In providing aid to developing nations, international development programs, especially from the West, suggest different forms of austerity and trade liberalization. However, institutions such as the International Monetary Fund (IMF) are often lenient when a recipient nation does not follow programs for development. Furthermore, the IMF’s founding mission is to provide short-term financial aid to countries that need assistance in times emergency crises or economic hardship. Being one of the largest aid institutions in the world, made up of an extensive bureaucracy that is essentially free from the burden of accountability. Their provision of funds has been variant at best, and a catalyst for state failure at worst.
Providing aid requires the investigation of the economic ailment of a country, and utilizing the appropriate “treatment.” To decide whether or not an aid program has worked, the outcome is an important factor. Was poverty alleviated? Did standards of living increase? Or did the poor suffer from the program, or political stability compromised? Finally, the biggest question that must be answered is whether the country progressed, as a prolonged use of the aid without advancement is a sign of a dysfunctional aid program. In the case of the IMF, many nations it aided caused them to develop another program for heavily indebted poor countries (HIPCs) that provided opportunity for loan forgiveness. The longer a country received aid from the IMF, the more likely it is to get a loan. This would suggest that their aid programs do not work, or at the very least do little to advance a substantial number of recipient countries with the conditions. While the money provided undoubtedly does some good, the lax enforcement of actual development programs, or the social unrest that comes when they are implemented, detracts from the positives of IMF intervention.
Another method of measuring the effectiveness of aid programs is looking at the broader region as a whole and comparing the advances of the areas aided to ones not participating in the program – I believe this rules out many arguments for saying an aid program worked. This is because there are countless non-governmental organizations, aid institutions, and countries providing aid and economic development programs (or suggestions) to developing countries. As Michael Clemens and Gabriel Demombynes said, basing the success of a program on the hypothetical impact of no aid is not reliable. The Millennial Village Project (MVP) sought to aid poor, rural villages of sub-Saharan Africa through a variety of infrastructural and medical interventions, as well as school construction. After the first three years of the program, their first report described improvements as “impacts” of MVP, when similar improvements occurred at similar rates in villages not involved with the program.
For this reason, I believe it is impossible to say whether an aid program “worked.” As a blanket mission for all aid programs, the goal is to alleviate (if not eliminate) poverty. Therefore, an aid program working goes beyond slight changes in living standards or mobile phone ownership – it requires analyzing whether or not the specific program solved any of the “diseases” of a poor country. In the case of the IMF conditional aid programs and the MVP, I would say no, they did not work. Their “impact” has either been too variant or inconclusive based on other advancements being made in the region. However, I think with proper empirical evaluation, aid programs will eventually be able to say their programs truly “work.”
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