number 7, 2013

Overview When, why and how has foreign aid Democratic Trajectories in facilitated, or hindered, democracy in recipient countries? Focusing on sub- Saharan Africa, this policy brief examines Africa: Unravelling the Impact the impact of foreign aid on supporting transitions from one-party to multi- of Foreign Aid party regimes, preventing democratic breakdown and the erosion of civil ­liberties, enhancing vertical and horizon- ver the last decade, sub-saharan africa has tal accountability, and enabling competi- experienced impressive economic growth and witnessed the emergence of a tive political party systems. Particular O nascent middle class. Nevertheless, for a number of African governments, foreign attention is given to the trade-offs and aid continues to represent a vital source of finance to provide public goods and complementarities between different ­services. While aid certainly plays a role in shaping development outcomes in types of foreign aid, namely democracy Africa, this policy brief focuses on its impact on general political governance and assistance and economic development aid. Select policy recommendations are specifically democracy. As highlighted in a declaration at the conclusion of the offered to improve aid effectiveness at 2011 Fourth High-Level Forum of Aid Effectiveness, “promoting human rights, bolstering democratic trajectories democracy, and good governance” are viewed as integral to the efforts of the inter- 1 within the region. national donor community. The relationship between aid and democracy is especially relevant in Africa due to the region’s still high level of aid dependence and its relatively short experi- Written by Danielle Resnick ence with democracy. Official development assistance (ODA) to all of Africa as a © United Nations University, 2013 share of gross national income (GNI) has declined from 6.2 to 4.9 per cent over ISBN 978-92-808-3109-2 the period from 1990 to 2009. Yet, this still remains four times higher than the ISSN 1814-8026 next most aid-dependent region, the Middle East and North Africa.2 The role of Licensed under the Creative Commons aid within the region is complicated by new resource flows, including large-scale Deed “Attribution-NonCommercial- NoDerivs 2.5” natural resource discoveries and the growing influence of non-traditional bilateral donors, such as China, India and Brazil, that do not belong to the Development The views expressed in this publication Assistance Committee (DAC) of the Organisation for Economic Co-operation are those of the authors and do not and Development (OECD). necessarily reflect the views of the United Nations University. Although a large number of studies exist on the aid–democracy relationship, this brief examines the disparate effects and trade-offs of both democracy and eco- nomic development aid. Moreover, democracy is conceptualized as a multi-faceted process that includes both transitions to multi-party elections as well as the long- term consolidation of democratic gains. Examples are drawn from fieldwork con- ducted in seven African countries—Benin, Ghana, Malawi, Mali, Mozambique, Tanzania and Zambia. After defining key concepts, this brief then examines how different types of aid have impacted transitions to multi-party democracy, democratic breakdown and www.unu.edu

the erosion of civil liberties, vertical in sectors such as education, health, and horizontal accountability, and agriculture, water, sanitation and competitive party systems. A variety transport. The current aid regime has of policy recommendations are sub­ been aimed at influencing the Millen- sequently offered that try to reconcile nium Development Goals (MDGs) and existing trade-offs between enhancing the Poverty Reduction Strategy Papers aid effectiveness at addressing eco- (PRSPs) through a “partnership model” nomic development outcomes and that attempts to increase harmoniza- using aid to bolster democracy. tion among donors, rectify asymmetric relationships between donors and Development aid and democracy recipients, provide more predictable assistance: does the difference resource flows, and use local systems matter? for programme design, implementation Although imperfect, differentiating and evaluation. Budget support is the between development and democracy main modality underlying the partner- assistance highlights variations in the ship model and it can be disaggregated stated aims of such aid and reflects into general budget support, which is diverse communities of practice. non-earmarked funding to support the ­Development aid refers to resources government’s policy priorities as out- distributed for the goal of promoting lined in a national development plan growth, reducing poverty, and further- and sectoral budget support, which ing social welfare through interventions specifically funds a development pro- gramme for a particular sector. Democracy assistance refers to technical expertise and material fund- Fig. 1: Democracy aid to sub-Saharan Africa by DAC and multilateral donors ing from donors, party foundations and (commitments in millions of 2010 constant US$) non-profit organizations that is aimed at furthering political liberalization. The visibility of democracy assistance increased during the early 1990s when much of the developing world experienced significant political openings. Africa currently is the region that receives the most democracy assistance. As indi- cated by the solid line in Figure 1, the amount of total democracy assistance committed to Africa by multilateral and DAC donors was almost US$2 ­billion by 2009. Yet, the dotted line shows that this was still only about 4 per cent of total foreign aid, meaning that development rather than demo- cracy aid has predominated. Notes: Democracy aid as a percentage of total ODA is highlighted by the dotted line and total democracy aid is represented by the solid line. Democracy aid includes support Conceptualizing democratization for anti-corruption, decentralization, democratic participation­ and civil society, elections, By conceptualizing democratization, ­legislatures and political parties, legal and judicial development, media, human rights and we can better understand the disparate women’s equality. impacts of the above two categories of Source: Calculated from OECD's Creditor Reporting System Database.

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aid. At a basic level, democracy is of inputs and infrastructure, and the achieved as a consequence of transi- adoption of anti-media laws in some tions from a one-party to a multi-party countries. One of the most contentious regime. The consolidation of democracy civil liberties issues relates to lesbian, is a much more long-term process that gay, bisexual and transgender (LGBT) can move in both positive and negative rights, and 36 African countries directions (see Figure 2). On the one ­currently have laws criminalizing hand, consolidation implies avoiding homosexuality. a democratic breakdown due to a coup In the area of deepening demo- or reinstatement of one-party rule cracy, one challenge is that political and avoiding democratic erosion, which parties rarely have a defined policy occurs when civil liberties are sup- ­orientation and opposition is generally pressed, freedom of speech is circum- weak. Power tends to be highly central- scribed, and key political institutions ized around the executive due to legis- are bypassed. On the other hand, con- latures that have limited constitutional solidation involves deepening democracy powers, low salaries for members of by enhancing those institutions and parliament (MPs), and limited support actors that enforce accountability and staff. Likewise, many African courts create a level playing field for multi- are severely underfunded, and judiciar- party competition. ies often are dependent on the execu- There has been progress both tive for financing, which reduces towards and away from these elements judicial independence. of democracy in Africa. During the 1990s, a number of African countries The impact of aid experienced multi-party transitions. Democratic transitions Yet, at least 12 African countries that officially transitioned to multi-party Development aid, rather than demo- democracy in the early 1990s experi- cracy aid, has played a stronger role in enced a breakdown by 2010.3 With facilitating democratic transitions regards to civil liberties, the environ- through at least two channels. One ment for freedom of expression is channel, observed often in the 1990s, ­generally more favourable today, but has been direct coercion whereby independent media is still hampered donors withhold aid in response to About the Author by poor journalism, insufficient regula- severe human rights abuses and mili- Danielle Resnick is a Research tory capacity of the profession, a lack tary coups. These actions were most Fellow at the International Food Policy Research Institute (IFPRI) and formerly a Research Fellow at UNU-WIDER. She directed the UNU-WIDER projects Fig. 2: Conceptualizing democratic trajectories “Foreign Aid and Democracy in Africa”, “Decentralization and Service Delivery in African ­Cities”, and “Africa’s Emerging Middle Class”. She is the author of Urban Poverty and Party ­Populism in African Democracies (Cambridge University Press, 2013).

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effective in promoting democratic In some key instances, however, tious area of intervention. Notwith- change in countries where governments donors have used development aid to standing declarations in 2011 by some lacked alternative sources of resources avoid democratic erosion. In Mozam- bilateral donors that respect for LGBT and faced concurrent domestic bique, a majority of the budget support rights would be taken into account demands for political­ liberalization. donors withheld aid from mid-2009 to when determining aid allocations, For instance, high levels of aid depend- early 2010 to protest violations in the donors have a mixed record in this ence increased the leverage of the donor 2009 elections as well as a perceived domain. In Malawi, public complaints community in their efforts to convince increase in government corruption. by donors helped with the release of a Malawi’s President, Hastings Banda, to The donors put forth 10 demands gay couple from prison in 2010 but leg- allow a referendum on multi-party before resuming budget support, and islation introduced in 2011 to penalize democracy in 1993. A second, more the Mozambican government eventu- lesbian acts provoked little immediate indirect channel, observed in Benin ally conceded to most of the donors’ reaction. In Ghana, donors remained and Zambia, was the imposition of ­concerns. silent when government ministers structural ­adjustment programmes Nevertheless, very real divisions banned an assembly of sexual minori- that resulted in citizens protesting high exist within the donor community ties in 2007. Unlike other human costs of living­ and concurrent demands about how much leverage they should rights issues, such as gender violence, for greater political liberalization. use to prevent democratic erosion. donor reluctance to intervene in this

“Countries that have recently transitioned to democracy are particularly vulnerable to the breakdown of multi-party politics and the gradual loss of democratic gains”

Avoiding democratic breakdown and Electoral violations, economic mis­ arena is most likely due to the level of erosion management and corruption appear to division amongst African citizens Countries that have recently transi- be the main tipping points for encour- themselves on homosexuality. tioned to democracy are particularly aging greater donor coordination. In Enhancing vertical accountability vulnerable to the breakdown of multi- Malawi, misuse of government money party politics and the gradual loss of and resistance to currency devaluation Vertical accountability refers to the democratic gains. In theory, develop- ultimately prompted a widespread sus- ability of citizens to assess the per- ment aid can help target key areas of pension of budget support in late 2011. formance of government officials and contention that have the potential to In Benin, donors have cited corruption to be able to sanction or reward their contribute to breakdown. For example, as the main reason for withholding aid performance accordingly. Democracy the causes of Mali’s breakdown in during Mathieu Kérékou’s second term assistance has played a direct role in 2012, including Tuareg grievances as as president, and for more recent supporting vertical accountability, pre- well as gaping socioeconomic and lin- ­reductions in budget support under dominantly by supporting key aspects guistic inequalities between the capital Yayi Boni. Similarly, in Mali, donor of the electoral process such as cleaning Bamako and the rest of the country, pressure resulted in the resignation of the voters’ roll, providing civic and were long-standing problems. Donors the health minister in 2010 due to alle- voter education, funding the costs of could have done much more ex ante to gations of misuse of project funding. ballot papers and monitoring elections. address these structural impediments Leverage by development donors to Nevertheless, election assistance and to alter long-standing patterns that prevent human rights abuses, particu- remains primarily targeted at electoral undermined political stability and larly for those belonging to the LGBT periods rather than focused on national unity. community, is clearly the most conten- ­providing long-term support between

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elections. This prevents the institution- Inspection office, which aims to­prevent alization of election administration, corruption and bribery in the public fomenting a dependence on temporary sector, an audit court in Mozambique rather than permanent personnel who to increase the transparency of public often possess little experience. expenditures, and an anti-corruption Civil society, which includes non- commission in Zambia that was cred- governmental organizations (NGOs), ited with unveiling malfeasance in the trade unions, social movements and country’s health ministry. journalists, can provide accountability Democracy assistance in particular by educating citizens about elections has directly contributed to strengthen- and monitoring the performance of ing legislatures and certain “islands public officials. Although support to of effectiveness” have emerged, such civil society represents one of the most as Ghana’s Parliamentary Public favoured interventions by donors, there Accounts Committee. The impact of are areas of contradiction between the democracy aid to enhance the ability democracy and development assistance of egislatures to provide horizontal communities. For instance, trade and accountability, however, is limited by labour unions are more likely to have high rates of turnover by parliamen­ grassroots ties and be more broadly tarians, the dominance of a particular representative of citizen interests than political party in the legislature and narrow, issue-based NGOs led by rules that allow MPs to simultaneously ­professional elites. Yet, as highlighted serve as cabinet ministers. The lack of most vividly in Benin in 2011, the long-term, coordinated commitments demands of unions for higher wages by donors is equally problematic. For and broader social welfare benefits can instance, some democracy aid donors be antithetical to the macroeconomic have partnerships with the speaker or criteria governments must follow to the clerk of the national assembly while maintain donor funding, especially others focus on increasing the capacity budget support. More broadly, by of select committees. ­elevating government-to-government Most troubling is that development interaction, budget support can prevent aid in the form of budget support has civil society organizations from further marginalized the role of parlia- ­learning valuable information about ments and reduced executive account- government policy and reform issues, ability to this particular institution. even as the democracy aid community By negotiating directly with finance attempts to improve civil society’s ministries and heads of state, budget ­ability to monitor such activities. support donors are less likely to com- municate their activities to parliament, This policy brief is based on Promoting horizontal accountability and neither executives nor donors Democratic Trajectories in Africa: Horizontal accountability refers to the require legislative approval of how such Unravelling the Impact of Foreign ability of institutions to monitor and aid is used. Donors assume that parlia- Aid edited by Danielle Resnick­ sanction the actions of other state ments obtain sufficient information and Nicolas van de Walle agents or agencies. Such institutions during the budget approval process. (Oxford University Press, 2013). include judiciaries, legislatures and reg- Yet, this ignores existing weaknesses in The book in turn originates ulatory bodies, such as anti-corruption ­parliamentary systems, including poor from a UNU-WIDER project commissions. Some notable examples research capacities and insufficient time on “Foreign Aid and Democracy of donor impact in this domain include to review the budget before approval is in Africa”, directed by Danielle Resnick. the creation of Benin’s State General required.

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Creating competitive party systems By contrast, development aid can ance, including a robust multi-party Viable and competitive political parties indirectly and unintentionally bolster democracy, should receive greater are essential for a functioning demo- incumbents. Certain practices included weight in determining how aid should cracy, but political party aid is dwarfed the increase in expenditures for a be disbursed. The effectiveness of aid to by the amount of assistance that is allo- ­partially donor-funded input subsidy ­promote democracy is also hindered

“Viable and competitive political parties are essential for a functioning democracy, but political party aid is dwarfed by the amount of assistance that is allocated to civil society”

cated to civil society. Among those that programme around elections in Malawi by prevailing aid practices that need do support parties, there is a difference and the synchronization of resources to be reformed. in approaches. Major bilateral donors to combat malaria with the electoral funnel their assistance through larger cycle in Benin. These practices are Enhancing the effectiveness of electoral assistance programmes in most extreme in dominant party democracy aid which party strengthening might just ­systems, such as Mozambique and Democracy aid donors require greater be one small component. Otherwise, Tanzania, where the opposition is attention to increasing the sustainabil- party support is left to the party foun- already quite weak and the boundaries ity and harmonization of their inter- dations and international and national between state and party are increas- ventions. One option is to concentrate NGOs, which tend to offer a longer- ingly blurred. on funding-concerted groupings

“Democracy assistance and development aid can have important synergies, but, in some domains, their different objectives result in a clear contradiction of priorities on the ground”

term engagement with parties. The Policy recommendations: moving already established by civil society Ghana Political Parties Programme, forward groups, such as the Peace Infra­ which involved collaboration by the Democracy assistance and development structures in Benin, which consists of Netherlands Institute for Multiparty aid can have important synergies, but, approximately 150 NGOs. Another Democracy, is typical of the latter in some domains, their different option is to establish donor working approach. Notwithstanding these ­objectives result in a clear contradiction groups, such as the Nordic+ pro- ­different approaches, the small level of priorities on the ground. These gramme and the Civil Society Support of party assistance provided by the ­con­tradictions often reflect broader Mechanism in Mozambique, so that democracy aid community has proven ­uncertainty about whether economic democracy and governance partners are invaluable by providing opposition governance, including efficient public better aware of each other’s efforts. ­parties with monetary resources, sector management and macro­ Reducing the imbalance in support equipment and knowledge essential economic stability, or political govern- between civil society and political for campaigning. ­parties represents another area for

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improvement. Given that party aid can There are at least three possible suspended. In addition, the simple act be resented by ruling parties, efforts approaches for better exploiting the of ensuring that the annual budget is should be focused on activities that benefits of this modality while simulta- distributed to parliament with ample benefit all parties rather than just the neously minimizing its disadvantages. time for scrutiny would represent an opposition. Foremost among these First, general budget support could be important step for ensuring that this include providing advice for strength- pegged to three sets of outcomes on institution has a greater voice in the ening parties’ internal democracy, (1) macroeconomic management and budget support process. focusing on the development of clear transparency, (2) progress on key social policy manifestos, and offering tech­ welfare indicators and (3) de facto Conclusions nical training about how to raise cam- adherence to practices that support The fate of a country’s democratic tra- paign resources from party members. democracy and human rights. In this jectory ultimately lies in the hands of A more difficult challenge for the way, countries with strong economic its citizens. Yet, external actors, includ- democracy community is that the legis- management would not be penalized ing the international donor community, lative environment for promoting civil for poor democratic credentials but can contribute to the process in both liberties is not always amenable. Even would have an interest in improving positive and negative ways. Much relatively open African governments their record in order to access a larger greater effort needs to be taken to still attempt to control freedom of set of resources. ­minimize the trade-offs between the organization and expression by their Second, budget support disburse- democracy and development assistance citizens, as highlighted by the 2002 ment indicators need to be much more communities as well as to better NGO Act in Tanzania and the 2010 explicitly defined and consistent across ­grapple with the distribution of power NGO Bill in Zambia. Donors there- countries. Clear examples of unaccept- within recipient countries that con­ fore need a two-pronged approach able violations should be delineated in dition aid’s ability to simultaneously that involves offering both legal train- the same manner that they are for enhance socioeconomic well-being ing and legal support for NGOs and ­macroeconomic issues. For instance, and support democratic consolidation. journalists, as well as communicating changing the constitution to run for As we quickly approach a post-MDG with MPs about the potential negative additional terms or holding elections world where governance is receiving implications of passing legislation deemed blatantly unfair by inter- increased attention, there is no better that limits freedom of speech and national observers could be considered time to ensure that these lessons are ­association. examples of incidents that a subset of finally incorporated into the inter- donors would not tolerate. In this national development agenda. Minimizing the weaknesses of budget regard, donors would commit them- support selves ex ante to delivering a coherent In contrast to democracy assistance, response when such incidents occur Notes the development aid community has rather than adopting ad hoc and frag- 1. See http://www.aideffectiveness.­ increased its coordination and harmo- mented approaches ex post. org/busanhlf4/images/ nization in many African countries as a Third, budget support needs to stories/hlf4/OUTCOME_­ result of using budget support. How- avoid reinforcing the weaknesses of DOCUMENT_FINAL_EN.pdf 2. These trends were calculated ever, it is precisely because budget African legislatures. To do so, greater from the World Bank’s World ­support is intended to support a longer- interaction is needed between budget Development Indicators. They term planning horizon based on donor support donors and parliamentarians are regional aggregates that coordination and recipient govern- to inform the latter of what activities only include countries consid- ments’ own policy objectives that the are being funded by the international ered “developing”. 3. These include Burundi, ­Central modality is not well adapted to deepen- community. Donors should also pro- African Republic, Congo-­ ing democracy. Indeed, the PRSPs that vide explicit details to parliament Brazzaville, Côte d’Ivoire, guide government expenditures backed regarding the benchmarks for their Gambia, Guinea-Bissau, Liberia, by budget support rarely focus on pol- ­disbursements so that legislators know Madagascar, Mauritania, Niger, Sierra Leone and Zimbabwe. itical governance. whom to hold accountable when aid is

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INSIDE: Policy Brief Democratic UNU World Institute for Development Economics Research Trajectories in Africa: (UNU-WIDER) is a research and training centre of the United Nations University. UNU-WIDER was established by the United Nations Unravelling the University (UNU) as its first research and training centre and started work in Helsinki, Finland, in 1985. The Institute undertakes Impact of Foreign Aid applied research and policy analysis on structural changes affecting An analysis of how the developing and transitional economies, provides a forum for the ­democracy assistance and advocacy of policies leading to robust, equitable and environmentally economic development aid sustainable growth, and promotes capacity strengthening and training in the field of economic and social policy-making. Work is carried out by jointly have influenced staff researchers and visiting scholars in Helsinki and through networks multi-party transitions and of collaborating scholars and institutions around the world. democratic consolidation

in Africa.

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Finland

Helsinki

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Economics Research Economics

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