aid print slides oct 19 2011

aid print slides oct 19 2011 - Foreign Aid to Africa...

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Unformatted text preview: Foreign Aid to Africa Outline • Politics • Theory • Evidence A road too far • Donors spent $2 billion over the last 20 years on roads in Tanzania • The roads did not improve • The principal output has been aid bureaucracy, with the Tanzanians producing 2,400 reports a year for the 1,000 donor missions who visit each year. Hypothesis: Foreign aid bureaucracy has run amok because there is no “market test” of its actions Conditions favorable to excessive bureaucracy in foreign aid • Foreign aid outcomes are largely unobservable even to agents, only to voiceless poor – makes principal-agent contracts even more difficult. • Foreign aid agency can force recipient of its funds to work with its own bureaucracy; agencies set up by international treaties – high barriers to entry. • Foreign aid is inherently risky, which leads to a “blame-sharing” coalition of aid agencies. Anyone outside risks exposure to blame. Lack of incentives at the bottom – examples from MP reports • Cambodian teachers’ salaries are low, and “many supplement their income by soliciting bribes from students, including the sale of examination questions and answers….the end result is a high dropout rate” • In Uganda, “sanitation has been highlighted as a high priority in the sector plans of water, health, and education. Practically however, it is yet to clearly come out as a funding priority for any of them. In fact, by spreading out everywhere, it has received no attention anywhere!” (MDG Needs Assessment) • In international and national agencies, foreign aid “is not evaluated or documented systematically for results.” (Main report). This is a scandal! Lack of information from the bottom – examples from the Millennium Project Needs Assessment report • In Tanzania, “our results show that Tanzania needs at least $1.1 billion over 2005-2015 to attempt to meet the gender goal. We recognize that gender data is it a large extent nonexistent, and that therefore these numbers probably underestimate the true cost of meeting the gender MDG.” • There are 40 target areas where the intervention is either listed and said “to be specified further” or there is no intervention listed at all and it is “to be specified” in the future . The anthropologist James Ferguson described his encounters with Development Experts in Lesotho. “What do you think we should tell Lesotho to do?” one asked. Ferguson asked who was the “we” doing the telling or the “Lesotho” doing the following. The World Bank report describes a particular region of Lesotho as made up of subsistence farmers pursuing techniques little changed for millennia. The report then goes on to recommend Western-financed agricultural extension services and roads so that the farmers could get cash crops to market. Ferguson, who lived in the villages so described, points out that actually these “subsistence farmers” got most of their income from providing migrant labor to South African mines. They income from providing migrant labor to South African mines....
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This note was uploaded on 11/07/2011 for the course ECON GA.3001.1. taught by Professor Williameasterly during the Fall '11 term at NYU.

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aid print slides oct 19 2011 - Foreign Aid to Africa...

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