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What is the rationale for foreign aid?

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Making Aid More Effective: Lessons from the Philippines. Notes from the Field Making Aid More Effective: Lessons from the Philippines November 30, 2011 By Jaime Faustino As thousands of development experts and leaders gathered this week in Busan, Korea, for the Fourth High-Level Forum on Aid Effectiveness, The Asia Foundation has just published a book featuring case studies from the Philippines that focus on many of the most critical development challenges being raised in Busan.

Making Aid More Effective: Lessons from the Philippines

The book, Built on Dreams, Grounded in Reality: Economic Policy Reform in the Philippines, examines both successful and unsuccessful reforms in order to draw lessons from those experiences. A number of regularities that can inform development thinking and practice emerged from the cases: Institutional change is an iterative, non-linear, and context-specific process. Instead of a long and rigid work plan, the grant project structure allowed local partners to identify, develop and implement strategies and activities with broad goals identified.

Write a comment: * Required. Pakistan, an Ally by Any Other Name. • That U.S. leverage over Pakistani actions is fundamentally limited.

Pakistan, an Ally by Any Other Name

In addition, polling data suggest that public support for the United States in Pakistan is astonishingly low, civil-military relations are dominated by the military, and elements of the military support the Taliban along with a range of other Islamist militant groups. Because Pakistan has more than 100 nuclear weapons, is currently building them more rapidly than any country on the planet, and already has a population larger than Russia, it is fair to say that U.S. -Pakistan relations should be a high priority. 1 In fact, an argument can be made that the association with Pakistan is the most difficult partnership the United States has tried to manage since its alliance with the Soviet Union in World War II.

The recent death of Osama bin Laden brought an interesting response inside Pakistan. The United States has seen this kind of mendacious behavior before. It is unlikely, however, to have to make that choice. Increasing aid, wasting money? By the standards of some of the commentary that has appeared in the wake of the review of Australian aid, Hugh White’s op-ed in the Age is pretty good.

Increasing aid, wasting money?

Its tone is measured and it makes coherent points. Its central argument is plausible. And yet it is still wrong. It’s worth explaining why it is wrong, because the arguments it advances are conventional wisdom among many who comment on foreign aid, despite being mistaken. White’s case against aid runs like this: Australia is rapidly increasing its aid budget, but aid money (other than disaster relief) is wasted. This is a reasonable argument, but wrong nonetheless. First the claim that poverty is falling rapidly is not evidence that aid is not needed. “[P]overty is being overcome. The numbers are contested but White is probably right: the proportion of the World’s population living in poverty – as defined by White — is probably falling rapidly. White clearly believes that it doesn’t. Terence Wood is a PhD student at ANU. What is the rationale for foreign aid? Well, many thanks to Annmaree for her response to my op-ed. Over the years, she's taught me a fair bit of what little I know about aid, so I take her views very seriously.

But I'm not sure her points quite settle my concerns about the underlying rationale for our aid program. (Another interesting post responding to my op-ed by Terence Wood over at Devpolicy raises some similar questions). Just to reassure: I'm not 'anti-aid'. But I do think that we should be clear about what the aid program is trying to achieve, and I think both the Aid Review and the Government's response have left that very muddled. I think it is pretty clear that the only way to overcome poverty is to grow economies. What strikes me is how reluctant aid advocates are to claim that it can. Her first example, the Millennium Development Goals, are a mixed bag. Her second and third examples both relate to health care.