Development aid is a recognized practice of international cooperation and an instrument of foreign policy. It is provided by rich countries for the benefit of poor countries. It is not an international legal norm, but a good practice legitimized by numerous recommendations and resolutions of the United Nations and other international organizations. In October 1970, in the resolution of the UNGA, following the recommendations of the so-called Pearson report, it was recommended that states should strive for their development aid to reach a level of at least 0.7 percent of GDP. Only a few European countries (Sweden, Norway, Denmark, the Netherlands, Luxembourg, UK) have achieved this goal. The international community spends over $ 160 billion annually on official development assistance. Almost thirty percent of aid is channelled through multilateral channels, i.e. through international organizations (the World Bank, UNDP and others). The rest flows through bilateral channels. More than half of the world’s development aid comes from the countries of the European Union. Development aid is also provided by non-governmental and charitable organizations, and ordinary citizens (including Bill Gates). It is estimated that private funds constitute approx. 20 percent of all aid.
Many poor countries are highly dependent on external aid. In countries such as Liberia, DR Congo, Mali, Malawi, Mozambique and Ethiopia external development aid is higher than government budget spending. Without development aid, these countries would not be able to function normally, even if they are in a dire state of weakness.
The idea of development aid is a relatively recent concept in international politics. In times of colonial expansion, Western metropolies were guided by simple rules of economic exploitation of controlled territories. They invested a lot in them, built roads, railways, ports, telegraphs, schools, hospitals, and administrative infrastructure, but they did it on a profitable basis. There was little state charity. And overexploitation and tax burdens sparked independence tendencies (the case of the United States or the Spanish colonies in America). In general, the colonial policy, especially British one, was governed by the principle of self-sufficiency of the colonies. British colonies paid the salaries of officials, financed infrastructure investments, and maintained public institutions.
The breakthrough was the British Colonial Development Act of 1929. The global economic crisis severely hit then the standard of living in the colonies. The British law provided for the allocation of a million pounds to the development of transport infrastructure, energy networks and water supply systems in the colonies. The aid program for the colonies grew every year, and the aid allocated to the colonies was significantly increased, reaching tens of millions of pounds on a global scale in the early 1960s (decolonization wave).
The United States launched systemic development aid only after World War II. Encouraged by the European success of the Marshall Plan, Americans extended its mechanisms to the Middle East and Asia. President Truman announced the ambitious intention to support underdeveloped regions of the world, lifting them out of poverty, disease and malnutrition. A Technical Cooperation Cell within the Department of State was established to coordinate the assistance. Very quickly, the imperative of development aid became part of the strategy of containing communism. Poverty and underdevelopment made societies vulnerable to communist slogans. Just as the Soviet Union, for ideological reasons, directed aid to newly independent developing countries in its zone of geopolitical influence and actively supported pro-Soviet national liberation movements, the United States saw it necessary to provide development aid to countries and poor areas to resist communism. In the late 1950s, the US announced promoting development in low-income regions of the world as a self-standing foreign policy goal, and President Kennedy established an independent government agency: USAID.
In the early 1970s, development aid became a fully-fledged element of the global agenda, and its provision – the moral norm of rich countries’ policy. Its positive effects on the life of poor societies are beyond dispute. But it also triggers strong criticism.
In 2019, as the ambassador of the European Union to Armenia, I hosted in Yerevan at a private dinner an outstanding figure of Polish culture, a famous actor and writer. When asked politely what I do as an EU ambassador, I replied lightly: “I am busy transferring European money to help Armenia. I sign transfers amounting to over one million euros per week”. “Our European taxpayers’ money?” – the guest could not believe it. “For what?”
This surprise had a very strong justification, because Armenia is a civilized country, although, after Moldova (and for the time being Ukraine) the poorest country in wider Europe. The European Union and its Member States provide in Armenia more than half of all external aid annually, including the tens of millions that end up directly in government accounts. And the role of the EU ambassador in these transfers is sometimes irreplaceable. After a sports accident I had in 2016 (“Sport ist Mort” – as the Germans say), I suffered a severe spinal shock. All my limbs were paralyzed. I was regaining feeling in my hands very slowly, and I wasn’t able to hold the pen in my hand for a good few weeks after the accident. However, the so-called committee signing of the transfer of budget support to Armenia (my hand supported by others) had to take place, because no one could replace my signature, unless the entire decision-making procedure was started from the beginning, which would delay the transfer by several months.
I agreed with my famous interlocutor at the dinner table pointing to a decent standard of living in Yerevan (good restaurants, expensive cars) that it may seem that Armenia is a poor country of rich people. So my quest might say that our development aid is the transfer of money from poor people in rich countries to rich people in poor countries. It is one of the most common accusations made against development aid.
It is alleged that the aid fosters corruption. The mechanisms for controlling the correct implementation of contracts and grants are very strict in Western countries, also, and perhaps especially, in the European Union. The execution of projects is scrupulously accounted for. Of course, there are cases of fraud and corrupt practices, and not only on the part of the beneficiaries. The EU anti-corruption service is an efficient and professional service. But it decisively enters only in the case of significant abuses (as one of its officers told me: “we would not have enough people and time for a fraud of less than half a million euros”). Petty thieves often get away with it. The European Union has procedures for the recovery of improperly spent funds, but it is very difficult for them to be effective in many countries.
It is often claimed that the aid perpetuates bad governance practices, favors the centralization of power, and keeps neopatrimonial elites in power. It is true that, for example, in the case of many African countries, there has been an endemic management crisis that cannot be solved by any military coups or changes in power. In extreme cases, such as Somalia or Yemen, the state actually broke up. Development aid, however, is a small fragment of the whole picture. Critics blame the donors for contributing to progressive paralysis by taking over the financing of many functions of the state. By offering a financial cushion, they limit the positive effects of market forces. Whether these forces could indeed induce appropriate reforms by state institutions is debatable.
One thing is beyond doubt, development aid has in many cases kept the state in a state of relative efficiency and saved people from extreme poverty. As a rule, however, it did not solve the structural problems.
For years, states, especially international organizations, have been exposed to pressure to make aid more effective. First of all, it is postulated to tighten the so-called conditionality, i.e. linking the aid with the fulfillment of specific conditions that must apply not only to financial and budgetary aspects, but also to purely political ones, such as the state of democracy, human rights, respecting environmental standards or labor law norms. But it has emerged in recent years that other donors, especially China, have been willing to lay out money quite unconditionally and make the leverage of conditionality in aid redundant as the need for conditional aid has inevitably declined.
Second, the West began to transform the essence of aid. It isn’t just about development. The main goal is modernization and to overcome technological and administrative backwardness. The problem is that in some countries the fastest path of development is to invest in non-technologically advanced branches, pursue the simplest social and administrative reforms.
Why are we helping? While humanitarian aid, supporting countries affected by war (like now Ukraine), natural disasters, crop failure, drought, disease epidemics has always had a strong moral justification, it has never aroused controversy, also among scientific authorities (since Ricardo), the development aid, i.e. redistribution of wealth, evokes till today serious doubts.
To silence the doubts, it’s easiest to call help “self-interested altruism.” The West helps in the name of its own interests, because it is in its interests to keep the world relatively in balance, to eliminate the spores of instability. Filling development gaps serves global prosperity, expands markets for Western investment and exports, stops economic migration, alleviates political tensions in poor countries, preventing internal and external conflicts, the resolution of which involves Western countries, causes humanitarian problems, drives migration, which exposes the West to even greater costs and problems.
Sometimes, however, it is only a gesture of empathy, a sign of compassion, an emotional message.
In the case of the European Union, its political strategy in the immediate vicinity, of which development aid is part, has been built on the concept of “resilience” for several years. It is a preventive strategy of solving external problems in the bud, that is, where they arise, before they directly affect the security of the European Union.
The political usefulness of the aid is more and more evident when analysing the sense of spending taxpayers’ money in Western countries for the development of poorer countries. It’s no secret that former colonial powers give priority to helping their former colonies. It is by no means a matter of cynical neocolonialism. It is not only about the inertial sense of responsibility for their fate. Former colonies, through linguistic, cultural and religious ties, are a natural political base in building influence in the world by Western countries.
Development aid favors the economic interests of donors. It is estimated that the so-called “tied aid”, which strictly defines the country from which goods or services should come under the assistance projects, constitutes over 20 percent of the total aid. As part of aid projects, donor state experts, its consulting companies, non-governmental organizations, and its infrastructural tools have a natural advantage in the implementation of contracts.
Above all, development aid has become a powerful “soft power” instrument. The aid is conducive to building a positive image of the donor, building a network of contacts, and promoting language and culture. Even if there are no measurable economic benefits, it serves broadly understood political interests.
But the importance of development assistance will inevitably diminish. It is not through aid that the path to a better state and greater prosperity lies.
