appolinario gpe final research paper-1[1]

8/3/2019 Appolinario Gpe Final Research Paper-1[1]

1/36

Effectiveness of Foreign Aid in Zambia

1

THE EFFECTIVENESS OF FOREIG AID

CASE STUDY: ZAMBIA

Written by:

Uliane APPOLINARIO

Email: [email protected]

Geneva June 08th

, 2009

MASTERENETUDESDU

DEVELOPPEMENT

GLOBALPOLITICALECONOMY

Academic Year: 2008 -2009 (Spring)

Professors: Cedric DUPONTDaniel TRACA


2/36


2

Table of Contents

Introduction 2

1. Contextualizing Foreign Aid - The Theoretical Framework about Aid

Effectiveness

1.1 Aid and Development Theories 4

1.2 The Big Push Model 4

1.3 The Paradox of the Lack of Growth: Failure of Aid? 7

1.4 Aid and Policy: a New Perspective 8

1.5 Aid: Is it Working or Not? The debate Easterly x Sachs 11

2. The Main Constraints of Foreign Aid in Sub-Saharan Africa

2.1 What is Wrong with Sub-Saharan Africa? 13

2.2 The Problem of Ownership x Policy-based Conditionalities 14

2.3 World Bank Policies and Reform Strategies 16

3. Case Study Country Aid Effectiveness in Zambia

3.1 Problem Overview 19

3.2 Aid and Policy in Zambia 21

3.3 The Kaunda Years 21

3.4 The Reform Period under MMD 1991 - 23

3.5 Analytical Framework : The outcomes of a decade of failed reform in Zambia

3.5.1 Evolution of Social Indicators 27

3.5.2 Economic Growth: The Failure of decade Lost 28

3.5.3 Aid Dependency 30

3.6 What has gone wrong? And what can be done? 32

4. Conclusion 33

5. Bibliography 34


3/36


3

Introduction

William Easterly started his article Can Foreign Aid Save Africa presenting his

scepticism on the good intentions at the attitude of some governments to increase

the amount of foreign aid to very poor countries in order to help their population

which is dying of hunger and serious diseases. He mentions the speech of Gordon

Brown, the UK Chancellor when he called for a doubling of foreign aid in January

2005 in an attempt to show how easy to do good is. Others world leaders have also

called upon a big push in Africa to end poverty, and people ask if a Marshall

Plan to Africa could not save this country. In July of 2005, the G8 agreed to

double foreign aid to Africa, from $ 25 billion a year to $ 50 billion to finance the

big push (Easterly, 2005). Today, this amount of cash has been certainly

compromised specially by the current financial crises, and even the promise of the

new president of the United States of America, Barack Obama, before being

elected, of doubling the foreign aid to Africa will certainly not be achieved. But

despite the monetary amount of money invested to save poor countries , we

might rather question: Has this aid been effective? Many studies have showed that

not, or at least, not proportionally to the amount of aid.

In this sense, the effectiveness of foreign aid has been the reason of a growing

number of debates and academic productions in the last years. A considerable

number of studies and researches show that after some decades of increasing

volume of financial flows to poor countries, the results seen today are substantially

far from the expected result of the foreign aid to the recipient countries (see for

example). Thus, the main reason for the increasing number of debates around this

theme reflects the attempts to address a main problematic: Why aid is not showing

the results that it was supposed to show? In other words: Why increasing flows of

investments sent to poor countries are not being able to promote economic growth

and social development? And following: What can be done to achieve a more

effective foreign aid?

A exhaustive - but not conclusive - literature has already been trying to answer

these questions and thus, my main interest on this work is try to discuss critically

some of these works with a main focus on questions which will be raised starting


4/36


4

with the analysis of the theoretical debate around the effectiveness of aid as well

as the study of some data and evidences ins Sub-Saharan Africa. The methodology

adopted in this paper presents as follows: With basis on this theoretical debate as

well on the evidences that I have found and which will be presented further, I will

focus my study on a central question: Which are the main factors that lead to the

failure of foreign assistance in SSA countries both to improve the quality of

institutions as well as to reduce poverty? My main argument to this question is

that: The lack of confidence by the donors regarding the government of recipient

countries, has motivated the formers to adopt a high number of conditionalities

which had a negative effects both to ownership of the aid and to the political

environment of the recipient countries. The country case study considered in this

paper will be used in order to try to verify the feasibility of this argumentation.

Zambia was chosen for presenting a challenging case, but despite of the

specificities of this country, it can be considered to be an illustrative case, which

can somehow represents the course followed by most of sub-Saharan countries in

the last 30 years of foreign aid1.

Finally, I will divide the study as follows: Session 1 will present a brief

contextualization of the foreign aid and the evolution of the debate around aid

effectiveness. Session 2 will present the main constraints of foreign aid to Sub-

Saharan Africa giving a special attention to the World Bank policies and the

conditionalities of the structural adjustments and finally Session 3 will provide an

illustration through the study of the case of Zambia.

1 There are a lot specificities among the countries in Sub-Saharan African, but a general trend thatreflects the most of these countries followed unsuccessful plans of adjustments, high level ofendebtness and rise of indicators of poverty. Most recently, the World Bank has published a studynamed Aid and Reform in Africa where there is a compilation of analysis of ten SSA countries.The World Bank classifies the ten countries according to the success of implementation of reforms

and improvement of institutions in (1) successful reformers, (2) Post-Socialist reformers, (3) Mixedreformers and (4) Non-reformers. But paradoxically, even the successful reformers, Ghana andUganda, were not able to pay the external debt and had to have the debt cancelled.


5/36


5

1. Contextualizing Foreign Aid - The Theoretical Framework about Aid

Effectiveness

1.1 Aid and development theories

In this session, I will present a brief literature review that has been trying to raise

the main concerns about aid effectiveness. A very important point to be highlight

before starting our review is that aid strategy was somehow related to the

mainstream development though of each decade. To broadly sketch (and

oversimplify the changes), in the 70s the main emphasis was to improve the world

income distribution by directing aid more to the poorest nations. In the 1980s,

there was increased awareness of the importance of government policies to give

favourable incentives to the private sector, get prices right, facilitate free trade and

maintain macroeconomic stability. This was reflected in a concrete policy change:

the introduction of the structural adjustment lending by the World Bank and the

international Monetary Fund in 1979-80 to give loans to developing countries

conditional on them adopting these policies. Then beginning in the 1990s, there

was increasing emphasis on the quality of government institutions such as

democracy, accountability and control of corruption. The new approaches in the

1980s suggested that individual projects would have high returns only if national

government policies were favourable, and then beginning in the 1990s only if

institutions were supportive (Easterly 2007). All these approaches to development

will serve as a support to the allocation of and the pattern of foreign aid. We will

see more detailed this discussion in the present topic.

1.2 The Big Push Model

The macroeconomic theoretical basis to promoting financial aid has appeared on

1950s and had as the starting point the Big Push Model. Briefly this model states

that Africa is poor because the continent is stuck in a poverty trap. To get out of

the poverty trap, they need a large aid finance increased in investments, which

would be the Big Push. In this sense, the Harrod-Domar growth model was

extensively used to discuss the mechanisms of how a poverty trap arises.

According to this model, a determined level of savings is necessary to promote


6/36


6

stability and growth of the economies. If saving is too low to keep up with

population growth and the depreciation of capital, then per capita growth will be

zero or negative (Easterly 2005). Thus, some development economists in 1950s

and 1960s postulated a desirable per capita growth rate and calculate the

investment requirement to meet this target the distance between the low

domestic saving rate and the investment requirement was called the Financial

Gap. In this sense, the role of aid was to fill this financial gap (Rostow 1960)

(Chenery 1996) (Easterly 2005).

Later, by modifying the rigidities in the growth model and introducing the trade

deficit, the two-gap models developed by Chenery and Bruno (1962) and Chenery

and Strout (1966) improved on the analytical framework. Taylor (1988, 1990) and

Bacha2 (1990) introduced the fiscal gap as another constraint requiring external

financing to augment governments tax effort in a noninflationary way. The two

major conclusions that emerge from the literature with respect to the effectiveness

of aid are that: (i) foreign aid should aim at raising domestic savings to a level

sufficient to finance the investment needed to sustain the targeted growth rate of

GDP; and (ii) foreign aid should not discourage the recipient countries from

seeking to relieve the foreign exchange constraint by improving competitiveness a

and export diversification (Agrawal 1993).

The empirical relationship between the size of foreign assistance and its impact on

both the GDP growth rate as well as domestic savings behaviour has been

extensively debated. Some studies have questioned the usefulness of aid and

showed that there is little or no correlation between aid inflows to developing

countries and their GDP growth rates (for example, Gupta and Islam, 1983; or

Mosley, 1987) and also that there is a negative impact of increased foreign aid on

domestic savings (for example, Weisskopf, 1972). Other studies, however, do not

confirm these relationships and there are a multitude of studies that have generally

concluded that aid has been beneficial to the growth prospects of developing

2Citation of Nisha AHMED, Zafar MERDED, Michael and NORDL, Roger Agrawal, StructuralAdjustment, Economic Performance and Aid Dependency in Tanzania , Working Paper Series -

Country operations, Eastern Africa Department The World Bank and Fiscal Affairs and AfricanDepartaments and International Monetary Fund Deepa.lments InternationMaol netarFyu nd(Washington: World Bank, 1993), 1-28.


7/36


7

countries (for example, Cassen, 1986; or Riddell, 1987)3 (Agrawal 1993).

1.3 The Paradox of Lack of Growth: Failure of Aid?

All these studies have in common the analysis of the role of aid under

macroeconomic aspects. Today it can be considered a simplistic view because it

started with the assumption that just a flow of capital entering the treasure of the

recipient country can have a positive effect that would engender the economic

growth and that economic growth would reduce poverty. Paradoxically, evidences

show that most of these studies went toward a wrong way and principally that

there has been a negative correlation between raise of aid flows which was

called by many prestigious economist (e.g. Sachs, 2006) and the effective

economic growth of most of recipient countries specially in Africa. The graphic

bellow illustrates this relation in a period where the flows of aid to Africa have

raised steadily (tripling as a percentage of African GDP from 1970s to 1990s), but

African growth remains stuck at zero percent per capita (Easterly 2005).

Fig. 1 Aid and Growth in Africa (10 years moving average)

Source: Easterly, 2005

Because of the failure on attempting to find evidences that just foreign aid per se

would be able to promote economic growth and consequently poverty reduction4

3Ibid


8/36


8

the literature on aid effectiveness started to make some progress and take account

on the severe problem of reverse causality with the use of variables which

included not just macroeconomic factors, but at this new era the political variables.

1.4. Aid and Policy: a new perspective

Peter Boone (1996) was one of the first to consider the relation between aid and

political environment. He was extremely critical to the effects of foreign aid to

political institutions. He arrives even to mention that foreign aid programs were

launched long before the existence of a compelling theory, or compelling evidence

that proved they could work and massive aid programs that began after the second

world war, but only took off in the 1960s, are an unprecedented economic

experiment (Boone 1996). But most interesting Boone has stated that aid does not

significantly increase investment and growth, nor benefit the poor as measured by

improvements in human development indicators, but it does increase the size of

government. He finds that the impact of aid does not vary according to whether

recipient governments are liberal democratic or highly repressive. But liberal

political regimes and democracies, ceteris paribus, have on average 30% lower

infant mortality than the least free regimes. This may be due to greater

empowerment of the poor under liberal regimes even though the political elite

continues to receive the benefits of aid programs. An implication is that short term

aid targeted to support new liberal regimes may be a more successful means of

reducing poverty than current programs (Boone 1996).

Most recently, Burnside and Dollar (2000), have also included the political

environment aspect to the analysis of aid effectiveness but differently of Boone,

they follow a much more liberal perspective and they do find a relation between

growth and aid. The main argument of Burnside and Dollar is that aid accelerates

4There is another debate concerning the relations of economic growth and poverty reduction andsome evidences of a negative relation between these factors. The neoclassical economy believed ina positive relation concerning economic growth and poverty reduction based on the idea of Trickledown. It states that in a first moment, economic growth would concentrate wealth, bus so far thisgrowth achieve a certain level, the wealth would trickle down to the poorest of the society and thenreduce inequalities and poverty as well. Some evidences shows that there was no trickle down to

most of poor countries and despite some considerable level of growth the level of poverty has evenincreased. For further information on this debate see Dollar and Kray, (2002); Weisbrot, Naimanand Kim, (2000) and Ravaillon, M, (2005).


9/36


9

growth in developing countries with sound institutions and policies, but has less or

no effect in countries in which institutions and policies are poor (Burnside &

Dollar,2000). This result is argued to be quite intuitive: a corrupt, incompetent

government is not going to use aid wisely and outside donors are not going to be

able to force it to change it habits. This evidence is supportive of the growing

trend among aid agencies toward greater selectivity that is, channelling

relatively more aid resources to poor countries with reasonably good institutions

and policies (Burnside & Dollar, 2000 : 3). It is important to note here that this

can be challenging not just for recipients who will be obliged to improve the

quality of their institutions, but also to donors, to whom strategic allocation of aid

might be reviewed.

The graphic bellow illustrates the hypothesis of Burnside and Dollar.

Fig.2 Growth, Aid and Policy

Source: Burnside&Dollar, 2000


10/36


10

Another finding at the article of these two authors, which will be very important to

our case study, is what concerns the impact of aid on institutions and policies.

They argue that there is a consensus around the fact that aid, as traditionally

practiced has not systematic, beneficial effects on institutions and policies

(Burnside and Dollar). This is important when we consider that many donors have,

several times even increased the amount of aid to a recipient country that has

steadily showed bad political performances, expecting to improve the quality of

institutions. This is for example the case of Zambia, which will be discussed

further. Coming back to Burnside and Dollar, they argue that in particular, there is

a broad agreement that giving a large amount of financial aid to a country with

poor economic institutions and policies is not likely to stimulate reform, and in

fact it may retard it (Burnside & Dollar 2000 : 4).

Two important problems rise of the analysis of Burnside and Dollar. The first one

is how to define good institutions. In this sense some researchers question the

long list of things that must be done and the casual chain from good governance

to development, by exploring the particular histories of developed countries,

suggesting that specific conditions of good governance are basic characteristics

needed for sustained development secure property rights and contracts, for

example -, while other governance factors emerge over time in conjunction with or

in consequence of economic growth and poverty reduction (Grindle 2007).

Furthermore the World Bank has suffered much criticism by prescribing a model

of governance based on Western values of democracy and free market.

The second problem is the idea of selectivity. Assuming that the foreign aid will

just have a positive impact on countries with a sound policy, countries with bad

policies will be excluded of aid, then what to do with their population. The Paris

declaration has embodied the principle of selectivity in order to improve the

quality of aid and specially to serve as an incentive to countries with poor policies,

to pursue the improvement of the institutions5.

5 To further information, see the document of the Paris Declaration on the web sitehttp://www.oecd.org/document/18/0,2340,en_2649_3236398_35401554_1_1_1_1,00.html


11/36


11

Following this same reasoning, Van de Walle states that according to many studies

the foreign aid to Sub-Saharan Africa has presented a very small effect, being in

several cases negative both to growth and poverty reduction. He argues that,

because of corruption, the most part of the poor people in these countries has never

received any kind of aid (Van de Walle, 1999)

Should we then use only policy and institutional quality as measure in determining

aid flows? Should countries with poor policy and poor institutional quality receive

no aid at all and then all their population would pay the price by the path followed

by the government? This would probably be to rash a conclusion. Recent research

by Clemens, Radelet, and Bhavnani (2004) takes an entirely different approach.

Instead of focusing on the different policy and institutional characteristics of

recipient countries, they focus on the characteristics of different types of aid flows.

Importantly, they consider only what they term short impact, which includes

budget and balance of payment support, infrastructure investments, and aid for

productive sector such as agriculture and industry. In contrast to previous studies,

they find a strong impact of aid on growth (and thus in poverty reduction, at least

to some extend) regardless of institutions and policies In light of such evidence, it

is necessary to be cautious and avoid a new faddism or herd behaviour in the

relocation of aid flows to a small group of countries that meet the criteria. Timely

interventions to support reform efforts and to avert famines and other crises

remain a vital function of aid (Clemens, Steven and Rikhil 2004)(Goldin 2007).

1.5 Aid: Is it working or not? The debate Easterly x Sachs

The most recent debate on foreign aid is between Jeffrey Sachs and William

Easterly. Sachs is optimist about the possibilities of the foreign aid. He consider

that the money invested in aid is still just a small value compared to wastes in war,

subsides etc. He notes that aid and technology has improved the life of many

societies specially regarding health and education. According to him:

Life-saving and poverty-reducing measures raise the productivity of the

poor so that they can earn and invest their way out of extreme poverty, and

these measures do so at an amazingly low cost. To extend these proven


12/36


12

technologies throughout the poorest parts of Africa would require around

$75 billion per year from all donors, of which the US share would be

around $30 billion per year, or roughly 25 cents per every $100 of US

national income. (Sachs 2006).

William Easterly is extremely critical to this assumption and the overall effect to

aid to Africa. In response to Sachs, he states that:

Poverty in Africa is the outcome of much deeper factors such as political

elites who seek mainly to protect their own position, dysfunctional

institutions like corruption and lack of property rights, and a long history

of exploitation and meddling from abroad (the slave trade, colonial

depredations, the creation of artificial states, military interventions). It

takes breathtaking hubris to assert that this mess can be fixed for the tidy

sum of $75 billion. A similar hubris leads to amnesia concerning the many

previous generations of technical experts that have ineffectively tried

Sachs's "proven strategies" to end African poverty (Easterly, 2007).

And continues

Poverty never has been ended and never will be ended by foreign experts

or foreign aid. Poverty will end as it has ended everywhere else, by

homegrown political, economic, and social reformers and entrepreneurs

that unleash the power of democracy and free markets (Easterly, 2007)

Easterly view s of aid is substantially skeptic and considers most the destructive

effects of aid as well as how aid was, most of times, tied to political and sector

strategies, rather being pro-poor oriented. See for example (Easterly, 2007)6

6

In this study, Easterly focus on the problem of allocation of aid and he shows us that aid has beenmuch more associated to strategic interest (for example, political and economic) rather than pro-

poor oriented. This lead to a problem of allocation and coordination of aid. Many countries see aconcentration of aid in a certain sector, whereas the better strategy, according to Easterly should beto diversify aid and find a better coordination among the donors.


13/36


13

In the same line of scepticism of Easterly, Collier argues that as a general rule, aid

tends to retard the growth of the labour-intensive export industries that are a poor

countrys most effective engine of growth. And much aid gets diverted into

military spending (Collier, 2005)

2. The Main Constraints of Foreign Aid in Sub-Saharan Africa

2.1 What is Wrong with Sub-Saharan Africa?

Sub-Saharan Africa is often cited as the paradigmatic example of destructive

political effects of foreign aid. There is a set of constraints that lead several

authors to state that foreign aid to Africa has been failing. Briefly summarizing,

the main evidences are:

- Existing aid organizations have achieved very little poverty reduction despite theastronomical sums of money they have spent on SSA (Easterly 2006);

- Many countries in SSA, which have received a large amount of aid have,paradoxically, increased the indicators of poverty in the last years;

- Larges amounts of aid have made some countries extremely dependent on foreignassistance to supply basic services;

- Corruption and aid fungibility have been some main problems.

In this topic, we will focus in two main problems in order to support the main

argument of this paper: The problem of ownership and policy-based

conditionalities. Indeed, the option to focus in these problems does not reflect

that we will neglect, which I consider some of the root causes of poverty

corruption and lack of a strong state as well a broad range of structural problems

faced by SSA states since the very beginning of their formation but rather, it

reflects my understanding, that because of these root causes, both donors and

recipient countries are failing to find a way in which aid will effectively promote

growth and specially reach the poorest. By one side, recipients are not able to

assure that the development assistance will find a safe place and money will be


14/36


14

properly used. Then, by the other side, donors will try to assure the maximum of

certainty by imposing more and more conditionalities and this will have a negative

impact on ownership. We will better discuss this relation on the next topic.

2.2 The problem of ownership x policy-based conditionalities

There are many problems faced when two countries or a multilateral organization

and a country work together in order to establish an aid arrangement. This happens

essentially because donors and recipients have different perceptions and different

interest. This is a main problem of development assistance. One could simple ask

if both the interest of donors and recipients might simple be fight poverty and raise

the standard living of the population. Unfortunately the answer is not. Easterly,

2005 has showed in a very illustrative study, how donors allocation of foreign aid

has varied along the time and how it was related to political and economic

strategies.

But supposing that both interest of donors and recipients is to fight poverty in

recipient countries, the problems is not solved. The perceptions on how to

implement the most appropriate strategy to reduce poverty can be very different.

Donors will always have an advantage of being creditors and this gives then a

stronger position to impose what we call conditionalities. The conditionalities

have as the main objective to solve the problem of the broken feed back loop7, in

other words to provide the most possible environment of certainty where funds of

donors will be applied.

Considering the financial aid or the aid to the balance of payments made by the

World Bank and the IMF in 1980s to most of the Sub-Saharan countries, the set of

conditionalities more known as structural adjustment had the main objective of

increasing the probability of prompt repayment of dent and sometimes even to

ensure that the funds do not support (including grants) do not support policies

inconsistency with the values of the creditors. In other words, the creditors/donors

typically want the funds to be used productively, and that the recipient government

7 See Severino & Charnot 2007


15/36


15

is able to collect taxes and the country able to generate the foreign exchange to

facilitate timely repayment of any debt assumed (Johnson, 2005).

But the hard side of the conditionalities is that, according to critics, conditionality

is often used as an attempt to buy policy change with financial aid ignores certain

countervailing factors. Most notably, the aid by alleviating fiscal and payments

pressures could daunt the incentive for policy change. This aggravates a time

inconsistency problem, namely, that once the aid was received unless the

government wanted the reform it could reverse it. In addition, when a government

does not sustain the reform, it has not been typically punished, for reasons that

include the fact that to cut off the recipient country from further assistance would

aggravate its payments problem thereby threatening its ability to repay the very aid

donors, where relevant (Collier, 2001). For this reason, we note several examples,

and here I mention again the case of Zambia, where financial flows persisted even

when conditionalities were not filled and the political environment was going even

worse.

Regardless all the discussion about the effectiveness or not of the conditionalities,

a main problem the second main problem that I propose to analyse in this section

- raise from the simple existence of this kind of arrangement: the ownership

problem.

Van de Walle considers that ownership is of the main problems of effectiveness of

foreign aid in Africa. According with this author, recipient governments have the

ownership of a financial activity of the foreign aid when they are convinced that

the aid will enforce their power and their interest (Van de Walle, 1999).

To Johnson, 2005 if a country owns a programme, it has the right to insist on

making the final decisions without coercion on the contents of a programme. In

addition, the country accepts without coercion the obligation to take full

responsibility for the outcome of the programme and hence for the welfare

consequences to its citizens and for certain external effects on noncitizens.

Furthermore, the above right and obligation would be generally acknowledged by

all other parties such as creditors, international organizations, and other countries


16/36


16

who have anything to do with the programme (Johnson, 2005).

For Ranis, 1995, it seems clear that the lending cum conditionality process works

well only when local polities have decided, largely on their own, possibly with

outside technical help, to address their reform needs, effect certain policy changes

sequentially, and approach the international community for financial help in

getting there' (Ranis, 1995 from Dollar and Svenson).

2.3 World Bank Policies and Reform Strategies: Can Conditionalities Promote

Good Governance?

When we talk about foreign aid by the World Bank and the International Monetary

Fund, an important point in terms of conditionalities is the structural adjustment.

As already stated, the structural adjustment programs came out of another view of

why Africa is poor, and this gained prominence in the early 1980s with the advent

of the Washington Consensus. This view says that Africa is poor because its

government have chosen bad policies. The bad policies view of Africas poverty

led to a different view of the role of aid. In this sense, throughout the imposition

of a set of macroeconomic conditionalities, the role of the Western donors should

be to induce changes in the political context of the recipient countries. The

structural adjustment loans (SALs) of the IMF and the World Bank were the

embodiment of this approach. As already argued in a previous session, Western

donors and international institutions were not very successful in changing policy

(Alesina and Dollar 2002, Burnside and Dollar 2000, Van de Walle 2001, 2005,

Easterly 2005).

According to Goldin 2007, the adjustment program that came into their own in

part in response to the severe macroeconomic imbalances of the 1970s, including

these that were the result of oil shock, had own problems. Donors incorrectly

believed that conditionalities on loans and grants could substitute for country

ownership of reforms. Too often, governments receiving aid were not truly

committed to reforms. Moreover, neither donors nor governments focused

sufficiently on alleviating poverty in designing adjustment programs. In the late

1970s, and early 1980, the pendulum in leading donor countries swung to the new


17/36


17

policies of Ronald Regan in the United States, Margaret Tachter in The United

Kingdom, and Helmut Kohl in the Federal Republic of Germany. This was

reflected in the World Bank by a new emphasis on getting the prices right and

the articulation of the Washington Consensus, and the aid community focused

on macroeconomic reform in developing countries. While it was necessary to

achieve macroeconomic stability as a prerequisite for sustainable growth and

poverty reduction, both donor and recipient countries underestimated the

importance of governance, of institutional reforms, and social investments as a

complement to macroeconomic and trade reforms. Prescriptions for reform were

too often formulaic, ignoring the central need for country specificity in the design,

sequencing and implementation of reforms (Goldin 2007).

This author thus considers that, as a result, weak of governance and institutions

reduced the amount of productivity growth and poverty reduction that could result

from the macroeconomic reforms and many of these factors were present in

Africa, contributing to the impoverishment of this continent. In this sense, Goldin

considers that t here are many causes to slow development in Africa, including

poor domestic policies and institutions and weak commitment to reform, but too

often aid did little to improve the situation and in some cases even worsened it

(Goldin 2007).

An illustration of the impoverishment of Sub-Saharan Africa is well showed in a

study by Easterly, 2005. He picked out the African countries that were in the top

20 worlds wide in number of structural adjustment loans received from the World

Bank and IMF. Most African countries that received intensive treatment from

structural adjustment have negative or zero growth and some have high inflation.

On balance, the outcomes associated with frequent structural adjustment lending

are poor negative growth or high inflation, or both. Of course, there is a selection

problem in that countries that are already in trouble were the ones that were

chosen to receive these loans. However it is hard to believe in a positive effect of

structural adjustment lending despite the selection problem, for three reasons:

First, things were so bad in so many recipient of structural adjustments that it

stretches belief that it had a strong positive effect. Second, since structural

adjustment loans were repeated year after year, one wonders why the patient did


18/36


18

not improve after repeated doses of the medicine. Finally, formal statistical

methods to control for possible reverse causality from crises to treatment still finds

that structural adjustment lending had a zero or negative effect on economic

growth (Easterly, 2005).

Przeworski and Veeland, using a bivariate, dynamic version of the Heckman

selection model have a very interesting study on this issue. They find that the

effects of the IMF programs on growth are negative, and even selection is taken

into account, IMF programs still appear to reduce growth. Thus, they show that

countries could have a better performance on economic growth without the IMF

loans. (Przeworski & Veeland, 2000)

Another piece of evidence is that even the considered success stories by the

report aid and reform in Africa, namely Ghana and Uganda could not play back

zero interest Structural Adjustment Loans, and the World Bank and IMF had to

forgive the debts through the Heavily Indebt Poor Countries.

Collier has argued that the failure of the conditionalities imposed by the World

Bank reflected two fundamental weaknesses. First, governments learned to game

the system by reneging on their promises. Aid was committed on the basis of a

promise, yet the limited continuity in Bank decision-taking and the strong

incentives to disburse made enforcement through future aid commitments

incredible. In the event, some governments were able to sell the same promise of

reform to the Bank several times. This weakness of conditionality is a

straightforward instance of a class of problem known in economics as time

inconsistency. The second weakness was that the coercive nature of the Bank is

promotion of policy reform deepened government resistance to policy change.

This is also a straightforward instance of a class of problem known in the

psychology literature as reactance (Collier, 2001). In this regard, Hirshman has

talked about the perversity thesis. It consists on the belief that an attempt to push

the society in one direction will move it the opposite way. According to

Hirshmman, 1991 the perversity thesis is a standard justification for being against

government programmes.


19/36


19

But maybe, the main mistake made by donors specially in the 80s is that in

general they have not discriminated effectively among different countries and

different phases of the reform process and they have tended to provide the same

package of assistance everywhere and at all times. In this sense, failures in

implementation result from lack of political will of the authorities or simply from

inadequate capacity (Johnson, 2005).

3. Case Study Country Aid Effectiveness in Zambia

3.1 Problem Overview

Zambia is a very challenging country to study the effectiveness of foreign aid. As

argued in a report of the World Bank, in Zambia more than in most other sub-

saharian african countries, financial aid from the international donor community

over the last two decades has been tied to the implementation of economic policy

reform (Van de Walle and Rakner 2001 : 535). But the conditinalities combined

with a complicated relationship between donors and the government of Zambia

have damaged the effectiveness of a big ammount of money which was one of the

major flux of aid in Africa for many years. Thus, the relationship with the

government of Zambia with these institutions as well as to the bilateral donors is

something very important to our analysis especially when we consider the problem

of lack of ownership.

Since the independency from England, in 1964, this country has been extremely

dependent on foreign aid, while at the same time an increasing number of

Zambians have seen their social and economic conditions deteriorated. As we will

see further illustrated on social and economic indicators, there is evidences that

over the last 35 years the indicators of poverty have increased in a sense that puts

this country as one of the poorest in sub-Saharan Africa. For the most of the 1990s

a staggering 65-70 % of the population has been living on or below the poverty

line. Given the political and economic role of foreign aid in the country it is highly

relevant to ask how well the aid from the most important donors reflects the

pressing issue of poverty reduction (Carlsson, et al. 2000 : vi)


20/36


20

There is a wide range of methodological regressions to evaluate the impact of the

financial aid in a country and good methodology will consider a broad set of

macroeconomic and structural factors. My purpose in this paper is more limited. I

will adopt an analytical framework and my main objective in this part is to show

how political instability in Zambia has affected the impact of foreign aid.

The analytical framework is presented as follows:

Fig.3 - Analytic Scheme

Elabored by Appolinario, U.

Political instability will be an independent variable which will have adverse effects

both to donors and investors confidence and consequently to the implementation

of reforms. This leads to the failure of the role of foreign aid. The evidences

adopted to verify this argument will be (E1) Economic performance, (E2)

Evolution of social indicators, (E3) Aid dependency. The adoption of these

indicators lays on the fact that the mains purpose of the foreign aid is argued to be

the rise of standard livings of the population of recipient country trough the

economic growth. Aid dependency for the other side can be a negative signal that

the country is not responding productively to the amount of money lent.

In order to introduce the problematic of the political environment I will present in

the next sub sessions a brief analysis of the evolution of the relations between

donors and government of Zambia and how aid was sensible to the issue of

governance and reform.


21/36


21

3.2 Aid and Policy in Zambia

To study policy of the foreign aid to Zambia, we can divide the history of this

country in two main periods (1) From independence in 1964 to the adoption of a

multiparty system in 1991 the period know as the Kaunda years; and (2) from

1991 to nowadays, dominated by the MMD, or the Chiluba years. As we will see

in the following session, the flows of external aid and the behavior of donors were

directly conditioned to the performance of reforms and to the political willingness

to accept donors conditionalities.

3.3The Kaunda Years

Right after independency, Zambia experienced a period of growth and stability,

with the economy based specially on copper sector. The mining companies were

traditionally the most important employers in the economy, and copper itself was

the biggest generator of foreign exchange. It thus provided the basis for the

import-substituting industrialization efforts that the government had embarked on

in the 1960s. The Zambian Government considered the sector so important for its

development that the mines were nationalized by the beginning of the 1970s

(Bigsten and Kayizzi-Mugerwa 2000).

However a dramatic slowdown in the economy and the end of the successful years

started with the global recession of the 1970s. As a first impact, the copper

incomes fell dramatically. The government was initially not willing to adjust, but

borrowed large amounts of money to maintain the copper mines and the public

sector, in the process building up a large debt. The first adjustment programme,

with IMF backing, was introduced in 1978. This Action Programme led to a

certain measure of stabilization, but the government failed to maintain reform

momentum. Another structural adjustment programme was embarked on in 1983,

with the major goal of correcting price distortions. Included was the decontrol of

interest rates, deregulation of prices, and general reduction of tariffs. The

government also sought to reform the parastatals, as well as the taxation system. A

notable feature of the programme was its emphasis on raising agricultural

production, which would be achieved by agricultural producer-price increases.


22/36


22

However, as in earlier attempts, the success of the new programmes was

conditioned on support for the policies by the elite and urban dwellers (Bigsten

and Kayizzi-Mugerwa 2000). The reforms were highly unpopular and moreover

also tended to undermine the position of the ruling partys main political

constituencies (see Bates and Collier, 1993). This leads to a context of political

instability in the country. President Kaunda replaced key members of his

economic policy team in April 1986. The shift culminated in May 1987 in the

abandonment of the IMF-supported adjustment programme altogether, putting an

end to the most sustained reform attempt during the Kaunda era (Bigsten and

Kayizzi-Mugerwa 2000).

Curiously, despite the political instability in the country in this period, the foreign

aid has increased.

The graphic bellow illustrates the relation between aid and policy in Kaunda era.

Fig.4 Aid and policy performance in SSA

Source: World Bank, 1998

According to the World Bank, there are a number of reasons why donors have

given so much assistance to poor countries with weak policies and Zambia


23/36


23

illustrates it. Donors hope that aid will induce policy reform, but unfortunately,

money has proved to be quite ineffective in generating reform in this country.

Foreign aid increased steadily reaching 11 percent of real GDP in the early

1990s. However, policy got worse throughout this period. Despite a series of

structural adjustment loans from the World Bank and the IMF, there was no

substantial improvement in policy before a new government came to power in the

early 1990s (Pritchett and Dollar 1998). It shows us that, instead of improving

political institutions, in Kaunda era, aid had a negative effect and might have

retarded the reforms instead of promoting them.

3.4 The Reform Period under MMD 1991 The misleading of a promissory

decade

The opposition won the elections in 1991 on a liberal platform of commitment to

reforms and the IMF. To the donors, the introduction of a multiparty system was a

promise of a new era based on reforms and for this reason they increased the

support to Zambia, with aid, at close to US$1.5 billion, reaching its all time peak,

in 1992 (Bigsten and Kayizzi-Mugerwa 2000).

Two main programs were adopted in a attempting to show that the new

government was committed to economic reforms. The first one was the Economic

Program Reform (EPR) with the goal of arresting the economy decline, and the

second, the Rights Accumulation Programme (RAP) supported by the IMF. At the

end of 1995, the government had made enough progress under RAP to resume

borrowing from the IMF and this was the first time that Zambia had actually

completed an agreement with the Fund (Bigsten and Kayizzi-Mugerwa 2000).

Another initiative toward the economic reforms was the establishment of the

Zambian Privatization Agency in 1992 and the Public Sector reform launched in

1992.

As expected by the donors, the new government introduced some measures which

included rapid liberalization of external trade and payments system, and a

movement towards a market-determined exchange rate; depreciation of Kwacha

the domestic currency; removal of exchange controls on current transactions and


24/36


24

removal of all licensing and quantitative restrictions on imports and exports were

removed, and the tariff structure was rationalized. By 1994, Zambia had one of the

most liberal foreign exchange regimes in SSA and the International cooperation

institutions have considered Zambia a case of success.

Considering all the reforms implemented in this period, I will argue here that the

core of the failure of the external aid in Zambia is to be discussed specially on

MMD government. Not because the relations with the donors were more turbulent

in this period than the period of Kaunda, but rather because, different of Kaunda

mandate, at the beginning, this party was strong committed to reforms requested

by the donors and indeed, none of the reform measures implemented have been

reverser and no aid agreements with the IFIs have been canceled (Van de Walle

and Rakner 2001). Even one of the most sensible issues, the privatization of the

mining sector was put into practice starting on 1997. So, how can we explain that

the MMD years achieved so little in terms of growth and that the poverty

indicators increased even more rapidly in this period? Was that an signal that the

structural adjustment prescription by the World Bank and the IMF were going

toward a wrong direction.

According to Van de Walle and Rakner 2001, a number of explanations for the

limited supply response have been offered ranging from claims that the

governments commitment to reform has waned, to sequencing errors, inverstor

security, exogenous factors and Zambias landlocked status. They argue that most

of these explanations point to one commonality : The precarious absence of a

genuine strategy for economic development set forth by the MMD government.

Long term development goals have also largely been absent from the donors

strategy (Van de Walle and Rakner 2001). In this sense the failure of the foreign

aid can be felt both in the economic and in the political field.

Bigsten argues that it also seems quite likely that the slow reform of the mining

sector that always was polically difficult, did cost a lot in terms of lost momentum

and financially in termis of subsiddies throughtl the 1990s and this foot-dragging

also sent the wrong signal to potential investors about the governments reform

commitment.


25/36


25

However these measures were not sufficient to stabilize the economy and soon the

population was unsatisfied with the government. Furthermore, although the MMD

has taken a set of economic reforms, the same cannot be said about the political

institutions. Other aspects of reform programm, most notably institutional reforms,

have lagged behind (Van de Walle and Rakner 2001) and this fact has caused

many constrainst in the relation government and bilateral donors.

In fact, the government maintained the autocratic legislation of Kaunda still intact,

and with this legislation, the new government soon came to abuse its power. One

of the first episodes that illustrate this fact took place just one year after the

elections. Fear of oppositions by the side of Kaunda, led to the declaration of a

state of emergency in 1993. The MMD then changed the constitution to bar

Kaunda from running in future elections in 1996 and the elections in this year was

indeed considered flawed by many observers (Van de Walle and Rakner 2001).

The conduct of the elections proved that the Chiluba government was willing to

compromise the rule of law, was intolerant of criticism and willing to exploit its

majority position and control of government resources to undermine its opponents

(Van de Walle and Rakner 2001). This met extensive opposition from the

domestic press, civil society, opposition parties and donors. (Bigsten and Kayizzi-

Mugerwa 2000). At this same time, it has been also raised concerns about issues

of corruption and drug trafficking within high political offices (Van de Walle and

Rakner 2001).

As a consequence of these political crisis, the majority of Zambias bilateral

donors withheld balance-of-payment support from 1996-1998. In June 1996, US,

Norway, Sweden, the Netherlands, Germany and Japan cut off balance-of-

payments support to protest the exclusion of Kenneth Kaunda from the

presidential elections. At the Consultative group meeting in July, US 150 million

was pledged in balance-of-payment support, conditional on governance reform.

Again in May, 1998 Consultative Group Meeting Zambias donors pledged US

530 million in balance-of-payment support but the disbursement was made

contingent on the sale of the cooper mines and further improvements of the

governance record. Most bilateral support was again held back. However, it must


26/36


26

be noted that the financial cuts have in most affected programme aid, or balance of

payment support. The governance situation in Zambia has nit improved

significantly in recent years. Furthermore, the privatization of ZCCM has not been

finalized. (Van de Walle and Rakner 2001)

It is clear that the post-election period (1996), the international community appears

to have lost faith in the effectiveness of the conditionalities instruments. The

Zambian government on its side has adopted a rather skeptical attitude towards the

donors, increasingly viewing the process of policy reform as externally imposed

and charging the donors of moving goals post. Thus, within a few years, the

international donor communitys view on Zambia appears to have changed from a

position as a most promising reformer to a most reluctant reformer (Van de Walle

and Rakner 2001).

It seems clear that the turbulent relation between donors and the government of

Zambia was related much more to the unwillingness of the government to reform

the political institutions and this fact had several consequences to investors

confidence and consequently to the economy of Zambia. By the donors part, since

the government of Zambia has given many signals that they were not willing to

reform political instituitons, this leads to a crisis of confidence and despite the

implementation of the structural adjustment, many donors have reduced and even

interrupted the flows of aid for several times in this period.

The curious thing is that, despite all those indicators, it cannot be argued that the

direction of the governments overall econcomic policies has been altered, as so

often was the case during the Kaunda years. The Zambian government has, in

principle remained commited to stabilization and the economic liberalization

process throught its first electoral period and also into the second period. What

remains unclear is : The pressure exercised by donors toward governance and

democratic issues really reflect their committment with these principles, or rather

the fear that they had of the constraints that the political environment could cause

to the plans of privatization and economic liberalization ? This is still a ongoing

question present in all the debate on foreign aid and that certainly will challenge

the especialist in this field toward an improvement of this tool to achieve a real


27/36


27

development in recipient countries8.

3.5 Analytical Framework : The outcomes of a decade of failed reform in Zambia

3.5.1 Evolution of Social Indicators

The poverty situation of Zambian population started to increase after the 80s with

the world recession and the substantial fall on copper prices, the most important

resource of exportation to this country. The situation deteriorated to such an extent

that, in 1985, the World Bank re-classified Zambia from a low income to a low-

income country. By the early 1990s, Zambia had reached a level where the UN

General Assembly included Zambia on the list of least developed countries. Thus,

during the last 35 years, Zambia has experienced the worst economic decline in

Sub-Saharan Africa. In this sense, Carlsson, 2000 argues that to make matters

worse, it is difficult to see a rapid change for the better (Carlsson, et al. 2000).

According to this author, the high levels of poverty in Zambia have been

characterized as a social crisis (Carlsson, et al. 2000). But not just the failure of the

economic policies and the impossibility of this country to achieve political

instability have been responsible to this situation. The dramatic effects of the

AIDS epidemic, increasing rates of population growth and consecutive droughts

have all played their role in shaping this crisis (Carlsson, et al. 2000).

The table below shows the evolution of some social indicators. The general

tendency is degradation in all social indicators. For example, life expectancy has

declined from 51 years to 48 and real income per capita has been reduced by

almost half in this period.

8 There is an extensive debate on how to improve the effectiveness of foreign aid and it has a strong

linkage to donors intentions. For more information on this debate, see www.ocde.org


28/36


28

Fig.5 Zambia: Evolution of Social Indicators from 1985 to 1995

Source: Bonnick 1997: 56 cited in (Van de Walle and Rakner 2001)

The poverty indicators are even more warning. In 2001, about 68% of Zambians

live below the recognized national poverty line, with rural poverty rates standing

at about 78% and urban rates of 53%9. The IDH of Zambia is one of the lowest in

the world, 0.453 and its classification and in 2006 the classification of this country

in the ranking was 165.10

3.5.2 Economic Growth: The Failure of Decade Lost

After almost a decade of uninterrupted policy reforms, the record in terms of

economic growth, employment creation, investiments and poverty reduction

remains extremely weak. In terms of macro economic growth indicators, the

Zambian economy has shrunk and is now smaller than it was in 1991. With a 25

per cent increase in population over the last decade, per capita income has dropped

by 4 per cent annually in the last decade, thus extending the long period of

economic decline that begun in the 1970s. Mineral production has declined

throughout the decade formal employment has been reduced in all sectors but

public admnistration and social indicators reveal that poverty and infant mortality

9

Development Indicators Unit, Statistics Division, United Nations. "Population below nationalpoverty line, total, percentage".http://mdgs.un.org/unsd/mdg/SeriesDetail.aspx?srid=581&crid=8910 Fromhttp://hdr.undp.org/en/statistics/ on June, 08th, 2009


29/36


29

have increased since the 1980s (Van de Walle and Rakner 2001).

The graph below shows the gap between the economic growth that Zambia was

supposed to have achieve with the large amount of foreing aid according to the

Harrod-Domar Model and the real growth achieved in this period.

Fig.6 The Gap between Harrod-Domar model and the reality in Zambia

Source: Easterly, 1997

Even in the context of Sub-Saharan Africa performance, Zambias ecomomic

decline has been extreme. Real GDP per capita is stimated to have more than

halved since 1970. The need to restructure and diversify the economy was an early

concern in Zambia. Andersson, 2000 argues that Since independence in 1964, a

number of attempts have been made to reduce the dependence on copper. First,

import substitution was vigorously supported. Today, the oversized industries

from import-substitution era produce way below installed capacities and are now

seen as hindrances to the development of a viable manufacturing sector based on

small-scale firms and using a technology in keeping with Zambias meagre

resources (Ardersson, 2000).


30/36


30

The following indicators below show the declining rates of growth that the

economy of Zambia has experienced since 80s.

Fig. 7 Macroeconomic Data for Zambia

Year GDP Growth Inflation Budget defict as

share of GDP

1964 12,9 3.1 5.7

1979 -3 9.7 -9.1

1985 1.6 37.3 -15.2

1990 -0.5 117.5 -8.3

1992 -1.7 197.4 -2.5

1994 -8.6 52.3 -6.8

1998 -2.0 24.5 -4.3

Source: IMF Financial Statistics, Central Statistical Office and Bank of Zambia

Cited in Andersson, 2000.p.12. Adaped by Appolinario, U.

3.5.3 Aid Dependency

Over the years Zambia has developed into one of the most aid dependesnt

countries in Sub-Saharan Africa. In 1992, Zambia received an aid per capita of

USD 125; this was about 3,2 times as much as SSA as a whole (World Bank 1999)

(Carlsson, et al. 2000)

Fig. 8 The aid dependency of Zambia, 1992 and 1997

Source: (Carlsson, et al. 2000)

When interpreting aid dependency ratios the World Bank had the following to say

(World Bank, 1999)


31/36


31

Care must be taken in drawing policy conclusions. For foreign policy

reasons some countries have traditionally received large amounts of

assistance. Thus, aid dependency ratios may reveal as much about the

interest of donors as they do about the need of recipients.

In this sense, Carlsson argues that the volume and composition of external

assistance to Zambia has been conditioned by the country willingness to reform

and by the degree of economic adversity (Carlsson, et al. 2000).

It is important to understand that the reduction showed in the table does not reflect

that the productive activities in the country has increased, but rather that the

donors have withdrawn their support to this country mainly because the political

instability of the final of 90s.

The external debt burden is also another indicator of aid dependency. Statistics

shows that, the Zambias debt stock remains unsustainable. The debt/export ratio

has gone from an impossible 515% in 1995 to an even more impossible level of

741% in 1998. Just in 2005, Zambia attained HIPC status and in 2006 MDRI

status, which resulted in debt reduction from $7.2bn to $0.5bn (World Bank,

2008).

Fig. 9 The External Debt of Zambia, 19951998

Source: Ministry of Finance and Economic Development. Lusaka.

Cited in (Carlsson, et al. 2000)p.6


32/36


32

What has gone wrong? And what can be done?

It seems quite evident that it was the lack of a sound political environment that has

caused the failure of these two decades of foreign aid in Zambia. Nevertheless, it

cannot be assumed that it is of entire responsibility of the government. Indeed the

instable political scenario of 90s in Zambia has adversely affected the confidence

of donors and in this sense not even the economic reforms were able to show the

compensate it. However, a key factor that must be considered is the absence of

commitment by the donors side to a sound national development project. In this

sense, Zambia has become extremely dependent on foreign aid to supply basic

services to the population and when the flows of aid were reduced or interrupted,

this was strongly harmful to the most of the population. The high debt burden has

also affect adversely the national accounts of this country for many years and

because of the political instability of 90s, Zambia has achieved the status to have

the debts cancel just in 2005.

In sum, Zambia is a clear case of essential panorama to which foreign aid created

an vicious circle in which institutional weakness on the recipient side encourage

donors practices that undermined national ownership of aid.

But, if aid can just be effective in stable environments, what to do with poor

countries with poor environments as the case of Zambia, for example? According

to Moyo, an economist from Zambia, aid apparatus has not only come to trap poor

and indebted Zambia but in her view is the root cause of poverty. The central

argument of her book Dead Aid, is that aid is the fundamental cause of poverty

and therefore eliminating aid is critical to spur growth in ailing African states. She

uses the common statement that aid distorts incentives among policy makers and

society at large (Moyo, 2009). The solution proposed by Moyo is quite radical: cut

definitely aid and adopt a strategy of access to international markets, supported by

microfinance, trade, FDI and remittances (Moyo, 2009). According to Moyo, the

access of African countries to the international market will operate also as a toll of

selectivity and in this sense can serve as an incentive to improvements in

governance.


33/36


33

4. Conclusion

In this study I have focus on the main constraints of foreign aid and the costs that

entire populations of African countries has paid and will continue to pay, instead

of really taking benefits of the foreign workers. It is important to highlight that in

the last years the main concerns about the adverse effects of foreign aid were part

of a debate that has primarily focused the problems of the recipient side, specially

the problems of governance in recipient countries. Today, the debate starts to

address also the problems of coordination between donors and this recognition of

the responsibility of donors has showed a new tendency to this kind of assistance.

The Paris Principles and the creation of the Poverty Reduction Strategic Papers,

have at the same time given more responsibility to donors and more ownership to

recipients. It seems to be contradictory at a first glance, but it is not. Actually the

responsibility of donors is more concerned with the principles of the foreign aid

and the main purpose of development and poverty reduction. At the same time, the

recipient governments have the role of decide the national priorities. If this fact

will represent a new paradigm to the foreign aid is still an ongoing question, but

the recognition that donors were also responsible for many years of failure of this

tool to development, is maybe a considerable advantage.

The principle of selectivity raised by the Paris Declaration can be a effective tool

to encourage states to adopt better policies, but for the other side it can also

neglect very poor populations at the measure that states with poor environment

policies will not receive aid. A solution to these populations can be an increase of

project and humanitarian assistance. The problem is that the effectiveness of this

kind of aid can be very limited in the long term considering most of cases of

political instability, there will always be a wide range of factors operating in the

contrary side and neutralize or even damage the effects of aid.

In sum, much still remains to be done both to donors and recipient countries.


34/36


34

5. Bibliography

Agrawal, Nisha AHMED, Zafar MERDED, Michael and NORDL, Roger.

Structural Adjustment, Economic Performance and Aid Dependency in Tanzania .

Working Paper Series - Country operations, Eastern Africa Department, World

Bank 1993, 1-28.

Alesina, Alberto and David Dollar. "Who Gives Foreign Aid To Whom And

Why?," Journal of Economic Growth, 2000, v5(1,Mar), 33-63

Andersson, Per-Ake, Hkan Persson, Arne Bigsten, 2000, Foreign Aid, Debt and

Growth in Zambia. Reserch report no. 112. Afrikainstitutet, Motala, Sweden

Bigsten, Arne, and Steve Kayizzi-Mugerwa. The Political Economy of Policy

Failure in Zambia. Working Papers in Economics no 23, Department of

Economics, Gteborg: Gteborg University, 2000, 1-18.

Boone, Peter. "Politics and the Effectiveness of Foreign Aid."European Economic

Review 40 (1996): 289-329.

Burnside, Craig and Dollar, David. "Aid, Policies and Growth." American

Economic Review 90 (2000): 847-68.

Carlsson, Jerker, Patrick Chibbamullilo, Orjuela, and Saasa Oliver. Poverty and

European Aid in Zambia A study of the Poverty Orientation of European Aid to

Zambia. Working Paper 138, Overseas Development Institute, Sweden: The

Nordic Africa Institute Uppsala, 2000, 71.

Chenery, H and A.M Strout. "Foreign Assistance and Economic Development."

The American Economic Review 56 (1996): 679-731.

Clemens, Michael A., Radelet Steven, and Bhavnani Rikhil. "Counting chickens

when they hatch: The short-term effect of aid on growth." Center for Global

DevelopmentWorking Paper Number 44 (July 2004): 58.


35/36


35

Collier, P., 2005. Is Aid Oil? An analysis of whether Africa can absorb more aid.

Centre for the Study of African Economies, Department of Economics,Oxford

University.

Collier, P. and Bates, R., 1995 The Politics and Economics of Policy Reform in

Zambia, Journal of African Economies, Volume 4, Number 1, 115-143

Easterly, William. "Are Aid Agencies Improving?" Global and Economic

Development Working Paper n.9 (Brookings Institutions), 2007: 1-46.

Easterly, W., 2006, The white man's burden : why the West's efforts to aid the rest

have done so much ill and so little good. New York : The Penguin Pr.

Easterly, William. "Can Foreign Aid Save Africa." Clemens Lecture Series (Saint

John's University) 17 (December 2005): 1-28.

Easterly, William The Ghost of Financing Gap How the Harrod-Domar Policy

Paper L807, 1997

Goldin, Ian and Reinert, Kenneth. Globalization for Development. Washington:

World Bank and Palgrave Macmillan, 2007.

Grindle, M. S. (2007). "Good enough governance revisited." Development Policy

Review 25, no. 5 (September 2007): 553-574.

Hirschman, Albert, 1991. The Rhetoric of Reaction: Perversity, Futility, Jeopardy.

Cambridge, MA: The Belknap Press of Harvard University Press.

Johnson, Omotunde E.G. 2005. Country Ownership of Reform Programmes and

the Implications for Conditionality. G-24 Discussion Paper Series No. 35, January

- United Nations Conference to Trade and Development


36/36


Moyo, Dambisa, 2009. Dead aid : why aid is not working and how there is a better

way for Africa / New York : Farrar, Straus and Giroux.

Pritchett, Lant, and David Dollar. Assessing Aid What Works, What Doesn't, and

Why. Evaluation Report, World Bank, New York, N.Y 10016: OXFORD

UNIVERSITYP RESS, 1998, 1-160.

Radelet, Steven, 2004 Aid Effectiveness and the Millennium Development Goals

Center for Global Development Working Paper No. 39.

Rostow, W. W. "The stages of Economic Growth: A non-comunist manifesto."

1960.

Saasa, Oliver S., 2002, Aid and poverty reduction in Zambia : mission

unaccomplished. Uppsala : The Nordic Africa Institute.

Sachs, Jeffrey. "How Aid Can Work ." The New York Review of Books 53, no. 20

(December 2006): 1-3.

Severino, Jean-Michel, 2007 LAide Publique au Dveloppement. Repres series,

Editions La Dcouverte, Paris.

Van de Walle, Nicolas, and Lise Rakner. "Zambia." In Aid and Reform in Africa,

by Devaraja Shantayanan, David R Dollar and Holmgren Trogny, 535-623.

Washington, DC: The World Bank, 2001.

Van de Walle, Nicolas and Johnston Timothy A.1999 Repenser l'aide l'Afrique /

et trad. de l'anglais par Paulette Graud Paris : Ed. Karthala.

Vreeland, James Raymond and Przeworski Adam, 2000 The effect of IMF

programs on economic growth Journal of Development Economics Vol. 62 , 385

421. New York University.

appolinario gpe final research paper-1[1]

Documents