'Re-compromising' development aid for the future

by Jos Jonckers

The author of this article offers an academy critique of *e challenges facing the global system of development cooperation in the post-cold War era. He argues that the old compromises that have shaped development assistance since the Second World War have broken down and pleads for a radical re-think of the strategy in order to 'enable' fess affluent societies to gain from the advent of global 'free market democracy'

Let us face it. International development early 50 years, the developed world has taken aid for granted. It no longer does. In real terms, it has started to give less. The expected 'peace dividend' has not materialised and scepticism is rising. Aid and solidarity are considered old-fashioned concepts. Progress and development, it is increasingly argued, must come from cooperation based on mutual interest and a businesslike approach.

Aid scepticism is at its highest in the USA. A conservative majority in Congress promotes radical 'winner' recipes and aid has been slashed. Slowly but surely, America is getting out of the development business. Lacking domestic support, the Clinton administration seeks to 'rescue' the country's aid programme by seeking more cooperation with other donors - particularly the KU, whose solidarity horizons do not yet stop at its own borders. But even here, horizons are shrinking. European aid to its immediate neighbours in the East and the southern Mediterranean basin has risen. Happy and prosperous neighbours suddenly seem more important than distant friends in need.

Has the end of the cold war marked the beginning of a cold world - where international solidarity is being dismantled together with the nuclear warheads ? Or could we be experiencing the beginning of a fundamental reshaping of international solidarity and aid between nations?

Beyond altruism - self interest

International aid has always involved a compromise within affluent society. People and nations are not normally disposed to give something away unless they receive something in return. Any attempt at understanding and reshaping the future of development aid must therefore start from the premise that those providing development aid do so as a result of a complex and evolving compromise between altruism and self-interest.

Affluent countries are usually only interested in assisting poorer ones when the effect is to strengthen their international leadership, and in some way to enhance their security and material wellbeing. Looked at in this context, we must recognise that development aid, whatever its altruistic aims, will only exist if it also serves the legitimate, albeit more selfish agenda of the donor. It also means that the compromise which gives aid its rationale in affluent society changes over time: aid is regularly 'recompromised'. In secure and prosperous times, donors are more inclined to forego self-interest and to cooperate in the interest of less affluent countries. In times of insecurity, the altruistic dimension is likely to diminish in importance.

In colonial times, systematic aid flows first emerged as a result of a compromise between expansionist Northern governments and Christian society with its own 'colonizing' clergy. Decolonisation had the effect of increasing insecurity in most former colonial powers. In an attempt to safeguard the capital they had 'invested' in their overseas territories, following the latter's independence, they increasingly shaped aid with a view to 'buying' goodwill from the new rulers. This process, which 'recompromised' aid from a colonial into a neocolonial form, resulted in the secular, institutionalised arrangement now known as 'bilateral aid'. In addition, during the Cold War, Western aid was used increasingly as a device to stop the Third World joining the Second World (the communist bloc). The result was an aid system which was both more internationalised and more politicised.

The next stage came with the end of the Cold War. Communism had joined colonialism and fascism in the dustbin of history. Affluent Western society had emerged as the winner. With it came the Western vision for stability, peace and progress: a world of sovereign nations, organised on the basis of democratic and capitalist market principles and committed to respect for each other's territory and for basic human rights. Today, capitalism has become the norm in most nation states. Long-time sceptics such as India, and even convinced opponents such as China and Vietnam, have embraced it. Democracy has not yet achieved the same coverage, but it is sailing forward under favourable conditions. Political pluralism is steadily being consolidated in much of East and Central Europe, while dictatorial regimes in Africa, Asia and Latin America are now the exception.

The effect of all of this has been a speedy erosion of the terms of the compromise on which development aid thrived for so long. In a rapidly globalis ing,multi-polar world, the old approaches appear increasingly redundant. From this perspective, the current aid crisis is not surprising and is not necesarily a bad thing. Western affluent society is essentially trying to come to terms with the demystification of its development aid, as part of a process of reshaping it for the future.

Three 'recompromising' strategies

As in the past, the recompromising process is influenced by both self-interest and altruism in affluent society. Three trends can be identified.. The first, which is the most idealistic, involves restoring altruism. This approach seeks to 'purge' aid of the perverse political and economic compromises and contradictions caused by decades of neocolonial and Cold-War self-interest. It has impacted on aid in several ways. First, it has given a significant boost to humanitarian aid - the most altruistic form - at the expense of development assistance. Second, it has led to a 'decentralisation' of aid - with more assistance being channelled through organisations such as NGOs, that have an 'uncompromised' altruistic profile. Third, it has led to a 'deconstruction' of development aid along idealistic-altruistic lines. 'Women in development', 'child health', 'environment'and 'poverty alleviation' are all examples of deconstructed labels around which aid is increasingly being structured and justified. Finally, it has prompted an 'intellectualisation' of development aid with the particular purpose of tightening its altruistic aims. For example, the Logical Framework Approach, the concept of 'sustainable development', the UNDP's Human Development Index and various experiments with more 'accountable' project management systems, have all essentially been devised as ways of encapsulating and supporting the altruistic intentions that lie behind aid.

The second recompromising strategy, which may be summed up in the expression be businesslike, approaches development cooperation much more skeptically. Aid, it is argued, only makes sense if it leads to real progress and development - and the prevailing view is that this is not happening. The approach is fueled by the obsession of trying to measure progress with the help of business tools such as 'output', 'impact', 'efficiency', 'rates of return' and so on. This has led to burgeoning aid 'evaluation'. It has also probably contributed to the discovery of aid failures which, in turn, has prompted growing criticism of aid agencies and operators. The businesslike strategy has gained further ground because of the failure of many countries to achieve any real progress in recent decades. Its advocates argue that the compromises which undermined aid's development impact in the past are inherently linked with its altruistic nature. The conclusion is that altruistic aid will seldom or never work. The strategy has impacted on aid in a number of ways being, for example, the major cause of so-called 'aid fatigue'. It has also prompted a search for ways to enhance cooperation for mutual benefit, indeed transforming the narrow, pre Cold War trade cooperation link with developing countries into a much broader and rapidly growing economic cooperation approach. Finally, it has sought to enhance aid's impact on the economic conditions and growth prospects of developing countries through more ambitious, structural-oriented forms of aid.

Regionalism, the third major strategy, is linked to globalisation. Rooted in human survival psychology, this approach prompts nations in close proximity to form 'strategic' coalitions. In the post-Cold War era, development aid is one of the instruments used by affluent regions to strengthen their position in a 'globalising' environment. The strategy entails promoting 'open' regionalism elsewhere in the world and capitalising on this to create linkages and interactions which enhance their own influence or hegemony. From the point of view of the international political economy, this makes perfect sense. Having succeeded in making the 'world of nations' accept capitalism and democracy, it is through the consolidation process of free market democracy in other countries and regions that powerful affluent nations will seek to gain maximum advantage.

Need for a vision

With this improved insight into the dynamics that have been reshaping development aid, is it now possible to go further and develop a more political vision of relations between affluent and less affluent nations in future ?

Free market democracy, having endured the 'crises' of decolonisation, fascism and communism, has succeeded in promoting stability and peace within and between nations. Its main strength has probably been its crucial enabling function, with an increasing number of people and nations now in a position to 'earn' a better future. It appears that the model has the capacity to generate fairly equitable growth and progress, which is presumably why more and more countries are turning to it. As is so often the case, however, the strength of the system also contains the seeds of its weakness. Conceived as an 'enabling' mechanism, it results in the categorisation of those who fail to 'be enabled' as 'unable'. Marginalised because they cannot participate and perform in the system, the excluded (whether individuals or states) are dubbed 'losers'.

They are seen as a burden and a threat by the 'winners'.

The result is disparity in society.

Experience in most affluent nations suggests that despite the enabling environment created by free market democracy, up to a quarter of the population finds itself unable to perform effectively, and is marginalised as a result. Moreover, there seems to be an upward trend in the numbers affected by unemployment, underemployment and poverty. Disparity never occurs without some cost to society, which is a good reason why it ought to be minimised. The costs come mainly in the form of internal transfers earned (but foregone) by the active, 'winning' section of society. In more sociallyinspired, free market democracies, it is accepted that marginalisation resulting from the model's shortcomings must be minimised and/or adequately compensated for. In more conservative free market democracies, exclusion is seen more as a weakness of individuals than of the system. Compensatory transfers are generally kept to a minimum to induce people to 'break out' of their situation. But while such societies may save on 'empathetic' transfers, they will generally need to spend much more of their wealth defending against threats posed by growing disparity, such as crime, drug-trafficking and political extremism.

The costs of disparity are political as well as financial. Genuine democracy is based on the participation of a representative majority of citizens. In affluent societies, however, a growing minority no longer participates. The real danger stems from the fact that this is highly skewed. It is the same, growing, marginalised minority that is 'unable' to participate which is also withdrawing from democratic involvement. The result is alienation from the political system and an erosion of democracy to the extent that its very survival may be threatened.

What is really at stake

Having conquered most of the world's nations, free market capitalism is now set to conquer the world of nations, helped by technological advances in communications, transport and computer technology. Economists have amply shown that the interdependence resulting from free international competition need not be detrimental. Indeed, because global capitalism ensures that ideas, initiatives and resources can be 'put to work' anywhere in the world - wherever they generate most profit - interdependence is usually seen as mutually beneficial. In essence, it confirms what might be called the global enabling effect of free-market capitalism. The basic thesis is that the adoption by less affluent nations of free market democracy should 'enable' many more of them to improve the lives of their people in the coming decades. The boost engendered by this 'enabling effect' will, in turn, help to sustain progress in the more affluent countries.

If this is the aim, then a new vision should progressively inspire future cooperation between the affluent and less affluent countries. The first concern should be to define 'purpose' and 'interest' much more in terms of system and process, than of output. What really matters is the 'enabling potential' of free market democracy in the specific context of the less affluent countries. How something is achieved and by whom should take precedence over what is achieved. The ultimate aim must be to ensure that free-market democracy 'takes root' in less affluent nations and is able to determine who does what and how.

A second major concern should be to maximise the 'enabling potential' of free market democracy for the most vulnerable sections of individual populations. As mentioned earlier, up to a quarter of the people in affluent societies are excluded. In poorer countries, the figure is much higher. If free market democracy fails to enable a significant proportion of this marginalised group, then it will not take root. And if the poor cannot be mobilised, the growth that does occur will be highly skewed, leading to growing disparity.

A third point is to ensure that the 'global enabling' effect of free market capitalism does not become the exclusive preserve of deregulated capital and the 'winners' who control it, leading to new forms of exploitation and disparity. The concern must be to find a way of directing the combined forces of 'capitalism without borders' and 'democracy within borders' in such a way that it leads to a genuinely better world in which the number of 'losers' is dropping and disparities are diminishing.

A historic perspective

It is useful at this stage to take a look at the history of capitalism. Freemarket democracy delivered affluence to about a third of the global population over the last century mainly because of the 'accommodation' between labour and capital in an enabling environment created by 'Fordist' mass-production and consumption. A similar accommodation is now needed to enable global free market democracy to extend material wellbeing to the remaining two thirds of the (continually growing) world population, while at the same time sustaining it among the existing affluent third. It is no longer an accommodation between capitalists and workers that is required, however, but one between the affluent and the less affluent.

Fordism basically transformed the 'interdependent' stake of capital and labour in the economic pie, into a 'joint stake' - leading to the production of a larger pie. By analogy, what is needed today is to ensure that affluent and less affluent societies develop a joint stake in the production of a larger 'global pie' as a result of new technologies and more efficient, globalised modes of production. Attracting and sustaining capitalist investment in such modes will increasingly depend on demand and consumption structures which guarantee that poorer societies share with affluent ones the benefits of such global production systems. In the same way that a larger 'mess-produced pie' was dependent on higher and more equitable mass consumption, so will a larger 'globally-produced pie' depend increasingly on higher and more equitable global consumption. In this context, the principal policy aim of development cooperation should be to ensure that growth resulting from globalisationis both enabling and disparity-reducing.

The disabling effect of

'poor' competition

Driven by the powerful motive of capital accumulation, globalisation has the tendency to promote competition. In principle, this should be a good thing, but left unchanneled, it can have negative effects. One might draw an analogy between the conquering of the global market and the spread of water during a flood. The water always takes the easiest route, entering the most vulnerable areas first where it causes the most damage. Likewise, globalization, fueled by 'deregulated' capital, often tends to promote competition where it is easiest, but where it is not necessarily beneficial. This is the case, for example, in less affluent countries, where poverty is exploited to achieve what might be dubbed a 'poor' competitive advantage - in the sense that it is based on disparity, but also in that, far from 'enabling', it may actually have the opposite effect. Child labour, sex tourism, environmentally destructive tourism, tropical forms logging, the export of industrial pollution and misuse of intellectual property are all examples of 'disabling' competition resulting from global disparity. In a rapidly globalising world this is ultimately damaging to all concerned, which is why both affluent and less affluent nations have an interest in reducing the gap.

All of this points to the need for a major redefinition of society's role in general and of aid in particular. During the colonial and Cold War periods, development cooperation was progressively uprooted and alienated from society. Serving an increasingly complex and non-transparent agenda, it became more and more a 'cockpit' affair, piloted by a small specialised crew - and it found itself flying higher and higher above society. In short, affluent society lost touch with development cooperation and aid. Occasionally, the media intervened to 're-establish contact' but the result was that development aid usually only attracted mainstream public attention when things had gone terribly wrong.

Turning vision into action

If the aim is to have affluent and less affluent society working together to ensure that the latter adopts 'free market democracy'- and can adapt it in a way which benefits both - it is vital that the former be reconnected to the business of development cooperation. The affluent must be challenged to help transform their less affluent partners, in the interested and creative manner of a minority stakeholder. They must be ready to share the wealth of knowledge and experience generated in their own process of development. Representatives of all walks of affluent life should therefore be provided with greater opportunity for dialogue and cooperation with their less affluent counterparts. Increasingly easy and cheap communications and transport should facilitate this. This new form of stakeholdership will not happen, however, unless affluent society can be imbued with the new vision.

Donors should actively support the process. Instead of spending most of their time and resources determining the scope and content of development cooperation, they should step down from their cockpit. Their new role should be as brokers and facilitators of cooperation. An initial priority must be to extol the vision itself. As this gathers momentum, they should then turn to 'brokering' it in practice - acting as a catalyst between the affluent and less affluent in order to facilitate 'enabling' cooperation between them. The development of an effective brokerage profile and methodology will probably entail important changes in the way that donors work. They need to move much closer to their constituency, and to be made democratically accountable again.

As mentioned earlier, the concept of enabling cooperation concentrates on who does what, and how. Essentially, therefore, it should be seeking to mobilise democratic and free market forces in less affluent societies. The advantage of working this way is that change and progress will be determined primarily from within the society in question - with cooperation as a source of encouragement. Such an approach also entails acceptance of the fact that the pace of progrms must be left much more to the enabling forces of the maturing democracies and free markets, however weak and imperfect these may still appear. Indeed, the central purpose of cooperation should be to help these fore" become stronger. To achieve this, cooperation will need to move away from an emphasis on engineering outputs to one which involves 'messaging' the system and process. And it is not just methodologies that need to be altered; there must also be a radical change in cooperation mentality. Thus, for example, donors should attempt to broker cooperation which is 'small but smart'. Advancing 'best practice' might be another creative way to pursue cooperation which is enabling. And while some output-related decision techniques can still be used, these must be creatively reshaped to support a more 'enabling' approach.

In conclusion, this enabling vision entails an awareness of the imperfections of free-market democracy, combined with a conviction that it offers enormous potential for the less affluent countries of the world. 'Recompromising' development aid for the future will mean reshaping it to support a process of adoption and adaptation of free market democracy in less affluent countries which is highly 'enabling'. The result should be a system of international solidarity which is working for free-market democracy, rather than as a substitute for it.

J.J.