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The Changing Nature of Development Assistance

Posted on the 05 October 2011 by Center For International Private Enterprise @CIPEglobal
The changing nature of development assistance

Will Egypt and Tunisia turn to Turkey for assistance in building democratic institutions and rebuilding their economies? Photo:

The south-to-south model of international development assistance has become a popular topic in debates on reforming traditional aid approaches. And while there are certainly numerous benefits to engaging developing countries in helping each other address their development challenges, the south-to-south model is not replacing traditional aid models as Jonathan Glennie argues over at the Guardian’s Poverty Matters Blog.

One of the limitations highlighted by Glennie is that the south-to-south market in aid remains relatively small – there is only $15 billion from just a few countries, including China, India, Venezuela and Turkey. But even within that market, much of the cooperation is far from the horizontal engagement that it is advertised to be (peer to peer engagement between development actors). Further, Glennie argues, many of the southern governments are quite complicit in keeping their own citizens in poverty and actually have little to offer in terms of poverty reduction in other countries.

Still, greater attention to aid on the part of the developing world is changing the terms of the debate about aid effectiveness. As the Economist argues in its recent article on India’s effort to set up its own international aid agency, the growing emergence of the south as a source for development funding can actually be beneficial for the development assistance community by forcing donors to specialize and refine their different approaches.

For Westerners, justifying aid will be harder. But there is a reason [for donors in the south] to give: like trade, aid benefits from specialisation and comparative advantage. Emerging countries, with recent experience to draw upon, might do a better job of infrastructure spending. The West should focus more on policies and good governance (something many poorer Indian states are crying out for). There is a new world of aid but over a billion people remain poor; they still need help, even if some of them live in countries that now give aid as well as get it.

That’s not to say that the south can’t play a role in promoting better governance.  While countries such as China and Venezuela are unlikely to integrate democracy and governance into their development programs in the near future, Brazil, India, South Africa and Turkey have much to contribute. The question is, will they?

Tom Carother’s attempts to answer this question in his recent article on engaging developing country democracy champions in international assistance efforts. He argues that while the potential is there, developing country governments (with few exceptions) are unlikely to take a vocal stance on democracy. As Carothers argues, the silver lining may be that civil society organizations in emerging democracies can become voices for democracy internationally and lend a helping hand to their counterparts in fragile democracies and authoritarian countries.

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