By Tim Anderson

Aid worldwide runs at more than $120 billion per year (World Bank 2011a), yet there is very little correlation between this expenditure and the often stated goal of poverty reduction. The failures of aid are legion. Yet this ‘development assistance’ has become a massive and semi- permanent global industry which in western countries is often erroneously equated with ‘development’. Nothing could be further from the truth. Aid programs, despite the stated good intentions, certainly deserve some critical scrutiny. 

The most important problem with aid is that it undermines processes of self-determination and democratic development in developing countries which are, for the most part, former colonies of the current aid ‘donors’. What sort of independence have they gained if, after decolonisation, they remain beggars before their former colonial masters? Whatever might be said about the practical benefits of any particular aid program, one thing is certain: there will be no democratic accountability. The donor countries may pretend to ‘consult’ with local peoples, but they will never be held accountable by them. On the contrary, aid programs will always answer to the ‘national interest’ (commercial and strategic) of their home countries. For the ‘recipients’, the longer aid programs persist, the more serious is this undermining of democracy and disempowerment of their own citizens. 

The more frequently cited - but second order - problems of aid (obligation, debt and policy leverage; corruption and aid elites; and aid trauma) also deserve scrutiny. Some of them are consequences of the first order problem. Only after full scrutiny of these problems is it be possible to properly consider what role, if any, aid might play in the nation building of a sovereign people.  

The attached short paper (6 pages) sets out some initial myths and dilemmas of aid, before briefly but systematically addressing these key problems. It then seeks to characterise the most harmful forms of aid, as well as the potentially useful forms, and from there formulate some regulatory criteria that might assist in determining a sovereign response.