Aid in the 21st Century: Reconciling the real and the desirable
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Development. Copyright © 1999 The Society for International Development. SAGE Publications (London, Thousand Oaks, CA and New Delhi), 1011-6370 (199909) 42:3; 16–21; 009790.
Thematic Section
Aid in the 21st Century: Reconciling the real and the desirable FRANCES STEWART
ABSTRACT Frances Stewart argues that significant levels of aid from rich to poor countries will come to be viewed as peculiar to the second half of the 20th century. With the end of the cold war and the replacement of Keynesian interventionist models of development by laissez-faire capitalism in most developing countries, aid will seem much less useful. These factors will determine new patterns of development co-operation. Stewart explores what type of aid is desirable for the 21st century from a development perspective. She proposes a human rights-based approach to North–South relations in the 21st century, focusing on aid as a facilitator for the realization of positive human rights.
The newly emerging role of aid For donors, aid serves a number of self-interested objectives, including political ones (as an instrument of foreign policy) and economic ones (as an instrument of trade and investment policy). The combination of the end of colonialism and the Cold War provided a powerful motive for aid. Since countries had acquired political independence they could no longer be controlled directly; moreover, the existence of the apparently successful Soviet Bloc provided an alternative economic and political model. The collapse of the Soviet model meant not only that there was far fewer foreign-policy/military-security reasons to support aid, but also that the socialist model no longer presented a real alternative. In addition, pressures from the donor community were hugely successful in shifting the prevalent economic model away from Keynesianism and in establishing liberalization (i.e. privatization, import liberalization, abolition of constraints on FDI, capital market liberalization). The liberal agenda is not yet complete but the end appears to be in sight. The changes have achieved their own momentum, so aid is no longer as essential to leverage the changes. The changes have brought about a new political economy in developing countries, so that weakened
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Stewart: Aid in the 21st Century governments not only cannot but also do not want to challenge powerful companies, and come to favour further liberalization under pressure from emerging domestic private interests. Hence, in so far as the main purposes of aid were to help fight the Cold War and to shift the economic model from Keynesianism to laissez-faire, they have largely been achieved and one would therefore expect aid to diminish. And this, as is well known, is what has happened. In aggregate, aid has fallen from 0.34 percent of GNP of DAC countries in 1984–5 to 0.27 percent in 1995. This conceals divergent trends among donors. Much the biggest drop was from the US, where aid fell from 0.24 percent of GNP to just 0.1
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