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Systemic Constraints on Aid Policy and Aid Outcomes: the History of Canadian Official Development Assistance to Tanzania Submitt

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Systemic Constraints on Aid Policy and Aid Outcomes: the History of Canadian Official Development Assistance to Tanzania Submitt Systemic Constraints on Aid Policy and Aid Outcomes: The History of Canadian Official Development Assistance to Tanzania submitted by Natalie Folster In fulfillment of the requirements for the degree of Doctor of Philosophy in Development Studies at The London School of Economics May 2001 UMI Number: U166540 All rights reserved INFORMATION TO ALL USERS The quality of this reproduction is dependent upon the quality of the copy submitted. In the unlikely event that the author did not send a complete manuscript and there are missing pages, these will be noted. Also, if material had to be removed, a note will indicate the deletion. Dissertation Publishing UMI U166540 Published by ProQuest LLC 2014. Copyright in the Dissertation held by the Author. Microform Edition © ProQuest LLC. All rights reserved. This work is protected against unauthorized copying under Title 17, United States Code. ProQuest LLC 789 East Eisenhower Parkway P.O. Box 1346 Ann Arbor, Ml 48106-1346 Tweses F 787o POLITICAL AHD 7 8\z%!± ABSTRACT This thesis examines the aid process to discover why aid so often fails. It does this through an investigation of the determinants of Canadian aid policy, the forces which have shaped the manner in which it has been implemented in Tanzania, and how this has affected the outcome of these efforts. The study examines in detail three significant policy decisions taken with respect to the Canadian aid programme in the past fifteen years: the decentralization and recentralization of aid administration 1989 - 1993; failed efforts in the DAC to further untie bilateral aid in 1999; and the termination of Canadian bilateral aid to Tanzania and the rest of East Africa in 1993. In addition, Canadian assistance in Hanang District, Tanzania between 1967 and 1999 is examined as a means to identify the numerous obstacles encountered by aid officials in the course of implementing aid agreements, and the forces which influence their decision-making process. Particular attention has been paid to the influence exerted on the Canadian aid programme as a result of its participation in international organizations like the Development Assistance Committee of the OECD and the World Bank. The study also identifies constraints on the effective use of aid resources inherent in the institutionalized processes of aid which inhibit the capacity of the Canadian International Development Agency to respond effectively to evidence of policy failure and improve aid practice. It is argued that bureaucratic processes have an enduring power to shape the policies they were designed to administer. In addition, that the institutional structure of the aid programme has made it extremely vulnerable to the pursuit of economic and political objectives which conflict with the stated purpose of Canadian ODA as an instrument for poverty alleviation in recipient countries. 2 TABLE OF CONTENTS TITLE PAGE............................................................................................................... 1 ABSTRACT.................................................................................................................. 2 TABLE OF CONTENTS.............................................................................................. 3 LIST OF FIGURES......................................................... ..............................................7 ACRONYMS................................................................................................................ 8 ACKNOWLEDGEMENTS...........................................................................................10 EPIGRAM....................................................................................................................14 INTRODUCTION...................................................................................................... 15 0.1 The problem and the hypothesis and its problems ..............................................15 0.2 Research questions.................................................................................................. 26 0.3 Structure of thesis....................................................................................................26 0.4 Methodology........................................................................................................... 30 0.5 Limitations to Study................................................................................................ 31 0.6 Contribution to Knowledge ......................................................................................32 PART Is POLICY-MAKING CHAPTER ONE COMPETING INFLUENCES ON CANADIAN AID POLICY...............................33 1.1 The theoretical rationale for aid ................................................................................ 34 1.2 The origins of aid .....................................................................................................38 1.3 The Cold War ........................................................................................................... 40 1.4 The pursuit of commercialinterests abroad ................................................................42 1.5 The international aid regime ........................................ :........................................ .44 1.6 Aid as a bureaucratic process ...................................................................................55 1.6.1 Tendency to inertia ...........................................................................................56 1.6.2 Goal displacement ............................................................................................58 1.6.3 Malfunction of oversight/corrective mechanisms in public institutions . ........... 59 1.6.4 Incentives .........................................................................................................62 1.6.5 Accountability..................................................................................................66 1.6.6 The generation, circulation and use of information ............................................ 69 1.6.7 Relative autonomy........................................................................................... 92 1.7 The determinants of Canadian aid policy .................................................................73 1.7.1 The influence of the Cold War on Canadian aid policy .................................... 74 1.7.2 Humane Internationalism ................................................................................. 75 1.7.3 The Dominant Class explanation ......................................................................76 1.7.4 The pluralist perspective .................................................................................. 80 1.7.5 The statist interpretation ...................................................................................82 1.7.6 The international aid regime and Canadian aid policy .......................................84 1.8 Conclusion ...............................................................................................................86 3 CHAPTER TWO CIDA’S EXPERIMENT WITH DECENTRALIZED AID ADMINISTRATION 1988 -1993 ............................................................................................................. 92 2.1 Introduction ...................................................................................................... 92 2.2 The decision to decentralize ..............................................................................96 2.3 The implementation of decentralization ............................................................101 2.4 CIDA evaluations of decentralization ...............................................................103 2.5 Conflict between CIDA and External Affairs ................................................... 106 2.6 Two views of the purpose of aid .......................................................................Ill 2.7 Policy reversal: recentralization of aid administration ...................................... 115 2.8 Explanations of policy reversal: costs................................................................117 2.9 Opposition of the Canadian commercial sector ................................................ 122 2.10 The failure of policy oversight mechanisms......................................................128 2.11 Conclusions ...................................................................................................... 129 CHAPTER THREE TIED AID: DOMESTIC AND INTERNATIONAL PRESSURES ON CANADIAN AID POLICY............................................................................................................132 3.1 Introduction ........................................................................................................ 132 3.2 Canadian restrictions on procurement for aid contracts ...................................... 133 3.3 The arguments for and against tying aid............................................................ 137 3.4 Donor inclination to untie aid ............................................................................. 138 3.5 Canadian commodity grants to Tanzania ............................................................141 3.6 Canada’s tied aid policy and the Open General License Facility in Tanzania 149 3.7 Canadian resistance to international pressure to untie aid ....................................153 3.8 The disciplinary power of the international aid regime........................................156 3.9 DAC negotiations to untie
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