William Easterly and Laura Freschi (NY book review) — Foreign aid observers have often worried that Western aid to Africa is propping up autocratic regimes. Yet seldom has such a direct link from aid to political repression been demonstrated as in “Development without Freedom,” an extensively documented new report on Ethiopia by Human Rights Watch. Based on interviews with 200 people in 53 villages and cities throughout the country, the report concludes that the Ethiopian government, headed by prime minister Meles Zenawi, uses aid as a political weapon to discriminate against non-party members and punish dissenters, sending the population the draconian message that “survival depends on political loyalty to the state and the ruling party.”
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Ethiopia is Africa’s largest recipient of foreign aid (at $3.3 billion in 2008 and rising), and is frequently described as a country where western assistance is providing a safety net for the poor and laying the groundwork for country-wide economic growth. Donors working in Ethiopia, citing progress on six out of the eight Millennium Development Goals, claim that aid has “had a significant impact on improving the lives of the poorest families.” A predominantly Christian country bordering two unstable Islamic states (Somalia, and Sudan), Ethiopia is also seen as a crucial ally in the “war on terror.”
Yet Human Rights Watch contends that the government abuses aid funds for political purposes—in programs intended to help Ethiopia’s most poor and vulnerable. For example, more than fifty farmers in three different regions said that village leaders withheld government-provided seeds and fertilizer, and even micro-loans because they didn’t belong to the ruling party; some were asked to renounce their views and join the party to receive assistance. Investigating one program that gives food and cash in exchange for work on public projects, the report documents farmers who have never been paid for their work and entire families who have been barred from participating because they were thought to belong to the opposition. Still more chilling, local officials have been denying emergency food aid to women, children, and the elderly as punishment for refusing to join the party.
Nor should any of this come as a surprise. Meles has for many years managed to charm and win the trust of Western leaders even as his government becomes increasingly repressive. As Helen Epstein recently reported in the New York Review, “countless journalists, editors, judges, academics, and human rights defenders have fled the country or languish behind bars, at risk of torture. New laws passed in 2005 have made political activity more difficult than ever.”
Indeed, many aid officials interviewed in the Human Rights Watch report admit that they were aware of these abuses. As one western donor official said, “Every tool at [the government’s] disposal—fertilizer, loans, safety net—is being used to crush the opposition. We know this.” Yet the umbrella group representing 26 donors in Ethiopia (the Donors Assistance Group, or DAG), suggests that aid agencies intend to continue more or less with business as usual. Their overall response has been to reject the conclusions of the Human Rights Watch report, noting that, in their own research, they have not found “any evidence of systematic or widespread distortion.”
A study of aid recipients over the past three decades shows that the failure of western aid donors to separate themselves from autocratic rulers is not confined to Ethiopia—or even to Africa. In fact, despite growing awareness in the aid community of how foreign development support has sustained anti-democratic regimes, little has changed: dictators continue to receive a third of all international aid expenditures, and much of the remaining portion goes to countries that are only “partly free.”
One reason for this inertia is a genuine concern for the poor, hungry and sick who might suffer or die if the government stopped providing vital social services as a result of aid cuts. Another, less sympathetic, reason is that aid agencies literally exist to give aid; organizational incentives push aid bureaucrats to keep the money flowing, to keep their field offices open, and secure their own jobs.
In the case of Ethiopia, a violent government crackdown on the opposition that left 200 dead in 2005 embarrassed the donor community into an unusually frank reconsideration of their strategy. Until that point, many donors had been giving aid through the mechanism known as “direct budget support,” in which money goes directly into the federal government’s budget (as opposed to, say, going to specific projects to improve public services). Seemingly alarmed by the Ethiopian government’s repressive turn, the World Bank in 2006 resolved to “move away” from this system by channeling aid through local government instead, in order to protect its funding from “political capture.” It also said it would decrease aid to Ethiopia if governance did not improve.
But these threats have proved empty. Even before the Human Rights Watch report came out, observers had pointed out how hollow the World Bank’s move was, since local governments are also under control of the ruling party. And now, donors have been reversing even this feeble step, arguing for a quick return to direct budget support. The donors cite illusory “progress in long-term institution-building and gradual improvements in governance.”
This blatant indifference to democratic values is particularly tragic since there are many ways the aid community might help Ethiopians rather than their rulers. First and foremost, donors could insist that investigations into aid abuse be credible, independent and free from government interference, and then cut off support to programs they find are being used as weapons against the opposition. They could speak out forcefully against recent legislation that smothers Ethiopian civil society. They could also seek to bypass the government altogether, channeling funds through NGOs instead, or giving direct transfers or scholarships to individuals.
As a last resort, if the government prevents all attempts by donors to reach beneficiaries, then aid to Ethiopia could be suspended altogether. An aid cutoff under these circumstances does not hurt the intended beneficiaries if aid was not reaching them in the first place. Above all, though, donors must recognize that the current status quo is unacceptable. For not only is foreign aid to Ethiopia not improving the lives of those most in need, by financing their oppressors, it is making them worse.