Donors still in the driver’s seat

Development Policy05 Feb 2008David Sogge

Even in summary form, the IOB’s assessment of Dutch Africa policy 1998–2006 provides plenty of reasons to sit up and pay attention. In our public forums on aid, its findings might help bring into public view what have until now been merely rumblings backstage.

The report relieves us of some comforting illusions. Aspirational mottos like ‘ownership’, that have saturated aid talk in recent years, turn out to be hollow words. For Dutch aid providers in any case, those words never get hard, operational definitions. Our ‘partners’ (another prettifying term) don’t own or operate the real policy levers. The vandals took the handles – to Washington DC. Donors remain in the driver’s seat. Aid continues to bypass genuine public control.

The IOB expresses guarded optimism about direct government-to-government aid, whether sector-wide or general budget support. It concludes that such aid does indeed allow poor people to benefit from more public services, managed by the state. So much for those mottos about the blessings of private provision. But in setting priorities among service sectors, according to the IOB, donor preferences rule. No wonder Africa lacks strong, self-confident public sector leaderships that can be called to account for their choices. In this and other findings, the IOB appears to confirm the aid institutions paradox: aid can be as corrosive for good governance as oil revenues.

The IOB expresses alarm that aid is excluding civil society, which it terms ‘crucial for the advancement of the constitutional state’. That’s valid. But I wonder if exclusion is the right term. Most African settings are overflowing with NGOs, full-time and part-time, rising and falling on aid fashions. They dominate civil domains effectively as nonprofit enterprises, accountable not to citizens but to donors. They’re merely another bypass mechanism – bypassing public sector authority and bypassing citizens. If the IOB had been allowed to study the work of the co-financing agencies in Africa, perhaps they would have found some cases of Dutch aid promoting countervailing power in civil society – but I fear not very many cases.

On other private sector terrains, the IOB is disappointed by the record of public-private partnerships (PPPs). No surprises there. If they routinely fail in the UK and the Netherlands, why should anyone expect PPPs to work well in Africa? Might this be just one more instance of a nice phrase dressing up a coercive ideology?

The IOB tries to make a case for progress toward overall policy coherence. It holds that the 3D approach – diplomacy, defence and development cooperation – is making headway. That’s remarkable. For in 2005 a mixed inter-ministerial commission concluded that Dutch foreign policy was anything but ‘joined up’. With at least 13 different official departments, each pursuing its own programmes with great verve, managing foreign policy is like herding cats. There being so many priorities, is it any wonder that the result is dispersed action with no coherence?

Coherence is a core issue, but the study is confined to matters on the outer margins of that issue. No doubt ring-fenced by its terms of reference, the IOB could not look very broadly or deeply. That was a missed opportunity. But there were grave dangers, since coherence is a Pandora’s box. If we open that box and look in, some inconvenient truths will poke us in the eye. Here are two:

The IOB holds that general budget support causes dependency. Perhaps, but I wonder if it lost sight of deeper problems at work here. Revenue shortfalls in Africa are common outcomes of aid-driven policy. As IMF economists Thomas Baumsgaard and Michael Keen recently demonstrated,1 donors demanded tax reforms that ended up depriving African governments – especially the poorest ones – of big revenue streams they used to depend on. How do states become fragile and fail? One solid clue is this story of how they have been forced to give up tax revenues. Yet the IOB study apparently had to pass over those donor-imposed measures, analogous to medieval medical practices, in silence.

Then there’s the little matter of who actually aids whom. During the nine-year period under review by the IOB, Africa’s wealth poured out of the continent in a rising gusher. Its recorded financial transfers to the rest of the world in 2006, net of aid and investment inflows, approached US$100 billion. And then we’re talking only about the recorded flows, as detected by the UN, not the shadow capital flight. Let’s get real. It’s Africa that aids the rich, not the other way around. Next time, let the IOB investigate that mother of all incoherences.


  1. T. Baumsgaard and M. Keen (2005) Tax Revenue and (or?) Trade Liberalization? IMF Working Paper WP/05/112.