Aid Conditionality

Staatliche Subventionen sind – wie auch öffentliche Aufträge – ein wichtiges Lenkungsinstrument der nationalen wie internationalen Wirtschaftspolitik. Sie sind ein Hebel, um dort, wo ein sogenanntes Marktversagen besteht, anzusetzen und die unternehmerischen Tätigkeiten, wie Investitionen oder Forschung in eine politisch erwünschte Richtung zu lenken oder wirtschaftliche Aktivitäten überhaupt erst anzuregen, wo diese ausbleiben, jedoch für die Versorgung oder Transformation notwendig erscheinen. Die Gewährung von Beihilfen nach Kriterien der sozialen und ökologischen Nachhaltigkeit ist daher ein zentraler wirtschaftspolitischer Hebel für die gerechte Gestaltung der Transformation zu einer CO2-neutralen Wirtschaft. So etwa die Konditionierung der Auszahlung von Beihilfen für den Ausbau erneuerbarer Energieträger mit standort- oder arbeitsbezogenen Kriterien. Ein Realitätscheck, Teil II. Artikel auf Anfrage!

Why do elites in low-and middle-income countries (LICs and MICs) prefer some foreign aid projects and partners over others? We report results from a conjoint survey experiment administered to 3,641 elites from 141 LICs and MICs. The experiment elicits the preferences of policymakers and practitioners who are uniquely close to the debates that shape their countries' development policies. Perhaps unsurprisingly, we find that elites favor larger over smaller projects, grants over loans, and projects dedicated to building transportation infrastructure over those focused on strengthening civil society or tax collection capacity. But elites also prefer projects with transparent terms, good governance conditionalities, and labor, corruption, or environmental regulations. These preferences hold even among respondents who might be expected to favor more "no-strings-attached" approaches to aid. Our findings have important implications for research on the "aid curse" and on policymaker preferences over rival development partners in an increasingly competitive aid marketplace.

This article examines South-South cooperation from its beginnings, and its transition to today's world politics and economy. We show the contrast of the North-South vision of the world, and we outline some of the contemporary debates around this resurgence.
We highlight the division between the optimists about the potential of the economic development of the South and the project of liberation from the domination of the North, and the more pessimistic critics, who see this same success as another paradigm of the existing global capitalist development.

This article minimises the reliance on apparatus one would normally associate with an academic paper. It is a subjective interpretation of my experiences of teaching and thus justifies its vision as a personal recollection rather than an aspirant to 'truth' or suitable scholarly standard. It raises questions close to my personal and professional concerns and perhaps to yours. Just recently, I was involved in the teaching of a first-run undergraduate course on film and the Holocaust. The history of the Third Reich and the Holocaust is taught at numerous universities in Victoria although I am unaware of film's centrality as a medium in this teaching. The course was a difficult experiment in provocation: in mapping the limits of what could be shown and in anticipating the emotional and intellectual responses of students. In pragmatic terms, the course aimed to confront and navigate the possibilities of using film in stimulating an individual and collective historical consci...

This article empirically examines the effects of foreign aid on economic freedom while considering the mediating role of political institutions. We contribute to the literature in two ways. First, we provide an empirical analysis of how different types of foreign aid affect the economic freedom of the receiving country. Second, we provide evidence regarding how political institutions mediate the foreign aid/economic freedom relationship. We use IV and GMM techniques to test a model using data from 40 developing countries covering the time period 1985 to 2016. Our analysis yields three main findings. First, democratic and politically stable countries enjoy more economic freedom. Second, foreign aid's net effect is to reduce economic freedom, whether we consider official development assistance (ODA) or net official assistance (NOA). Finally, economic freedom increases with both types of foreign aid if the receiving country's political institutions are more democratic and/or durable.

The relationship between development aid and recipients' 'good behaviour' (human rights, democracy, and good governance) has been frequently examined, in a belief that giving more aid to countries with better performance in these areas can motivate their improvement. Most researchers agree that traditional, Development Assistance Committee (DAC) donors reward recipients' 'good behaviour' at least to some extent; however, the 'new', non-DAC donors have so far been portrayed as largely unconcerned with these issues. In this paper, I examine the evidence underlying such claims, by investigating whether human rights, democracy, and good governance play any role in 'new' donors' aid allocation. I find that similar to DAC donors, many non-DAC donors pay heed to recipients' democracy, human-rights or good-governance records at some point in their aid decision-making process. These results suggest that the fears raised regarding the nature of 'new' aid might be unfounded and rather point to the emergence of stronger global norms vis-à-vis the importance of human rights, good governance, and democracy to development.

Previous studies have found that the democratizing effect of conditional aid is temporally contingent: the collapse of the Soviet Union as an alternative source of aid enhanced the effectiveness of Western aid conditionality on the adoption of democratic reforms in Africa during the post-Cold War period. Does conditionality still work with the rise of China as a major donor in Africa since the early-2000s? Building from earlier work on aid conditionality and the credible commitment problem in donor-recipient relationships, this article argues that the increased availability of Chinese aid would encourage African recipients to resist pressure from Western donors to improve democratic governance. In the meantime, traditional donors may also feel compelled to compete with the new donors, reducing their credibility in enforcing the conditions. Consequently, the positive relationship between Western aid and democracy in the African recipients would dissipate as the amount of Chinese aid increases. To empirically examine this argument, this article leverages the first Forum on China-Africa Cooperation (FOCAC) in 2000 as the temporal dividing point and new measures of China's development assistance to Africa based on expert opinions and media reports. The results show that the democratizing effects of the OECD's development aid in Sub-Sahara Africa has indeed diminished in this century. Furthermore, results from a synthetic control analysis suggest that major recipients of Chinese economic assistance have registered smaller improvement in political freedom than other comparable countries in the post-FOCAC period. These findings support the thesis that aid conditionality works only during a period when recipient countries do not have other alternative sources of aid, allowing donors to more credibly commit to enforce aid conditionality. The findings also suggest that the propitious conditions for democracy-promoting aid generated by the end of the Cold War may have been weakened by new geoeconomic realities.

La ayuda programática tiene como propósito principal apoyar el financiamiento de
políticas públicas del país socio, ya sea a nivel general o sectorial, a efecto de que los
recursos aportados refuercen las capacidades nacionales, en aras de incentivar mejoras
en cuanto a las condiciones de vida de la población beneficiaria. Este esquema de
cooperación requiere de un marco de compromisos recíprocos entre los actores
participantes, en un plano de responsabilidad compartida, transparencia y rendición de
cuentas mutua. En este sentido, la condicionalidad de la ayuda programática, entendida
como un recurso de gestión de la ayuda acordado previamente por las partes en
cuestión, dedicada a identificar y promover compromisos comunes a favor del
combate a la pobreza, el respeto a los derechos humanos y la rendición de cuentas,
conforma un elemento fundamental del cual depende en buena medida la eficacia de las
acciones a llevarse a cabo en el seno de estas actividades de cooperación. Ya que la
condicionalidad es un elemento inherente de la ayuda, es necesario atender a
determinados preceptos y procedimientos en torno a su instrumentación, en aras de
promover que esta actividad atienda sus objetivos con miras a hacer de la ayuda un
instrumento más eficaz de desarrollo, tal y como lo señala explícitamente el Plan de
Acción de Accra. Con ese objeto, el presente documento, con base en las
disposiciones que en la materia señala el Plan Director de la Cooperación Española y
Accra, tiene el propósito de proponer directrices y estrategias prácticas para la puesta
en marcha de este dinámico recurso en el marco de la ayuda programática de España, a
la luz de los estudios y consideraciones más representativas sobre el tema, como del
análisis de buenas prácticas que en este sentido han puesto en marcha otros donantes
de cooperación al desarrollo.

There are only two families in the world as my grandmother used to say: the haves and the have nots. – Sancho Panza, Don Quixote de la Mancha, Miguel de Cervantes (as quoted in Human Development Report, UNDP, 2005)

The rising tide of the global economy will create many economic winners, but it will not lift all boats…[It will] spawn conflicts at home and abroad, ensuring an even wider gap between regional winners and losers than exists today…. [Globalization’s] evolution will be rocky, marked by chronic financial volatility and a widening economic divide…. Regions countries and groups feeling left behind will face deepening economic stagnation, political instability and cultural alienation. They will foster political, ethnic, ideological, and religious extremism, along with the violence that often accompanies it. (CIA, Global Trends 2015, 2000).

Ante el establecimiento del inacabado nuevo orden mundial, la cooperación internacional al desarrollo se ha transformado radicalmente. Un ejemplo de ello es que la condicionalidad política de la cooperación, entendida como un instrumento de persuasión ejercido por el donante (como las sanciones a la ayuda internacional), cuyo objetivo es que el receptor se comporte como lo estipule el primero, ha adoptado las reformas estructurales, así como la promoción de la democracia, los derechos humanos y el buen gobierno como sus principales ejes temáticos. Esta investigación mediante consideraciones teóricas, históricas, jurídicas y prácticas, analiza el papel de la condicionalidad política de la cooperación, a través del estudio de su evolución histórica, sus objetivos, su eficacia, los efectos generados tras su instrumentación, así como las razones que explican la incapacidad de las sanciones a la ayuda para constituirse como una estrategia viable de desarrollo.En este trabajo se concluye que la condicionalidad ha servido a tres propósitos: a) como una medida de presión (no siempre coercitiva) para que los países del Sur instauren las reformas económicas solicitadas por el Norte; b) para promover la democracia y los derechos humanos, si bien en aras de fomentar las condiciones de vida de los ciudadanos del Sur, también para consolidar al principal objetivo actual de la agenda internacional: el sistema político-ideológico neoliberal, que en principio requiere de la práctica de ambos valores para su aplicación; y c) para practicar discrecionalmente este recurso de poder, a fin de mantener líneas de presión y coerción por parte de algunos donantes hacia algunos países del Sur, sin que el impulso al desarrollo ocupe el sitio que en principio le debería corresponder.

In this paper, we compare the aid-giving practices of EU Member States and the European Commission in order to establish whether the Commission‟s development policy is in fact, as some believe, superior to the Member States‟ and whether consequently the Commission should be granted a larger purview in this domain. More specifically, we examine the progress of the two EU donors in the four areas identified as crucial to increasing aid coordination and effectiveness: division of labour, use of country systems, aid predictability and mutual accountability for results. We find that, contrary to our expectations based on existing research, the Commission performs slightly better than the Member States with respect to division of labour, but not in the latter three areas. We hence conclude with a reflection that while the EU aid architecture should be reformed to improve aid coordination and effectiveness, turning EU development policy into a larger, or even an exclusive domain of the European Commission would probably not achieve the desired end.