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Aid to Poorly Performing Countries: A Critical Review of Debates and Issues

Author: J Macrae
Date: 2004
Size: 125 pages (606 KB)

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Summary

What should donors do about countries that are not performing well? How can assistance be provided to protect poor people without reinforcing governments that show no commitment to development or human rights? This report by the Overseas Development Institute addresses these questions and reviews current debates on aid to poorly performing countries. It analyses performance criteria, identifies key constraints to aid engagement and develops a country-level approach for better understanding poor performance. It draws on case studies from India, Malawi, Rwanda and Sudan.

'Poorly performing' countries are characterised by very poor and often deteriorating socio-economic conditions, poor governance and low levels of trust between donors and recipient governments. Populations living in such countries face neglect or abuse by the state and exclusion from access to aid. The problems of such countries are not new but their profile has been raised due to changes in their political economies, international consensus on addressing the Millennium Development Goals and links to the security agenda following September 11th 2001. The reports findings are tentative and preliminary, with the following main conclusions:

• Data regarding all aspects of development remain weak in these difficult environments making it difficult to identify priorities, monitor progress and allocate resources.
• The problem of poorly performing countries cannot be located solely or even primarily in the conditions prevailing in-country - it is a reflection of wider international relations, including aid.
• Aid has generally been supportive of effectiveness, but blind to authority and legitimacy. This results in problems protecting the welfare and interests of the poor.
• The assumption that it is easy to distinguish between good and bad performers is flawed. Very few countries perform badly universally and persistently.
• Poor development is not the defining problem that is at issue. More important is the absence of strong and legitimate institutions with which donors can engage.

The 'poor performers' debate focuses attention on the plight of poor people in some of the most hostile environments in the world. Disengagement does not reform states and can reinforce a decline in human development. New understanding is required, based on more rounded and politically informed analysis. Policy implications are:

• Concern for effectiveness of a state needs to be balanced with concern for its legitimacy and authority.
• Responding to the challenge of legitimacy and authority will require using the range of existing aid instruments to support poor populations living in contested or weak states.
• There is a need to disaggregate countries' performance by indicator and period, and treat each country on its merits.
• Resource allocation methods that rely heavily on statistical data, especially those that use a single performance 'score', should be critically reviewed or rejected.

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Source: Macrae, J. et al., 2004, ‘Aid to 'Poorly Performing’ Countries: A Critical Review of Debates and Issues’, Overseas Development Institute, London
Author: Joanna Macrae , hpgadmin@odi.org.uk
Overseas Development Institute (ODI), http://www.odi.org.uk/