The Future of Development Assistance.

That the approach is original is certain; in face of current economic and political orthodoxy, it is not easy to show the rich, let alone the very rich, that they too will suffer if the poor, let alone the very poor, continue to suffer. Yet, this is precisely what the authors have done, and a further merit of their argument is that they have put it tersely and directly, in terms drawn from technical but non-mathematical economics. "The Future of Development Assistance: Common Pools and International Public Goods," by Ravi Kanbur and Todd Sandler with Kevin M. Morrison, (Overseas Development Council, Policy Essay No. 25, 1999), makes a bold, direct and original attempt to address some of the most striking problems of our age, namely, those arising from the frequent failure of international aid programmes to achieve their apparently unimpeachable aims.

The problems are familiar enough. According to the authors, they include the direction of aid towards political rather than development objectives, most notably during the cold war, as well as a lack of coordination among donors and a lack of participation or "ownership" by recipient States. One result has been that recipients have focused, at great cost in resources and staff time, on meeting donors' requirements or conditionalities, even if this has meant failing to convince their own populations that such requirements are sound. It is worth noting here that neither the authors nor respected aid agencies such as Oxfam reject conditionality per se; but Kanbur and his colleagues point out that, in practice, aid flows have little connection with whether or not donor conditions are met. They also note that the imposition of conditions can actually make it harder for donors to know precisely what recipients are thinking. Excessively close monitoring too, means that only what is monitored will actually be seen.

Significantly, the authors go on to reject several current dogmas of aid. The first is economic liberalism, which favours aid for those States that follow "sound" fiscal policies and, in some cases, has shown results in the form of improved aggregate growth, but has signally failed to solve the problems of coordination and ownership. The proliferation of non-governmental organizations (NGOs), all of whom seem to have their own particular policies and priorities, has made coordination, monitoring and evaluation virtually impossible, and has created an interest group in the form of NGO staff and beneficiaries.

As to private-sector bodies in donor countries, these often benefit directly (sic) via procurement contracts with donor Governments and have a vested interest in the maintenance of aid programmes. This interest presumably obtains irrespective of the effectiveness or quality of a programme. The upshot is that, driven by their different political and institutional environments, recipients and donors have become entwined in a system of development assistance, despite a lack of consensus on how to pursue that development.

The second dogma the authors reject is the currently fashionable--but hardly new--idea of partnership, according to which donors design programmes in the light of recipients' national development strategies. This method has its adherents in the World Bank and has succeeded where recipient States have provided domestic political space for wide debate over their own development strategies. In general, though, partnership approaches have failed to create institutions and mechanisms for the realization of coordination and ownership.

A third approach which, according to the authors, has failed is that of country-focused but sector-wide strategies, in which all donors working in a particular area of aid such as health or education coordinate their work. This has the advantage of giving donors and recipients the capacity to evaluate sector-wide progress and thereby develop policy environments; it has succeeded where recipient States and their populations have had a high level of ownership. Kanbur and his colleagues, however, remind us that the approach depends heavily on transparency and accountability in recipient States, and that it inevitably creates a gap between recipients' national strategies and donors' priorities and concerns. It also requires a high level of coordination between donor agencies, and the authors conclude that in general it has been a failure.

A further set of problems is identified by the authors in the sheer unreliability of economic dogma and aggregated economic information as a guide to the effectiveness of aid. The development strategies in the 1970s of certain Latin American States increased internal inequalities, in apparent contrast to the results obtained in East Asia in the 1980s and 1990s, but the aggregate information has to be handled with great care.

Arvind Sivaramakrishnan is a lecturer in politics and law at Taunton's College, Southampton, United Kingdom. Specific references have not been listed, but several texts have served as background. He is also indebted to Dr. Atul Khare, Permanent Mission of India to the United Nations, for discussions on the monitoring of programmes.

To start with, inequalities in East Asia showed signs of increasing even before the financial crisis of the late 1990s; secondly, in Africa, economic liberalization may have increased aggregate growth and provided some reduction in poverty, but it has increased inequalities; thirdly, in Russia, the devastation caused by liberalization, combined with the abolition of public provision, has shown that governance and regulation cannot be safely abdicated; and finally, more careful analytical work has revealed significant distributional differences across gender and ethnic lines.

If the authors leave little to be commended in the current field of development aid, they do not hesitate to throw down the gauntlet: what is needed is a more radical approach in which donors really do cede control to the recipient-country Government, advancing their own perspective on development strategy through general dialogue with the country and with each other, rather than through specific programmes and projects. The radicalism of this proposal goes further, with the requirement that donors would neither be permitted to earmark funds for particular projects nor allowed to monitor specific attempts at implementation; rather would recipient States devise plans and programmes in consultation with their own populations and then in discussion with donors who would contribute funds according to their own assessment of strategies, specific projects and recipients' ability to implement and monitor programmes.

Although the authors do not make it very clear how their proposal would in practice be made convincing enough for apparently self-interested donor-States--and domestic constituencies and interest-groups-to support it, they start with the strong example of international public goods, which although not intended to replace the better forms of current aid will, Kanbur argues, strengthen the case for aid by showing how donors and recipients are mutually involved. According to Kanbur, the key points about international pure public goods are that they are non-marketable in that there is no affordable way to extract payment from the beneficiaries and, secondly, that consumption of these goods by one does not affect others' access to them. That public goods are not necessarily universally available--for example, particular goods may he confined to particular geographic regions--does not affect the argument; neither does Kanbur consider it a problem that public goods do not necessarily have to be provided by the publ ic sector. He and his colleagues go on to develop a taxonomy of international public goods, according to which some goods are exclusive or partially exclusive, and therefore impurely public. They also suggest, if schematically, possible institutional arrangements for the maintenance of international public goods. The precise taxonomic and institutional details are not germane here; what does matter about Kanbur's argument is that he and his colleagues have, in and through apparently conventional economic language and terminology, opened up issues that are both highly significant and inherently political.

Indeed, the authors themselves all but underplay the political issues which their case necessarily involves. For example, when criticizing the linking of aid to political objectives, they seem to take "political" as equivalent to "ideological," in the everyday sense of the latter term. Secondly, they recognize that aid programmes cannot succeed unless recipient States have systems which provide high standards of public debate on priorities and needs, as well as high levels of transparency and political accountability in their public processes, and that the so-called miracle economies of East Asia provide substantial and highly directive State funding for both infrastructure and education. The latter is often considered decisive for national economic advancement, for the reduction of infant mortality and population expansion, and for the improvement in the condition of women's lives; South Korea spends $130 of public funds per head per year on education, while the current figure for India, where many of the re levant indicators are worse than they were 30 years ago, is $9.

Thirdly, the authors are well aware that in both donor and recipient States there are substantial interest-groups who stand to benefit from the existence of certain types of aid programmes and even to benefit from the non-delivery of funding to intended recipients. In response, they call for the greater involvement of electorates in debate on the nature and direction of aid, and recognize that in some programmes this is already happening. It is here, perhaps, that the genuinely innovative nature of the argument emerges. What Kanbur and his colleagues have demonstrated is both the politicality of the questions and, by implication, the way in which the issues involved reach for and appeal to a common humanity in all of us. It can be no accident that ordinary people around the world are starting, as a matter of routine, to buy what are sometimes called fair-trade goods; neither can it be an accident that ordinary people in both the developed and developing world have expressed themselves very forcefully on the existing schemes of international trade, even to the point where the head of a transnational food giant has stated publicly that what the big corporations fear above all else is consumer backlash.

At this point too, the arguments around aid may have to take leave of the customary categories of economics, the language of preferences and of costs, benefits, utilities and disutilities. The language of preferences seems unable to address the question of the justification of preferences and, at worst, has to rule the matter of justification out of court. This is not just a theoretical matter. Kanbur cites the improvement of labour standards in the developing world as a possible international public good, because it could well relieve downward pressure (sic) on workers in the developed world. Yet, that point is itself iconoclastic and original in a world in which controllers of production in the developed world have substantial disincentives to improving conditions for workers in the poorer countries.

Not to mention still further disincentives to admitting any commonalities between the respective groups of workers. As to market access, despite all its talk of opening up markets, the World Bank, in a recent evaluation of India's economic reforms of the last decade, never once mentioned the matter of how Indian producers of industrial goods might gain access to markets in the developed world. All it says is that the prospects are good for expanded Indian exports of traditional products like leather and textiles. Neither of those can earn the volume of hard currency that, say, engineering goods could earn. An extended idea of international public goods, is the key issue here.

This would include knowledge, information and debate. No culture has a monopoly of these, and the further possibility obtains that if they are treated as commodities, then they will be subject to the pathologies of aid that are already all too common.

Reasoning and argument towards the establishment of the best course of action were for Aristotle the defining features of humanity; their importance today could not be greater. Perhaps, what the transnational giants and those in political office should fear most is not consumer backlash, but the responses of informed and thinking citizens anywhere in the world.