[Original post from 24/3/2014. Reposted for fun factor]
The journal Development Policy Review will publish in May my article on the types of aid donors and their impact on institutional change. It will have been a little over two years since I first presented the argument at the Midwest Political Science Association with the help of Conan of Cimmeria, Saruman the White, the Black Knight, and the criminal genius Vizzini.
I had brought this motley crew of characters to an academic audience in Chicago in order to explain how different international development agencies (like the World Bank or USAID) deal with the challenges of institutional assistance. The analogy began with two assumptions: reform is more complicated in poorer countries where the political control of the state marks the difference between wealth and destitution; and not all donors are equally willing to engage with the politics of reform. If we further assume that aid conditionality in favor of reform is a public good (if it works, it benefits all donors), then Mancur Olson‘s logic of collective action leads to the expectation that aid donors are likely to free-ride off each other. How much each individual donor will shirk political engagement depends on its commitment to reform; how much institutional conditionality the group of donors will be able to produce depends on their relative financial presence in a given country.
Consider Conan the Cimmerian: a strong and supple warrior who knows what’s best in life, with a predator’s instinct and earthly ambition which guide him through a storied life as slave, mercenary, pirate and king of Aquilonia. Conan is highly committed, and he is also a commanding presence in every group: when Conan sets his sights on a goal, it gets done. He is a leader, as are some aid donors with strong commitment to reform and a strong relative presence in a country: when they are invested in change, local reformers are empowered.
Not every hero is as strong and powerful as Conan, though. Some small characters share Conan’s commitment, yet lack his strength and battle prowess: a good example would be the Black Knight who guards the bridge in Monty Python and the Holy Grail – in particular in his armless and legless condition. He is fierce, and so committed that he will bite your legs off if he has to. In large enough groups, such characters can change the course of events; in isolation, however, their efforts are often overshadowed by those of other actors with lower commitment. The Black Knight is a protester, as are some aid donors with vocal commitments to reform despite their relatively small footprint in a country: when they represent a majority they can promote reform, but when they are in the minority they can do little more than complain.
There are other small characters who can be obstacles to the heroes. Vizzini the Sicilian criminal genius is perilously close to defeating Westley with his mind games and poisonous wine; his wit so powerful that the protagonist of The Princess Bride only manages to overcome his trap by cheating. A single enemy like him seems like a small obstacle to overcome, but a whole group of them could certainly frustrate even a hero. Vizzini is an enabler, and so are some aid donors which are small in the larger scheme of things, but always likely to side with the status quo against change: although they can never compare with a leader, in sufficient numbers enablers can insulate reform-averse governments from the demands of pesky protesters, and even turn a leader into a protester by diluting its relative presence in the country.
Consider, lastly, Saruman the White: a powerful wizard – head of the five Istari, no less – and leader of the White Council, unmatched in his knowledge of artifacts and sorcery. And yet Saruman turns against the Free Peoples, embracing Sauron as the better ally – or at least the lesser of two evils. Such strength and such treachery combined almost lead to the defeat of Rohan, which would have inevitably led to the collapse of Gondor and thereby the Middle Earth itself. He is a spoiler, as are some aid donors with little appetite for the politics of reform despite their relative importance in a country: when they support governments no matter what they do, reforms tend to stall and wither away.
And that, in essence, is the point of my article in Development Policy Review: not all donors are created equal. Whether local reformers find in the aid community support or neglect is likely to depend on the particular configuration of donors in a country. Which means that aid coordination or harmonization may not be the best course of action in places where spoilers and enablers will undermine the ability of leaders and protesters to push for reform; in such cases it may be best to channel assistance through a single donor who has both the drive and relative weight to change local incentives so that things get done.