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From Aid to Development BRIAN the Balance of Economic Power Is the Global Fight Against Shifting

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From Aid to Development BRIAN the Balance of Economic Power Is the Global Fight Against Shifting BRIAN KEELEY From Aid to Development BRIAN the balance of economic power is The Global Fight against shifting. Countries that were once poor KEELEY From Aid to are becoming economic powerhouses. Poverty Yet poverty persists worldwide, depriving billions of people of basic necessities and the From Aid to prospects of creating a better life. How are we responding to this challenge? this book explores development the multi-faceted world of aid and development The Global Fight against Poverty co-operation – a range of global, and sometimes contested, efforts aimed at reducing the impact of poverty. it traces the history of these efforts, explains where they come from and where they’re going, d and asks whether they’re achieving as much as they evelopment could. it also examines some of the ways in which they can be made more effective through good governance and the creation of a deeper partnership between developed and developing countries. And it looks at how the economic emergence of countries like China and india is bringing a new dynamic to development co-operation. other titles in this series: Human Capital, 2007 Sustainable Development, 2008 International Trade, 2009 International Migration, 2009 Fisheries, 2010 From Crisis to Recovery, 2010 On the Internet: www.oecd.org/insights Visit the Insights blog at www.oecdinsights.org ISBN 978-92-64-11152-3 01 2011 10 1 P Aid + Dev cover [f].indd 1 24/04/2012 21:32 OECD INSIGHTS From Aid to Development The Global Fight against Poverty Brian Keeley Aid+Dev text [4].indd 1 13/05/2012 19:04 This work is published on the responsibility of the Secretary-General of the OECD. The opinions expressed and arguments employed herein do not necessarily reflect the official views of the Organisation or of the governments of its member countries. This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. Please cite this publication as: OECD (2012), From Aid to Development: The Global Fight against Poverty, OECD Insights, OECD Publishing. http://dx.doi.org/10.1787/9789264123571-en ISBN 978-92-64-11152-3 (print) ISBN 978-92-64-12357-1 (PDF) Series: OECD Insights ISSN 1993-6745 (print) ISSN 1993-6753 (online) The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law. All websites and data were accessed in April 2012 unless otherwise noted. Corrigenda to OECD publications may be found on line at: www.oecd.org/publishing/corrigenda. Revised version, June 2012 © OECD 2012 You can copy, download or print OECD content for your own use, and you can include excerpts from OECD publications, databases and multimedia products in your own documents, presentations, blogs, websites and teaching materials, provided that suitable acknowledgement of OECD as source and copyright owner is given. All requests for public or commercial use and translation rights should be submitted to [email protected]. Requests for permission to photocopy portions of this material for public or commercial use shall be addressed directly to the Copyright Clearance Center (CCC) at info@ copyright.com or the Centre français d’exploitation du droit de copie (CFC) at contact@ cfcopies.com. Foreword Development has been at the core of the OECD’s mandate from the very beginning; it’s what the “D” in our name stands for. The drive to reduce poverty, support and improve development perspectives and create better policies for better lives has been a consistent theme of the Organisation’s work for over half a century. There have been some notable successes, and across the world millions of people have been lifted out of poverty. However, today we are faced with a new reality. The global economic landscape has changed beyond recognition since the OECD was established. Half a century ago, the focus was on co-ordinating aid efforts by the world’s wealthiest countries to help people in the world’s poorest regions. But since then, the global development landscape has been shaped by some key trends: The world’s centre of economic gravity is changing, and developing and emerging economies are among the key drivers of global economic growth. Their dynamism is also leading to historical shifts in global governance, as refl ected in the emergence of the G20 as the premier forum for global policy co-ordination. There is a growing diversity of growth and development models, which underscores the fact that there is no one-size- fi ts-all solution and ultimately the people who know best what a country needs to break the pernicious cycle of poverty and deprivation are the people in that country itself. The nature of development fi nancing is changing. Many developing economies are becoming important actors in international fi nance, trade, investment and development co-operation. However, it remains critical that the Least Developed Countries continue 3 Aid+Dev text [4].indd 3 13/05/2012 19:04 to benefi t from effective, predictable and sustainable development fi nancing. The geography and nature of poverty are changing with a growing proportion of the world’s poor living in middle- income countries and urban areas. At the same time, inequality is increasing in advanced and developing countries alike, potentially undermining further growth, social cohesion and development. Development challenges are global challenges. In a highly interconnected world, issues such as climate change, natural resource scarcity, and food and energy insecurity have implications for all, and call for collective and co-ordinated global action. As much of the world struggles to recover from the worst economic crisis in 50 years, we are called upon to rethink our approach to the challenges of economic development. The time has come for a new approach and a renewed impetus for development, based on a real partnership between developed and developing countries. As the international community approaches the target date for the Millennium Development Goals (MDGs) in 2015, this latest book in the OECD Insights series looks at the way development and aid have evolved, how the development landscape is changing, and how a new era of development partnerships can be built on the new commitments established at the Busan High-Level Forum in December 2011, and the new OECD Development Strategy. Together we must do our utmost to reduce poverty and inequality and deliver better policies for better, more prosperous and equitable lives throughout the world. Angel Gurría OECD Secretary-General 4 Aid+Dev text [4].indd 4 13/05/2012 19:04 Acknowledgements The author gratefully acknowledges the advice, assistance and insights of Federico Bonaglia, Christine Graves, Raundi Halvorson- Quevedo, Sue Kendall-Bilicki, Brenda Killen, Megan Grace Kennedy-Chouane, Justin Yifu Lin, Isabel Huber, Hans Lundgren, Andrew Mold, William Nichol, Simon Scott, Janine Treves and Michael Ward. Special thanks to J. Brian Atwood, Chair of the OECD Development Assistance Committee (DAC), and also to Patrick Love for additional research and writing. OECD Insights is a series of primers commissioned by the OECD Public Affairs and Communications Directorate. They draw on the Organisation’s research and expertise to introduce and explain some of today’s most pressing social and economic issues to non-specialist readers. Read the OECD Insights Blog at http://oecdinsights.org Currency Note Currency references are in US dollars unless otherwise indicated. Constant dollar values have been adjusted to account for inflation. Current dollars are the sums actually given or received. This book has... StatLinks2 A service that delivers Excel® files from the printed page! Look for the StatLinks at the bottom right-hand corner of the tables or graphs in this book. To download the matching Excel® spreadsheet, just type the link into your Internet browser, starting with the http://dx.doi.org prefix. If you’re reading the PDF e-book edition, and your PC is connected to the Internet, simply click on the link. You’ll find StatLinks appearing in more OECD books. 5 Aid+Dev text [4].indd 6 13/05/2012 19:04 CONTENTS 1. Introduction 8 Partners for development 11 Contexts: The persistence of old ideas 13 What this book is about 20 2. The persistence of poverty 22 Why are some countries still poor? 25 What is the development challenge? 33 Special section: The Millennium Development Goals 35 3. What is aid? 46 Is all aid the same? 49 Who provides aid? 54 Special section: Aid – some numbers 60 4. Shifting development goals and motivations 66 Development co-operation: A brief history 69 What motivates aid-giving? 77 What are aid’s objectives? 80 5. Are we getting results? 84 What are the critiques of aid? 87 Does aid promote growth? 89 What does the public think? 94 How is success or failure measured? 97 6. Changing relationships and policies 102 How can aid be made more effective? 105 What is the impact of corruption on development? 113 What is policy coherence? 117 7. Governance matters 124 What is the role of governance? 127 What are fragile states? 134 How can taxation help development? 137 8. New partners for development 146 How is the world shifting? 149 What is South-South co-operation? 154 By way of conclusion 162 References 166 7 Aid+Dev text [4].indd 7 13/05/2012 19:04 1 From a young girl in Pakistan to an old farmer in Ethiopia, aid is changing people’s lives.
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