From: wolda002@umn.edu
Date: Mon Jan 25 2010 - 23:07:40 EST
Conditioning Aid
January 23, 2010
Michele Acuto, Contributing Editor
A gift relationship always involves some form of reciprocity: “when
someone gives you something” a sociologist friend of mine used to say,
“Always ask yourself what he’s getting in return, or what you already
gave away.” Chronic sociological cynicism aside, there might be some
truth in seeing beyond the “gift”, especially in the complex world of
international politics.
In the aftermath of the January 12th earthquake in Haiti, the Obama
Administration assured $115 million, while EU nations pledged $575 million
in aid to the wrecked nation. Many others followed suit. Was it all
‘free’ money? Let us indulge in a rapid theoretical speculation on the
value of expecting returns from one’s own charitable donations, and in
the art of making sure such compensations are attended to—that which
practitioners in the field call “aid conditionality.”
In the contemporary democracy promotion scenario, characterized by disputes
upon a “democratic rollback” and by an increasingly wide transatlantic
divide over the methods of promotion, the issue of aid and trade
conditionality still finds much consensus in its effectiveness. It lied at
the hearth of the Bush administration’s Millennium Challenge Account,
which offers substantial funding to developing countries on the basis of
three requirements: good governance, health care and education promotion,
and market liberalization.
Similarly, the European Union’s overseas development aid (ODA) is often
linked to prerequisites and qualification standards. These policies are
based in the assumption that autocratic and illiberal regimes seeking
foreign support will have to introduce democratic reforms and comply with
international human rights standards to be able to secure external funding.
As a consequence, governance practices will be induced as a trade-off for
those regimes’ survival, while democratic forces ‘from below’ will
progressively arise. In this view, aid is seen as a catalyst of democratic
practices if coupled with conditions to the rendering of assistance. On a
similar note, aid and trade benefits can be used as rewards to sustain a
democratizing regime.
In spite of these theoretical speculations, conditionality systems present
numerous problems. Firstly, it aims at the form rather than the substance,
advancing the adoption of democratic institutions, often disregarding the
effective application of these. For instance, the record of conditionality
in the so-called “Washington Consensus” in Latin America is far from
inspiring. While a certain degree of political stability has, arguably,
been achieved, the levels of social equality and good governance are rather
poor, with substantial gaps in justice and economic sectors, and increasing
democratic deficit.
In many countries, the acceptance of some liberal practices did not
translate into implementation, with mixed results and few success stories.
In Venezuela, Colombia, Peru and, to a lesser extent, Ecuador democracy
promoters have witnessed the rise of illiberal regimes and predatory
elites, which are usually the major (if not the only) beneficiaries of aid
and trade.
Democratic governance is often considered by advocates of a liberal
internationalist approach as something that can be fostered from the
outside through assistance, emulation and even coercion. However, this
reasoning might be fundamentally flawed: democracy is rooted in social
processes that rise from within, with strong external determinants, and
does not materialize through what American democracy promotion pundit
Thomas Carothers called “a society-wide epiphany.” Rather, it is a
complex development of structures of legitimacy, which require more than
just foreign political pressure to be established within a society.
Furthermore, due to the complexity of the contemporary global system, the
question of multiple earmarking should be taken into careful consideration.
Both in the context of aid architecture and the international trade system,
the number of actors and cross-boundary relations is dramatically higher
than what many proponents of the ‘catalyst solution’ assume: there
exists, beyond traditional elements (states and international
organizations), a plethora of NGOs, semi-governmental agencies and private
actors such as foundations, academic bodies and multinational companies.
All of these engage in political, economic and cultural exchanges with the
‘targets’ of the conditions, often adding their own earmarks. For
instance, in the case of trade-related policies, the International Monetary
Fund and the World Bank are most likely to set requirements, which will
then be followed by regulations imposed by the World Trade Organization and
coupled with regional agreements such as the ones in the Asia-Pacific
Economic Forum or the Euro-Mediterranean Partnership framework. Alongside
with this already substantial amount, other earmarks are put on trade by
bilateral or multilateral agreements (usually Free Trade Agreements), as
well as by private entrepreneurs who seek to push the players involved in
the process in their desired direction.
Hence, these multiple layers of conditionality result in the overlapping
and duplication of numerous policies and in mixed messages sent to the
recipients. Likewise, in the context of ODA or humanitarian aid, it is now
rather common to see conditions at odds with each other, although coming
from the same country. Seen in this light, the argument in favor of
earmarks for democratization is, at best, criticizable.
[DIPLOMATIC COURIER]
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