Contending Theories on Development Aid

Post-Cold War Evidence from Africa

Leslie O. Omoruyi

• Publisher: Routledge
• Year: 2017
• Print ISBN: 9781138701366
• eBook ISBN: 9781351808460
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Politics
• Index: Politics & International Relations

This title was first published in 2001: This thorough and comprehensive examination of the nature and pattern of post-Cold War aid to sub-Saharan Africa provides incisive, comparative case studies of the motivations behind the foreign aid policies of key members of the Development Association Committee (DAC). In one of the most rigorous contemporary efforts to evaluate the adequacy of the dominant theories of international relations on an important subject like foreign aid, Dr Omoruyi eschews easy answers to the problem of Africa's marginalization in the international system. He provides thoughtful, innovative suggestions for promoting a new development partnership between industrialized countries and Africa using a sophisticated quantitative method of inquiry, making this text a valuable contribution to social science literature on research methods.

Part One

1	Introduction

Setting and Purpose

Although the affairs of humanity do not occur in neat temporal packages, few events of the 20^th century rival in their historic significance, dramatic symbolism, and confounding coincidence, the fateful events of December 25, 1991. On that day, Mikhail Gorbachev, then president of the Union of the Soviet Socialist Republic (USSR), marking his final hours in office, telephoned his American counterpart, President George Bush, to bid him good-bye. A few hours later, the red flag bearing the hammer and sickle emblem of the USSR was lowered for the last time, and a new flag of a Russia with curtailed ambitions was hoisted in its place. Like the epochal events of the preceding two years – the fall of the Berlin Wall in 1989, the unification of Germany in 1990, and the break away of the Baltic republics of Estonia, Latvia and Lithuania from the USSR in 1991 - this event was a symbolic testimony to the end of the Cold War. In its aftermath, the theoretical edifice of realism as the dominant paradigm in the study of international relations has come under vigorous attack. Whereas it was once considered heretical in the discipline to question the assumptions of realism and its variants, it is now deemed necessary to “revise, reconstruct or more boldly, reject its theoretical postulates” (Kegley, 1995:3). This peeling of the prophylactic that once sheltered realism is attributable to the triumph of neo-liberal ideas.

One of the many areas in the discipline where the realist - liberal divide has been sharpest is in studies of the motivations for the flow of foreign aid from advanced-industrial countries (AICs) to African states. Although many realists claim that African states, and indeed the whole of the Third World lack intrinsic strategic significance to the West, throughout much of the Cold War period, the realist justification for the allocation of foreign aid to African states was the strategic imperative inherent in the containment of communism.¹ Some liberal theorists, on the other hand, posit that during this period, “developed countries provided aid [to the Third World] mainly because of their belief that they had a humane responsibility to do so” (Lumsdaine 1993:283).² Lumsdaine’s arguments notwithstanding, a review of the literature on foreign aid reveals that a majority of scholars support the realist position that the containment of communism played a significant role in the allocation of aid to developing countries, especially for a donor such as the United States.³ Now that the Cold War has ended, it is unclear what motivations undergird the aid policies of the key members of the Development Assistance Committee (DAC). Equally puzzling are the reasons why these donors should continue to coordinate their aid efforts, as suggested by Boyer (1993), in the absence of a potent security threat to the Western alliance. Moreover, initial review of the record of the aid allocation pattern of DAC member-states in the post Cold War period appears to contradict the propositions of realism and liberalism on the motivation question. For if the realist explanation that donors use aid to serve their disparate national interest is correct, it is not clear why a county like Malawi should attract so much aid from a donor like Germany with no clear national interest in a region like sub-Saharan Africa. The suggestion by liberal theory that donors provide aid to developing countries for humanitarian reasons and the promotion of democracy around the world is equally problematic. For if that is the case, why has bilateral aid from all DAC member states to sub-Saharan Africa not disproportionately gone to the poorest countries, or to those with more impressive records on democratization? It is also puzzling that despite the euphoria generated by the transformation of the international system from a bipolar to an increasingly multipolar one, and the great expectations about increased North-South cooperation stimulated by the triumph of liberal ideas, the prosperity gap between rich and poor countries in general continues to widen. And more specifically, countries in sub-Saharan Africa continue to experience intense marginalization in the international system.

If therefore, the propositions of both realist and liberal theories are lacking in their resolution of these puzzles, what then are the motivations for the allocation of aid to sub-Saharan Africa in the post-Cold War period? How much has the transformation of the international system influenced these motivations? What are the implications of these motivations for sub-Saharan Africa in particular, and the larger international system in general? These are the questions, which animated this study. My primary objective has been to assess the adequacy of realist and liberal theories on the motivation question. In a sense, such a focus is problematic since the complexity of the motivations behind each donor’s foreign aid policy is inexplicable by any single factor or set of factors. The argument which I present, however, is that despite the multiplicity of issues pushing and pulling foreign policy in, sometimes, unpredictable directions, the flow of development assistance to sub-Saharan Africa has recurrent patterns, which could be better understood by comparing the primary propositions of the dominant theories of international relations on why states behave the way they do. An adequate theoretical framework should be able to account for the broad similarities and differences in the factors motivating different donor countries to disburse aid to sub-Saharan African states. All donor countries are sovereign entities that, though encumbered by the constraints of anarchy as realists contend, do have ample latitude to define and pursue their interests as they see fit. An important observation of this study is that in the post-Cold War era, neither the assumptions of traditional realism about an unchanging world where military might will always be the most effective determinant of international relations, nor liberal theory’s expectation of the emergence of a more humane, just and benevolent order where the states in the international system will have a harmony of interest, adequately explain the motivations which translate donors interests into foreign aid allocations.

Relevance of the Study

This study is relevant for several reasons. First, while considerable descriptive and analytic work has been produced on the effects of the end of the Cold War on international relations in general, there is a dearth of works that measure the effects of this system transformation on the allocation of aid to a resource needy region like sub-Saharan Africa. This is despite the impressive scope of the foreign aid literature in general.⁴ Given that the Cold War ended about a decade ago, this is, perhaps, understandable.

Second, even though foreign policy decisions are seldom amenable to the often mutually exclusive categories suggested by the realist - liberal divide, it is of some heuristic relevance to ascertain whether on balance, foreign aid allocations to sub-Saharan African states reflect the theoretical propositions of realism, or the postulation of liberalism. Bearing in mind the influence which dominant paradigms tend to exert on the foreign policies of advanced-industrial states (especially the United States), the results from this type of research could call such theoretical assertions into question. Moreover, as Kegley (1993:142) reminds us:

The realist-idealist dialogue can be informed by the insights generated through scientific investigation without requiring acceptance of the logical positivists’ most extreme claims about the possibility of an objective science. Scholars can creatively build new theories and refine old ones on the basis of concrete evidence and deduction.

A third way in which this study is useful is that, an understanding of the motivations undergirding the allocation of aid to sub-Saharan Africa by the members of the DAC, and the adequacy of the propositions of theories of international relations on the subject, could supply valuable insights into the behavior of aid-donor states in relation to adjacent fields like foreign investment and trade policies. Besides, the current era in international relations - the end of the Cold War coupled with systemic turbulence⁵ - presents ample opportunities for one to peek into broader intra-disciplinary debates such as the propositions of liberal theory about the “democratic peace” and the arguments of realist theory with respect to the notion of relative gains. The proposition that democratic states do not go to war with one another has emerged as the new orthodoxy in studies of international relations. For some scholars, this proposition is so persuasive that it is “as close as anything we have to an empirical law in international relations” (Levy, 1989:270). Yet, as Mueller (1989), Layne (1996), Caprioli (1998) and numerous other scholars have pointed out, the propositions of democratic peace are flawed in several ways. In particular, incidents of war, the premise upon which arguments for the democratic peace have been most frequently tested are such historically rare events that a statistically significant finding of zero war among democratic states in the international system, which boasted few democratic states until recently, is statistically insignificant (Spiro, 1996). An examination of the foreign aid policies of Western donors to sub-Saharan African states in the post-Cold War era, therefore, could serve as additional relevant test of the democratic peace proposition. If the democratic peace theory is correct, one should find greater degrees of peaceful cooperation between AICs and democratizing states in developing countries. With respect to sub-Saharan Africa, such cooperation should translate into more aid disbursements to states with relatively more impressive records on democratization.

A focus on the motivation for foreign aid allocation could also supply additional, even if tentative, insights into the veracity of the neorealist argument about the salience of relative gains in cooperation among states, especially now that the Cold War is over. Neorealists, such as Layne (1992), Waltz (1993), and Measheimer (1990, 1995a, 1995b), for examples, contend that with the end of the Cold War, the international system is undergoing transition from a bipolar structure to a multipolar one. Reasoning along the same lines, other realists, like Grieco (1991), assert that because states are relative-gains maximizers, such structural shifts would reinforce the salience of the relative gains problem in international cooperation. An examination of the motivation for the allocation of foreign aid to sub-Saharan African states, therefore, promises valuable insights into the veracity of such positions.

Furthermore, just as traditional realists have argued that a state’s intentions are shaped by its capabilities (Morgenthau, 1973:5), neorealists have reiterated that when a state climbs to the highest rungs of the international ladder, as Japan has done in recent years, it will “try to expand its economic, political, and territorial control; it will try to change the international system in accordance with its own interests” (Gilpin, 1987:94–95). An examination of the behavior of seemingly ambitious states such as Japan and Germany in sub-Saharan Africa, therefore, could contribute valuable strokes to the intellectual sketches of the emerging structure of the international system.

This study is relevant for a sixth, and perhaps, even more important reason: of the many issues competing for scholarly attention since the end of the Cold War - nuclear proliferation, resurgent nationalism, the expansion of NATO, the European Union, and the intensification of global economic competition - arguably, none presents a more realistic and immediate external threat to sub-Saharan African states as much as the fate of foreign aid. Pertinently, as a review of global financial flows from 1960–1997 shows, during the Cold War era, despite the low levels of financial transfers from advance industrialized states to sub-Saharan Africa, compared to other regions, such transactions represented the largest financial transfers to the sub-continent.⁶ Since the global economy began to attain greater degrees of integration in the 1970s, the future of sub-Saharan African states has increasingly depended on the willingness of AICs and international organizations to provide the region with finance for development, because of the reluctance of private lenders to fund development projects whose viability are not readily measured by their short term profitability. In essence, given the high dependency rates of some sub-Saharan African states on foreign aid, an examination of the donors’ motivations for aid allocation may yield findings which could help generate policy relevant suggestions for such dependent states on how they could better attract other forms of development assistance and manage their scarce resources. The contradictory tendencies which one observes in the features of the contemporary global economy - the triumph of liberal ideas and an increasing economic marginalization of sub-Saharan African states, evident in the inability of a majority of the sub-continent’s peoples to afford the most basic needs of adequate food and shelter - lend even greater credence to the urgency of policy relevant studies.

The Argument

Results from this study provide ample support for several propositions. First, the discarding of the Cold War mask brings us face to face with an unsettling reality: despite the divergence of motivations behind the allocation of aid to sub-Saharan Africa by the prominent donors whose aid policies are investigated in this study, the results from this study speak with a single voice about the continuous marginalization of sub-Saharan Africa in the emerging structure of the international system. Just as the low levels of statistical correlation between ODA and the independent variables derived from the propositions of realist and liberal theories in this study, indicate the difficulty of applying mainstream IR thinking to the study of sub-Saharan Africa (marginalization 1), so has there been, in the post-Cold War period, a pattern of diversion of aid resources by hitherto generous donors away from the sub-continent to regions such as the newly independent states in the former Soviet Union and Eastern Europe (marginalization 2). These observations evince the peripheralization of sub-Saharan Africa at a time when the people of the sub-continent appear to have embraced the liberal ideas of democracy and capitalism, and advances in the technologies of communication, food production and storage have condensed the world into the now fabled global village.

Second, the original goal of poverty alleviation, the avowed objective of ODA in several DAC documents, has been a prominent feature in the pattern of aid allocation to sub-Saharan Africa in the post-Cold War period. Judged by the relative poverty of the recipient states, the grant element of ODA and the inverse correlation between aid and the values of the gross domestic product (GDP) of the recipient states, bilateral aid allocations to the region reveal strong humanitarian motives. This finding is at odds with the realist proposition about the parochial national interest motivation behind foreign aid. Among DAC members, however, there have been notable differences in the priority accorded this goal. The Scandinavian countries, more than France and Italy tended to disburse substantial portions of their bilateral aid, oftentimes 100 percent, as grants. This evidence provides support for the assertion by liberal scholars like Lumsdaine (1993:29) that foreign aid cannot be explained on the basis of the donors’ economic and political interest alone.

Third, in the post-Cold War era, the pattern of bilateral aid allocation from the key members of the DAC to sub-Saharan Africa reveals a strong correlation with trade. With the exception of Japan and the United States, all other key donors whose aid policies were examined in this study tended to disburse aid, preferentially, to the sub-Saharan African countries, which imported greater amounts of goods from them. This finding provides tentative support for the neorealist’s position about the self-interested motivation behind the flow of aid. Although, in comparison to their commercial interests in other parts of the world - for instance, the emerging markets in Asia and Latin America - most donors covered in this study have low levels of trade ties to sub-Saharan Africa. Arguably too, the profits that they receive from their existing trade ties with the region are marginal. Still, it is curious that within the interstices of such expected marginal returns, aid has dovetailed trade. A corollary neorealist proposition that aid recipient states naturally endowed with strategic minerals would attract more aid is not, however, statistically confirmed by the results of this study for most donors. With respect to sub-Saharan African states, “those who have what others want or badly need” (Waltz, 1979:147), have not been favored recipients of aid by most members of the DAC.

Fourth, whereas in the Cold War era, the allocation of aid to sub-Saharan African states was unmindful of the type of political regimes in these states, the pattern of aid allocation to the region in the post-Cold War era, indicates a shift in favor of countries with relatively more impressive records on democratization for donors like Japan and Denmark. While being welcome this finding, nonetheless, falls short of a deep support for liberal values which the alleged triumph of liberal ideas occasioned by the demise of the Cold War would lead one to expect. For the majority of the donors covered in this study, the application of the democratization metric was not evident in their pattern of aid allocation to sub-Saharan Africa.

Finally, in the realm of theorizing about the nature and study of international r...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• List of Figures
• List of Tables
• Acknowledgements
• Part One
• Part Two (The Study of Four Cases)
• Appendices
• Bibliography
• Index