt to local conditions and regulatory framewor,s& Chinese companies have major investments and a strong presence in a country such as 7outh Africa% which has strong regulatory framewor,s related to% for e*ample% labour conditions 4although the type of business they engage in there may be different from% say% .R Congo or \ambia6& Aid and /overnance China is emerging as a significant aid donor to Africa& We ,now very little about the 0uality and impact of Chinese projects and assistance activities in Africa& Dor do we ,now how Chinese authorities themselves assess such issues& The Chinese debt cancellations and -ero1rating of tariffs on products from least developed African countries are significant initiatives& Beyond this% a number of observations can be made& The strong Chinese focus on physical infrastructure has been welcomed by many% but the heavy use of tied aid% procurement prescriptions and a lac, of coordination with other actors has been criticised for reducing the effectiveness of the assistance& 7trong criticism and 0uestions have been levelled at the Chinese policy of Enon1 interferenceF and its implications for governance issues and democratisation& 'any fear that the Chinese will be the EspoilerF in emerging efforts to increase aid effectiveness and improve good governance& The Chinese e*plore business opportunities and provide aid irrespective of political conditions and the repressive nature of the regime in power& This contrasts sharply with the role of some of the traditional donor countries&

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The Chinese non1interference policy is under pressure and may be increasingly difficult to uphold& our pointers may be of some help in understanding the dynamics at play here& 2ne is that China also strongly emphasises the need for political stability& $t wants to protect its investments and commercial interests& This will be difficult to reconcile with non1interference& 7econdly% China often emphasises human resource development and capacity building in its aid programmes& This may lead to a situation where it ends up targeting capacity building in state institutions in an effort to improve management& Thirdly% and significantly% China is also committed to wor, with ABGD3PA. and African regional organisations& We may see a further alignment and development of modalities for co1operation and dialogue between African regional organisations and 2CAC& Chinese priorities have been strongly focused on D3PA.)s economic development programme 4especially infrastructure6 and to some e*tent some of D3PA.)s social programmes 4training in particular6& However% D3PA. also has a strong focus on governance issues through the African Peer Review 'echanism as well as through its evolving approach to post1conflict reconstruction& This will increasingly re0uire a Chinese response and provide entry points for possible future Chinese activities in this area& inally% China is also a signatory to the Paris .eclaration on aid effectiveness and see,s to portray itself as an international development partner& This will create additional and growing pressure on the Chinese to engage with other donor countries in discussing the delivery of aid& Responses Africa)s political response to the new Chinese offensive has generally been positive& African leaders have emphasised the importance of China for growth in their economies% as a supplier of development finance and technical assistance% and as a political ally and friend& China)s emphasis on Enon1interferenceF is also welcomed& There are% however% tensions and frictions below the surface& This has mainly been over trade 4complaints about cheap imports and dumping6% limited local outsourcing by Chinese companies and poor employment conditions and low wages& .oes the arrival of the Chinese imply that Africa)s position will be strengthenedW Are they provided with different alternativesW .oes this create opportunities for increasing African ownership of their own developmentW $n reflecting upon new opportunities% challenges and imponderables% two critical issues are highlighted& 2ne is that China may not yet have succeeded in presenting Africa with a new alternative& The Chinese have in their actions so far primarily focused on trade and investment opportunities for Chinese companies& This remains the Achilles heal KsicL in China)s relations with Africa& China needs to be more active 1 in Africa% in dialogue with Africa% and in the multilateral system 1 in presenting how it wants to contribute to Africa)s development and in the reduction of poverty on the continent& China may have to focus more on how its vision for increased 7outh17outh co1operation will translate into better opportunities for Africa and a reduction in poverty&

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The second critical issue is Africa)s response& Can Africa ta,e advantage of new opportunities and respond to new challengesW The 2CAC initiative + the main mechanism for joint African engagement with the Chinese + has so far largely been driven by the Chinese& Within Africa% it has mainly been left to 7outh Africa to push for changes in China)s Africa policy and for China to broaden its engagement& Will there be an alignment between 2CAC and the African BnionGD3PA. prioritiesW (ecommendations The rapidly e*panding Chinese engagement in Africa will have strong implications for the development of the continent& The report argues that it therefore also should have implications for Dorwegian foreign and development policy& Dorway is in a position to ma,e a small difference through its development policy in Africa and through its engagement in the energy sector& Dorway possesses s,ills% resources and influences to potentially ma,e a small% but important contribution& The team recommends that% in selected areas in its foreign and development policy% Dorway formulates strategies with the following objectives in mindC 7trengthen the capacity of partner countries and African organisations to negotiate and co1operate effectively with China: 7upport initiatives that stimulate institutions and donor fora: China)s participation in regional

multilateral

.evelop bilateral co1operation with China in areas of mutual benefit

$n devising strategies and outlining alternatives for Dorwegian responses it is helpful to distinguish between three areasC Dorwegian Africa policy% Dorwegian bilateral relations with China% and engagement in the multilateral arena& Africa Policy Dorwegian Africa policy will be the most important area for addressing the challenges posed by China)s engagement& A first recommendation is that Dorway should support efforts to strengthen regulatory framewor,s and the management of natural resources& Country programmes in selected countries should be revisited with a view to offering support for strengthening local management capacity& The areas selected will depend on the country concerned and the focus of the Dorwegian country programme& $mportant sectors include fisheries and forestry% but especially the management and governance of the energy sector& This includes hydro energy% but also% importantly% petroleum& The Dorwegian Eoil for developmentF initiative will assume an added importance and relevance& 7econdly% it is important to monitor what the Chinese are doing in individual African countries% to build local competence for doing so and to stimulate public debate& Dorway should support such efforts through assistance to% for e*ample% local research communities% D/2s and media groups&

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Thirdly% relations with African regional organisations assume a particular importance& These organisations are important vehicles for advancing African positions and for engaging with the Chinese on critical issues& Dorway should support such efforts through its regional support activities& ourthly% and at the country level% it will be important to help facilitate dialogue and where possible co1operation between traditional donor countries and the Chinese& ifthly% China should be invited to meetings and institutions established to facilitate communication between donors and African regional organisations& This includes meetings related to ABGD3PA. initiatives& At the sub1regional level% current efforts in 7outhern Africa to establish a theme1group in energy% bringing together donors and 7A.C% may offer a potentially very important arena for engaging with the Chinese 4the planned theme group is e*pected to be co1ordinated by Dorway6& The possibility of establishing relations between China and the Africa Partnership orum 4in which Dorway is currently one of the co1chairs6 should also be e*plored& 'ultilateral This arena is crucial in providing e*ternal influences on evolving Chinese development and Africa policies& Dorway should stimulate and support efforts to strengthen Chinese participation and commitment to international co1operation& irst% Dorway should actively see, to engage with the Chinese at the BD and in the international finance institutions& Critical issues central to the African agenda should be emphasised here& 7everal issues may be available for joint consultation and possible co1operation& 7econdly% Dorway should support efforts ensure that the African .evelopment Ban, can become effective an effective mechanism for facilitation of co1operation between donor countries and China in support to African infrastructure development& Thirdly% Dorway should help encourage Chinese participation in multilateral institutions where the Chinese are currently passive or are not members& This includes supporting efforts to invite China to join the $nternational 3nergy Agency& Dorway should also support efforts to facilitate Chinese participation in the 3*tractive $ndustries Transparency $nitiative& inally% Dorway should support efforts to ensure that the 23C.1.AC structures engage with China by inviting the Chinese to share their e*periences in various wor,ing groups% by inviting the Chinese to observe .AC review missions% and so on& Bilateral Co12peration Dorway should also engage bilaterally with China& This will be demanding% it will be challenging% and any successes will belong to a distant future& $n particular% it will be difficult to establish a meaningful political dialogue with Beijing on African development issues& However% building upon the e*periences and direct interaction in African countries a number of steps can be ta,en which may evolve into a bilateral dialogue even at the political level&

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irstly% Dorway should monitor China)s Africa policy% what it is doing in Africa and its relations with Africa& 7econdly% Dorway needs to learn more about Chinese e*perience and thin,ing in providing development assistance and assisting poverty reduction outside their own borders& What are they doingW How do they do itW How efficient and effective do they consider this to beW Thirdly% Dorway should e*plore the possibility of engaging directly with the Chinese on e*perience from the petroleum sector& The focus for such a dialogue could be joint lessons in African countries where Chinese oil companies are active% and where Dorway has an Eoil for developmentF programme& A final area to be mentioned is Chinese companies& Corporate social responsibility and compliance with international environmental and social rules and regulations are emerging as important issues&

&issenbach* (6 -.//;0* 1,he +(@s !es"onse to %hina@s Africa Safari: %an ,riangulation #atch )eeds34 draft to be "ublished in European Journal of &evelopment Research Special Issue * 5ol6 .<* )o6 86 A:6 5onclusion+ -#e &:;s and 5#ina;s Dilemmas and )frica;s 5#oice The comple* picture of the 3BZs and ChinaZs relations with Africa reveals dilemmas on all sides and wea,nesses in their respective policies& The 3B carries substantial baggage from colonial and Cold War history and still needs adjustments to the realities of globalisation and in Africa itself& The 3B has struggled more to adapt its policy in the conte*t of its normative and ethical concepts& $t has found it difficult to re1define its interests in a credible way and to move away from a charity approach to Africa% long a ,ey feature of public pressure *iii& This is also because its economic interest in Africa is 0uite limited& Chinese EcompetitionF provides 3urope)s policy ma,ers with an opportunity also to address interests which were more difficult to articulate as long as poverty was the sole reference in the discourse about Africa& With the renewed interest for African oil and minerals% some African countries tend to play off e*ternal competitors against each other and often load this game with political overtones 4Wade% !"";6& 7imultaneously% the debate about the resource curse has been fuelled by China)s African safari 4Xates% !"">6& Chinese Africa policy has ta,en an almost e*clusively economic twist% despite its political rhetoric% and with une*pected negative impacts on some social groups in Africa& This raises 0uestions about the benefits for Africa)s industrialisation and the durability of China)s engagement beyond the commodity boom& The current economic crisis and cooperation in the /1!" will be a litmus test and the Chinese leadership has realised thisC during his !""9 visit to Africa President Hu has sought to re1assure African hosts about China)s resolve to fulfil its commitments while Prime 'inister Wen has sought to fend off e*pectations of new pledges *iv& $n order to overcome these dilemmas the 3B has concluded that effective cooperation between the 3B and China in ta,ing up common responsibilities is

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central to the shaping of international affairs and global governance in the future& Hence% the proposed trilateral dialogue and cooperation 43uropean Commission% !""56 can be regarded as a test1case for the Africa13B Partnership% the 3B1China strategic partnership and more generally for the 3B)s strategy to promote global security and governance through effective multilateralism instead of prescriptive moral crusades% for China)s ambition to be a responsible 4great6 power% and for Africa)s development and position in the world& $n such a dynamic constellation Africans are wor,ing on a strategic consensus in the AB framewor, and of course nationally in order to be in the driving seat of the debate& The African Bnion Commission 4ABC6 has laid the groundwor, by creating a tas, force on this topic 4ABC% !"">6*v& The challenge ahead is to build on the positive effects of the 3B)s and China)s engagement and use their willingness to cooperate on the basis of similar objectives for growth and development in Africa in order to ultimately construct a common set of Erules of engagementF in Africa& These rules would promote sustainable peace based on an emerging African security community and the African Bnion G the Dew Partnership for Africa)s .evelopment 4ABGD3PA.6 principles for governance and development in Africa& These African rules for engagement applied to all e*ternal partners would gradually supersede both the Washington ConsensusG.AC rules and ChinaZs rigid templates& However% changes in attitudes% path1dependent policies or conditionality will not happen overnight& They may be facilitated by the currently envisaged overhaul of the international financial institutions or a possible regionalisation of these& This is an opportunity for Africa to collectively assume responsibility internationally for its development& This is what Africans have long claimed% but such an approach is also associated with ris, for AfricaZs leadersC they have to find consensus on how to engage with e*ternal partners despite internal divisions and diverse impacts 4economic gains and losses are unevenly distributed6: they have to e*ercise these responsibilities and obtain the outcomes% in terms of development% which the people of Africa and the international community support& 2therwise African responsibility may just become a convenient e*cuse for disengagement and further marginalisation of Africa 4Wissenbach% !""5b6& Africa needs to decide whether it wants its partners to cooperate on this agenda or to have them compete for influence% thus perpetuating the post1colonial pattern of African policy1ma,ing being driven by outside actors and resulting divisions among and within African countries and races to the bottom*vi& Bltimately% Africa may succeed to ensure a real convergence of values and priorities of the Western donors and China around those of the AB Constitutional Act&

&u* Friedrich &6 M6 -8;A80* 1From Self-!eliance to Interde"endence3: De$elo"ment Strategy and Foreign +conomic Policy in Post-#ao %hina*4 in %odern *hina* 5ol6 >* )o6 <* ""6 <<7-<A.6 2n the basis of the preceding analysis% this essay advances the argument that the new Chinese leadership in the post1'ao era has made a decisive brea,% in both rhetoric and practice% with the 'aoist strategy of self1reliant development& .ue

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mainly to the economic imperatives generated by the our 'oderni-ations program% China is now opting for a development strategy that resembles closely what is being described in Western literature as interdependence& By noting this shift% we by no means suggest that the post1'ao Chinese leadership has relin0uished the long1 standing national goal of ma,ing China a self1reliant and totally independent country& `uite the contrary& What this shift does imply is that to attain this goal% the new leadership is willing to ma,e some radical modifications + modifications that the late 'ao most probably would not have endorsed + in its internal developmental policy and its e*ternal relations with the world economy& Thus% while it may be argued that self1reliance as a national goal has remained essentially intact in post1 'ao China% self1reliance as an operational strategy of development in the 'aoist sense has been pushed to the bac,ground in China)s latest moderni-ation drive& $t is still far too early to draw any conclusions from this shift in developmental strategy in China% considering the short span of time during which this change has been evolving& .omestically% however% the logical corollary of an interdependent developmental strategy is bound to be an increasingly comple* economy augmented by an e*panding division of labor and a growing structural1functional differentiation in management and production& Although it could be presumed that an economy based on internal1e*ternal interdependence is in a better position to accrue the benefits stemming from regional comparative advantage and division of labor% such an economy could also create a pattern of uneven development that would e*acerbate the urban1rural gap% income ine0uality% social stratification% and elitism + in short% the host of problems that socialism professes to combat and eliminate& $t remains to be seen whether the post1'ao leadership can% in the future% devise measures to ,eep these undesirable repercussions within tolerable limits% while at the same time retaining the benefits of the interdependence strategy& 3*ternally% the ramifications of pursuing a strategy of interdependent development could mean a certain reduction in autonomy to China)s national economy& An unpleasant dilemma inherent in interdependence strategy that policyma,ers must confront is Ehow much global involvement should a state foster and how much vulnerability and loss of autonomy is a state willing to sufferWF 4Caporaso% #95;C #56& $n the immediate future% China)s increasing demand for advanced technology from developed countries and its dependence on foreign mar,ets for its e*ports will undoubtedly e*acerbate the sensitivity and vulnerability of China)s economy vis1c1 vis the world economy& 7o far% officials of the PRC have said very little about China)s response to this problem other than to ma,e such typically vague statements as that China pursues its global economic involvements Eon the basis of persevering in maintaining independence and ,eeping the initiative in our own handsF 4Pe,ing Review% July ;% #9556& 7ooner or later% however% China)s leaders will have to move beyond rhetoric and come to terms with this issue s0uarely by defining the critical areas where China must maintain its initiative and those others where China may accept less control& China)s e*panding interdependent relationships with capitalist countries also raise the 0uestion of the country)s commitment to the reali-ation of a socialist world system& E7ocialism%F as Wallerstein has pointed out% Einvolves the creation of a new ,ind of $orld1systemF 4Wallerstein% #95MbC M#<6% since% the nationali-ation or sociali-ation of all productive enterprises within the bounds of a nation1state is not and theoretically cannot be a sufficient defining condition of a socialist system% even if the whole nation thin,s of socialism as its objective& As long as these nations remain part of a capitalist world

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economy% they continue to produce for this world mar,et on the basis of the same principles as any other producer KWallerstein% #95MaC 5L& This is a position that assuredly would be endorsed by 'ao% who during his lifetime had insisted that the capitalist world economy would be replaced by a socialist one through Enot only competition but also fierce% broad1ranging struggleF 4'ao% #955C #"<6& But the irony is that% since the decade of the #9>"s% socialist countries have% one after another% chosen to drop out from this struggle and to become Ean increasingly integral part of the capitalist world1economyF 4 ran,% #955C 9M6& As sociologist Christopher Chase1.unn has argued% these socialist countries Ehave reentered the capitalist world1economy as producers of commodities which they sell for profit on the world mar,et and as importers of world mar,et commoditiesF 4Chase1.unn% #9;"C <#>6& With its current emphasis on interdependence and tilt toward the capitalist world mar,et% China% too% seems to be following a path similar to that of other socialist countries& Whether her present posture represents a permanent withdrawal or a temporary retreat from that struggle is a 0uestion that will only be answered with the passage of time&

Nafar* Ali -.//>0* 1,he 2roCing !elationshi" BetCeen %hina Sub-Saharan Africa: #acroeconomic* ,rade* In$estment* and Aid LinBs*4 in The World +an) Research 3"server* 5ol6 ..* )o6 8* ""6 8/9-89/6 China)s economic ascendance represents a shift in the international economy and a change in some of the parameters that have been guiding the world trading system& The implications of China)s rise will be felt increasingly over the ne*t decades% and the 7ino1African relationship will only intensify in coming decades in line with China)s resource re0uirements& Chinese aid and investment in Africa will grow e*ponentially in parallel with the trade surge and will remain unaffected by any slowdown in economic growth in China& or 7ub17aharan Africa% China)s economic boom has been a mi*ed blessing& 2n the positive side% China has helped accelerate economic growth in Africa by contributing to a strong commodity boom due to the upward swing in the prices of oil and metals e*ported by many African economies& 7econd% it has deepened trade and investment on a continent that has been marginali-ed from flows of international trade and global capital% and China is investing significantly in Africa)s transport and education infrastructure& Third% it has given many Africans access to low1cost consumer goods& ourth% China)s low1transactions+cost way of doing business and its noninterference in countries) internal affairsYeschewing political conditionalities on loans provided that countries adhere to its one1China policyYhas won it some support in the developing world& ifth% China)s ascent has created more competition in the aid mar,et and increased countries) bargaining power with donors& China may contribute to the continent)s economic development and act as a force for change in Africa& 2n the minus side are several important challenges and ris,s& irst% there is some concern that Chinese investment in Africa will be based on capital1intensive natural resource e*traction and will not contribute to local employment generation and the continent)s long1term economic development& 7econd% China)s influence on global

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energy demand and on oil mar,ets will lead to increased energy prices for net oil importers in Africa and a worsening of their terms of trade& Third% the supply shoc, to world manufacturing% particularly in te*tiles% and the growing imports of cheap Chinese goods in Africa% coupled with increasing competition between Chinese and African te*tiles in third1country mar,ets% threaten to hinder economic diversification in Africa and contribute to deindustriali-ation& $n this conte*t% a growing bac,lash against Chinese investment in the continent% amid allegations of improper labor and human rights standards% may gather momentum& ourth% important issues li,e corruption and governance% which had moved to the forefront of the development agenda% may slide bac, down again& There may be some slippage in the progress that has been made in the development agenda with regard to transparency and civil society participation& The ascent of China will influence the dynamics of Western aid to the continent and alter the landscape of development assistance& Dew wor,ing mechanisms between the lenders will have to be crafted& 'oreover% the traditional donors and international financial institutions will have to wor, creatively to bring the Chinese into the broader development platform& 2verall% China represents a great opportunity and challenge for Africa% and only history will give its verdict a half1 century from now&

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,able .6

!ealist Internationa lism

umane Internationalism Recogni-es obligation of rich countries to alleviate global poverty and to promote social and economic development in the Third World& Compassion

!eform Internationalism Ac,nowledges obligation of rich countries to alleviate global poverty and to promote social and economic development in the Third World& 7imilar to humane internationalism% though the international ethic goes further% stating that the e*isting global distribution of resources and incomes is considered indefensible and the international economic system is considered unfair to the poor&

Liberal Internationalism

!adical Internationalism

,hird &orld

Recogni-es An acceptance of responsibility for the the obligation to development of the show solidarity with 7outh& the poor and oppressed in other countries% even at the sacrifice of narrower interests in one)s own country& Combines main concept of humane internationalism with a strong commitment to an open% multilateral trading system& $t is motivated by humanitarian tradition and adds to it an enlightened self1interest coming out of the increased interdependence between Dorth and 7outh% and the new opportunities that have come about as a result of the integration of the Third World into the Western 'ar,et economy& 3conomic growth in 7outh through the pursuit of genuine common interests between rich and poor countries& Based in ideologies which advocate the e0uity of man and solidarity across national borders& Confronts the e*ploitive and oppressive economic and political structures current within and among states&

#oti$atio ns

ObHecti$e s

Promote economic% social and political rights in the Third World% alleviate human suffering% and promote social and economic development&

7imilar to humane internationalism& Promotion of human rights% improved e0uity and social and economic justice within and between nations&

ull economic% political and social e0uity& 3cological concerns are also becoming increasingly important&