Donor Logic in the Era of Gates, Buffett, and Soros

Abstract

T en years ago, when I was invited to comment on the inspiring article "Too Close for Comfort?The Impact of Official Aid on Nongovernmental Organizations" (Edwards & Hulme, 1996), I was perhaps too preoccupied with criticizing how and why international NGOs transplant their educational programs from one continent to another with little input from local organizations and experts. Readers of Current Issues in Comparative Education commented on how harsh I had been with NGOs. However, had the topic of the special issue been, "Are development banks overrated? or "Are UN organizations overrated?", I would have come to the same conclusions.There is an organizational logic to transferring the same kind of programs to every corner of the world. NGOs are not alone in transferring prepackage programs or reforms. All international organizations do so for all kinds of good and bad reasons, such as, for example, saving on design costs, generating institutional name recognition, obtaining approval from their own boards, as well as for better monitoring and controlling of their staff in distant field offices. Dissecting Donor LogicToday, I would propose to also analyze the institutional rationale behind grants or loans, and examine how donor logic differs for the various agencies. Alesina and Dollar's study on Who Gives Aid to Whom and Why (Alesina & Dollar, 2000) revived this line of research. Six years later, Dollar and Levin ( 2006) investigated a related question: who deserves aid from the perspective of donors? In the 2000 study, Alesina and Dollar present a multivariate analysis of donor strategy, which considers trade openness, democracy, civil liberties, colonial status, direct foreign investment, initial income, and population of the target countries. Their analyses are not restricted to U.S. government loans and grants, but rather include all rich countries that provide Official Development Assistance (ODA). They find that former colonial empires (in particular, Portugal, United Kingdom, France, Australia, and Belgium) spend more than half of their external aid on their former colonies. From 1970 to 1994, Portugal channeled 97 percent of its aid to its former colonies. In comparison, the United Kingdom allocated 78 percent, France 57 percent, Australia 56 percent, and Belgium 54 percent of their external funding to former colonies. Another variable, being a "U.N. friend", also proved important for donors' selection of target countries. The variable measures whether the target country has voted in line with the donor at U.N. conferences. In the past decade, for example, Japan directed funds to poor countries in return for a vote on admitting Japan as additional member of the U.N. Security Council. The authors (Alesina & Dollar, 2000, p. 40) also calculate the likelihood of a country receiving aid if relevant variables, such as initial income of the country or population size, are held constant. Their findings illustrate the high funding priority of the United States for its allies in the Middle East. All other factor...