In a recent article about Ethiopia, Helen Epstein agonizes over this question:
Meles’s Ethiopia is now the subject of an informal experiment to see whether “the big push” approach to African development will work. Its foreign aid receipts, which have tripled since 2000, amounted to some $3 billion in 2008, more than any other nation in sub-Saharan Africa. A nominally Christian country surrounded by largely Islamic Somalia, Sudan, and Kenya, Ethiopia is also a key Western ally in the “war on terror,” and this is certainly a factor in how much foreign aid it receives—though most of the money goes not to the military but to development programs, especially health, education, and agriculture projects. The big push has financed 15,000 village health clinics, seventeen universities, countless schools, and the beginnings of a new road network that will bring trade and services to many previously isolated rural areas.A similar dynamic seems evident in North Korea: the regime's economic policies basically create famine, but it would be horrible to let people die, so many countries (including the USA) send food aid. Part of the aid is used to help ordinary people, but some quantity, perhaps a large quantity, is diverted to the army or given to well-placed officials who can make a profit out of it - i.e., it serves to cement the winning coalition. (For the more outraged version of this argument, see here). A sufficiently bloody-minded leader can basically externalize responsibility for feeding his people so as to force external powers to subsidize the maintenance of his winning coalition.
Unfortunately, this aid is also subsidizing a regime that is rapidly becoming one of the most repressive and dictatorial on the continent. During Ethiopia’s most recent parliamentary elections in May 2005, the government suspended the vote count in some areas when it seemed that the opposition was winning more seats than expected. When the results were eventually announced, Meles’s EPRDF, to no one’s surprise, had won. European Union observers criticized the conduct of the elections, and opposition supporters organized demonstrations that soon turned violent. Security forces shot into the crowds, killing some two hundred people, and thousands of others, including journalists and human rights activists, were arrested. Seventy opposition leaders were charged with treason. Although most were later pardoned, several, including the leader of the opposition party Unity for Democracy and Justice, Birtukan Mideksa, remain behind bars.
On May 23, Ethiopia will hold its first parliamentary elections since 2005, but the results seem foreordained. Opposition groups have been prevented from opening local offices and some opposition candidates have been assaulted by EPRDF officials or arbitrarily detained by the police. The government uses Chinese spy technology to bug phone lines and Internet communications, and countless journalists, editors, judges, academics, and human rights defenders have fled the country or languish behind bars, at risk of torture. New laws passed since 2005 have made political activity more difficult than ever. The Anti-Terrorism Proclamation of 2009 makes hearsay admissible as evidence in court, and one of Ethiopia’s few remaining independent newspapers recently closed after its editors learned that charges against them were being prepared under the act. Voice of America and other international radio programs are routinely jammed before elections, including this one.
These events are unfolding as billions of dollars in foreign aid pour into the country. Foreign aid is important. It helps needy people, it creates allies for our causes and markets for our products, and redeems some of the damage inflicted on the third world during the cold war. But aid agencies need to ensure that their programs don’t exacerbate the political problems that are keeping people poor in the first place.
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At first, the Europeans threatened to cut off aid until Ethiopia made more progress on human rights, but then reconsidered. The Europeans had their own security and strategic interests in the region, and may have reasoned that without American cooperation, an aid boycott of Ethiopia would have little leverage over Meles’s human rights violations. These were also the days of Our Common Interest, Bono, and “Make Poverty History,” and cutting off aid to one of the poorest countries in the world might have been seen as a bad PR move. However, the Europeans resolved to channel their aid directly to local district authorities, bypassing the central government. This would prevent its use for political purposes, or so it was hoped.
The plan was not a success. As local elections scheduled for 2008 approached, opposition groups, mindful that so much money was now flowing into district coffers, feared widespread rigging. Local government officials earn meager salaries, but are enormously powerful because they control access to food aid programs, fertilizers, educational opportunities, jobs, plots of land, small business loans, and even health care.15 The opposition groups unsuccessfully petitioned the US and other donors to fund independent poll monitors, but when the EPRDF won 99.99 percent of the seats, US officials said they could not comment on the fairness of the elections because they hadn’t monitored them.16
Scholars and human rights groups had for years been alerting the international community to the fact that EPRDF officials frequently deny the benefits of foreign aid programs—food, fertilizers, training, and so on—to known opposition supporters.17 When I asked World Bank officials whether they were concerned about these allegations, they said that they’d heard a few anecdotal reports, but had yet to see convincing evidence that political diversion of resources was a systematic problem in their programs.
No doubt conducting a systematic survey would be difficult. A Human Rights Watch researcher was deported last November while attempting to investigate the politicization of a World Bank food aid program, and a journalist who tried to follow up the investigation was arrested and jailed for two days.18 In December 2009, the Western press began publicizing these stories, and the donors finally agreed to conduct a study of the “distortions” in the uses of aid in Ethiopia. However, this investigation will be overseen by the government.
For years, Ethiopia’s foreign donors supported a fledgling human rights community that provided voter education, documented political repression, and advocated for the rights of rape victims, abused children, the blind, deaf, and other vulnerable groups. In response to increasing criticism from some of these groups, the government recently enacted a Charities and Societies (CSO) law, forbidding them from receiving all but minimal funding from non-Ethiopian sources. Since few Ethiopians can afford to donate to charity, numerous human rights programs have shut down. The donor agency officials who once supported these programs have protested in internal reports and private meetings with the prime minister, but their public pronouncements have been conciliatory. On the day the EU announced a new €250 million aid package for Ethiopia, it expressed the hope that the CSO law would be “implemented in an open-minded and constructive spirit.”
Moreover, theory suggests that this is will normally be the case: in a small winning coalition system, increasing the discretionary resources available to the leadership (which is basically what development aid given directly to governments does) should make it harder to overthrow him. The implications of Bueno de Mesquita et al. are basically grim on this point: the more a regime can count on external aid (because others are more concerned about poverty and famine than it itself is), the more likely it is that the regime can maintain itself in power.
What do you think can be done about this? Is there a tradeoff between giving development aid and promoting democracy in authoritarian regimes? Are there ways around this problem, if it is a problem?
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