Development aid

Development aid (or development cooperation) is a type of aid given by governments and other agencies to support the economic, environmental, social, and political development of developing countries, as well as least developed, low-income or poor countries. It is distinguished from humanitarian aid by aiming at a sustained improvement in the conditions in developing countries, as well as least-developed, poor of low-income countries, rather than short-term relief. The overarching term is foreign aid (or just aid). The amount of foreign aid is measured though official development assistance (ODA). This is a category used by the Development Assistance Committee (DAC) of the Organisation for Economic Co-operation and Development (OECD) to measure foreign aid. Aid may be bilateral: given from one country directly to another; or it may be multilateral: given by the donor country to an international organisation such as the World Bank or the United Nations Agencies (UNDP, UNICEF, UNAIDS, etc.) which then distributes it among the developing countries. The proportion is currently about 70% bilateral 30% multilateral. About 80% of the aid measured by the OECD comes from government sources as official development assistance (ODA). The remaining 20% or so comes from individuals, businesses, charitable foundations or NGOs (e.g., Oxfam).…

Development aid (or development cooperation) is a type of aid given by governments and other agencies to support the economic, environmental, social, and political development of developing countries, as well as least developed, low-income or poor countries. It is distinguished from humanitarian aid by aiming at a sustained improvement in the conditions in developing countries, as well as least-developed, poor of low-income countries, rather than short-term relief. The overarching term is foreign aid (or just aid). The amount of foreign aid is measured though official development assistance (ODA). This is a category used by the Development Assistance Committee (DAC) of the Organisation for Economic Co-operation and Development (OECD) to measure foreign aid. Aid may be bilateral: given from one country directly to another; or it may be multilateral: given by the donor country to an international organisation such as the World Bank or the United Nations Agencies (UNDP, UNICEF, UNAIDS, etc.) which then distributes it among the developing countries. The proportion is currently about 70% bilateral 30% multilateral. About 80% of the aid measured by the OECD comes from government sources as official development assistance (ODA). The remaining 20% or so comes from individuals, businesses, charitable foundations or NGOs (e.g., Oxfam). Most development aid comes from the Western industrialised countries but some poorer countries also contribute aid. Development aid is not usually understood as including remittances received from migrants working or living in diaspora—even though these form a significant amount of international transfer—as the recipients of remittances are usually individuals and families rather than formal projects and programmes. Negative side effects of development aid can include an unbalanced appreciation of the recipient's currency, increasing corruption, and adverse political effects such as postponements of necessary economic and democratic reforms. ==Output-based aid (OBA)== ==Extent== Most development aid is counted as part of the official development assistance (ODA) reported by governments to the OECD. The total amount of ODA in 2018 was about $150 billion. For the same year, the OECD estimated that six to seven billion dollars of aid was given by ten other states, including China and India. However, these amounts include aid that is humanitarian in character as well as purely developmental aid. The proportion of development aid within ODA was about 80%. The OECD classifies ODA development aid by sector, the main sectors being: education, health (including population policies, water supply and sanitation), government & civil society, economic infrastructure (including transport and energy), and production (including agriculture). Additionally, there are "cross-cutting" aims; for instance, environmental protection, gender equality, urban and rural development concerns. Some governments include military assistance in the notion of foreign aid, although the international community does not usually regard military aid as development aid. Development aid is widely seen as a major way to meet Sustainable Development Goal 1 (to end poverty in all its forms everywhere) for the developing nations. ===By type of project=== File:Total official flows for infrastructure, by recipient, OWID.svg|Total official development assistance (ODA) and other official flows from all donors in support of infrastructure in 2017 File:Total official flows commitments for Aid for Trade, by recipient, OWID.svg|Total official flows commitments for aid for trade in 2017 File:Total official financial flows for water supply and sanitation, by recipient, OWID.svg|Total water and sanitation-related Official Development Assistance (ODA) disbursements that are included in the government budget in 2015 File:Total official development assistance for biodiversity, by recipient, OWID.svg|Total official development assistance (ODA) transferred for use in biodiversity conservation and protection efforts 2017 File:Total official development assistance for biodiversity, by donor, OWID.svg|Total official development assistance for biodiversity, by donor in 2017 File:Total official flows commitments for Aid for Trade, by donor, OWID.svg|Total official flows commitments for Aid for Trade, by donor in 2015 === Effectiveness=== Three main measures of gender inequality are used in calculating gender equality and testing programs for the purposes of development aid. In the 1995 Human Development Report the United Nations Development Program introduced the Gender Development Index and Gender Empowerment Measure. The Gender Empowerment Measure is calculated based on three measures, proportion of women in national parliaments, percentage of women in economic decision-making positions and female share of income. The Gender Development Index uses the Human Development Index and corrects its results in life expectancy, income, and education for gender imbalances. Due to criticisms of these two indexes the United Nations Development Program in its 2010 Human Development Report introduced the Gender Inequality Index. The Gender Inequality Index uses more metrics and attempts to show the losses from gender inequality. Even with these indexes, Ranjula Swain of the Stockholm School of Economics and Supriya Garikipati of the University of Liverpool found that, compared to the effectiveness of health, economic, and education targeted aid, foreign aid for gender equality remains understudied. Swain and Garikipati found in an analysis of Gender Equality Aid that on a country and region-wide level gender equality aid was not significant in its effect. Swain and Garikipati blame this on the relative lack of aid with gender equality as a primary motivation. In 2005, the Interagency Gender Working Group of the World Health Organization released the "So What? Report" on the effectiveness of gender mainstreaming in NGO reproductive health programs. The report found these programs effective, but had trouble finding clear gender outcomes because most programs did not measure this data. When gender outcomes were measured, the report found positive programmatic effects, but the report did not look at whether these results were from increased access to services or increasing gender equality. Even when gender equality is identified as a goal of aid, other factors will often be the primary focus of the aid. In some instances the nature of aid's gender equality component can fail to be implemented at the level of individual projects when it is a secondary aspect of a project. Gender equality is often put forward as a policy goal for the organization but program staff have differing commitment and training with regards to this goal. When gender equality is a secondary aspect, development aid which has funds required to impact gender equality can be used to meet quotas of women receiving aid, without effecting the changes in gender roles that Gender Mainstreaming was meant to promote. Programs can also fail to provide lasting effects, with local organizations removing gender equality aspects of programs after international aid dollars are no longer funding them. Robert C. Jones of McGill University and Liam Swiss of Memorial University argue that women leaders of governmental aid organizations and NGOs are more effective at Gender Mainstreaming than their male counterparts. They found in a literature review that NGOs headed by women were more likely to have Gender Mainstreaming programs and that women were often the heads of Gender Mainstreaming programs within organizations. By breaking down gender equality programs into two categories, gender mainstreamed programs and gender-focused programs which do not mainstream gender, Jones and Swiss found that female leaders of governmental aid organizations provided more financial support to gender mainstreamed programs and slightly more support to gender aware programs overall. ===Britain for its colonies=== The concept of development aid goes back to the colonial era at the turn of the twentieth century, in particular to the British policy of colonial development that emerged during that period. The traditional government policy had tended to favor laissez-faire style economics, with the free market for capital and goods dictating the economic role that colonies played in the British Empire. , as Secretary of State for the Colonies presided over a Development Committee for the colonies. He is pictured entertaining Jamaican recruits for the RAF.]] Changes in attitudes towards the moral purpose of the Empire, and the role that government could play in the promotion of welfare slowly led to a more proactive policy of economic and developmental assistance towards poor colonies. The first challenge to Britain was the economic crisis that occurred after World War I. Prior to the passage of the 1929 Colonial Development Act, the doctrine that governed Britain (and other European colonizers) with their territories was that of financial self-sufficiency. What this simply meant was that the colonies were responsible for themselves. Britain was not going to use the money that belongs to the metropole to pay for things in the colonies. The colonies did not only have to pay for infrastructural development but they also were responsible for the salaries of British officials that worked in the colonies. The colonies generated the revenues to pay for these through different forms of taxations. The standard taxation was the import and export taxes. Goods going out of the colonies were taxed and those coming in were also taxed. These generated significant revenues. Apart from these taxes, the colonizers introduced two other forms of taxes: hut tax and labor tax. The hut tax is akin to a property tax today. Every grown up adult male had their own hut. Each of these had to pay a tax. Labor tax was the work that the people had to do without any remunerations or with meager stipends. As the economic crisis widened and had significant impact on the colonies, revenues generated from taxes continued to decline, having a significant impact on the colonies. While this was going on, Britain experienced major unemployment rates. The parliament began to discuss ways in which they could deal with Britain's unemployment rates and at the same time respond to some of the urgent needs of the colonies. This process culminated in the passage of the Colonial Development Act in 1929, which established a Colonial Development Advisory Committee under the authority of the Secretary of State for the Colonies, then Lord Passfield. Its initial annual budget of £1 million was spent on schemes designed to develop the infrastructure of transport, electrical power and water supply in colonies and dominions abroad for the furtherance of imperial trade. The 1929 Act, though meager in the resources it made available for development, was a significant Act because it opened the door for Britain to make future investments in the colonies. It was a major shift in colonial development. The doctrine of financial self-sufficiency was abandoned and Britain could now use metropolitan funds to develop the colonies. By the late 1930s, especially after the British West Indian labour unrest of 1934–1939, it was clear that this initial scheme was far too limited in scope. A Royal Commission under Lord Moyne was sent to investigate the living conditions in the British West Indies and it published its Report in 1940¹ which exposed the horrendous living conditions there. Amidst increasing criticism of Britain's colonial policies from abroad and at home, the commission was a performance to showcase Britain's "benevolent" attitude towards its colonial subjects. The commission's recommendations urged health and education initiatives along with increased sugar subsidies to stave off a complete and total economic meltdown. The Colonial Office, eager to prevent instability while the country was at war, began funneling large sums of cash into the region. The Colonial Development and Welfare Act was passed in 1940 to organize and allocate a sum of £5 million per year to the British West Indies for the purpose of long-term development. Some £10 million in loans was cancelled in the same Act. The Colonial Development and Welfare Act of 1945 increased the level of aid to £120m over a twenty-year period. Further Acts followed in 1948, 1959 and 1963, dramatically increasing the scope of monetary assistance, favourable interest-free loans and development assistance programs. ===Postwar expansion=== in Europe, the first large scale development program. It was designed to boost European economies shattered by war and prevent the growth of communist influence.]] The beginning of modern development aid is rooted in the context of Post-World War II and the Cold War. Launched as a large-scale aid program by the United States in 1948, the European Recovery Program, or Marshall Plan, was concerned with strengthening the ties to the West European states to contain the influence of the USSR. Implemented by the Economic Cooperation Administration (ECA), the Marshall Plan also expanded its reconstruction finance to strategic parts of the Middle East and Asia. Although Marshall aid was initially offered to Europe in general, the Soviet Union forbade its neighbouring states from accepting it. This has been described as "the moment of truth" in the post-World War II division of Europe. The Soviet Union provided aid to countries in the communist bloc; for instance, on Poland's abstention from the Marshall Plan, Stalin promised a $450 million credit and 200,000 tons of grain. In January 1949 the inaugural address of U.S. president Harry Truman announced an extension of aid to "underdeveloped areas" in the form of technical assistance. While the main theme of the speech was strengthening the free world against communism, in his fourth point Truman also appealed to the motives of compassion and pride in civilization. "For the first time in history, humanity possesses the knowledge and skill to relieve the suffering of these people." The United Nations followed up the US initiative later that year by setting up an Extended Programme of Technical Assistance (EPTA) to help pool international donor funds for technical assistance and distribute them through UN agencies. EPTA was a precursor of UNDP. U.S. aid for development in the 1950s came to include grants and concessional loans as well as technical assistance. This development aid was administered alongside military aid within the framework of the Mutual Security Act. But for most of the decade there was no major multilateral body to provide concessional loans. An initiative to create such a body under the UN met with resistance from the U.S. on the grounds that it was premature. Accordingly, when the UN's "Special Fund" was created at the end of 1958, its remit was only for technical assistance not loans. (The Special Fund was differentiated from EPTA by assisting public infrastructure rather than industrial projects.) In 1959, a significant annual amendment to the Mutual Security Act declared that it was "a primary objective of the United States" to assist "the peoples of other lands who are striving to establish and develop politically independent and economically viable units". This shifted the emphasis of U.S. economic aid away from immediate Cold War security needs, towards supporting the process of dismantling the empires of the UK, France and other European colonial powers. The amendment also made clear that Congress expected those industrialized nations which had been helped by U.S. aid to rebuild after the war would now share more of the burden of helping less-developed countries. Following on, the U.S. encouraged the Organisation for European Economic Cooperation (OEEC) to set up a Development Assistance Group (DAG) composed of the main donor states, in order to help coordinate their aid. This was done in January 1960. The following year the DAG adopted a "Resolution of the common aid effort", vowing to increase the volume of aid, and to share the task equitably. Shortly after this, the OEEC was succeeded by the OECD, expanding its scope from Europe to the world, and embracing a particular concern with less-developed countries. The DAG became the Development Assistance Committee (DAC). 1960 also saw the creation of a multilateral institution to provide soft loans for development finance. The International Development Association (IDA) was created as part of the World Bank (over which the U.S. and other Western countries exerted more influence than they did over the UN). In 1961 several Western states established government departments or agencies to administer aid, including USAID in the United States. In 1960 the USA was providing half of all aid counted by the OECD. This proportion increased to 56% by 1965, but from 1965 to 1973 (the year of the oil price crisis), the volume of U.S. aid generally declined in real terms (though it increased in nominal terms, due to inflation). The other OECD-DAC members meanwhile generally increased their aid, so that the total volume of OECD aid was fairly constant up to 1973. ==References== ==External links== Open Aid Register IATI search engine (Beta). Find any development aid activity around the world. Using the IATI registry as access point. AidData: Tracking Development Finance Open Aid Data Provides detailed developing aid finance data from around the world. German Development Institute - the German think tank of development aid Work on Development Aid by the Institute of Development Studies (IDS)

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