There are other cases of good government breaking out even without much donor involvement. Aid researcher Judith Tendler at MIT wrote a great book called Good Government in the Tropics, about the success story of the Ceará state government in northeastern Brazil. Traditionally one of the most corrupt and backward states in Brazil, Ceará had two reformist governors alternating in power from 1987 to 2001—Tasso Jereissati and Ciro Gomes. They had the State Department of Health do a new preventive health program using community health workers. Only a few years after the beginning of the program, vaccination rates for measles and polio had increased from 25 percent to 90 percent. Infant mortality in Ceará fell by one third.39
It would be too simplistic to attribute these success stories just to governors Jereissati and Gomes. Part of the success of the Ceará programs was the way they built in feedback from the poor. The state publicized the new programs, leading the local communities to expect more from (and to monitor) the government workers, such as the new health workers. The health workers themselves felt motivated by community approval when they got good results, and they got rewarded for such approval. The Ceará story shows that good government can happen in the tropics, and that it can happen for homegrown reasons.
Could Aid Make Government Worse?
We can turn to cross-country data to see which is most typical—aid promoting good government, aid not affecting government at all, or possibly even aid promoting bad government. Earlier, this chapter talks about how oil makes democracy and good government less likely—the “natural-resource curse.” More recent studies have found that there is also an “aid curse”—probably for the same reasons as the oil curse. High aid revenues going to the national government benefit political insiders, often corrupt insiders, who will vigorously oppose democracy that would lead to more equal distribution of aid. Systematic evidence in a couple of recent studies suggests that aid actually decreases democracy and makes government worse. Steve Knack of the World Bank finds that higher aid worsens bureaucratic quality and leads to violation of the law with more impunity and to more corruption. Maybe bad government attracts donors who want to reform it just as sinners attract televangelists. However, even if you control for this effect, donors make government worse.40
Simeon Djankov (of the World Bank), Jose Montalvo (of Pompeu Fabra University in Barcelona), and Marta Reynal-Querol (World Bank) similarly found that high aid caused setbacks to democracy over 1960–1999.41 They found aid’s effect on democracy to be worse than the effect of oil on democracy.
Social Action Programs for Lending
Bad governments can sabotage even the most well-intentioned aid programs. Another critical government input for development is good public services. Governments in poor countries often fail at delivering basic health and education services. One egregious case that donors tried to remedy is Pakistan, which has poor health and education even when compared with other poor countries at its level of income. Pakistan has 36 percent lower births attended by trained personnel. It has 11 percent more babies born with low birth weight, 42 percent lower health spending per capita, 1.6 percent less GDP in public health spending, twenty-seven excess infant deaths per thousand, nineteen excess child deaths per thousand, and 23 percentage points lower share of the population with access to sanitation. Relative to children in other countries at Pakistan’s level of income, 20 percent fewer Pakistani elementary school–age children are enrolled in primary school. This gap is explained entirely by the 40 percent fewer elementary school–age girls who attend primary school. The 14 percent shortfall in secondary enrollment compared with other countries at Pakistan’s income level is explained mainly by a 20 percent shortfall for females. Twenty-four percent more of Pakistan’s population is illiterate than is normal for a country of its income level, reflecting excess illiteracy of 32 percent for females and 16 percent for males.
The World Bank in 1993 tried to repair this social train wreck by supporting a “social action program” in Pakistan, which aimed to “improve the coverage and quality of basic social services.” An independent analyst, Dr. Nancy Birdsall of the Center for Global Development, later concluded that aside from a few modest successes, the period during which the SAP was implemented witnessed stagnation, marginal improvement, and—in some cases—even a decline in social indicators. For example, aggregate education enrollment rates stagnated during the 1990s, with enrollments for children from public schools registering a modest decline.42
World Bank staff recognized the first phase of the project, SAP I, as a failure. Therefore, World Bank management approved a second phase, SAP II. Deep into the project, in 2000, a World Bank review concurred: “Improvements in service delivery are either not happening, or occurring at a very slow pace.” After nearly a decade of failure, the SAP was finally abandoned in June 2002.
Dr. Birdsall asked, “Why did a sound idea turn into a practical disaster?” She said that “implementation failures were rampant—manifested in non-merit recruitment of staff, absenteeism of teachers and doctors, and frequent transfers of essential staff…. [P]oliticians used staff recruitment, construction contracts, and site selection for schools and clinics to enrich their kith and kin.” A Pakistani economist gave the deeper reason for failure in 2003: “[T]he poor face markets, state institutions and local structures of power that discriminate against [them]….[They are] unable to access public entitlements like…goods and services.” Foreign aid could not deal with the deep roots of bad government in Pakistan, such as a powerful agrarian elite and sharp ethnic divisions.
The Selling of Bad Governments
Since donors understandably don’t want to admit they are dealing with bad governments, diplomatic language in aid agencies becomes an art form. A war is a “conflict-related reallocation of resources.43 Aid efforts to deal with homicidal warlords are “difficult partnerships.44 Countries whose presidents loot the treasury experience “governance issues.” Miserable performance is “progress [that] has not been as fast and comprehensive as envisioned in the PRSP.45 When government officials want to steal while the aid agency wants development, there are “differences in priorities and approaches [that]…need to be reconciled.” If debt-relief dollars disappear before reaching the poor, then “continued progress on the Expenditure Management and Control Program will be needed to maximize the benefits from the HIPC [Heavily Indebted Poor Country] Initiative.46
Diplomatic donors also put a positive spin on awful recipient governments by asserting that while things are bad, they are getting better. The use of gerunds indicating progress is ubiquitous in aid documents, such as “developing,” “emerging,” and “improving.” This language infects even scorecards that are supposed to hold governments accountable for poor results. The aid agencies recently evaluated the “supportive environment” for achieving the Millennium Development Goals created by Cameroon’s autocratic and corrupt ruler Paul Biya (in power since 1982).47 The aid agencies’ possible evaluations were “strong,” “fair,” and “weak.” They opted for “weak but improving.”
The “weak but improving” line is popular among aid agencies in Africa. The World Bank produced a stream of progress reports on Africa over the last two decades. It first described the poor state of African government: “Domestic policy inadequacies…trade and exchange rate policies have overprotected industry, held back agriculture” (World Bank, 1981). “Unless [there are] major changes in African programs…no amount of external assistance can generate rising levels of income” (World Bank, 1984). “Weak public sector management has resulted in loss-making public enterprises, poor investment choices, costly and unreliable infrastructure, price distortions” (World Bank, 1989). “Most African countries still lack policies that are sound” (World Bank, 1994). “The adjustment decades also saw a substantial deterioration in the quality of public institutions, a demoralization of public servants, and a decline in the effectiveness of service delivery in many countries” (World Bank, 2000). Africa “remains the world’s
foremost development challenge. Many countries continue to be held back by weak institutions, civil strife…” (World Bank, 2004).48
Donors then responded to these disasters with perpetual promises of a change for the better, sometimes detecting a nascent trend toward improvement: “many African governments are more clearly aware of the need to…improve the efficiency…of their economies” (World Bank, 1983). “African leaders increasingly recognize the need to revise their development strategies….[S]ome countries are introducing policy and institutional reforms”(World Bank, 1984). “Progress is clearly under way. Especially in the past two years, more countries have started to act, and the changes they are making go deeper than before” (World Bank, 1986). “Since the mid-1980s Africa has seen important changes in policies and in economic performance” (World Bank, 1989). “African countries have made great strides in improving policies and restoring growth” (World Bank, 1994). “Since the mid-1990s, there have been signs that better economic management has started to pay off” (World Bank, 2000). “Africa’s leaders…have recognized the need to improve their policies, spelled out in the New Partnership for African Development [NEPAD]….[They] have pledged to pursue acompact of good governance with their people” (World Bank, 2002). There has been “remarkable progress in several African countries over the past year” (World Bank, 2004).
The contradiction between “weak institutions” and “remarkable progress” calls to mind Japanese government propaganda during World War II, which to the very end of the war celebrated every battle as a triumph. The long-suffering Japanese people could track the war’s progress only by noting that the glorious victories of the emperor’s forces were moving them ever closer back to Japan.
Differences in Government Performance Across Countries and Sectors
Some blame the perception of bad government in Africa on racism—an insult to the many courageous Africans who have resisted tyrannical rulers at risk of their lives and safety. It is a mistake to go to either extreme—overlooking bad government in Africa or embracing a stereotype of African government as always bad or ineffective.
The aforementioned Botswana is a long-standing African democracy. Countries such as Benin, Ghana, and Mali now have democratic governments after decades of autocracy (see figure 16). Other countries such as Kenya and Nigeria now have more turbulent democracies that are still an improvement over the dictators who used to hold power. A rating of democracy (again from Polity IV) shows a rise in democracy in Africa since the early 1990s, although still far short of a high rating (such as Botswana achieves).
Fig. 16. Democracy in Botswana and Average for Africa
Moreover, governments—together with foreign aid—do not have a universal record of failure in Africa. One success was the steady expansion of education, represented by the huge leap in adult literacy rates from 1970 to 2000. Another accomplishment has been in reaching girls for education, as the ratio of female-to-male literacy has climbed steadily over the last thirty years (see figure 17). The higher literacy of men and women has so far not translated into increases in earnings, but education is both a worthy end in itself and a contribution to many other good development outcomes. There are some quality problems, such as poorly motivated teachers and the absence of textbooks, not to mention inadequate utilization of educated people because of other distortions in African economies—which may be why education has not translated into rising incomes.
Fig. 17. Total Literacy and Female-to-Male Ratio in Africa
There were also upward trends in electrification (provided by state-owned utilities) until 1990, although this stagnated afterward. Electric production per person increased by 50 percent from 1973 to 1990. Again, there are some quality problems, with power outages common, but the increased quantity indicates that some progress is being made (see figure 18).
In a more general area where effort is less visible—corruption—there are so far no signs of progress (see figure 19, which has two different measures of corruption). Some democratic governments in Africa have turned out to be as corrupt as some autocratic ones. As the great Alfred E. Newman once said, “Crime does not pay…as well as politics.”
Fig. 18. Electricity Production Per Capita in Africa
Some progress in government performance in Africa is taking place—from which donors might have learned more if they had not patronizingly claimed progress in places where and when there was none. These examples also show that governments and donors working together do sometimes achieve something—again, it seems that piecemeal interventions with visible outputs, such as education and electricity production, show more progress than more general programs where effort is less measurable, such as controlling corruption or stimulating economic growth. Donors are more accountable for visible, piecemeal improvements. Governments, even non-democratic ones, could also be more accountable for these hotly demanded and visible services. The interaction between the donors and African governments led to happier outcomes in these areas—perhaps because the greater accountability of the donors forced them to work out a pragmatic way to deal with the governments, or the governments were more accountable in these areas to deal with donors and the public, which facilitated the outcome.
Fig. 19. Percentage Ranking on Corruption of Typical African Country, 1985–2004
The trend toward increased democracy in Africa (noted in figure 16) may be an exception where donors contributed to progress on a general goal of transforming government. However, this chapter has mentioned two findings that are evidence against this: (1) who got aid was unrelated to democracy, so it is unclear how the donors applied pressure; and (2) the formal statistical findings suggest that aid makes democracy worse, not better. Maybe Africans should get some credit for increased democracy for themselves?
Power to the People
The World Bank and the IMF are certainly aware of the problems of dealing with gangsters in trying to deliver foreign aid. They have recently emphasized consultation with nongovernmental think tanks and philanthropic organizations (the so-called “civil society”), seeking to have ordinary people participate in designing economic policy by getting their input on a “Poverty Reduction Strategy Paper” (PRSP). This is a positive step for the World Bank and IMF, to talk to people outside government.
However, as a device to get good government, this falls a few valleys short of the mountaintop. A PRSP is no substitute for democracy. Even if civil society prepared the PRSP with participation by everyone and his cousin, it is unclear how we bureaucrats could redistribute power from those who had it to those who did not. For example, in April 2002, the World Bank and the IMF awarded a second round of debt relief to Burkina Faso, based upon the country’s satisfactory completion of a participatory PRSP.49 Burkina Faso is run by the same ruler who has been in power since 1987, who was among the worst fifth in the world in corruption in 2001, and who supported rebel warlords who perpetrated atrocities in Angola, Liberia, and Sierra Leone.
To the aid agencies, participation is an apolitical technical process of consulting the poor. As Daniel Patrick Moynihan said about a similar participation idea in the 1960s: “The socially concerned intellectuals…seemed repeatedly to assume that those who had power would let it be taken away a lot easier than could possibly be the case if what was involved was power.50
The participation chapter of the IMF and World Bank’s PRSP Source-book advocates consultation of the poor “stakeholders.” The Sourcebook does not address how aid deals with tyranny and political conflict—if “stakeholders” disagree with a dictator, as seems likely, who does the IMF and World Bank listen to? What if stakeholders disagree with one another? It is hard to think of how the IMF and World Bank are in a position to do anything constructive to referee political conflict and opposition to tyranny.
Often society and politics fracture along regional or ethnic lines, and foreign aid maintains neutrality with difficulty. For example, a study of the Mahaweli irrigation project in Sri Lanka showed that aid biased
toward Sinhalese areas exacerbated the Tamil-Sinhalese hatred during the ongoing civil war.51 Even humanitarian aid can make political conflict worse rather than better. In the worst-case scenario of Somalia in the early 1990s, food aid increased violence among rival clan militias, who fought to steal the food. The warlords may even have provoked starvation to get more food relief. This was not typical—most poor-country government leaders are better than Somalian warlords (rather faint praise).
Ironically, the way the donors implement “participation” sometimes contradicts existing democratic mechanisms. In Tanzania, the democratically elected government had already devised a National Poverty Eradication Strategy in consultation with its parliament, but the IMF and World Bank insisted upon a new process for the Poverty Reduction Strategy Paper anyway. Because of “the urgency with which they wanted to secure HIPC relief, the Tanzanians initially acquiesced in the World Bank writing the I-PRSP for them.52
The IMF and the World Bank don’t show a ton of respect for democracy when it starts to take hold. As Yale Professor of political science and anthropology James C. Scott points out, there is an inherent contradiction between planning (what he calls “high modernism”) and democratic politics: “Political interests can only frustrate the social solutions devised by specialists with scientific tools adequate to their analysis. As individuals, high modernists might well hold democratic views about popular sovereignty…but such convictions are external to, and often at war with their high-modernist convictions.53
The head of the IMF, Michel Camdessus, told the Haitian parliament during the 1990s that if it rejected privatization of state enterprises, it “would mean that the people are rejecting the support that they need, [support] the international community sees as necessary for Haiti. It will mean that Parliament rejects those policies and this support at a very heavy cost.54 Similarly, one of the main World Bank goals for Bolivia in 2004 was that “Bolivia opts for a ‘Yes’ vote in the Referendum” on gas exports.55
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