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Democracy and aid: the missing links

Anna Lekvall
13 May 2009

The relationship between aid and politics is the subject of increasing debate. For some, the political landscape in Africa is the key reason for poor developmental outcomes. For others, external-assistance interventions themselves help to sustain and perpetuate non-developmental political conditions.

Anna Lekvall is senior programme officer with the International Institute for Democracy and Electoral Assistance (International IDEA)

Several varied perspectives on the aid-politics nexus are represented in recent specialist studies. Here are just four. First, Thandika Mkandawire argues that in dominant perceptions of Africa the west is idealised while Africa's political pathologies are overemphasised. This neo-patrimonial picture of Africa should be questioned, he says (see "Thinking about Developmental States in Africa", Cambridge Journal of Economics [25/2001]),

Second, a number of severe critics argue that aid does more harm than good, in part by reinforcing neo-patrimonial tendencies, particularly in Africa. "The west can't save Africa", as William Easterly puts it (see also William Easterly ed., Reinventing Foreign Aid [MIT Press, 2008]). A new voice supporting this approach is Dambisa Moyo, in her book Dead Aid (Penguin, 2009). Moyo's case is essentially that donors are overriding domestic accountability and crowding out local initiatives.

Third, a significant current of thinking considers that "(aid) is needed and budget support is the least distortive modality"; though it suggests that donors - the key to development - still need to engage in understanding politics (see the research programme commissioned by the Advisory Board for Irish Aid, Good Governance, Aid Modalities and Poverty Reduction [2008]). Also in the debate on democracy support co-hosted by the Institute for Democracy and Electoral Assistance (International IDEA) and openDemocracy:

Vidar Helgesen, "Democracy support: where now?" (17 November 2008)

Rein Müllerson, "Democracy: history, not destiny" (25 November 2008)

Monika Ericson & Mélida Jiménez, "Taking stock of democracy" (17 December 2008)

Kristen Sample, "No hay mujeres: Latin America women and gender equality" (4 February 2009)

Ingrid Wetterqvist, Raul Cordenillo, Halfdan L Ottosen, Susanne Lindahl & Therese Arnewing, "The European Union and democracy-building" (10 February 2009)

Daniel Archibugi, "Democracy for export: principles, practices, lessons" (5 March 2009)

Asef Bayat, "Democracy and the Muslim world: the post-Islamist turn" (6 March 2009)

openDemocracy, "American democracy promotion: an open letter to Barack Obama" (11 March 2009) - a document hosted by the Center for the Study of Islam and Democracy(CSID)

Rodrigo de Almeida, "The inspectors of democracy" (13 March 2009)

Tarek Osman, "Democracy-support and the Arab world: after the fall" (17 March 2009)

Christopher Hobson & Milja Kurki, "Democracy and democracy-support: a new era" (20 March 2009)

Shadi Hamid, "Democracy's time: a reply to Tarek Osman" (6 April 2009)

Rumbidzai Kandawasvika-Nhundu, "The gender of democracy matters" (7 April 2009)

Vessela Tcherneva, "Moldova: time to choose" (9 April 2009)

Krzysztof Bobinski, "The partnership principle: Europe, democracy, and the east" (22 April 2009)

Winluck Wahiu & Paulos Tesfagiorgis, "Africa: constitution-building vs coup-making" (28 April 2009)

Achin Vanaik, "Capitalism and democracy" (29 April 2009)

Fourth, Richard Josephs and Alexandra Gillies who argue that aid needs to be reinvented (see their co-edited book Smart Aid for African Development [Lynne Rienner, 2008]). Donors, they contend, should apply strict governance conditionalities so that the structure of political incentives provides clear compensation for "good behaviour".

So much for politics and aid. But what about democracy and aid? After all, democracy is the only political system that gives voice and choice to citizens; that increases accountability and the distribution of power; and that is devised explicitly to deal with the peaceful transfer of power. Democracy - indeed, much more democracy - may in fact be the best option for addressing the issues of development in Africa.

So far, there has been little analysis of how aid - in particular the ways in which it is structured and delivered - works in relation to and affects democracy. This article, a contribution to the debate on the subject of democracy-support co-hosted by openDemocracy and International IDEA. is a modest contribution to this end. 

The good

International IDEA has started to engage in the debate, exploring the pros and cons of aid in relation to democratic consolidation. In particular, we are looking at new forms of aid modalities and structures. A recently commissioned desk-study explores both challenges and opportunities in the aid-democracy relationship as played out within the new development architecture (see Global Partners & Associates, Democratic Dimensions of Aid, 2009).

The "Paris Agenda for Aid Effectiveness" - which developed out of the international declaration agreed on 2 March 2005 by more than 100 developing countries, donors and NGOs - is rapidly changing the international development architecture. The agenda emphasises themes such as ownership and alignment to partner-country priorities; harmonisation of donor support; mutual accountability; and transparency - all in the interest of making aid more effective.

The agenda also incorporates new forms of aid modalities, such as budget-support and sector-wide approaches, designed to improve the aid system: by (for example) supporting the development of recipient countries' domestic institutions; increasing the transparency of aid flows; and reducing the administrative costs of receiving aid (weak administrations have long been drowning in innumerable donor-missions and external-reporting requirements).

These efforts have already gone a long way towards streamlining assistance and emphasising the importance of national processes, as opposed to donor-driven approaches - although more efforts are still needed in this respect. The overall outcome is that partner-government resources are freed up to focus more on promoting development than servicing donors. The Paris Agenda is doing more than making development aid more effective: it is also providing building-blocks for strengthening national, democratic decision-making.

The bad

There are, however,  two concerns. First, there is a gap between policy and practice; in practice "ownership" tends to be narrowly defined as the executive arm of government, with the result that national political actors are marginalised. Second, democratic systems on the ground are often too weak to handle the new aid modalities.

Aid is still negotiated and delivered on "poverty-reduction strategies" that are driven by donors and agreed with the executive, with a palpable lack of underpinning democratic process. A mapping study on the role of political society in development in Senegal, commissioned by International IDEA, for example, clearly shows that parliamentarians and political parties play a minimal role in and have poor knowledge of national development processes.

Aid conditionalities - donor demands for policy changes - also reduce the space for national political decision-making, thus further undermining the role of politicians. Domestic-accountability structures are likewise undermined, with partner governments often demonstrating greater responsiveness to donors than their own citizens. Democratic institutions - parliamentarians and political parties in particular - are thus bypassed. Their roles in defining and overseeing development priorities are undermined, reducing their legitimacy and in turn, undermining democratic consolidation.

One of the few research projects to date on the linkages between aid and democracy was conducted by the Madrid-based think-tank the Fundación para las Relaciones Internacionales y el Diálogo Exterior (FRIDE), involving national case-studies from Mali, Vietnam, Nicaragua and Peru (see Stefan Meyer & Nils-Sjard Schulz, Ownership with Adjectives [FRIDE, 2008]). A key recommendation is that "democratic ownership" might result in interpretations of the Paris principles that are more conducive to democracy than is currently the case. (Alternatively it might also be more straightforward to drop the ill-defined concept of "ownership" altogether and go straight to strengthening democratic decision-making.)

The study argues that a first step in this direction is recognising that the concept of "effective developmental states" does not always equate to "democratic states". Democratisation involves the redistribution of power in the interests of citizens, whilst building state capacity may rather require concentration of state power and improved state autonomy.

The related concern is that in practice democratic systems are often too weak to handle the new aid architecture. Part of this concern can be addressed through capacity-building aid projects. But the concentration of power - power over politics, finances and security- is more difficult to deal with. The "winner-takes-all" culture and powerful executives in countries such as Uganda and Rwanda, but also in less challenged countries such as Senegal and Tanzania, remain a concern despite long-term aid efforts. 

In practice, being in government means access to large resources - sometimes even access to all the available resources. Some of these resources are used to retain political control. Bribery, coercion and threats for the purposes of securing political loyalty are all a concern. Parliamentarians and parties - and even NGOs and the media - live in and from the same political and financial environment as the executive. 

The capacity and motivation of oversight bodies such as parliamentarians to stay independent and hold the executive to account are minimal. The political opposition puts in an appearance around election-time, but often has no resources to play their democratic role in between elections, and basically disappears until the next poll. 

A country's media may be free on paper but is all too often challenged on the round by continuous legal charges and security threats. The private sector either depends on government for retaining its investments (political loyalty), is intertwined with politics - or both. Owners of major companies and politicians are often the same people, and for good practical reasons. Social and grassroots movements are non-existent or very weak due to prevailing capacity and resource constraints. Democratic checks-and-balances are weak and often under threat. 

The donor viewpoint

Many donors believe that aid is good - or at least neutral - for democracy. In other words, that it is possible to provide half of a country's national budget without having an impact on the domestic political situation. From a technical point of view at least this may not appear unreasonable, as distributing resources is a core state function. Aid programmes in areas such as health and education also strengthen state functions and, together with service delivery, can have an indirect democracy-supporting effect. Donors, realising the importance of good governance for development, have increased resources for building effective state institutions as well as the voice of civil society (see International IDEA/Centre for the Study of Developing Societies [CSDS], Democracy and Development in a Globalized World, 2009).

Overall, however, aid is treated as being "apolitical", a view underpinned by western assumptions about the functioning of the state. But fortunately there is an emerging realization and debate over how real politics influence development outcomes and efforts are being made to address these concerns by donor agencies such as the United Kingdom's department for international development (DfID), the Swedish International Development Cooperation Agency (Sida) and the Netherlands' development-cooperation programme.  

The Paris Agenda is an important stepping-stone for enhancing development as well as democracy. But aid does play a role in the political-power dynamics of a country, and in the absence of careful calibration of its impact on a range of domestic actors and structures it can easily serve to undermine democratisation processes - albeit unintentionally. Today, aid resources are increasingly channelled directly through government for development purposes, with minimal engagement and oversight by national political actors. 

But in polarised political societies such as Uganda and Mozambique characterised by a high degree of authoritarianism, misuse of resources and weak checks-and-balances, the delivery of aid can be understood not as the channelling resources through a legitimate state function but as placing resources at the disposal of a pre-eminently political actor. The risk, in other words, is that donors are - involuntarily - strengthening "the powers that be" rather than the redistribution of power and more robust democratic processes as a consequence.

There are no easy answers in this situation. Aid is usually needed the most precisely in conditions where it is the most difficult to provide it effectively. Donors should not take - or more accurately, take over - responsibility for the political situation in a given country. But aid does operate within and thus play into particular political environments and its prospective impact on power dynamics and politics need to be better understood (see Paul Collier, Wars, Guns, and Votes: Democracy in Dangerous Places [HarperCollins, 2009]).

Moreover, aid would become more effective if there was a solid democratic foundation to build from and in which domestic political actors and stakeholders play a substantial role in policy debate and oversight. Donors need to build on the emerging debate about the intrinsic linkages between politics and aid, and to modify their behaviour in the direction of achieving more balanced political relationships with the full range of relevant national stakeholders.

What can be done?

The linkages between aid and democracy are only starting to be explored. But here are eight initial recommendations that if followed would create a strong foundation for progress:

* Address the Paris Agenda and democracy Donors need to analyse their own behaviours, to appreciate and understand its influence on politics and democracy. In particular, they need to take the opportunities and deal with the challenges presented by the Paris Agenda for strengthening democracy (and development).

* Space for politics For democracy to take root and for ownership to carry real meaning, political actors - parties and legislators in particular - need to assume a key role in shaping and approving national development agendas. Donors need to allow for democratic, political processes to take place.

* The accountability chain Develop new ways to strengthen voice and accountability among all actors involved, and in an integrated, joined-up manner, so that the overall domestic accountability chain is enhanced and oversight actors are empowered.

* Democratic drivers for change Strengthening checks-and-balances includes providing what is viewed by some as "high-risk support" to political parties, trade unions and other political forces, as well as NGOs and the media. Increase democracy support and find new and more effective ways to support democratic drivers for change, not least in the media sector.

* Take politics and power seriously Whether the neo-patrimonial account of African politics is correct or not, it is vital to understand and address informal politics, its incentive structures and how it interplays with the goals of strengthening democracy and development. To date, political-economy analysis tools developed by donors have increased the understanding of politics, but have stopped short of bringing about real changes. This is undoubtedly the next step needed.

* Reform political conditionality The current use of political conditionalities - cutting, or cutting off aid when democracy, human rights or corruption worsens - is confusing and ineffective. In practice it amounts to a tap that is continuously being turned on and off. This helps neither development nor democracy. Political conditionalities need to be analysed and reformed to do good rather than bad.

* Integrate democracy and development support Donors promote both development and democracy. But development assistance is usually carried via processes and structures than are functionally separate from parallel democracy support efforts. Better integration of these two assistance areas would provide the right basis both for understanding how to promote them in tandem and for dealing with any resulting tensions and/or areas of contradiction - or even conflict - between the two.

* Raise the voice of Africa The policy debate on aid and politics is heavily dominated by western academics and practitioners. More African thinking and debate on the key challenges in democracy and development needs to be heard. African experts - from governments, but also from academia, media, and civil society - should address challenges in this area, not least the role of external actors in supporting or transforming domestic challenges. This will in turn provide a solid platform for future dialogue and reform efforts.

 

Among openDemocracy's articles on aid, development and Africa:

Chukwu-Emeka Chikezie, "African agency vs the aid industry" (6 July 2005)

Jonathon Porritt, "'As if the world matters': reconciling sustainable development and capitalism" (30 November 2005)

Ehsan Masood, "The aid business: phantoms and realities" (18 July 2006)

Ehsan Masood, "A German vision: greening globalisation" (27 March 2007)

Michael Hopkins, "Sustainable development: from word to policy" (11 April 2007)

John Elkington, "Brundtland and sustainability: history's balance-sheet" (11 April 2007)

Stephen Browne, "G8 aid: beyond the target trap" (6 June 2007)

Paul Collier, "The aid evasion: raising the ‘bottom billion'" (11 June 2007)

John Elkington & John Lotherington, "Can democracy save the planet?" (21 April 2008)

Kweku Ampiah, "Japan and Africa: a distant partnership" (6 June 2008)

Simon Maxwell, "Development in a downturn" (4 July 2008)

Andrew Shepherd, "The anti-poverty relay: a progress report" (24 September 2008)

Anita Sharma, "The core crisis: standing with the poor" (30 October 2008)

Andre Wilkens, "The global financial crisis: opportunities for change" (10 November 2008)

Simon Maxwell & Dirk Messner, "A new global order: Bretton Woods II...and San Francisco II" (11 November 2008)

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