02 June 2011

Aid Has 3 Roles and All Matter

Terence Wood writes on what he sees as the three different kinds of aid.
1. Development aid. In this, aid is a somewhat effective tool for sustainably transforming countries. For shifting them from a sub-optimal state to a better one. This is the aid of Jeffrey Sachs books and development agency rhetoric. This is the ideal.

2. Band-aid aid. This is aid that makes no pretence at changing societies. It’s simply about improving people’s welfare in the absence of systematic change. This is the sort of aid that might ensure that people get basic health care over many years, even as their country stays poor. I don’t use the term band-aid pejoratively here: if you’re bleeding, a band-aid helps. And, even if you never significantly change the development trajectory of a country, if you help its people, by reducing the number who die from disease or who are crippled by it, then you’re likely making the world a better, happier place.The improvements generated by this aid aren’t usually sustainable in the sense that they stop when the aid stops (although, arguably vaccinations fall into this category and their impacts can be sustainable.)

3. Keeping it together aid. This is aid which aims higher than band-aid aid, but which doesn’t pretend to be transforming anything. This is aid which tries to keep states together and functioning even if it’s not transforming them. It’s aid that works in the short term (when it works) and which may have a long term impact, not through developing anything but through providing at least a little bit of space for development to occur indigenously.

In the remainder of his post, he argues his case for concentrating on number 2 and maybe allocating some resources towards number 3. He makes a strong argument which is worth reading, but I want to needle a bit at his aim to use number 2.

The invocation of a band-aid is quite apt and Terence is aware of this noting that a band-aid does in fact help. I concede the point when, staying in the metaphor, the wound is manageable and the band-aid of adequate strength and size. In the world of aid, this is a supposition that highly unreasonable.

For example, it can be argued that people without clothing should be provided shirts so that they can have something to wear for warmth, decency, etc. This is the type of feel-good aid that Terence describes which is not sustainable, but does provide some sort of help. However, the problem with creating dependency appears as well as the issues that are caused by providing goods which can stifle business growth and maintain the overall status quo. (Even that is too simplistic on my part as there are times when charging fees can 'dramatically reduce access' as this J-PAL report finds.)

I am not quite as willing as Terence to give up on the first option. Maybe youth and idealism still have a strong hold, but programs which continue to spend massive amounts of money and not drive overall well-being upwards are problematic. While bashing aid is pretty fun, there is plenty of evidence to support that it has contributed to the improved living conditions of many around the world (Charles Kenny has a whole book about it). To me, this indicates that number 1 is in fact being accomplished, but a better job can be done.

Practically, I worry that the argument for number 2 will wear on donors, governments and voters. In the US there is push to de-fund USAID or significantly reduce the amount of foreign aid given each year. Some see it as wasteful spending which has no attributable benefit to the US. Arguing against that is for an entirely different post, but advocating for aid programs which will not lead to improved levels of state self-sufficiency will be only harder to sell in the future.

Maybe number 2 is more practical, but greater aspirations should endure. I do believe that development can take place if applied correctly, but must be done in conjunction with effective aid programs. In summation, all three are not just discussion points but approaches which should be taken concurrently to enable each and ultimately number 1.