I would love for you to take a look at the specific case of Afghanistan. It is political and there are much more bigger factors at play than aid (the effects of war, American politics, Soviet politics, regional politics). However, an argument that makes sense to me is that the Taliban had significant popular support because the institutions were so inefficient most people did not like the previous government, and these were institutions sustained by aid (their budget was 75% aid or so according to World Bank).
Sorry for going slightly off-topic, by I wanted to share this which is only related to the initial part of your post:
I am one of those people sustaining aid can be worse than no aid, but not just from the perspective of political institutions. I have a couple of assumptions based on my experience, that put together make me thing most aid has a negative outcome.
Most programs financed through aid and implemented by states and NGOs have a very modest effect, no effect, or a negative effect (usually also modest).
Most of these programs are implemented through institutions that implement systematic corruption. Non-profits and government units that are de facto for profit teams but can’t say it, so they have to collect this profit through corrupt processes.
Executing corrupt processes takes time, skill, and effort. You need to know how to fabricate financial reports and documentation, how to falsify beneficiary data, how to create the right paper trail, how to create an extortion network. To do it very well, you have to involve several people carefully, often your whole team, discuss it abundantly, and plan everything. Sometimes your donor or supervisor finds out or kind of finds out and you have to fabricate more explanations or defend yourself. It takes time. So for most of the professionals in these teams, corruption is a significant time sink, maybe 50% of their daily work gets dedicated to activities related directly or partially to corruption, maybe 25%, but for some people it could be more than 50%.
In many developing countries these institutions are very relevant economic actors and they attract some of the best minds in the country. In most developing countries there are not enough jobs in the private sector, and everyone practices entrepreneurship but wants to step out of it. Charities and government are a major employer when put together. In many cases, they pay top salaries. The worse the situation in the country, the more humanitarian and development funding, and the more significant these institutions are.
So we have an economic activity that does not have any significant positive effect (not when all budgets are aggregated) and where a substantial portion of the time is spent un a useless or harmful skill (it is not good for anyone that people learn to do this, maybe a small percentage can eventually be re-oriented to fraud prevention, but we don’t need this number of people learning all this) and the best people in the workforce are doing these “useless” tasks every day.
If there was less aid funding, there would be less of such corrupt teams, and people would be forced to start businesses, work for the private sector, or to emigrate and send back money, all seem better options for the good of the country.
Claims 1 and 2 are not hunches, I have worked in these type of programs at all levels and I have seen enough institutions to say that if this is not true then I might have had an extremely unusual sample in front of me. I have worked for close to 10 years in Cameroon, Nigeria, and Afghanistan and every day I had to work with, against, and around these type of teams.
Quick thought on the tangent, which I’d also love to hear more thoughts on from other people.
I’m skeptical that corruption is a big obstacle to growth and development. Measurement and historical comparisons are tricky here, but corruption seems to be a pervasive feature across many societies.
Even the United States had its local political machines and share of bribery before the Progressive Movement in the 1920s tried to filter it out. And conventional wisdom credits the Industrial Revolution (of the 19th century before the US reduced its corruption) with our modern wealth.
I suspect if we applied our same concern of corruption to currently-developed countries to their past, we’d find they (1) would fare just as bad and (2) had their development periods before they dealt with the corruption
The political scientist Yuen Yuen Ang has some great work addressing this neighborhood of intuitions. Her view is basically that “corruption” is decomposable into a several distinct types of phenomena, and some of these can be growth-promoting (as in China during the period between, approximately, Deng and Hu), whereas others can be fairly extreme impediments to growth.
Thanks so much for this! I don’t know why I ever thought about decomposing the idea of corruption but it seems like a really obvious framework now that you’ve mentioned it. Hoping to give that a read sometime.
Thanks Geoffrey it’s and interesting discussion. I have mixed thoughts about this. There’s a great section in the book ” bad Samaritan’s” by the awesome economist Ha Joon Chang which makes this argument very well.
Off the top: I’m not an expert on Afghanistan and it wouldn’t be overly surprising to me if we could find specific times in specific countries when aid did affect politics. Maybe post-invasion Afghanistan is one. All that said, my personal bet would be that aid just isn’t doing much in Afghanistan.
Now if the question is “does aid work well in Afghanistan?” then I’d guess the answer is “no.” I fully believe that politics can interact with aid to make aid more or less effective, especially in the sense that aid to very badly governed places might do very little. However, that isn’t the question. The question here is “would Afghanistan be better off without aid?” and while I’m open to the answer being “yes” I imagine that most of the problems are larger and more serious, and that aid offers only a very minor push in any direction. And of course this goes quadruple for Cameroon or Nigeria, where aid is a sideshow compared to the other money in the system.
I think it is very difficult to argue that aid “didn’t work well” in Afghanistan when you look at any education or health metric. According to UNICEF there was a 90% increase in child malnutrition in the year from June 2021-2022, capturing the period following the collapse of the state and the majority of aid projects (number is partially inflated by the expansion of UNICEF programming to cover gaps left by other actors).
I don’t think it is controversial that there was too much money and way too much corruption in Afghanistan. Obviously, the state-building project failed. But “aid” in that environment covered such an extreme range of activity. I’ll be honest, it’s a sensitive personal topic, having lived there and given everything that since happened, but it does bother me to see “aid” as a whole written off when it includes such diverse activities as addressing child malnutrition and funding unaccountable quasi-police forces.
This is very interesting!
I would love for you to take a look at the specific case of Afghanistan. It is political and there are much more bigger factors at play than aid (the effects of war, American politics, Soviet politics, regional politics). However, an argument that makes sense to me is that the Taliban had significant popular support because the institutions were so inefficient most people did not like the previous government, and these were institutions sustained by aid (their budget was 75% aid or so according to World Bank).
Sorry for going slightly off-topic, by I wanted to share this which is only related to the initial part of your post:
I am one of those people sustaining aid can be worse than no aid, but not just from the perspective of political institutions. I have a couple of assumptions based on my experience, that put together make me thing most aid has a negative outcome.
Most programs financed through aid and implemented by states and NGOs have a very modest effect, no effect, or a negative effect (usually also modest).
Most of these programs are implemented through institutions that implement systematic corruption. Non-profits and government units that are de facto for profit teams but can’t say it, so they have to collect this profit through corrupt processes.
Executing corrupt processes takes time, skill, and effort. You need to know how to fabricate financial reports and documentation, how to falsify beneficiary data, how to create the right paper trail, how to create an extortion network. To do it very well, you have to involve several people carefully, often your whole team, discuss it abundantly, and plan everything. Sometimes your donor or supervisor finds out or kind of finds out and you have to fabricate more explanations or defend yourself. It takes time. So for most of the professionals in these teams, corruption is a significant time sink, maybe 50% of their daily work gets dedicated to activities related directly or partially to corruption, maybe 25%, but for some people it could be more than 50%.
In many developing countries these institutions are very relevant economic actors and they attract some of the best minds in the country. In most developing countries there are not enough jobs in the private sector, and everyone practices entrepreneurship but wants to step out of it. Charities and government are a major employer when put together. In many cases, they pay top salaries. The worse the situation in the country, the more humanitarian and development funding, and the more significant these institutions are.
So we have an economic activity that does not have any significant positive effect (not when all budgets are aggregated) and where a substantial portion of the time is spent un a useless or harmful skill (it is not good for anyone that people learn to do this, maybe a small percentage can eventually be re-oriented to fraud prevention, but we don’t need this number of people learning all this) and the best people in the workforce are doing these “useless” tasks every day.
If there was less aid funding, there would be less of such corrupt teams, and people would be forced to start businesses, work for the private sector, or to emigrate and send back money, all seem better options for the good of the country.
Claims 1 and 2 are not hunches, I have worked in these type of programs at all levels and I have seen enough institutions to say that if this is not true then I might have had an extremely unusual sample in front of me. I have worked for close to 10 years in Cameroon, Nigeria, and Afghanistan and every day I had to work with, against, and around these type of teams.
Quick thought on the tangent, which I’d also love to hear more thoughts on from other people.
I’m skeptical that corruption is a big obstacle to growth and development. Measurement and historical comparisons are tricky here, but corruption seems to be a pervasive feature across many societies.
Even the United States had its local political machines and share of bribery before the Progressive Movement in the 1920s tried to filter it out. And conventional wisdom credits the Industrial Revolution (of the 19th century before the US reduced its corruption) with our modern wealth.
I suspect if we applied our same concern of corruption to currently-developed countries to their past, we’d find they (1) would fare just as bad and (2) had their development periods before they dealt with the corruption
The political scientist Yuen Yuen Ang has some great work addressing this neighborhood of intuitions. Her view is basically that “corruption” is decomposable into a several distinct types of phenomena, and some of these can be growth-promoting (as in China during the period between, approximately, Deng and Hu), whereas others can be fairly extreme impediments to growth.
Thanks so much for this! I don’t know why I ever thought about decomposing the idea of corruption but it seems like a really obvious framework now that you’ve mentioned it. Hoping to give that a read sometime.
Happy to recommend her work highly.
Thanks Geoffrey it’s and interesting discussion. I have mixed thoughts about this. There’s a great section in the book ” bad Samaritan’s” by the awesome economist Ha Joon Chang which makes this argument very well.
Thanks for the comments!
Off the top: I’m not an expert on Afghanistan and it wouldn’t be overly surprising to me if we could find specific times in specific countries when aid did affect politics. Maybe post-invasion Afghanistan is one. All that said, my personal bet would be that aid just isn’t doing much in Afghanistan.
Now if the question is “does aid work well in Afghanistan?” then I’d guess the answer is “no.” I fully believe that politics can interact with aid to make aid more or less effective, especially in the sense that aid to very badly governed places might do very little. However, that isn’t the question. The question here is “would Afghanistan be better off without aid?” and while I’m open to the answer being “yes” I imagine that most of the problems are larger and more serious, and that aid offers only a very minor push in any direction. And of course this goes quadruple for Cameroon or Nigeria, where aid is a sideshow compared to the other money in the system.
I think it is very difficult to argue that aid “didn’t work well” in Afghanistan when you look at any education or health metric. According to UNICEF there was a 90% increase in child malnutrition in the year from June 2021-2022, capturing the period following the collapse of the state and the majority of aid projects (number is partially inflated by the expansion of UNICEF programming to cover gaps left by other actors).
I don’t think it is controversial that there was too much money and way too much corruption in Afghanistan. Obviously, the state-building project failed. But “aid” in that environment covered such an extreme range of activity. I’ll be honest, it’s a sensitive personal topic, having lived there and given everything that since happened, but it does bother me to see “aid” as a whole written off when it includes such diverse activities as addressing child malnutrition and funding unaccountable quasi-police forces.