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September 10, 2015

Responding To: SFS Dean Inaugurates Georgetown's Discussion of Global Governance

Aligning Incentives between Donors and Recipients of Aid

Desha Girod

Dean Hellman challenges us to ask: What can international organizations, foreign governments, and private aid agencies do to significantly improve assistance to fragile states? Importantly, he points out, donor programs in fragile states (like donor programs everywhere) focus on short time frames, not the long time frames required for meaningful development to take off. 

I find Dean Hellman’s discussion very compelling, and I especially agree with the idea that the problem is not the amount of money going into fragile states, but how the money is spent. Reading his post inspired me to think about some particular challenges that I’ve explored in my research on fragile states.

Could Haiti become a Bangladesh faster if the right incentives are in place? We have reason for hope. Civil war left government institutions very weak in Uganda and Mozambique. But in the 1990s, leaders of both countries reconstructed their societies using Western assistance. Because these leaders depended on Western donors for income, they faced incentives to meet donor development goals. Sadly, Uganda backtracked after discovering natural resources, i.e. its own revenue source. Nevertheless, the reconstruction experience of these two countries suggests that institutional capacity can be created (quite rapidly) when incentives align. 

Of course, incentives need to align between both donors and recipients of aid. This is extremely hard in many cases. The governments of Uganda and Mozambique both lacked strategic importance to donors when they reconstructed their countries. But major powers typically engage in reconstruction of states when their own security interests are at stake. And their primary objective is to back a leader who aligns with that security agenda. They may demand development but lack leverage over the leader who knows that major powers are unlikely to withdraw support from an ally. Under these circumstances, does it matter whether an aid project has a 10-year time frame instead of a 3-year time frame?

Understanding the incentive structure driving donors and leaders of fragile states seems essential. Dean Hellman’s vision to broaden and deepen our community’s engagement with fragile states so that we can find new ways to help seems very promising.

Desha Girod is an associate professor in the Department of Government and a faculty affiliate in the African Studies Program. 

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