Rethinking Foreign Aid

Foreign aid administration badly needs an overhaul

The issue of foreign aid is once again in the news as the international development select committee has blamed the global spread of Ebola on spending cuts made by the British government. Meanwhile, in South Sudan, relations between foreign aid workers and the country’s government have been called into question, and, in Australia, a recent report has suggested that the government there has been considering foreign aid cuts in order to fund military involvement in Iraq. 

Despite these difficulties, Danish novelist Janne Teller has spoken to the IAI about the need to maintain aid to those countries that need it most. “There is a moral case for aid,” she says, “both due to arguments of humanity as well as due to the guilt of past Western sins of colonialism.”

Teller is the author of the best-selling Nothing (2000) as well as War, what if (2012), about life as a refugee, and Everything (2013), a collection of short stories. Teller was originally educated as a macro-economist and worked for the United Nations on development and conflict resolution in Tanzania, Mozambique and Bangladesh until 1995. She is highly critical of the current approach to aid and recommends a structural overhaul of the way it is administered: “The present system does too little good compared to its costs. That doesn’t mean that aid should be abandoned, but the system should be totally transformed.”

“As with anything major in this world,” she says, “aid will only work if addressed systematically over a longer period of time. Aid doesn’t seem to work well, at least in its present form – or there would be no more recipient countries in need of aid. Both recipient and donor countries would benefit from a total overhaul of the system of development aid.”

The question, for Teller, is what that more efficient system might look like. “The question, she says, “is whether there are other better ways to help countries in need.” “Much fairer trade policies” are one suggestion. So too transforming aid to that she calls “direct budget support”, contingent only on an emphasis on certain economic sectors and an improved system of post-auditing to prevent fraud or corruption. The goal is to avoid aid becoming a never-ending project. Instead direct budget support aims to “put the recipient country in charge of its own funds and monetary flows”.

Currently the autonomy of developing countries is often severely limited. Teller blames external influence: specifically, “interference by donor countries or organisations such as the World Bank”.

There are difficulties, however, and the possibilities of this new approach largely depend on the institutions and political infrastructure of the recipient country. “Budget support,” Teller admits, “can only be given if the recipient country’s public financial management is in order – and also if the populations can hold their own governments accountable.”

Nonetheless, Teller is adamant that removing these interferences would create a significantly more efficient administration of aid: “I’m convinced the recipient countries (and thus the donors) could achieve more than hundred times as much for one tenth of the costs, if their own government could steer the flow of resources according to their own long-term policy plans and programmes – with the use of local and regional expertise, rather than Western.”


Image credit: Aaron Patterson

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