Contrary to classic paradigm, recent empirical studies during last a couple of decades have been converging to deny the notion that development aids are free from donors’ interests. The interests comprise, broadly speaking, political and economic ones. Those who advocate this thesis suggest that the ultimate goal of such aid release is to convert potential threats into strategic allies or at least to guarantee that the recipients are not becoming protectionists for their markets or hard liners against the aid providers’ exports or foreign policy. The donors include major industrial countries or international agencies backed by those developed nations. They are indeed few super powers in the global economy. Like a Trojan horse, the development aid is the main, if not sole, channel for these few super powers to intervene in other countries’ affairs, to extract whatever resources they may need, be it political, natural, or other economic resources.
In addition, various econometric models, based on dynamic longitudinal cross-countries data, have also attempted to simulate the long-term impact of development aids on economic growth, domestic saving, capital formation, and some other common development indicators of the recipients. Unlike common believe widely stated on popular media, these models whose won publication outlet in major top-tier academic journals predict that aid dependency indeed reverses the direction of development and the quality of development. The aid scheme often prohibits government to put public needs on the priority of their development agenda. Instead, the government focuses on donors’ agenda. The services made to debts or agenda that the donors insert on the aid scheme which they submit to the government eventually deteriorate the grade of development. Despite growth accounting records some positive numbers, unemployment among adults and malnutrition among children are steadily rising. It means that aid fails to add public goods, improve infrastructure, induce capital inflows, and create jobs. This picture is not a unique case of particular country, but apparent phenomenon in many economies. A quote from a pundit says that “aid is rather a mode of dependency than of development”. Those scientific predictions appear to confirm it, though the undesirable impacts may not be easily visible.
One can infer two main lessons from the discussion above. First, the end of Cold War era is definite, but the battle for seizing hegemonic power over the globe is not finite. It appears that the very basic foundation of real global politics remains the same, what is known as the principle-agent hierarchy. The asymmetric relations between the few super powers and the rest somewhat still survive. In other words, it suggests that not every animal is equal, as the power among players is not identical. Many say that comprehensive review and reform should be done to rectify these imbalance relations. Developing countries need to work together to innovate current practices of multilateral or unilateral actions that are not favorable to their own development agenda or not undertaken on a voluntary basis. However, pessimistic views suggest that the successor of the current system is not yet to come in the foreseeable future. Second, it is therefore only limited choice available to the weaker countries, that is adapt with or die by such less desirable system. It means that they must be able to isolate the malignant impacts of development aids and to fully exploit its benign values. They must be able to differentiate the harmful aid proposals from the necessary and useful ones. Yet, doing so is not as easy as separating chemical substances in sterile and controllable laboratory. Hence, the government of developing countries must equip development policy-making process with good skills in planning. Without it, government hardly succeeds to dispose effective and corrupt-free implementation in taking the best out of development aid.
In addition, various econometric models, based on dynamic longitudinal cross-countries data, have also attempted to simulate the long-term impact of development aids on economic growth, domestic saving, capital formation, and some other common development indicators of the recipients. Unlike common believe widely stated on popular media, these models whose won publication outlet in major top-tier academic journals predict that aid dependency indeed reverses the direction of development and the quality of development. The aid scheme often prohibits government to put public needs on the priority of their development agenda. Instead, the government focuses on donors’ agenda. The services made to debts or agenda that the donors insert on the aid scheme which they submit to the government eventually deteriorate the grade of development. Despite growth accounting records some positive numbers, unemployment among adults and malnutrition among children are steadily rising. It means that aid fails to add public goods, improve infrastructure, induce capital inflows, and create jobs. This picture is not a unique case of particular country, but apparent phenomenon in many economies. A quote from a pundit says that “aid is rather a mode of dependency than of development”. Those scientific predictions appear to confirm it, though the undesirable impacts may not be easily visible.
One can infer two main lessons from the discussion above. First, the end of Cold War era is definite, but the battle for seizing hegemonic power over the globe is not finite. It appears that the very basic foundation of real global politics remains the same, what is known as the principle-agent hierarchy. The asymmetric relations between the few super powers and the rest somewhat still survive. In other words, it suggests that not every animal is equal, as the power among players is not identical. Many say that comprehensive review and reform should be done to rectify these imbalance relations. Developing countries need to work together to innovate current practices of multilateral or unilateral actions that are not favorable to their own development agenda or not undertaken on a voluntary basis. However, pessimistic views suggest that the successor of the current system is not yet to come in the foreseeable future. Second, it is therefore only limited choice available to the weaker countries, that is adapt with or die by such less desirable system. It means that they must be able to isolate the malignant impacts of development aids and to fully exploit its benign values. They must be able to differentiate the harmful aid proposals from the necessary and useful ones. Yet, doing so is not as easy as separating chemical substances in sterile and controllable laboratory. Hence, the government of developing countries must equip development policy-making process with good skills in planning. Without it, government hardly succeeds to dispose effective and corrupt-free implementation in taking the best out of development aid.
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