This Economist piece doesn’t mince words: foreign aid, it says, “is a mess in almost every way”. Hard-won transparency in aid over the past decade has actually revealed “just how badly things are going”.
Despite good intentions that defined “good aid” as aimed at improving the lot of poor people, best channeled to countries that were relatively free and well-run — to lessen the odds of funds being looted and misused by corrupt leaders — aid has ended up elsewhere, writes The Economist. Not mincing words, it declares aid is “as co-ordinated as a demolition derby” but an extraordinary derby nevertheless — “extraordinary that so many clever, well-intentioned people have made such a mess.”
This graphic yardstick created by The Economist shows that “being well-governed (represented by the dark circles) seems to make no difference; nor, strangely, does being poor (the smallest circles)”.
What might count is being small, it notes, because for less money a “more visible effect” can be accomplished in an area where it shows more, suggesting aid is a vainglory pursuit for some donors [see: Size Matters].
Aid certainly seems to be spent more on countries that reflect donors’ political biases, such as rewarding democratic reforms — although once democratic governance reaches a certain level of improvement funds can suddenly drop off — or on strategically important states, writes The Economist. It gives Turkey as an example: “an increasingly autocratic country that is not poor” whose net foreign aid rose tenfold between 2004 and 2014.
Meanwhile, over time, the composition of aid sources has changed to one of fragmentation with aid now coming “from ever more directions, in ever smaller packages,” according to AidData. But, says The Economist, this increase in donors with smaller pay-outs strains poor countries with extra paperwork and ties up civil servants with the management of donors’ projects.
More preferable to the fuss and confusion of Western aid is the increase in Chinese aid, which also acts as a “shock absorber” when other countries pull out. Democracy isn’t such an issue for China, says The Economist, and “it seldom objects to loans being spent on pointless grand projects” which it also builds a lot of. Perhaps yet another indication that donors tend to favour countries that reflect their own preferences.