Posted by: tnowotny | January 23, 2011

A critical view on the effectiveness of 50 years of Official Development Assistance

In my quality as president of the Viernna Chapter of the Society for International Development – SID, I had chaired a meeting on January 13th 2011,  devoted to a critical evaluation of more than 50 years of Official Development Assistance.

A short summing up of that meeting is given below

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Official Development Assistance –

keep on learning from both failure and success

On January 13th, the  Vienna Chapter of the Society for International Development held a meeting to discuss the more than 50 years record of official development assistance. For that purpose, the circle of members was expanded by the participation of  a staff member of the Austrian Development Agency, by students having done research on that question, by a staff member from an International Organizations headquartered in Vienna, by a high ranking civil servant who had been responsible for Development Assistance in the Austrian public administration; and by the former chairman of SID – Europe.  Other very relevant contributions to the discussion were made by some of those SID members who, in their professional capacity, had actually been engaged in ODA projects.  

A look at the global figures – at the global sum of ODA, at the sum of all ODA provided to a specific country provides sobering insights. There is no correlation between these figures and the rate of overall economic growth as expressed by increases in per capita GDP or GNI. In fact,  the correlation frequently seems to be a negative one.

Such findings are, however,  in need of qualification. In order to arrive at a valid judgment we would need the counterfactual: what would the development have been in absence of Development Assistance? Also, we are in need of a new concept of development,  integrating progress in health and life expectancy, in literacy and education, in the share of poor persons in the world`s population, and along the – crucial – vector of equality in life chances, income and wealth.

As the recent reports on the march towards the Millenium Development Goals demonstrate, there has been progress in most of these fields, and as some of the discussants remarked, it seems likely that  ODA had helped at least somewhat in reaching such  positive results.

Nonetheless, the  effectiveness of past ODA  had been diminished  by severe deficiencies:

a)     Frequent changes in the underlying philosophy on what to deliver as a priority; and on the methods of this delivery

b)    The donor driven nature that persists notwithstanding all declarations of good intentions such as the Paris Declaration or the Accra Agenda. As a  result,  ODA projects are more shaped by the preoccupations of the developed world; and less  by the preoccupations of the developing world

c)     The failure of coordination between donors, with ever shifting notions on who the coordinators should be: the UNDP , the IMF, the IBRD, the OECD, or – for the EU Member Countries – the European Commission

d)    The fact that – even when successful – ODA interventions usually are  not extended over time or expanded and up – scaled; also by the involvement of additional donors.

e)     The failure to take into consideration  a frequently very limited absorptive capacity in  the recipient countries and, in particular, a limited capacity of the official administrative institutions in recipient countries. With clear pointers to its relevance, good governance nonetheless still does not receive due attention; and irresponsible behavior of ruling elites is not being sanctioned.

f)      Other than official channeled of delivery for ODA have thus to be exploited and expanded

g)     The distance which,  even with best efforts separates the world of donors and the world even of resident donor representatives and agents from the realty of day to day existence of poor countries inhabitants. That holds true also for  representatives and for the in – country offices of International Organizations. They too, move in their own world and according to their own laws.

h)    The unmet need to conceive of ODA as being just a part of a coherent, overall strategy for the development of still poorer countries

 Juxtaposed to these many critical  remarks were the observations of some SID members who  had been involved in the design and implementation of concrete ODA projects. One such project – involving the development of fisheries along some parts of the African coast – had been successful because it had been conceived as involving all actors, institutions and resources essential for its functioning.  Another project, again in Africa, was successful  through its mobilizing small local enterprise by giving the entrepreneurs both means and motives for success. Another practitioner pointed the – mostly ignored – relevance of the informal sector of the economy with its impact on the incidence of poverty.

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