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Summary book "How the Aid Industry Works" by Arjan de Haan
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A summary of the entire book "How the Aid Industry Works" Arjan de Haan.
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Chapter 1 why is aid contested?Arguments in favour of and against development aid
1: Aid flows should increase
* so that the economy of the country can grow
* to fight poverty
2: Too much money goes to international development
*1 aid has failed
*2 the entire development edifice causes the problems it was supposedly seeks to solve
*3 aid dependency, donor funding can form half of the government budget
*4 absorptive capacity, recipient government do not have the capacity to use increased aid flows
effectively. Depends on technical and political preconditions for aid to be effective in reducing
poverty.
*5 the motives and structures of donors continue to drive the way aid is given
3: Amounts of aid matter less than how it is given
*1 aid is not well targeted too many aid is given to countries that are not the poorest
*2 much aid does not reach the poorest people
*3 many of the poorest countries are not able to use aid effectively
*4 political nature of the aid process
*5 donors’ habits, the patterns of behaviour and incentives that limit aid effectiveness.
Disbursement pressure
*6 tied aid has restricted aid’s efficiency
4: Foreign policy, trade, and migration policies matter more than aid
*1 the U.S. aid is an instrument of foreign policy or diplomatic purposes (Cold War).
*2 how important is aid in a world in which private financial flows are so large?
These arguments are important, and a development agenda is about much more than aid. But aid
itself does have its place. There may be too few successes, but there are enough to illustrate the point
that aid does matter for the places and countries that are marginalized from globalization.
Why so many different views on the Aid Industry?
1. Aid has been used for different purposes. Because there are many objectives for aid, views
on what it can achieve differ.
2. There are no agreed-upon standards to measure whether aid works.
3. The ideological differences between Right and Left have exercised a great influence on
framing the aid debate, and the changes in political power over the last decades have
influenced the changes in the shape of aid institutions.
4. Differences in expectations about the extent to which governments can promote economic
growth and how much of this should be left to the private sector.
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