It seems that wherever you go in developing countries, vehicles driving around with logos on them are all over the place. Most of them belong to development aid agencies - many of them non-governmental organisations - NGOs as they are commonly known - working on aid projects.
By no means is all aid disbursed in this way, but projects are very much the public face of development cooperation. This is partly because many can be seen to be addressing poverty directly, something which cannot be said of a great deal of international aid.
Projects are implemented by a wide variety of agencies; the larger ones being carried out through special arrangements between governments and donors and the smaller ones usually being run by different kinds of development organisations, notably NGOs.
Non-Governmental Organisations (NGOs)
NGOs involved in aid projects are private, voluntary, non-profit organisations with altruistic and philanthropic motives. Often they are perceived to be in a better position to reach the poor than governments or large financial institutions and are seen as having a more "human face". In most developing countries numbers of NGOs have soared in the past four decades, with international NGOs increasing from just over 1,000 in the late 1950s to over 30,000, and the number of national and community-based NGOs rising well above this figure.
The emergence of NGOs is commonly explained as an institutional response to market or state failures. They are often viewed as being less bureaucratic and more flexible, and therefore more capable of responding to emergencies, promoting work at grassroots level and involving the participation of local people. NGOs are also seen as being cheaper, more efficient and non-political and therefore more equitable in their disbursement than governmental aid.
However, their increased involvement in development projects has been accompanied by growing criticisms as to how aid is used. Indeed, NGOs have become the centre of fierce debates, relating not just to NGOs themselves, but to the whole system of delivering international aid.
Why are NGOs and aid projects being criticised?
Aid has long been controversial. Some economists, for example, have always argued that it is damaging, but the main criticisms of NGOs and aid projects are as follows.
Questions have been raised about who NGOs and other aid agencies are accountable to, and it is also disputed whether NGOs are really as non-governmental as they appear. Although some NGOs are partly funded by charitable donations, providing them with a degree of independence, others are in fact completely dependent on governmental support, through such official agencies as the Department for International Development (DFID) and the Danish Agency for Development Assistance (DANIDA).
NGOs' staff maintain that they do have some degree of autonomy. But there are certainly major power imbalances within the system. A distinction is often made between NGOs in donor countries ("northern" NGOs) and those in recipient countries ("southern" NGOs). Sometimes northern NGOs are active on the ground running their own projects.
This can mean that southern NGOs are under-funded and their activities undermined. In other situations northern NGOs work with the big aid donors in formulating policy, and southern NGOs are, in effect, employed to implement projects on the ground. In these circumstances is it really possible to assert, as many aid agencies do, that they are in the business of 'empowering' the poor?
Undermining the state
Where aid agencies such as NGOs are providing services and infrastructure in countries where none is made available by the state, they come under heavy criticism for undermining the state and establishing parallel bureaucracies. As more and more resources are channelled through development agencies rather than through the state, there is the perception that these have an increasingly significant role to play. However, this is more often than not seen as undue interference by the government of the host country. Donors are now placing more emphasis on project integration.
This is why Clare Short, the former UK Secretary of State for International Development, has reiterated the importance of incorporating project funding into the national programme of the host country with a focus on "good governance" and policy reform in order that progress towards development is made.
Part of Clare Short's concern is that the proliferation of projects on the ground has led to an increased overlap of activities and compounded problems of coordination. There is often outright hostility between aid agencies, and their need for survival in a competitive aid market has, according to some, left development agencies open to the accusation that they exploit poverty in order to attract funding, and that they further proliferate projects so that northern expatriate salaries can be justified. Others feel that the rise in projects has come about simply because the state was unable to provide services. Whatever the case, it is important that projects are sustainable, and that they do not lead to the state becoming dependent on agencies for the continued provision of the services they provide. Coordination and cooperation between the government and agency is hence seen as being of paramount importance. But this is easier said than done, and it also runs counter to other goals that are being emphasised, notably 'empowerment'.
Limits to empowerment
Empowerment is a desired process by which individuals, typically "the poorest of the poor" take direct control of their own lives - that is, it is seen as the provision of tools for self-reliance and grass roots' development. Critics question whether or not international agencies are best placed to mobilise and empower communities or if they simply impose their own perspectives. Do aid agencies have the right to be the "voices of the poor" and to decide the "correct" life for humankind and to speak on behalf of grass roots' communities? And if they do, then how much say do they really have, given that northern donors will dictate where and how the resources should be allocated. Trying to build the confidence of communities in order to empower them is a long process and once institutions have been established and people know what their rights are, there is an increased chance that the demand for services will grow and will need to be further sustained. If resources are then unavailable to meet this demand, what benefit is there in this?
Most fundamentally, serious criticisms have been made about the way aid projects are implemented. Do they actually contribute to changing the lives of the people living in the poorest parts of the world? Critics would argue that they do not make a substantial impact; that projects have proliferated and development objectives have been shadowed by the lack of coordination and by personal gain. While often recognising these contradictions and difficulties, agencies operational on the ground argue that they do make a difference through the provision of services, such as water or health care, which would otherwise not be provided by the state. Yet it is hard to show that aid projects have any overall impact on poverty statistics. Furthermore, with the increased emphasis on promoting processes of social change, whether it be governmental reform or "empowerment", come increased difficulties in measurement of output. Development projects that build water-wells and roads are rather easier to assess.
The United Nations Millennium Development Goals
These criticisms of development projects and aid agencies have sometimes been used as justification for cutting international aid. Levels of Overseas Development Assistance, or ODA, from donor countries have steadily dropped over the past thirty years. In 1970 the international community adopted the target of contributing 0.7% of their Gross National Product (GNP) to development assistance. Only five countries - Denmark, Luxembourg, the Netherlands, Norway and Sweden - have ever achieved this target and have continued to do so in recent years. In 2000 the average ODA of the 22 member countries of the Development Assistance Committee (DAC) of the Organisation for Economic Cooperation and Development (OECD) was 0.22% of their GNP. Even excluding the United States, which has never committed itself to the 0.7% target, the average was only 0.33%.
Despite this, world leaders at the Millennium Summit in September 2000 committed themselves to reaching ambitious global targets for reducing poverty by the year 2015. The Millennium Development Goals include: halving extreme poverty and hunger, achieving universal primary education and gender equity, reducing under-five mortality and maternal mortality by two-thirds and three-quarters respectively, reversing the spread of HIV/AIDS, halving the proportion of people without access to safe drinking water and ensuring environmental sustainability. They also include the goal of developing a global partnership for development, with targets for aid, trade and debt relief Progress towards the goals thus far has been mixed. Some countries are on track for some goals but none of the goals are likely to be reached at the current rate of global progress. The reasons are many, but they often include insufficient and inefficient public spending, crippling debt burdens, inadequate market access in developed countries and declining development assistance.
It was therefore somewhat of a surprise when world leaders came together again in Monterrey, Mexico to once more reaffirm their commitment to the Millennium Development Goals and pledge to substantially increase foreign aid to developing countries. Achieving these goals carries a price tag of between $50 billion, according to the World Bank, and $100 billion, according to OXFAM, a leading British NGO. The increase in aid is to be accompanied by conditions that recipient governments are reforming with greater emphasis being placed on aid projects that do make a difference to vulnerable communities. However, making commitments is the easy part. How much of this is simply in response to the fallout from events of 9/11 in New York is questionable. Moreover, fierce criticisms continue to be made about how currently available aid is used, including aid aimed at poverty reduction through development projects. Indeed, some argue that more aid will only make things worse.
The Uganda case
In all this confusion Uganda is often held up as a model, partly because poverty can be shown to have declined directly or indirectly as a consequence of development cooperation with a reforming government. It stands out as being one of the few countries where overall improvements in livelihoods can be linked to aid funding and development projects. It seems to show that aid can work. Much credit has been attributed to close collaboration with Uganda's President, Yoweri Museveni, establishing this as an example of "good governance" in practice. Also important has been the way in which development projects have been incorporated into Structural Adjustment Programmes and given a clear poverty alleviation component. Both DFID and DANIDA have used Uganda as a showcase of what can be achieved with development cooperation.
Nonetheless, some would argue that Uganda, like many other poor countries requires a dynamic private sector. It is attracting investment albeit on a relatively small scale. Whether or not it will be able to sustain the high levels of growth that have been achieved in the last 10-15 years remains to be seen. In the meanwhile it continues to uphold the accolade for effective aid and reform in Africa.
This article was first published in 2003. The BBC and the Open University are not responsible for the content of external websites.