The authors of this book start from the premise that there is something “wrong with development aid” (p. 3). They point to a number of studies that were conducted in the 1990s and found little consonance between foreign aid levels and changes in macrolevel indicators like economic growth and poverty reduction in recipient developing countries. Their aim is to explore the “perverse incentives” within the current aid system that militate against aid's success.
Accordingly, the book examines the aid delivery process “from the home offices of the donor agency to the recipients in the field” (p. 4). This process is perceived as a web of strategic relations among the various actor groups involved, whose incentives to contribute to foreign aid are assumed—and empirically shown—to depend on a wide gamut of factors, ranging from personal concerns and career ambitions to organizational and contractual arrangements.
Half of this 320-page book is devoted to an elaboration of the terms and concepts that form the building blocks of the authors' analytical framework. The nonexpert reader thus receives a useful introduction to an understanding of public goods, collective action problems, principle-agent issues, information asymmetries, and institutional economics, as well as various aspects of foreign aid and international cooperation. The other half of the book discusses the findings of the archival research, interviews, and field studies undertaken for the purposes of this study.
Since the book emanates from consultancy work that the authors undertook on behalf of the Swedish International Development Agency (SIDA), the empirical data pertain primarily to SIDA. However, as they argue (and as is immediately obvious to anyone familiar with the reality of aid), many findings also apply to other aid agencies, bilateral as well as multilateral. In fact, the findings may even apply more generally to most any institutional context. They also lack novelty. Many management studies have identified the same or similar issues before, often, however, without the extensive theoretical discussion presented in the present book.
To illustrate, a key finding is that SIDA does not place sufficient emphasis on learning from past experience (p. 132 ff.). Another finding points to the fact that SIDA's contractors apparently have an incentive to please the agency (p. 160ff.), no doubt in the hope, which they might share with many of the world's consultants, that this “pays”—in terms of keeping them in the “good books” of the contract-issuing agency.
Other findings of the study raise basic conceptual issues, including the one that led to the book's title, The Samaritan Dilemma (see especially Chapters 9 and 10). Like Samaritans, aid donors are said to want to assist the poor. Thus, if aid recipients fail in both taking full ownership of the project and sustaining its results (the two conditions that the authors see as critical for aid effectiveness), donors confront the dilemma that they nevertheless have to continue aid provision. By canceling aid, they would deprive themselves of an opportunity to do “good,” and thus experience a decrease in utility. However, this “story line” raises two questions.
One, is the lack of enthusiasm for project ownership on the part of the recipients necessarily due to the fact that they recognize the Samaritan in the donors? As the authors note, much of foreign aid is donor- or supply-driven. Donors not only want to do good but they often also assume that they know what is good for the recipient poor. So an alternative reason for weak developing-country ownership of aid projects could also be that the preferences of donors and recipients do not overlap but differ. Moreover, development assistance tends to undergo rather rapid changes in “thematic fashions.” Thus, it could, also for this reason, be rational—rather than perverse—for the recipients not to become overly enthusiastic about projects, because aid priorities may shift again and new emphases might wipe away past efforts and results.
Donors' Samaritan attitudes are no doubt important. But they need to be queried more rigorously. For it would be important for a full understanding of aid (in)effectiveness to know why donors are so “addicted” to providing aid. Raising the second question, then, could it be that foreign-aid giving generates for donors more than just a “warm glow”? Is it a tool for exerting policy conditionality and promoting national self-interest? Are the donors “pure” Samaritans?
While many of the problems identified in the book no doubt adversely affect aid, the question is how much of aid's (in)effectiveness they do explain: more than 90% or perhaps only 1%? Considering the major countervailing macro forces against which foreign aid and the development of developing countries have had to succeed in recent decades (ranging from conflict and war to excessive financial volatility, a not-always-favorable international trade regime, mounting communicable-disease burdens, and environmental degradation), a reasonable conjecture could be that the answer is the latter: only a small part.
The present book deserves credit for highlighting the role of incentives in explaining aid effectiveness. But it also serves as a useful reminder that our understanding of the development assistance system is as yet quite limited—despite more than six decades of foreign aid.
A key topic for follow-up research might be the point that the authors of this book raise in their conclusion: Would a stronger voice of developing countries in shaping development assistance priorities help improve aid effectiveness? In fact, until the 1980s, the responsibility for determining aid priorities usually rested with developing countries. It was an integral part of national policymaking sovereignty. So an additional issue for follow-up research might be: Why did the international community move away from this demand-driven approach and choose a supply-driven aid strategy—with all its predictable problems of country ownership and sustainability?
For reasons of fairness it should perhaps be noted here that Sweden ranks very well on the Commitment to Development Index, notably in terms of aid (see http://www.cgdev.org/section/initiatives/_active/cdi/_country/sweden/). So the findings of the present book may apply not only to SIDA but perhaps even more so to other donors. This, however, would not distract anything from the earlier argument that the major problems of aid (in)effectiveness may lie elsewhere.
