Development Assistance Essay ⋆ Business Essay Examples ⋆ EssayEmpire

Development assistance, (or synonyms such as technical assistance, international aid, overseas aid, foreign aid, development aid, or development cooperation) is aid given by bilateral and multilateral agencies to support the socioeconomic and governance development of developing countries. It is provided by governments through their bilateral aid agencies such as the Canadian International Development Agency (CIDA), the U.S. Agency for International Development (USAID), the United Kingdom Department for International Development (DFID), or through multilateral institutions such as the World Bank, regional development banks, or through international development nongovernmental organizations. Development assistance focuses on poverty alleviation and governance as opposed to emergency relief or humanitarian aid, which aims at alleviating suffering following crises such as war or natural disasters.

Official development assistance has three main characteristics: (1) it is undertaken by government bilateral and multilateral organizations; (2) promotion of socioeconomic development and governance is the main objective; and (3) it has favorable terms, including donations and concessional loans, which have low interest rates on a longer repayment period including a grace period for repayment. Development assistance, as a flow of resources between developed and developing countries, differs from remittances—financial transfers sent home by foreign workers—or foreign direct investments made by multinational corporations. Most recently, some have included in the definition a security-related spending component, which is debated by several nongovernmental organizations, which argue that any military expenses, for example, cannot be accounted as development assistance.

Evolution

Development assistance emerged in the post–World War II, Cold War period. Development assistance began with a “modernist” paradigm involving the transmission of technical knowledge and technology in large infrastructure projects and in “universal” programs, such as programs in public health, most often funded and led by governmental and multilateral agencies. The focus of development assistance over the decades shifted from mainly large physical capital and technology-intensive infrastructure to human education, population control, and after the 1980s, to policy reforms in the form of the structural adjustment plans, and decentralization in the 1980s and 1990s. Overall, although large infrastructure projects have remained central in development assistance, there has been an increased recognition of the importance of smaller scale, local capacity-building projects led or managed jointly by governments and nongovernmental organizations. Different forms of partnerships, in the form of collaborations, cross-sectoral partnerships, and cooperation have emerged.

The domain of international assistance changed in the 1990s due to several factors. The first one concerns the emergence of national and international NGOs (nongovernmental organizations) also labeled “civil society” or “third sector organizations” or associations. This has been referred to as “the rise of global civil society.” The second factor has dealt with the emergence of new conceptions of “development” and “poverty,” especially under the influence of Martha Nussbaum and Amartya Sen.

Sen’s definition of development goes beyond the economics-based definition of poverty, which often tends to misrepresent the level of well-being of an individual or of a community. Sen argued that the most important factor to human beings does not concern income or consumption per se, but rather the capacity to realize their potential as individuals and groups and to achieve what they truly value. Sen views the removal of structural “un-freedoms,” or obstacles to human beings to achieving what they truly value, as a central element of poverty alleviation strategies and as a way to achieve individual and collective development. This new conception of development has been translated into measures of development including, among others, the Human Development Index.

The third factor concerns a major policy change toward aid effectiveness, which questioned the practice of international development assistance. Aid effectiveness has questioned the notions, the policies, and practice of international development, arguing that there was limited evidence of the effectiveness of its programs. It has led to rethinking the evaluation of processes and outcomes of development assistance. The fourth factor has aimed to connect aid—often operated and led by international cooperation agencies such as CIDA, Agence Française au Développement, USAID, and others—to development through trade, often led by trade departments, especially for Africa under the Clinton and Bush administrations in the United States. The fifth factor concerns the emergence of global private foundations such as the Bill and Melinda Gates Foundation.

In September 2000 the Millennium Summit was concluded by a common declaration of 191 heads of states to eight objectives on global poverty reduction for 2015 through concerted actions, which includes a reporting system to assess progress each year. The Millennium Development Goals create a template with objectives for coordinated activities to prevent duplication of efforts, which existed in parallel bilateral aid relations, and promote collaboration between sectors along commonly-defined objectives.

Quantitatively, the levels of aid funding promised by donor countries have most often not been translated into actual funding. Resolution 2626 adopted at the United Nations (UN) General Assembly on October, 24, 1970, assessed for each economically advanced country the objective of giving 0.7 percent of its gross domestic product (GDP) by 1975 in development assistance. Resolution 35/36 at the UN General Assembly on December 5, 1980, reassessed this objective. Two decades later, the 2000 Millennium Summit recognized that this objective for all the economically advanced countries to give 0.7 percent of GDP to the official public assistance had not been achieved. As of 2003, only five OECD countries were giving 0.7 percent of their GDP in foreign aid. The United States was providing 0.14 percent of its GDP to official assistance. In all, it is estimated that official development assistance has amounted to between $50 billion and $60 billion per year.

Structural and Contextual Limitations Development assistance needs to be understood and evaluated in the broader context of North-South/ international relations and country-level structural constraints. On the global level, agricultural subsidies in the United States and in Europe penalize developing countries’ exports and create conditions of unfair trade, as poorer countries face high barriers to access to international markets in products such as cotton. Second, it has been argued that the effectiveness of development assistance needs to be taken into account within changes in economic policies. Third, it has been argued that international/multinational corporations in oligopolistic positions control large areas of trade and severely restrict conditions for international trade. International assistance has been criticized for not addressing structural conditions to countries such as unequal access to means of production, including land.

Development assistance has been criticized on several accounts. The first critique concerns more particularly bilateral aid. It has been argued that large amounts of funding were dedicated to supporting strategically important leaders and regimes, especially in sensitive regions and during the Cold War. A second critique concerns the form of aid; several anthropologists have contended that developed countries were projecting their own needs, values, and solutions onto other societies through development assistance, regardless of local needs. Such projections have led to increased inequalities and disruption.

A third critique has proposed that development assistance creates dependency and corruption as funding flows into developing countries. This inflow of funds may discourage local production and distort local markets. Last but not least, the final critique concerns “red tape,” or the “bureaucratization” of international development assistance. It has been argued that developed countries have put so many conditions on aid that it has reduced aid effectiveness and distracted the focus from development outcomes in the countries per se to managing relations with donor countries.

New Business and Development Assistance

New forms of development assistance that connect the business sector with the aid and governmental sectors have emerged over the last few years. Several have proposed that globalization of business activities could have the potential to successfully address development issues. These new business–development assistance approaches include, among others, new market solutions, microcredit and microfinance, the UN Development Programme’s Growing Inclusive Market approach, the Bottom of Pyramid, and several initiatives related to information technologies and communication in order to reduce the digital divide between technologically advanced and poor countries. In all, there is an increasing trend toward more partnerships across sectors related to development assistance.

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