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Centre for Financial and Management Studies (CeFiMS)

Public Policy and Management: Development Assistance

Course Code:
C360
Unit value:

Introduction

The purpose of this course can summarised by the questions that students will be asked to think about and analyse in their study of this topic.

  • Has aid increased the rate of economic growth in the aid recipient countries?
  • Does aid change government policies?
  • Does aid have a detrimental effect on governments’ accountability to their citizens?
  • Do donor conditions have an effect on the quality of governance in recipient countries?
  • Does the aid industry distort the labour market in recipient countries and adversely affect government capacity?
  • Do donors need recipient governments more that governments need donors?
  • Does food aid adversely affect food production?
  • Does aid promote corruption?

Resources

Study Guide

You will receive a looseleaf binder containing eight 'course units'. The units are carefully structured to provide the main teaching, defining and exploring the main concepts and issues, locating these within current debate and introducing and linking the further assigned readings. The unit files are also available to download from the Online Study Centre.

Online Study Centre

You will have access to the OSC, which is a web-accessed learning environment. Via the OSC, you can communicate with your assigned academic tutor, administrators and other students on the course using discussion forums. The OSC also provides access to the course Study Guide and assignments, as well as a selection of electronic journals available on the University of London Online Library.

Textbooks

Riddell, Roger (2007) Does Foreign Aid Really Work?, Oxford: Oxford University Press.

Readings

You will receive two volumes of Readings, which consist of key articles and chapters, supplementing the main text. In addition there are journal articles, official documents and case studies with practical examples.

Objectives and learning outcomes of the course

The learning outcomes of this course are that you will be able to:

  • Define what is meant by development assistance and its constituent parts and understand the main trends in development assistance.
  • Understand some of the theory of economic growth and the role of development assistance in promoting economic growth and how successful it has been.
  • Understand what makes for successful and unsuccessful humanitarian assistance, including the relationship between immediate disaster relief and longer term reconstruction and development assistance.
  • Explain the evolution of development assistance policy in relation to poverty reduction and human development, including the definition and measurement of poverty.
  • Evaluate some of the evidence of the impact of development assistance on poverty reduction and social development.
  • Describe the main aid agencies and their ways of working and the links between them and governments.

Scope and syllabus

Course Units
Unit 1 A Brief History of Development Assistance

The course begins with a definition of development assistance and some descriptive material on trends in its volume and history. It then asks why governments give development assistance and finds a variety of motivations. The flows of assistance globally are then described, along with more detail about three examples: the United States Agency for International Development, the European Commission and the Islamic Development Bank. The Unit also examines the various ‘High Level Forums’, held in Paris, Accra and Busan, which have shaped donor operations.

1.1 What is Development Assistance?
1.2 Development Assistance: Main Trends
1.3 A Brief History of Development Assistance
1.4 Why Do Countries Give Development Assistance?
1.5 Aid Allocation
1.6 Conclusions

Unit 2 Development Assistance and Economic Development

Unit 2 looks at the relationship between economic development and development assistance. To answer the question ‘does development assistance contribute to economic growth?’ it looks first at some theories of economic development and then at some of the literature that has evaluated the impact. It then looks at the impact of conditionality (the various conditions that have been attached to development assistance) and asks whether the way that assistance is given (known as the ‘aid modality’) makes a difference.

2.1 Introduction
2.2 Development Assistance and Economic Development – Theory
2.3 The Impact of Development Assistance
2.4 The Impact of Aid Conditionality
2.5 The Impact of Different Modalities of Development Assistance
2.6 Conclusions

Unit 3 Humanitarian Assistance

Unit 3 is concerned with a specific category of aid – humanitarian assistance, which is given in cases of natural disasters such as floods, earthquakes or typhoons and in cases of conflict and unrest. It looks at three examples, the Haiti earthquake, the 2010 floods in Pakistan and the 2011 drought in the Horn of Africa. It finds that the effectiveness of humanitarian aid is variable, and points to some of the mistakes that can lead to failure.

3.1 Introduction
3.2 Emergencies
3.3 Is Humanitarian Aid Effective?
3.4 Aid in Conflict and Post-Conflict Situations
3.5 Case Studies
3.6 Conclusions

Unit 4 Making Poverty History

Unit 4 is about the impact of development assistance on poverty. Poverty reduction was not always the main aim of development assistance and the Unit looks at the development of policy in this direction. It then covers some technical issues on the definition and measurement of poverty, and on human development indicators. It looks at the impact of aid on poverty. It also shows that a small proportion of development assistance goes to the poorest countries. One instrument for directing assistance towards the eradication of poverty, the Poverty Reduction Strategy Paper, finds that this approach has had, at best, mixed results. The case example on poverty reduction in this Unit is India’s anti-poverty programme.

4.1 Introduction
4.2 Foreign Aid and Poverty: The Evolution of Development Policy
4.3 Concepts and Measurement of Poverty
4.4 Poverty and Development Assistance
4.5 Evaluation of the Impact of Development Assistance on Poverty
4.6 Conclusions

Unit 5 The Aid Agencies

Unit 5 looks at the agencies involved in development assistance. It starts with a theoretical discussion about why aid agencies exist (to align recipients’ preferences with donors’ preferences) and then describes national agencies or ‘bilateral donors’. This relies on the textbook, but extra material is given on Japan, China, Africa and one of the emerging players on the development assistance field, Brazil. It then turns to multi-national agencies including the World Bank and the International Monetary Fund and a small selection of Non-Governmental Agencies, with the examples of Save the Children and the Catholic Agency for Overseas Development. Finally the Unit describes the multilateral development banks that work in addition to the World Bank. It ends with a critique of the operation of the agencies, a theme that is taken up later in the course.

5.1 Introduction
5.2 National Aid Agencies
5.3 Multinational, Government Based Agencies
5.4 Private Foundations
5.5 Non-Governmental Organisations (NGOs)
5.6 The Multilateral Development Banks
5.7 'Managing' Aid
5.8 A Critique of the Operation of the Aid Agencies
5.9 Conclusions

Unit 6 Funding and Resource Allocation

Unit 6 looks at funding, starting with the Organisation for Economic Cooperation and Development members, then the non-members, and then how some of the largest non-governmental agencies, such as Oxfam are funded. It goes on to a discussion about the reasons for, and impact of, aid volatility. The second half of the Unit looks at some of the tools that agencies such as the World Bank and International Monetary Fund use to assess the eligibility of countries to receive development assistance, including assessments of their financial management systems, their policy processes, their country strategies and the degree of risk that each country poses.

6.1 Introduction
6.2 The Funding of Overseas Development Assistance (ODA)
6.3 Non DAC Bilateral Aid Donors
6.4 NGO Funding
6.5 Aid Volatility
6.6 Assessing Eligibility
6.7 Conclusions

Unit 7 Implementation: Aid Modalities, Conditionality and Aid Effectiveness

Unit 7 turns to implementation. It looks at the different ways of distributing development assistance, which were covered briefly in Unit 2. It looks especially at budget support, the preferred way of operating, that emerged from the Paris Declaration. It then looks at the use of development assistance to promote and encourage changes and improvements in management and governance. There are four examples: assistance to Afghanistan; an assessment of the degree of ‘aid effectiveness’ in assistance to Rwanda; a particular attempt to use development assistance to improve governance of the European Commission’s ‘Governance Incentive Tranche; the direct funding of a public management reform in Morocco.

7.1 Introduction
7.2 Choice of 'Aid Modality'
7.3 ODA, Governance and Reform
7.4 Case Studies
7.5 Conclusions
7.6 Feedback on Case Studies

Unit 8 Reflections on Development Assistance

Unit 8 gives you a chance to reflect on what you have learned. It has only two readings: one polemic which condemns development assistance as damaging to economic, social and political development; the second reading asks the provocative question of why donors do not simply give money directly to poor people to improve their lives. These are chosen to help you reflect on what you have studied, ask whether the development assistance effort over the past six decades has been effective and what has been learned from the experience.

8.1 Introduction
8.2 Dead Aid?
8.3 Give Money to the Poor?
8.4 The Schools of Thought
8.5 Have Your Opinions Changed?
8.6 Preparation for the Examination

Method of assessment

You will complete two assignments, which will be marked by your tutor. Each assignment is worth 15% of your total course mark. You will be expected to submit your first assignment by the Tuesday of Week 5, and the second assignment at the end of the course, on the Tuesday after Week 8. Assignments are submitted and feedback given online. You will also sit a three-hour examination on a specified date in October, worth 70% of your total mark. An up-to-date timetable of examinations is published in April each year.