Is the aid actually working?

How are we able to determine if a foreign aid program has worked or not? Are these developing countries better off without the aid we provide? Paul Collier says that when asking if aid is part of the problem or part of the solution, that it is something empirical. We can only determine if aid is truly helping through research and experiments. Collier’s research on determining if aid projects were working showed that aid was playing a large part in preventing more capital flight. Determining if an aid project has worked can mean different things for different people. For some people an aid project working can mean did the money for project actually build the school or was the program established? For the majority of people it means did the aid project improve the livelihood of the poor in the developing world.

One of the ways to provide data as to if an aid project was successful is impact evaluation (IE). The IE gauges the transformation of a community that was occurred due to a project or program was put in place to change it. IE looks at what would have happened if the community didn’t receive the aid provided. The problem with IE is that you can’t determine what a community would be like with or without the program, without intervening.  Although one of the problems with IE is that, “IE tools are best equipped for assessing what a project’s impact was, not how that impact was achieved (Easterly 2009, Deaton 2010),” (Clemens, Demonbynes). Some of the measures required in determining if an aid project was successful are a question of ethics. Jeffrey Sachs says that it’s “ethically not possible to do an intensive intervention of measurement without interventions of actual process (Clemens, Demonbynes, 8).

The IMF sometimes has more success with programs than other organizations because they don’t have very many goals. Although, the problem with the IMF is that it provides short-term fixes to help a country’s economy, that can be compared to a bandaid in some senses because they don’t think about the situation long-term. The IMF works to help countries stabilize their economy by providing money in the form of a loan. William Easterly believes that the IMF should stay away from countries that are considered true disaster states because they already have loans that still need to be repaid, by adding more it just leaves them in a constant state of repaying loans. Since these countries have to constantly pay loans, they are unable to leave their impoverished state. I personally do not think we can answer yes to if an aid project worked, maybe we’re able to say that it helped, but the ways of providing data on this topic seem somewhat arbitrary. There are so many unanswered questions or the information is too generalized and needs to be more specialized to whatever program is being assessed.

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Sources:

Michael Clemens and Gabriel Demombynes, The New Transparency in Development Economics: Lessons from the Millennium Villages Controvery.

Paul Collier, The Bottom Billion: Why the Poorest Countries are Falling Behind, and What can be Done About it, Chapter 7

William Easterly, The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much ill and So Little Good, Chapter 6

 

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