What is meant by developmentalism: what is its impact on global politics? Developmentalism Most global political agendas and concerns relate to development even if it is indirectly as these developing countries are so reliant on the policies and implications of decisions made on a global level. This essay will examine foreign aid in the current global political state. This is adapted from the question ‘What is meant by developmentalism: what is it’s impact on global politics? ’. Throughout this essay I will consider other ways in which foreign aid could be more effective regarding issues including accountability and security.
Firstly, we must establish the current global state. State sovereignty has undergone many changes in the last decade. New forms of states make up the new international political developments. According to Robinson (2002, p1056) “states have come from the Westphalian system, where control was exclusivist”. This means that no other states could exercise power over another state. Following WWII, a new series of international organisations was created, all with a common view to resolve transnational problems. This also recognised that states may not be as effective on their own.
In order for developed nations to stay at the top, developing nations must stay ‘developing’. Robinson furthers this point by stating that social order is increasingly organised globally, not nationally, therefore “inequality is globally organised” (Robinson, 2002, p1056). This emphasises the fact that to be ‘developed’ a state must prove itself on a global level. This forces states to shift their mindset from national to international, therefore suggesting that the focus is now at a global level economically and politically.
Capitalist global hegemony has shifted the focus from individual state development to a worldwide political framework of economic dependency. Global politics within the capitalist system are driven predominately by economic incentives. It is no longer just the state entities with international relationships that dictate development policies, instead it has transcended into global enterprising agendas beyond the nation state. This furthers the point that states cannot function as effectively on their own.
This has bred an increasing “global social polarisation” (Robinson, 2002, p1050) between the Global North and South. This “world industrialisation” (Robinson, 2002, p1052) shifting the developing world from agrarian production to mass industrialised labour, drives the TNC “densely networked firms and enterprises” which control the global market place. Kelly (2008) believes the state is making a comeback in development theory. “The World Bank’s most recent Annual Reports and World Development Reports suggest that the neo-liberal disapproval of the state is fading” (p319).
Furthermore, “political institutions, which structure markets, provide transparency, and even promote equity, are new areas of emphasis. But this liberal or Northern understanding of the role of the state scarcely fits the actual practice of late developers in the South” (Kelly, 2008, p319). He states “the two most important counter-paradigms to neo-liberal modernization… reject its neo-classical, economistic understanding of the state, emphasizing instead state-led development and external political autonomy” (Kelly, 2008, p319). History of aid
According to Goldin & Reinert (2006, p114) link the history of modern aid to colonialism; “ in so far as colonialism was driven by and exercise driven by a desire to stimulate and then exploit economic activity abroad, providing investment capital, technology, and technical assistance to colonies was integral to the process” (2006, 115). Institutions such as the United Nations, the World Bank, and the International Monetary Fund in the wake of World War II (WWII) to facilitate increased international assistance. “These efforts were informed by the adverse experiences of past conflicts, whereby the vanquished often had been ompelled to pay reparations to the victors” (Goldin & Reinert, 2006, p116). They refer to Germany after World War I, where the consequences of their loss often led to more severe financial crises and often a large feeling of resentment. They also believe that the “succession of European wars and failed armistices that resulted had, by 1945, provided a compelling lesson in the need to invest peace and economic integration” (Goldin & Reinert, 2006, p116). Goldin & Reinert (2006 p115) discuss the theme of “tied aid” as still being a feature in some forms of aid today. Tied aid” being that in which “aid as restricted to importing from the donor country” (Goldin & Reinert, 2006, p115). “To the extent that aid is tied, receiving countries have struggled to extract the full potential benefit, as the assistance provided does not necessarily fit with local choices and priorities” (Goldin & Reinert, 2006, p115); The irony is that the foreign aid has actually been detrimental to the local producers of the receiving countries, rather than to its benefit, and to the advantage of the donating countries.
Goldin & Reinert (2006, p115) make the point that “concerns are often raised about the efficacy of foreign food aid, for instance, which may ultimately serve to undermine the markets of domestic growers while at the same time providing a captive source of demand for producers in the donor country”. Overtime, aid has converged from being a local issue into a junction of objectives and strategy on a global scale concerned with development. According to Goldin & Reinert (2006, p119), “reducing income poverty became a greater priority for the international financial institutions as well as for the governments”.
International Monetary Fund (IMF) Foreign Aid Conditionality The IMF commands significant resources and wield considerable authority. Stone (2004, p589) points out “critics have argued that these international organizations are sufficiently autonomous to create a democratic deficit at the international level, as they pursue a vision of “undemocratic liberalism”. Other critics have argued that international organizations are “nothing more than instruments in the hands of powerful states” (Stone, 2004, p589). Why has IMF lending achieved such poor results in Africa?
Is it because the Fund imposes the wrong conditions, or because it fails to enforce them? Randall (2004, p577) states that “analysis of monthly data on 53 African countries from 1990 to 2000 shows that the IMF’s loans-for-reform contract lacks credibility because donor countries intervene to prevent rigorous enforcement”. Furthermore, he quotes Easterly (2001) as stating “Africa has become paradigmatic for critics from both sides of the political spectrum who argue that IMF programs are harmful rather than beneficial” (Randall, 2004, p577).
So why to IMF programs seldom achieve their goals? Prior research by Vreeland (2003, cited in Randall, 2004, p577) finds that “participating in IMF programs reduces growth and redistributes income away from the poor”, concluding that the conditions of the IMF aid policies is to blame. In fact, he argues, “governments participate in IMF programs in order to shift the distribution of income to benefit owners of capital, regardless of the consequences for national economies.
Stone also provides an alternative explanation; IMF programs fail to promote growth because their conditions are not implemented or enforced. “From this perspective, repeated lending to poorly governed countries has created a tradition of “recidivism” and dependency” (Randall, 2004, p577). There is a belief that the IMF policies generate more risk. Randall states, “providing long-term financing to countries that fail to reform themselves, it creates incentives to pursue unwise economic policies – unless the loans are firmly linked to enforceable conditions” (2004, p577).
Good Governance According to Sarver (2007, p81), in a BBC interview, Vasquez declared that many countries have dramatically reduced poverty levels without any outside help. “During the past twenty years, China, to cite one example, has been able to lift more than 100 million inhabitants out of poverty with little or no outside help” (Sarver, 2007, p81). This is an example of a country developing without foreign aid. According to Varquez (cited in Sarver, 2007, p81), “the key to eradicating poverty, is promoting policies that ensure economic liberty; prosperity will follow.
It is a fallacy, he claims, to think that development cannot occur without foreign aid” (2007, p81) According to Sarver (2007, p81), “Africa not only has the distinction of being the poorest continent, it is also the most corrupt. Since achieving their independence, few African countries have demonstrated a good record of preserving and promoting democratic principles”. This statement demonstrates the need for good governance in order for foreign aid to be effective. “In addition to corruption, aid dependency is a problem for some African countries.
Why should Africa’s rulers be encouraged to develop their countries when aid is easily accessible and there is so little accountability? ” (Sarver, 2007 p83). A case study provided by Goldin & Reinert (2006, p127) discusses aid in Zaire (now known as the Democratic Republic of Congo) as an example of the misuse of aid and lack of accountability. President Mobutu Sese Seko, who ruled from 1965 to 1997 (Goldin & Reinert (2006, p127), was “primarily motivated by amassing his own personal fortune”.
According to the case study, (Goldin & Reinert (2006, p127), considerable amounts of aid were given to Zaire, however, “failure to pay adequate attention to corruption and wasteful use of funds severely undermined the effectiveness of this foreign aid” (2006, p127). The result was an increase in uncertainty of the effectiveness of aid by the donor countries. As Sarver (2007, p82) states, “salaries for civil servants throughout Africa are quite low, fueling a public willingness to offer and accept bribes”.
This furthers the point that good governance is integral to a country that is receiving foreign aid, in order for it to be effective. Consequently, Goldin & Reinert (2006, p127) believe in three rules to increase the effectiveness of aid; “ 1) It must aim for poverty reduction rather than geopolitical or other objectives; 2) it must go to countries where poor people live; and 3) it must go to countries whose government are committed to the eradication of poverty” Goldin & Reinert (2006, p127). Another example of the need for good governance is in Ethiopia.
According to Sarver (2008, p80) “it is estimated that less than one-quarter of aid shipments reach the country’s neediest people because government agencies simply do not bother to evaluate recipients’ reliability or their distribution of aid based on need”. This problem worsens in regions more remote from the political center of that country. Ineffective Aid The effectiveness of aid is an issue that arises often. Sarver (2007, p79) states that “the deluge-of-money approach to solving the problems of Africa has not worked; the U. S. nd other wealthy nations have pumped money into Africa for several decades with little to show for it”. Varquez (cited in Sarver, 2007, p81) points out that aid and debt relief have not proved effective in the past; “since the 1980s, heavily indebted poor countries, most of which are in Africa, have received more than $30 billion in debt forgiveness, yet the debt problem has gotten worse. In practice, countries have been rewarded for having poor economic policies and foreign aid has encouraged [the policies’] maintenance”. Aid has helped to make the “poor poorer, and growth slower” (Moyo, 2009, xv).
Yet aid remains a centrepiece of today’s development policy. The African Studies Centre talks of the power of illegal activities in developing nations being more powerful than legal. This occurrence is often the case in developing nations, including Africa. Take for example the blood diamond industry. Moyo (2009, v) discusses the detriment to Africa, surrounding foreign aid. She compares countries, which have rejected aid and prospered with others that have become dependent on aid and been “trapped in a vicious circle of corruption, market distortion and further poverty- thus the ‘need’ for more aid”.
According to Axworthy (Brown, et al, 2007, pi), a World Bank Study concluded that millions were inflicted with enduring poverty because of a ‘security’ issue. Yet governmental aid agencies, the UN Millennium Development Goals Secretariat and a variety of multilateral agencies, while calling for more money to alleviate the poverty of the region, would not consider the security element as a necessary condition needing resolution. This is a serious contention, as the issues described in the ‘Good Governance’ section support the idea that aid must be accounted for, and not just given in sums of money.
A developing nation cannot benefit from aid unless it has a secure environment. According to Brown et al (2007, xiv) trade and aid policies are two imperative areas requiring attention. As trade and aid policies are more often than not decided by the developed world, they can have an overwhelming impact on the economics of a developing nation “in both positive and negative ways” (Brown, et al. 2007, xiv). They believe that “badly designed trade and aid policies are too often increasing the likelihood and longevity of violent conflict” (Brown, et al. 2007, xiv).
In effect, the “poorly designed and unfair” trade policies of the developed world are stunting economic growth in the developing world and “elevating many countries locked into notoriously volatile commodity markets” (Brown, et al, 2007, xv). Consequently, a reliance on the export of natural resources tends to lead to economic dependence and political instability (Brown, et al, 2007 xv). Conclusion Duncan Brack quoted US Secretary of State Edwin Stettinius, (cited in Brown, et al, 2007, p1) “The battle for peace has to be fought on two fronts. The first front is the security front, where victory spells freedom from fear.
The second is the economic and social front, where victory means freedom from want. Only victory on both fronts can assure the world of an enduring peace”. In spite of intensive engagement by international financial institution, Africa has failed to develop economically for the past 30 years. Instead, “African governments have persisted in pursuing market-distorting policies that impoverish agricultural workers, promote the flight of human and financial capital, encourage widespread corruption, and lower real incomes across the board” (Randall, 2004, p590).
Randall furthers this by stating that the IMF has developed programs to “dismantle this set of policies and has attempted to use conditional lending to create incentives for governments to implement them”, but the experience of several decades is that the policies persist, the programs are not implemented, and yet, the lending continues. What can be taken from the content of this essay is that aid is, “the disease of which it pretends to be the cure” (Karl Kraus, cited in Moyo, 2009 x).
Unless more structural adjustments are made, we will continue to be in a state of developmentalism where the poorer get poorer, and the rich richer. References • The African Studies Centre, Transnational Institute, Centre for Social Studies and the Peace Research Institute, 2003, Failed and Collapsed States in the International System, ASC: Leiden • Brown, O. et al, 2007. Trade, Aid, and security: an agenda for peace and development. UK, Earthscan. • Glennie, J. 2008.
The Trouble with Aid: Why less could mean more for Africa, Zed Books, London. • Goldin, I. & Reinert, K. 2006. Globalisation for Development: Trade, Finance, Aid, Migration and Policy, The International Bank for Reconstruction and Development/ The World Bank, Washington • Kelly, R. 2008. No ‘return to the state’: dependency and developmentalism against neo-liberalism. Development in Practice, Vol. 18, No. 3, Routledge Publications. • Knack, S. 2004. Does Foreign Aide Promote Democracy? International Studies Quartely, No. , pp251-266 • Moyo, D. 2009, Dead Aid: Why aid is not working and how there is a better way for Africa, Farrar, Straus & Giroux Publishing, United States of America • Njinkeu, D. & Cameron, H. 2008. Aid for Trade and Development, Cambridge University Press, New York. • Puri, D. 2009. Aid for Trade: Global and Regional Perspectives, Springer Science & Business Media, Switzerland. • Randall, S. 2004, Political Economy of IMF Lending in Africa, The American Political Science Review, Vol 98, No. 4, pp 577-591. • Robinson, William.
I 2002, ‘Remapping Development in Light of Globalisation: from a Territorial to a Social Cartography,’ Third World Quarterly, vol. 23, no. • Sarver, R. 2007. Counterpoint: UN MDGS and U. S. Aid to Africa: Ineffective and Unrealistic, International Social Science Review; Vol. 82, Issue ? , p79-86 • Stone, R. 2008. The Scope of IMF Conditionality: International Organizations, 62: 589-620, Cambridge University Press. • Wallterstein, I. viewed 6 June 2010, After Developmentalism and Globalization, What? Social Forces ; http://socialforces. unc. edu/epub/pub_soc/cornell. pdf;