Aid and conditionality: Enhancing good governance in sub-Saharan Africa

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It is the compelling insistence of donor countries for compliance by the recipient states.

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All African countries are recipients of aid and some depend on foreign aid on about twenty four percent of their national budgets. Donors lost confidence in the national governments because of the deplorable state of development in the region.

The sovereignty of the recipient African countries became increasingly undermined thus bringing into question the communitarian notion of international relations [5]. On the other hand, donor confidence increased occasioning a re-think of the hitherto prevailing doctrine of non-intervention in the internal affairs of sovereign states.

Conditionality is therefore enhancing the Westphalian notion of international society. The s marked the peak of economic and political crisis in Africa as most governments became bankrupt and heavily indebted.

Most states in the region were unable to finance their national expenditures or to service the huge amounts of debt owed to aid donor nations and private banks. There was rising inflation in the entire region and a very slow growth. In the republic of Benin for instance, there was economic stagnation and the bankrupt government could no longer pay salaries of civil servants Lancaster, Faced with these difficult situations, African governments turned to multilateral donors like the IMF, World Bank and the EU for more aid and debt relief.

Key to these problems was the huge mismanagement and misallocation of economic resources by African leaders. The World Bank once offered loans to Equatorial Guinea to promote cocoa farming and government ministers immediately seized the best cocoa farms and spent the loans on luxury cars. A study carried out between and , showed that for every one dollar that Africa received in aid, eighty cents flowed out as capital flight into Swiss bank accounts or to buy mansions in Europe The Economist, This attitude of the ruling class made the debt burden of African countries heavier, made aid ineffective and stagnated development.

Faced with increased demand from the African countries and the ever-deteriorating situation in the region, multilateral donors like the World Bank, the EU and other aid donors designed and funded economic reform programmes. This was because many African countries had deep-seated economic problems and started experiencing structural problems. The donors started broadening conditionality to structural issues and that became more apparent in the s.

In , a study by David Dollar and Lant Pritchett of the World Bank showed that countries with sound economic policies and good institutions benefitted from aid The Economist, African governments therefore accepted to implement structural and sectoral adjustment programmes as prerequisites of aid. The Structural Adjustment Programmes SAP were aimed at combating the ever rising inflation and achieving favourable balance of payments for African economies. Conditionality became formalised because of innovative thinking by Jacques Polak, who developed a model that had very clear policy implications in linking restoration of stability in the balance of payments through excessively expansionary monetary and fiscal policies.

So instead of requiring countries to try to act directly on the balance of payments, which would be very difficult, the World Bank wanted the African countries to try to act directly on monetary and fiscal policies that they could control. It was hoped that reduced inflation would increase investment that was necessary for economic recovery in the entire region.

Governments were required to cut spending, liberalise domestic markets, reform their tax systems and reduce trade barriers. Also, the recipient states were asked to carry out administrative reforms and the privatisation of parastatals. Surprisingly, the dream of increased investment and the most cherished goals of economic reform in Africa were never attained. Unemployment remained high in most of the region and economic growth was slow.

One reason for this was the unbalanced implementation of economic reforms with most governments resisting civil service reforms and privatisation. Most stabilisation programmes were never fully implemented and they had the negative impact of restraining domestic demand for imports Lancaster, Reforms in prices, public services, policies and institutions involving agriculture, education, finance were insufficient and poorly implemented.

Under conditionality, African countries were compelled to implement measures which essentially complicated the economic problems confronting them. The economic reform package imposed by the donor countries of the West, IMF and World Bank contained the virus that led to the crash of the economies of the recipient countries. Multilateral donors like the IMF, World Bank and the EU expected countries to reform but did not allow them to design their own programmes.

The SAPs were particularly geared towards enabling the highly indebted countries in the region to generate sufficient funds to service their debts. This led to frequent conflicts between the donors especially the World Bank and the recipient countries which began to resist the strict implementation of the SAP. Privatisation and economic liberalisation exposed the poor masses to excessive exploitation by capitalist owned multinational corporations.

In most parts of Africa, factories were closed down and workers laid off as a result of World Bank imposed policies that were later shown to be flawed. For example, in cashew-nuts processors in Mozambique were demanding a fifteen million dollar compensation from the World Bank to force it to pay for its mistakes.

This claim followed a release in September of a World Bank study which said the bank imposed reform on Mozambique was totally wrong and should be abandoned [6]. The Bank's reforms caused massive lay offs in the cashew industry in Mozambique. But some leading personalities in Africa argue that, unfavourable international trade conditions have been a greater impediment to African development than corruption and mismanagement.

President Yuweri Museveni of Uganda for example argues that Western protectionism has helped to frustrate all African efforts because their agricultural-based products do not have access to European and American markets. He notes that aid without trade is a lullaby-a song you sing to children to get them to sleep and that it was access to the huge American market that enabled Singapore, Thailand and South Korea to transform from developing to developed economies.

Africa cannot trade because they cannot bargain New African, However, focusing on the overall aggregates, the overall fiscal deficit and the total level of credit creation, the donors left a lot of scope for the recipient government to fix its own policies within those overall guidelines or conditionality.

Aid and conditionality: Enhancing good governance in sub-Saharan Africa

But most African governments made wrong choices and consequently got bad outcomes. Poor African leadership opened the door for more aid conditionality that went beyond economic measures to seek solutions for the problems of Africa. This chapter has exposed the factors that led to the development of conditionality in the cooperation between multilateral aid donors and the recipient countries of Africa.

It has explained how corrupt African leadership led to structural problems in most of the countries thus the emergence of economic conditionality. Also, it has argued that it was the failure of economic conditionality to produce intended goals that led aid donors to seek political causes for Africa's problems. Chapter three examines political conditionality with emphasis on the concept of good governance. This chapter explains the concept of good governance and analyses its relationship to aid effectiveness and development.

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It argues that there is a direct link between good governance, aid effectiveness and development and uses some case studies to discuss this link. This argument is in line with the general argument that good governance spurs development, makes the use of aid more transparent and helps to fight poverty. It contrasts the good governance approach to neoliberalism on their views of the roles of the state and market.

The failure of the donor imposed economic reform package in the s, led the aid donors and recipient African countries to look beyond economic policies to political causes for the persistent economic decline and low rate of development. During the s to s, economic policies in most African countries were so well enmeshed with the political aspirations and preferences of those who wielded political power.

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There was the concentration of power in the hands of a few autocrats who had seized power through military coups and had disbanded all political movements. Policy choices in most countries were faulty as there was an increasing control over economic resources by regimes with no sense of accountability and transparency.

Aid and other national resources were diverted to meet the needs of the influential groups and the personal uses of the ruling class [7]. By the late s, there was rising pressure in and out of Africa for political reforms in the region. To ensure that aid was effectively and efficiently invested, western governments including the EU, the World Bank and IMF began to insist that aid and investment had to be linked to political reform in Africa Wiseman, In the s, then began an era of democratisation as it became a prerequisite for aid.

The clamour for democratisation in Africa referred to as the second wave of independence, has always been plagued by dilemmas and stalemates. The imposition of democratisation as aid conditionality led to the emergence of stunted democratisation Nagle and Mahr, Liberal democracy reduced to the crude simplicity of multiparty elections, is impaired because indigenous people are excluded from democratic citizenship Carter and Stokes, There was therefore the need to strongly address the issue of power as the monopoly of power by a few leaders frustrated societal potentials.

The term governance is not new but is being increasingly used today in development literature. According to the World Humanity Action Trust, governance is the framework of social and economic systems and legal and political structures through which humanity manages itself Earth Summit, This includes the process by which governments are selected, monitored and replaced; the capacity of the government to effectively formulate and implement sound policies; the respect of citizens and the state for the institutions Kaufmann et al, Governance can be used in several contexts but this paper is limited to national governance.

They operated mainly in the agricultural and Petroleum sectors. No state should have the right to intervene in the activities of others irrespective of what goes on there.

Samenvatting

The World Bank insisted that raw nuts must be exported to India and demanded that the government imposed export tax be removed and export of unprocessed nuts be liberalised. Economics - Case Scenarios. Engineering - Power Engineering. Politik - Internationale Politik - Thema: Politik - Internationale Politik - Allgemeines und Theorien.

Politik - Internationale Politik - Region: Politics - International Politics - Topic: Sociology - Gender Studies. Pedagogy - Intercultural Pedagogy. Middle- and South America. VWL - Internationale Wirtschaftsbeziehungen. GRIN Publishing, located in Munich, Germany, has specialized since its foundation in in the publication of academic ebooks and books.

The publishing website GRIN. Free Publication of your term paper, essay, interpretation, bachelor's thesis, master's thesis, dissertation or textbook - upload now! Register or log in. This irreversible trend brought the good governance discourse in development cooperation between the donors and African counterparts. The purpose of this paper is to examine how the concept of good governance is being implemented in Africa. For clarity purposes, the work is limited to the analysis of the efforts being made by the European Union EU and the World Bank in assisting African countries to implement good governance.

This choice is based on the fact that the EU and World Bank are the main multilateral aid donors and development partners of the region. It argues that good governance enhances transparency in the use of development aid, helps to reduce poverty and spurs development, and that it is necessary to foster institutional reforms causative argument. The paper further argues that implementing good governance will improve the use of political power by leaders and help in the consolidation of peace normative argument.

Achieving global governance is a main issue in international politics today. Enforcing good governance is a must if Africa has to be fully integrated into the process of globalisation. And for globalisation to be complete and meaningful, poverty in Africa as well as other parts of the world must be eradicated. No amount of foreign aid can lead to meaningful development without effective governance. The poor state of development in Africa produces a backlash that has a global reach. Europe for example is facing a huge influx of migrants from Africa in search for greener pastures.

Aid and Conditionality

Eradicating poverty is therefore a global challenge as the world becomes smaller. The fight against poverty and underdevelopment has given rise to a greater inter-state relationship in which powerful institutions play a decisive role. Toon meer Toon minder.

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