Changing Trends in Development Aid
In the early decades, development aid was given on an economic basis mainly to enhance productive capacity and bring about modernization of developing countries (influenced by modernization theories). Many developing countries in the initial phase of development, post decolonization, wanted to industrialize their econ omies. This led to imports of technologies (such as hybrid varieties of crops, fertilizers, imports of machinery, and fuel) or building large scale infrastructural projects such as highways and dams, which would support development in other sectors. Many developing countries then borrowed on lower interest for these imports.
Over the last decade, grants have become the dominant form of bilateral aid to the poorest countries. Many of these countries over time are facing difficulties in repaying their loans which were previously borrowed on concessional terms. Iraq and Nigeria received debt forgiveness in 2005 accounting for $14 billion and $5 billion. This is of course an exception, but development aid is set to rise as long as the donors keep their promise, which, some critics think, is unlikely.
There has been increased collaboration both with governments and aid agencies based on a growing belief over the period that the promotion of NGOs could offer an alternative model of development and play a key role in processes of democratization. NGOs were seen as more administratively flexible, closer to the poor, innovative in problem solving and more cost effective than corresponding state partners. Donor pressure toward structural reform and privatization underlies the increased interest in NGOs as 'service deliverers' – part of a wider and explicit objective to facilitate productive NGO–state partnerships. In such an environment, the important role for NGOs in the last two decades has been in mitigating the adverse costs of structural adjustment (liberalization, privatization, export promotion, and reshaping the welfare state) and promoting donor reform packages in offering insurance against a political backlash towards harsh adjustment regimes. NGO involvement in implementing World Bank financed projects grew rapidly during the 1980s and 1990s as many governments' service delivery capacities were shrinking. The World Bank report in 2007 highlighted that 70% of World Bank financed projects in 2006 had NGO involvement. There is a realization among donor countries that aid is becoming ever more complex, with new instruments and players, with increasing criticisms over its effectiveness.
The expansion in partnership between northern and southern NGOs originated in changing attitudes in the north in the 1960s and 1970s. Aview took hold that merely transferring resources in the form of tools or funds was not an adequate response to poverty when that was rooted in structural problems. Indeed, such transfers could just preserve the situation by creating financial dependency. The establishment of research departments and policy units in northern NGOs marked this change in approach. Northern NGOs respond to emergencies, short term relief, and long term rehabilitation, such as victims of war and of natural or man made disasters. They raise money in the north from the general public, private sector, and governments to pay for their work, and to share as much as possible with their southern counterparts in order to help in building the capacity of southern NGOs and educate their own constituencies in the north about the underlying causes of poverty, and draw people into active lobbying and campaigning for change.
NGOs have pressed the World Bank to become more generous, egalitarian, and responsive to gender and minority concerns; more transparent and open to effective civil society participation; and more sensitive to natural resource use and human rights standards. Resistance and confrontational strategies to World Bank financed infrastructure projects have been the most visible form of NGO criticism, and have forced the Bank to give attention to environmental and rights policies, social issues involving major dams (e.g., Nepal's Arun River), energy projects (e.g., the Chad Cameroon pipeline), forestry, water, and major infrastructural projects. NGOs have won a seat at many World Bank policy discussions. NGOs will now have to build the local capacity to monitor and force implementation of the policy commitments won at Bank headquarters and increase the voice and control to NGOs based in borrowing countries.
- Reasons for Giving Aid
- Different Types of Aid
- Contested Models of Agri-Environmental Governance
- Toward Greener Farm Policies?
- Developing an Environmentalist Critique of Modern Agriculture
- Agri-Environmentalism and Rural Change
- Conclusions: Prospects and Challenges for Sustainable Agricultural and Rural Development
- Some Conceptual Building Blocks for the Sustainable Rural Development Paradigm