In 2017, the net amount of official development assistance (ODA) allocated by the members of the OECD Development Assistance Committee (OECD-DAC) was just shy of $150 billion. In addition, there are billions more dollars that flow around the globe in the form of military assistance, non-ODA development financing, and funding from countries that are not members of the OECD-DAC. At the macrolevel, there is a voluminous literature trying to understand the determinants of these financial flows and, in particular, the extent to which the wealthy countries of the world are sending money to the poor countries of the world because of the poor countries’ development needs or because of their own strategic interests. At the microlevel, there are numerous studies of how particular development projects funded by these financial flows work and of the impacts—intended or unintended—that they have. At the mesolevel, there are a relatively smaller number of studies that work to understand how international development bureaucrats charged with translating macrolevel allocations into microlevel projects do their job.
Sarah Bermeo’s Targeted Development is an important, novel look at the determinants of global ODA flows, with a special focus on climate financing and a parallel empirical analysis of the use of trade agreements as development policy. Dan Honig’s Navigation by Judgment is an impressive entry into the study of the mesolevel phenomenon of how aid agencies work and of the conditions under which different types of agencies are best positioned to do effective work from a development perspective. Reading the two books side by side highlights how two related literatures can develop simultaneously but with different premises, and may point the way toward further investigations that will draw on the insights of both books.
Bermeo’s central premise is that the twenty-first century has brought industrialized and developing states into a new relationship, in which industrialized states are particularly concerned about diffuse spillovers originating in developing states. Whereas donors might primarily have allocated foreign aid during the Cold War with an eye to maintaining state-level alliances, keeping friendly leaders in power, and providing supplementary financing for states fighting local wars on the “right” side of a global geopolitical struggle, donors today think about nonstate actors (including global terrorists and international gangs), the spread of disease, large-scale migrant flows, and climate change when they allocate foreign aid. These concerns have turned the twenty-first century into the era of “targeted development” in which donors want aid to be used for the purpose of economic development but have preferences across the set of states in which that development will occur. Bermeo makes a convincing case for this transition in thinking about how to use development assistance and development policy and provides a useful formal model that captures a way of thinking about the complementarity between true development assistance and development assistance that aims to achieve more specific strategic ends.
In the main empirical chapter, Bermeo analyzes data on dyadic aid flows from the Cold War era and the post-2001 era and presents evidence that the determinants of aid allocation have changed over time. In the twenty-first century, donors have preferred giving aid to nearby, populous states and have reduced the extent to which their development assistance flows parallel US military aid or arms transfers. (More surprisingly, donors also appear to be less responsive to recipient states’ income levels and levels of democracy.) In a later chapter, she looks specifically at climate financing and provides evidence that donors prefer to send climate-change-oriented aid to developing countries that are nearby, even if other states have larger apparent needs.
In a third empirical chapter, Bermeo explores another aspect of development policy: the use of preferential trade agreements to support economic growth in poorer countries. With a strong focus on the CAFTA-DR (Dominican Republic-Central America Free Trade Agreement), Bermeo makes a convincing case that large, wealthy countries are unlikely to be purely motivated by the economic gains that they will experience through entering into trade agreements with developing countries, because these will be small in size; instead, they are likely to be concerned with creating benefits through agreements for the poor countries in the interest of preventing the types of negative spillovers described earlier. After walking the reader through the CAFTA-DR case, Bermeo provides evidence that trade agreements are used in a complementary fashion alongside foreign aid and that they are targeted at lower-middle-income countries where they might reasonably have a development impact. As compared to the chapters on aid and climate finance, where the focus remains on allocation rather than effectiveness, here she provides some evidence about the success of CAFTA-DR, using a basic interrupted time-series design and showing some preliminary evidence of improved economic outcomes in at least some of the participating countries.
If Bermeo’s Targeted Development gives us insights into how donors are using foreign aid (and other policy tools) in the twenty-first century, Honig’s Navigation by Judgment offers insights into how likely it is that the development goals that donors are ostensibly pursuing through targeted development policies will be accomplished by the on-the-ground staff charged with overseeing the development projects being financed. Using Freedom of Information Act requests and direct solicitations, Honig collected project performance ratings for 14,000 development projects funded by nine bilateral and multilateral development organizations across 178 aid-receiving countries; providing an important public good, he has made available almost the entire dataset on his website (minus those parts that he was contractually unable to make public). These data allow Honig to test a theory about foreign aid performance in different situations under different levels of bureaucratic autonomy.
Honig draws on organizational theory and behavioral psychology to propose that development projects will meet with more success in uncertain environments when the technocrats within development organizations have more discretion. Categorizing the nine international development organizations in the data by the amount of “navigation by judgment” that their staff are allowed, Honig provides evidence that project ratings for low-navigation-by-judgment organizations decline with the unpredictability of the environment in which the project is occurring, whereas project ratings do not vary with the recipient-country environment for high-navigation-by-judgment organizations. In addition to the quantitative analysis, Honig provides illustrative case studies from Liberia (where he served as special assistant and then aid management adviser to the Minister of Finance from 2007 to 2009) and South Africa, comparing and contrasting the results obtained by the high-navigation-by-judgment UK Department for International Development to those obtained by the low-navigation-by-judgment US Agency for International Development (USAID).
Honig’s book is written as much for development practitioners as for academics, and in the concluding chapter, he proposes multiple strategies for increased development aid effectiveness. First, he calls for better—and often less—measurement of outputs and outcomes in development projects, having established elsewhere in the book that one behavior of low-navigation-by-judgment institutions is a propensity for creating a surplus of key performance indicators that do not actually seem to catalyze good performance. Second, he suggests that international development organizations need to allow their staff space to pilot navigation-by-judgment strategies. Third, he offers up the perennial suggestion that international development organizations specialize more, such that those organizations with low levels of navigation by judgment task themselves with working in predictable situations on projects with measurable outputs and outcomes.
Although Honig operates mostly at the mesolevel, he brings his focus to the level of the states that create and constrain international development organizations with a discussion of why some agencies have more ability to navigate by judgment than others. He argues that it has to do with the political authorizing environment, and he describes the ways in which the perpetual scrutiny of foreign assistance in the United States has led to institutional behaviors that are less present in the United Kingdom, where there is more public and political enthusiasm for overseas development. Interestingly, Honig notes that the constraints that follow from these authorizing environments may very well be self-imposed by the organizations, pointing out how his study revealed no cases of direct legislative interference in the design or implementation of the development projects for which the legislatures appropriate funding.
It is in this realm that scholars of international development have significantly more work to do. By working to combine the insights of Bermeo’s macrolevel analysis about funding appropriations and policy initiatives with the insights of Honig’s mesolevel analysis of how development agencies structure the work that they actually do, we will be able to learn more about the conditions under which development assistance and development policy can be successful. Honig’s suggestions about how to make development aid function better, for instance, seem completely compatible with a grand strategy of targeted development, and yet the core example of a state pursuing targeted development in Bermeo’s book—the United States—allows the least navigation by judgment. Perhaps USAID has imposed constraints on itself that need not be present or else might be able to make a better argument for more liberty in its operations by appealing to the goal of targeted development. By better developing our understanding of how aid organizations make the decisions that they make within the realms where they have discretion, we might, as scholars, be able to help them pursue strategies for better navigating the world of targeted development.
