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AID and bad governance poor bedfellows for sustainable development

Nov 02, 2009 Letters

Dear Editor,

AID in the form of loans, grants, and debt relief provided close to no comfort for the bottom billion countries over the last 30 years; in fact, research at the Centre for Global Development in Washington, D.C. concluded that AID becomes unproductive at 16 percent of Gross Domestic Product. Today, I examine additional ideas from Collier’s book, The Bottom Billion.

Within this context, Paul Collier’s work on the bottom billion shows how and why one billion poor people experience living in traps; and he shows, too, the required agenda for action to fumigate this gutter of misery and break the shackles of the traps; in a previous piece, I mentioned these traps as the Conflict Trap; the Natural Resource Trap; Landlocked with Bad Neighbours Trap; and the Bad Governance Trap.

The fact of the matter is that while other parts of the developing world are experiencing growth, countries housing the enslaved bottom billion remain sluggish or maintain their degeneration.

And even where some countries are able to liberate themselves from these traps, they remain in a halfway house, and at risk of re-enslavement in the traps.

How then is it possible to free these countries from the traps, to give a new lease of life to the bottom billion? Some would argue that AID in the form of debt relief, grants, and loans may free the bottom billion countries from the traps and provide them with a better quality of life.

Then there are others who think that AID is not the answer, since growth moves at such a slow pace that the poor country pretty much remains the same. Collier estimated that over the last 30 years AID gave one percentage point to the yearly growth rate of the bottom billion countries; but these countries’ growth rate over the same period was less than one percent, enabling these countries’ quality of life to remain somewhere between degeneration and decline.

What people like Collier are saying is that AID does not really help to remove the tears of misery from people’s eyes; what AID does is to enable those bottom billion countries to barely survive; unless less something dramatic happens; and how about governments from the bottom billion countries practicing something like good governance.

And so, AID may deliver the goods, if most of the bottom billion countries cease practicing bad governance.

The 1980s gave birth to the policy conditionality approach; where AID to poor countries became available if those governments promised to institute reforms; this approach failed miserably, particularly in failing states. The book, The Bottom Billion, argued that governments will make wonderful promises, clutch the AID, and spend it in whatever which way they wish. The donors exercised minimum control over these countries, forcing the poor to barely exist.

Then another approach with some donor control to providing AID emerged. Here, donors will make AID available only if requisite policies are in place. Think about the U.S. Administration’s Millennium Challenge Account funds that only become available if and when the government fulfills required governance standards.

But more to the point is what the book, The Bottom Billion, recommended, in the face of bad governance and ineffectiveness of AID in improving the quality of life of the downtrodden; and that is governance conditionality with a twist; where it works toward not transferring power from governments to donors, but from governments to their people.

The citizens of these bottom billion countries must have a voice to determine the use of the AID; and at the same time to see how the AID transforms poverty into progressive and sustainable growth. AID can help to wipe the tears from people’s eyes, but not if governments practice bad governance.

Prem Misir

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