Foreign Aid and Corruption

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Foreign Aid and Corruption Department of Theology Spring Term 2016 Master's Thesis in Human Rights 30 ECTS Foreign aid and corruption Ethical aspects of foreign aid Author: Melinda Sundsten Supervisor: Professor Carl-Henric Grenholm Masters in human rights, Spring 16 Uppsala University, Master’s Thesis Melinda Sundsten Abstract This literary analysis focuses on the correlation between foreign aid and corruption. The “Capabilities Approach” by Amartya Sen is used to discuss how to, and who is responsible for, developing an ethically justified aid policy. Arguments and ideas from five different sources have been analyzed. The primary sources are African Development by Todd Moss, Corruption and Development by Georg Cremer, Lord of Poverty by Graham Hancock, The White Man’s Burden by William Easterly, and Internationalisation of corruption by Daniela Herrmann and Clare Fletcher. This study analyzes three questions. Firstly, does foreign aid affect the level of corruption, and how? Secondly, how do you measure development and justice? Thirdly, who is considered accountable? The results show that there is a connection between aid and corruption and that the aid agencies together with the governments have the primary responsibility to improve the policy and reconstruct the organizations. The policy should focus on enhancing the quality of life of the individual. Masters in human rights, Spring 16 Uppsala University, Master’s Thesis Melinda Sundsten Acknowledgements I would like to thank Uppsala University and all the professors that I have met during my studies. My interest in peace and conflict studies, development studies, anthropology and human rights has grown a lot as a result of interesting lectures and fascinating meetings. I would like to thank my supervisor, Carl-Henric Grenholm, for being patient with me and for sharing his wisdom. I would also like to thank Freethem, the organization where I spent ten weeks as an intern. The time there taught me a lot and inspired me to keep pushing, learning and spreading the knowledge that I have gained. I will never forget the warmth and energy that the people there gave me. My ambition for the future is stronger than it has ever been before. My family and friends have been incredibly supportive during all these years. They have all believed in me and pushed me forward. They have given me enormous amounts of energy and happiness when I needed it. I would like to thank each and every one of these incredible human beings from the bottom of my heart. My mom Leena, who holds my heart and inspires me every day, my dad Kim, who supports me like no-one else, my brothers Martin, Kenneth and Philip, for always putting a smile on my face, and my very tolerant dog Harry. My awesome friends. Especially Jane, for being an amazing human being and friend and for having dog dates almost every week, Lina, for always being there for me and for being my sister from another mother, Jacob, for being my rock and for always believing that I can do whatever, Maria and Linnéa for being so supportive and for bringing joy to my life in so many ways. All of my colleagues at Coop Forum in Uppsala have given me the breaks that I have needed. I would especially like to thank Eva-Lena, Anita, Aranka, Eva, Annelie and Anna for being amazing people and motivators with the biggest hearts, incredible strength, energy, and love. They have given new perspectives to my life and new ideas for my studies. I am lucky to say that I love my job and that I can go home late at night with more energy and happiness than I arrived to work with. And this is something that I owe to these people. They all inspire me in so many ways. My love to all of you and thank you for being who you are and for being part of my life. I am looking forward to what the future has to bring for me. Masters in human rights, Spring 16 Uppsala University, Master’s Thesis Melinda Sundsten Content CHAPTER I: INTRODUCTION ........................................................................................... 1 1.1 BACKGROUND ........................................................................................................................ 1 1.2 SIGNIFICANCE AND PREVIOUS RESEARCH .............................................................................. 2 1.3 PURPOSE ................................................................................................................................. 3 1.4 PROBLEM AND RESEARCH QUESTIONS................................................................................... 3 1.5 PRIMARY SOURCES ................................................................................................................. 4 1.6 THEORY .................................................................................................................................. 5 1.7 METHODOLOGY AND LIMITATIONS ....................................................................................... 6 1.8 DEFINITION OF TERMS ............................................................................................................ 7 1.9 DISPOSITION ........................................................................................................................... 7 CHAPTER II: DEVELOPMENT POLICY AND THEORY .............................................. 9 2.1 DEVELOPMENT AND AID POLICY ............................................................................................ 9 2.2 DEVELOPMENT THEORIES .................................................................................................... 10 2.3 CAPABILITIES APPROACH ..................................................................................................... 12 2.4 INTERPRETATION OF THE CAPABILITIES APPROACH ............................................................ 16 CHAPTER III: THE EFFECT OF FOREIGN AID ON CORRUPTION ....................... 18 3.1 THE RECIPIENT GOVERNMENT .............................................................................................. 18 3.2 THE AID ORGANIZATIONS ..................................................................................................... 20 3.3 THE DONOR COUNTRIES ....................................................................................................... 21 3.4 THREE THEORIES ON CORRUPTION ....................................................................................... 22 CHAPTER IV: MEASURING DEVELOPMENT AND JUSTICE .................................. 28 4.1 ECONOMIC GROWTH AND EQUAL DISTRIBUTION ................................................................. 28 4.2 ECONOMIC GROWTH AND MARKETS .................................................................................... 29 4.3 ECONOMIC GROWTH AND REDEFINING DEVELOPMENT ....................................................... 29 4.4 DEMOCRATIC OPPORTUNITIES ............................................................................................. 30 4.5 QUALITY OF LIFE AND GOOD GOVERNANCE ........................................................................ 30 4.6 FIVE THEORIES ON MEASURING DEVELOPMENT AND JUSTICE ............................................. 31 CHAPTER V: ACCOUNTABILITY ................................................................................... 34 5.1 RESPONSIBILITY OF THE RECIPIENT COUNTRY ..................................................................... 34 5.2 RESPONSIBILITY OF THE DONOR COUNTRY .......................................................................... 34 5.3 SHARED ACCOUNTABILITY .................................................................................................. 35 5.4 THREE THEORIES ON ACCOUNTABILITY ............................................................................... 37 CHAPTER VI: RESULTS AND CONCLUSION ............................................................... 40 CHAPTER VII: SUMMARY ................................................................................................ 45 BIBLIOGRAPHY .................................................................................................................. 46 Masters in human rights, Spring 16 Uppsala University, Master’s Thesis Melinda Sundsten List of abbreviations GDP Gross domestic product GNP Gross national product HDI Human Development Index MDG Millennium Development Goals NGO Nongovernmental organization UN United Nations Masters in human rights, Spring 16 Uppsala University, Master’s Thesis Melinda Sundsten Chapter I: Introduction 1.1 Background There are people all over the world in need of support, people who are struggling each day to live and to be able to gain the human dignity that everyone deserves. Foreign aid is a frequently debated topic at an international level, and there are multiple ideas on how to further develop aid and its effectiveness. The amount of foreign aid that is distributed to developing countries every year makes it important to research closer, to understand how to do the best with the resources. The aid industry mainly focuses on how to raise the poor people’s incomes to make them less poor. There is a focus on economic growth and national gain among donor countries,1 which cast doubt on the purpose of aid and the level of justice. The United Nations (UN) use Human Development Index (HDI) to measure development. This index measures for example income, school enrollment and life expectancy to rank states. A wider measurement of development, which primarily originates from Amartya Sen, is the “Capabilities Approach” which will be discussed further in this thesis. This
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