National Interest and Foreign Aid 9781685852702

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National Interest and Foreign Aid

National Interest and Foreign Aid Steven W. Hook

LYN NE RIENNER PUBLISHERS

B O U L D E R . L O N D O N

Published in the United States of A m e r i c a in 1995 by Lynne Rienner Publishers, Inc. 1800 30th Street, Boulder, Colorado 80301 and in the United Kingdom by Lynne Rienner Publishers, Inc. 3 Henrietta Street, Covent Garden, London W C 2 E 8LU © 1995 by Lynne Rienner Publishers, Inc. All rights reserved Library of C o n g r e s s Cataloging-in-Publication Data Hook, Steven W., 1959National interest and foreign aid / Steven W. Hook. Includes bibliographical references and index. ISBN 1-55587-502-5 (alk. paper) 1. Economic assistance—Case studies. 2. Technical assistance— Case studies. I. Title. HC60.H6668 1995 338.9'1—dc20 94-31379 CIP British C a t a l o g u i n g in Publication Data A C a t a l o g u i n g in Publication record for this book is available from the British Library.

Printed and bound in the United States of A m e r i c a

@

T h e paper used in this publication meets the requirements of the American National Standard for P e r m a n e n c e of Paper for Printed Library Materials Z39.48-1984. 5 4 3 2 1

To my mother and father

Contents

List of Tables and Figures Preface Acknowledgments

ix xi xvii

PART 1: The Context of National Interest and Foreign Aid 1 2

Introduction The Setting of Development Assistance

3 19

PART 2: Country Studies 3 4 5 6

French ODA: The Projection of Grandeur The Geoeconomics of Japanese ODA Swedish ODA: The Nordic Model Under Stress The Geopolitics of U.S. ODA

47 69 93 117

PART 3: Patterns and Prospects 7 8

The Comparative Record National Interest and Foreign Aid: Toward the Millennium

Appendix 1: Summary of Research Strategy Appendix 2: Primary Aid Donors to Recipient LDCs References Index About the Book and the Author

vii

143 165 187 191 193 211 221

Tables and Figures

Tables 2.1 2.2 2.3 3.1 3.2 3.3 3.4 4.1 4.2 4.3 4.4 5.1 5.2 5.3 5.4 5.5 6.1 6.2 6.3 6.4 6.5 6.6 7.1 7.2 7.3 7.4 7.5

Origins of the O D A Regime, 1 9 4 4 - 1 9 6 5 Contrasting Views of D e v e l o p m e n t Aid Economic Profile of O D A D o n o r s Top Ten Recipients of French O D A , 1 9 7 0 - 1 9 9 0 French O D A Transfers, 1 9 7 0 - 1 9 9 0 Quality of French O D A , 1 9 8 0 - 1 9 8 9 French O D A and Recipient Characteristics Top Ten Recipients of Japanese O D A , 1 9 7 0 - 1 9 9 0 Japanese O D A Transfers, 1 9 7 0 - 1 9 9 0 Quality of Japanese O D A , 1 9 8 0 - 1 9 8 9 Japanese O D A and Recipient Characteristics Top Ten Recipients of Swedish O D A , 1 9 7 0 - 1 9 9 0 Two European Models of O D A Swedish O D A Transfers, 1 9 7 0 - 1 9 9 0 Quality of Swedish O D A , 1 9 8 0 - 1 9 8 9 Swedish O D A and Recipient Characteristics Top Ten Recipients of U.S. O D A , 1 9 7 0 - 1 9 9 0 U.S. Military Assistance to M a j o r O D A Recipients U.S. O D A Transfers, 1 9 7 0 - 1 9 9 0 Quality of U.S. O D A , 1 9 8 0 - 1 9 8 9 U.S. O D A and Recipient Characteristics U.S. O D A and Recipient Characteristics, Excluding Egypt and Israel Patterns of Donor O D A Flows to A f r i c a n Recipients Quantity Versus Quality of O D A Flows Systemic Roles, National Interests, and O D A Behavior Wealth of Aid Donors Versus Quality of Aid Flows O D A and Domestic Politics

ix

23 35 41 57 59 62 64 72 82 87 89 100 103 107 110 111 125 127 131 134 135 137 146 148 154 156 160

X

Tables and Figures

Figures 2.1 2.2 3.1 3.2 4.1 4.2 5.1 5.2 6.1 6.2 7.1 7.2 7.3 7.4

Donor O D A Market Share, 1 9 8 9 - 1 9 9 0 Recipient O D A Market Share, 1 9 8 9 - 1 9 9 0 Direction of French O D A , 1 9 8 0 - 1 9 9 0 Uses of French O D A , 1 9 8 8 - 1 9 8 9 Direction of Japanese O D A , 1 9 8 0 - 1 9 9 0 Uses of Japanese O D A , 1 9 8 8 - 1 9 8 9 Direction of Swedish O D A , 1 9 8 0 - 1 9 9 0 Uses of Swedish O D A , 1 9 8 8 - 1 9 8 9 Direction of U.S. ODA, 1 9 8 0 - 1 9 9 0 Uses of U.S. O D A , 1 9 8 8 - 1 9 8 9 D o n o r s ' N e t O D A Transfers D o n o r s ' O D A as a Percentage of G N P D o n o r s ' P e r Capita O D A O D A to Poorest Countries

30 33 60 61 83 85 108 109 132 133 149 150 151 152

Preface

F o r e i g n a s s i s t a n c e has e m e r g e d as a central c o m p o n e n t o f international rel a t i o n s s i n c e W o r l d W a r II. V i r t u a l l y e v e r y n a t i o n - s t a t e is c u r r e n t l y e n g a g e d on a regular b a s i s as e i t h e r a d o n o r or r e c i p i e n t o f f o r e i g n aid. C o n c e s s i o n a l aid f l o w s h a v e p r o v e n to b e m a l l e a b l e i n s t r u m e n t s o f f o r e i g n p o l i c y w h o s e applications equal the n u m b e r o f d o n o r s and r e c i p i e n t s in the international s y s t e m . T h e f o l l o w i n g study e x a m i n e s the most c o m m o n f o r m o f f o r e i g n aid, O f f i c i a l D e v e l o p m e n t A s s i s t a n c e ( O D A ) , w h o s e o s t e n s i b l e f u n c t i o n is the p r o m o t i o n o f sustained e c o n o m i c g r o w t h a m o n g the w o r l d ' s i m p o v e r i s h e d c o u n t r i e s . T h e number o f O D A d o n o r s , m a n y o f w h i c h have o n l y r e c e n t l y " g r a d u a t e d " f r o m the status o f aid r e c i p i e n t s , h a s c o n s i s t e n t l y i n c r e a s e d t h r o u g h o u t the p o s t w a r p e r i o d . T h e n u m b e r o f r e c i p i e n t s , w h i c h n o w inc l u d e s m a n y E a s t e r n E u r o p e a n states and m e m b e r s o f the C o m m o n w e a l t h o f I n d e p e n d e n t S t a t e s , has a l s o steadily i n c r e a s e d . A l t h o u g h the e c o n o m i c , s o c i a l , and p o l i t i c a l d e v e l o p m e n t o f aid rec i p i e n t s h a s r e m a i n e d the e x p l i c i t o b j e c t i v e o f m o s t O D A f l o w s , the tend e n c y o f d o n o r states to pursue their o w n i n t e r e s t s through the t r a n s f e r o f O D A is w i d e l y a s s u m e d . T h e r h e t o r i c o f aid d o n o r s m a y b e l i e t h e i r s e l f i n t e r e s t o n m a n y o c c a s i o n s , but a m o n g t h o u g h t f u l o b s e r v e r s o f f o r e i g n a i d — a n d a m o n g many o f its r e c i p i e n t s — t h e l i n k a g e b e t w e e n national interest and f o r e i g n aid is virtually a x i o m a t i c . B e y o n d this statement, however, the s u b s t a n t i v e relationship is far less c l e a r . A s t a t e ' s national interest v a r i e s with its p o s i t i o n within the international hierarchy, its p h y s i c a l and human r e s o u r c e s , cultural traditions, and o n g o i n g ties to other states. T h e s e f a c t o r s are o f t e n o b s c u r e , g i v e n the disc r e p a n c y b e t w e e n the w o r d s and d e e d s o f state l e a d e r s . O n e m a y intuitively s u s p e c t that national interests are at play in a g i v e n p o l i c y area, but what t h o s e interests are and how they are m a n i f e s t e d in b e h a v i o r r e m a i n s a m b i g u o u s . N e v e r t h e l e s s , leaders (and their c r i t i c s ) c o m m o n l y cast f o r e i g n p o l i c y in the c o n t e x t o f national interest, as the r e c e n t U . S . intervention in Haiti attests. M o r e generally, industrialized s t a t e s ' d i s b u r s e m e n t o f d e v e l o p m e n t ass i s t a n c e c h a l l e n g e s e s t a b l i s h e d a s s u m p t i o n s about f o r e i g n - p o l i c y behavior. xi

xii

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As sovereign actors in a structurally anarchic international system, nationstates must often place egoistic interests above altruistic concerns that benefit foreign populations at the cost of the donor states' own citizens. This presumption represents the basis of realism in international-relations theory. It is often argued, conversely, that the activity of wealthy states in dispensing aid to the world's poor reflects cooperative propensities in world politics, which suggests that relations among states may transcend the Hobbesian struggle for power often portrayed by realists. To proponents of idealism, a growing sense of global community has added the concept of international interest to modern statecraft. Four interrelated propositions are considered in the following pages. First, the foreign policies of modern nation-states have historically been informed, and continue to be informed, by widely shared conceptions of national interest. Second, the substantive content of these national interests in contemporary world politics varies widely among states, depending on their internal characteristics, both physical and social, and their role within the international system. Third, the most salient interests of states may be identified through systematic evaluation of their behavior in specific areas of foreign policy. Finally, the observable behavior of industrialized states in the area of development assistance provides such an opportunity to establish the linkage between national interest and foreign policy. In short, the well-documented paths of these financial flows open a window through which we can view the broader objectives of wealthy states, regardless of the declared statements of their political leaders. This study is designed to provide detailed substantive information to students of foreign aid, foreign policy, comparative politics, and international political economy. The case studies may be considered in isolation for more limited purposes or collectively for broader comparative analysis and theoretical speculation. Extensive citations are provided to facilitate ongoing research in any or all of these areas. By establishing empirical linkages between donor interests and aid flows, I address theoretical issues regarding the behavior of states in contemporary world politics, an era in which the "low politics" of social and economic concerns have achieved a degree of importance comparable to that of the "high politics" of war and peace. Further, the study pursues the meta-analytic function of promoting future research in the comparative study of foreign policy. Progress in this subfield of international relations has been limited by largely methodological obstacles, which this study attempts to surmount. Though the phenomenon of foreign assistance has received great attention within scholarly and policymaking circles, its role in contemporary world politics has remained elusive. Analysts have only recently undertaken systematic efforts to identify empirical linkages between aid programs and their broader roles in the foreign policies of donor and recipient states. For much of the postwar period, the scholarly literature on foreign

Preface

xiii

aid has been largely polemical, characterized by such titles as Billions, Blunders, and Baloney (Castle, 1955), Aid as Imperialism (Hayter, 1971), and Zapping the Third World (Linear, 1985). Cross-national studies of foreign assistance and research that documents aid patterns over time have been rare. More fundamentally, the lack of attention to foreign assistance as a sui generis tool of contemporary foreign policy has inhibited understanding and theoretical cumulation. The observation of Hans Morgenthau (1963: 70), though made long ago, remains true to this day: O f the s e e m i n g and real i n n o v a t i o n s w h i c h the m o d e r n a g e h a s introd u c e d into the practice o f f o r e i g n p o l i c y , n o n e has p r o v e d m o r e b a f f l i n g to both u n d e r s t a n d i n g and a c t i o n than f o r e i g n aid. N o t h i n g e v e n a p p r o a c h i n g a c o h e r e n t p h i l o s o p h y o f f o r e i g n aid has b e e n d e v e l o p e d .

Given the recent origin of ODA as a component of world politics, its lack of theoretical refinement may be understandable, particularly as compared to more established policy instruments such as alliance ties, military armament, and trade policy. Problems relating to comparative analysis in the area of development assistance are indeed formidable. States observe differing criteria in defining and reporting foreign-assistance transfers; the line between military and economic assistance is rarely definitive; and the burdens of equating currencies and differing terms of bilateral aid programs add to the complexity. Many of these problems have been resolved by the emergence of a foreign-aid regime that has brought some order to the diffuse network of concessional flows from rich to poor states. The Development Assistance Committee (DAC) of the Organization for Economic Cooperation and Development (OECD) has defined the parameters of ODA, identified qualitative standards of aid transfers, established guidelines for the reporting and monitoring of ODA flows, and compiled these data in annual tables that provide a statistical basis for cross-national comparison. Like other transnational regimes, that involving development assistance responds to collective concerns, many of which are transnational in nature, as well as the perceived and persistent self-interests of its most powerful members. This book is divided into three parts. In Part 1 I explore the historical and conceptual context of national interest and foreign aid. In Part 2 I detail the experiences of four major donors—France, Japan, Sweden, and the United States—in transferring ODA to less developed countries, with particular emphasis on their behavior during the 1980s. In Part 3 I contrast the four donors' aid patterns, consider their relationships to the foreign-policy objectives of each state from several perspectives, and evaluate the prospects for aid policy of the donor states and the ODA regime in general. In Chapter 1, the dynamics of the nation-state system are briefly reviewed, with particular attention to the often conflicting relations among

xiv

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states resulting from the s e l f - h e l p nature o f the state s y s t e m . T h e concept o f national interest is then e x a m i n e d , along with its various connotations, which have often reflected prevailing n o r m s o f international relations during their evolution. Finally, the phenomenon o f foreign a s s i s t a n c e is introduced as an element o f contemporary international relations and as a chall e n g e to c o n v e n t i o n a l presumptions and e x p e c t a t i o n s o f state behavior. Chapter 2 c o n t a i n s a broader review o f the global aid r e g i m e — i t s e v o l u tion, principal actors, institutional structures, and the varying f o r m s O D A transfers have taken since World War II. Contending normative approaches to understanding development a s s i s t a n c e are then e x a m i n e d . In Chapters 3 through 6 , the O D A programs o f F r a n c e , Japan, S w e d e n , and the United States are considered in detail. E a c h chapter includes a rev i e w o f the historical roots o f one s t a t e ' s O D A program and its relationship to that d o n o r ' s broader national interests and f o r e i g n - p o l i c y behavior. After a substantive discussion o f these programs, the empirical record o f e a c h donor during the 1 9 8 0 s is given special e m p h a s i s . T h e behavior o f these donors is a s s e s s e d from four v a n t a g e points: their a g g r e g a t e disbursements o f O D A , the direction and functional distribution o f aid flows, their " q u a l i t y " as defined by the aid r e g i m e , and their statistical relation to the d o n o r s ' potential f o r e i g n - p o l i c y interests. C r i t e r i a o f aid quality include the demonstrable human needs o f countries r e c e i v i n g assistance, the proportion o f aid given as grants as o p p o s e d to loans, and the degree to w h i c h aid transfers are tied to g o o d s and s e r v i c e s o r i g i n a t i n g within the donor country. D r a w i n g upon a ten-year data set that includes annual aid c o m m i t m e n t s by e a c h donor and the c h a r a c t e r i s t i c s o f recipient states, I then a d v a n c e the statistical l i n k a g e s b e t w e e n aid f l o w s and the d o n o r s ' broader f o r e i g n - p o l i c y interests. A f o r e i g n - p o l i c y model o f O D A , developed by R . D . M c K i n l a y and R i c h a r d L i t t l e ( 1 9 7 7 , 1 9 7 8 , 1 9 7 9 ) in their analyses o f aid programs o f the 1 9 6 0 s , is applied to e a c h c a s e ( s e e Appendix 1 for a summary o f this research strategy). In Chapter 7, the four c a s e studies are c o n t r a s t e d from a variety o f perspectives. T h e aid patterns are first considered relative to the potential presence o f three donor, f o r e i g n - p o l i c y interests: humanitarian, e c o n o m i c , and security. T h e findings are c o n s i d e r e d f r o m the p e r s p e c t i v e o f the donors' broader roles within the international s y s t e m and in the c o n t e x t o f their societal relations and political institutions. T h e relationship between the quantity and quality o f their aid f l o w s , as well as those f r o m other O E C D m e m b e r s , is considered along with the relationship between the absolute size o f their e c o n o m i e s and their o b s e r v a b l e b e h a v i o r in providing development aid. Finally, their patterns o f behavior are c o m p a r e d to those e x p e c t e d o f actors within an international e c o n o m i c regime. In Chapter 8 I e x p l o r e the theoretical i m p l i c a t i o n s o f these f i n d i n g s , r e v i e w the more general patterns o f d e v e l o p m e n t , and c o n s i d e r o n g o i n g c h a l l e n g e s to its norms and p r i n c i p l e s . I then a n t i c i p a t e future O D A patterns in the four

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donor states and the future of national interest as an orienting principle in foreign policy. Attention in this study is limited to the sources of bilateral development assistance—the donor countries—and to development assistance. Security assistance, particularly prevalent in the aid policies of the United States and the former Soviet Union during the Cold War, generally serves explicit foreign-policy interests and is thus less open to interpretation. In the case of development aid, ambiguities regarding donor motivation are pervasive and inhibit understanding, especially in comparative analysis. For analysts attempting to identify the determinants of ODA policy, however, this murkiness must not preclude systematic study. Given the increasing salience of ODA as a tool of foreign policy, understanding its role becomes all the more critical. It is a central presumption of this study that a combination of historical review, substantive description, and statistical analysis is essential in enhancing apprehension of comparative foreign-policy behavior. In isolation, none of these approaches adequately brings to light the linkage between national interest and foreign aid. Taken together, they illuminate the relationship. As is the case with other aspects of this book, our statistical presentations are designed to be accessible to a diverse readership, including students and administrators of aid policy in donor and recipient states. As such these techniques are relatively simple, but their findings are nonetheless instructive and their implications compelling. As the chapters to follow suggest, debates over foreign assistance have largely reflected broader normative disagreements about the appropriate roles and responsibilities of wealthy states in world politics. In the mid-1990s, these normative debates have been tempered by the absence of Cold War tensions and a growing consensus regarding the function of foreign assistance in promoting social, political, and economic development in the Third World. Transnational concerns regarding the effects of economic disparities between North and South have increasingly been accepted by donor states within the ODA regime. However, their ongoing aid programs continue to reflect their individual prerogatives and self-proclaimed national interests. The presence of both considerations throughout the Cold War period and toward the millennium is the primary subject of this book. —Steven W. Hook

Acknowledgments

This book would not have been possible without the assistance, cooperation, and patience of many close friends and colleagues. A m o n g the most instructive was Charles W. Kegley, Jr., whose work on comparative foreign policy energized the field and who supported this project from the beginning. Harvey Starr also brought his methodological expertise to bear on this project, as did Neil Richardson, a pioneer in the study of foreign economic policy, and James Kuhlman, a skillful political economist and valued colleague. David Cingranelli, Maurice East, C. Roe Goddard, Michael Link, Donald Puchala, and Jerel Rosati, w h o have c o m m e n t e d on early sections of this book, also deserve my long-lasting gratitude. At the University of Florida, I was provided with generous research support by Ken Wald, chairman of the Department of Political Science, and Pat Sivinski, director of the Faculty Support Center. Martin Ingram, Martina Jones, Richard Nolan, Steven Snook, and others contributed greatly to this effort. I was strongly encouraged by John Spanier, who showed interest in my work along the way and invited me to join him in his ongoing examination of U.S. foreign policy. In the final stages, Peter J. Schraeder provided thoughtful and invaluable guidance. All of these individuals perused parts of this manuscript and provided insightful critiques; none, however, should be held responsible for its deficiencies. I would also like to thank Fred Hindley, a mentor of long standing, for his enduring support. Most important, my w i f e , Debra-Lynn B. Hook, a gifted journalist who has wisely preserved her writing skills in the Fourth Estate, has patiently tolerated my frequent absences, physical and otherwise. My son Christopher and daughter Emily also deserve all the love and attention they have coming to them. —S. W. H.

xvii

PARTI The Context of National Interest and Foreign Aid

1 Introduction

T h e a c c e p t e d s t a n d a r d o f i n t e r n a t i o n a l m o r a l i t y in r e g a r d to the a l t r u i s t i c v i r t u e s a p p e a r s to b e that a s t a t e s h o u l d i n d u l g e in t h e m in s o far as this is not s e r i o u s l y i n c o m p a t i b l e with its m o r e i m p o r t a n t i n t e r e s t s .

—E. H.

Carr

T h e p r i v a t i o n and s u f f e r i n g o f m u c h o f the w o r l d ' s p o p u l a t i o n has presented its affluent minority with a humanitarian c h a l l e n g e to w h i c h the traditional imperatives o f national interest s e e m i n g l y do not apply. M o r e than 8 0 percent o f the w o r l d ' s population lived in low- or m i d d l e - i n c o m e c o u n tries in 1 9 9 0 and p r o d u c e d less than 1 5 p e r c e n t o f g l o b a l w e a l t h ( W o r l d B a n k , 1 9 9 2 ) . O f the w o r l d ' s 5 . 3 b i l l i o n i n h a b i t a n t s , m o r e than 1 b i l l i o n lived in " a b s o l u t e p o v e r t y , " and another 1 b i l l i o n survived on a s u b s i s t e n c e b a s i s . T h o u g h m a n y parts o f the w o r l d e x p e r i e n c e d u n p r e c e d e n t e d p r o s perity during the 1 9 8 0 s , the gap b e t w e e n the w o r l d ' s r i c h e s t and p o o r e s t p e o p l e s w i d e n e d c o n s i d e r a b l y during this p e r i o d , the " l o s t d e c a d e " o f T h i r d World d e v e l o p m e n t . 1 L e a d e r s o f industrialized states responded by sharing their wealth with i m p o v e r i s h e d p e o p l e s in the form o f f o r e i g n a s s i s t a n c e . In s o d o i n g , they o s t e n s i b l y w e r e m o t i v a t e d by the need to e a s e m a l n u t r i t i o n , p r e v e n t the s p r e a d o f d i s e a s e , limit the s u f f e r i n g that results f r o m natural d i s a s t e r s , c o n s t r u c t s t a b l e and r e p r e s e n t a t i v e p o l i t i c a l s y s t e m s , c u r b

population

g r o w t h , and p r o m o t e l o n g - t e r m e c o n o m i c e x p a n s i o n in less d e v e l o p e d c o u n t r i e s ( L D C s ) . T h r o u g h o u t the p o s t - W o r l d War II p e r i o d , f o r e i g n a s s i s t a n c e took on an air o f moral o b l i g a t i o n a m o n g affluent states, w h i c h res p o n d e d by c o m m i t t i n g m o r e than $ 5 0 0 b i l l i o n to L D C s ( O E C D , 1 9 9 4 a ) . C o n t r a r y to w i d e s p r e a d e x p e c t a t i o n s that f o r e i g n aid f l o w s

would

w e a k e n or disappear with the d e m i s e o f the C o l d War, w h i c h provided its o w n s t r o n g i m p e t u s f o r N o r t h - S o u t h " c o o p e r a t i o n , " the s c o p e and c o m p l e x i t y o f aid relations has only i n c r e a s e d in the 1 9 9 0 s . T h e d e v e l o p m e n tal n e e d s o f t r a n s f o r m e d s t a t e s in E a s t e r n E u r o p e and the f o r m e r S o v i e t U n i o n have b e e n a d d e d to t h o s e o f e x i s t i n g r e c i p i e n t s in A f r i c a ,

Latin

A m e r i c a , and s o u t h e r n A s i a , w h i c h h a v e b e e n r e c e i v i n g annual i n f u s i o n s o f aid for d e c a d e s and are in the midst o f s t r u c t u r a l - a d j u s t m e n t p r o g r a m s

3

4

National

Interest and Foreign

Aid

to m a n a g e g r o w i n g d e b t o b l i g a t i o n s a n d q u a l i f y f o r c o n t i n u e d a s s i s t a n c e . 2 At t h e s a m e t i m e , a g r o w i n g n u m b e r of i n d u s t r i a l i z e d states, m a n y of t h e m f o r m e r a i d r e c i p i e n t s , h a v e b e c o m e a c t i v e as d o n o r s . T h o u g h e s t a b l i s h e d aid p r o g r a m s h a v e b e e n r e d u c e d or e l i m i n a t e d in the 1 9 9 0 s b e c a u s e of d o mestic constraints within donor countries, new programs have been widely a d o p t e d b a s e d u p o n s t a n d a r d s of " s u s t a i n a b l e " e c o n o m i c d e v e l o p m e n t a n d o t h e r p r i o r i t i e s d e f i n e d by m a j o r d o n o r s a n d i n t e r n a t i o n a l o r g a n i z a t i o n s . At o n e level, this i n c r e a s i n g l y c o m m o n aspect of c o n t e m p o r a r y w o r l d p o l i t i c s r e p r e s e n t s an a p p a r e n t e x c e p t i o n to the p r e v a i l i n g r u l e s of s t a t e c r a f t , in w h i c h state a c t i o n s a r e j u s t i f i e d o n the basis of ( f r e q u e n t l y " v i t a l " ) n a t i o n a l i n t e r e s t s . T h e s e s e l f - i n t e r e s t e d c o n c e r n s i n f o r m t h e d e c i s i o n s of political l e a d e r s in m a n y a r e a s of d o m e s t i c g o v e r n a n c e but m o r e o f t e n inf l u e n c e f o r e i g n policy, a d i s t i n c t i v e r e a l m in w h i c h n a t i o n - s t a t e s f r e q u e n t l y c o m p e t e f o r p o w e r , p r o s p e r i t y , and p r e s t i g e in a c o n t e n t i o u s i n t e r n a t i o n a l s y s t e m . F r o m antiquity to the present age, the e n d s of national interest h a v e c o m m o n l y b e e n used to j u s t i f y any m e a n s n e c e s s a r y to a c h i e v e t h e m . Yet e v e n as f o r e i g n aid s e e m i n g l y d e p a r t e d f r o m the p r e v a i l i n g e g o i s m of i n t e r n a t i o n a l r e l a t i o n s , it b e c a m e e v i d e n t that aid p r o g r a m s w e r e o f t e n m o t i v a t e d as m u c h by t h e s e l f - i n t e r e s t s of d o n o r s as b y t h e h u m a n n e e d s of r e c i p i e n t s . T h e f a i l u r e of b i l a t e r a l a n d m u l t i l a t e r a l a i d p r o g r a m s to a c h i e v e t h e i r s t a t e d o b j e c t i v e s , as r e f l e c t e d in t h e g r o w i n g g a p b e t w e e n rich a n d p o o r d u r i n g the 1 9 8 0 s , only d e e p e n e d p u b l i c a n d s c h o l a r l y s k e p t i c i s m a b o u t the p r a c t i c e . " W h e n o t h e r b e n e f i t s to t h e d o n o r a r e t a k e n into a c c o u n t , t h e i m a g e r y of g i f t - g i v i n g e m b e d d e d in m o s t d i s c u s s i o n s of a i d b e c o m e s q u e s t i o n a b l e " ( W o o d , 1986: 14). In t h i s s t u d y , the t e n s i o n b e t w e e n n a t i o n a l i n t e r e s t a n d f o r e i g n a i d is c o n s i d e r e d as it p e r t a i n s to f o u r m a j o r d o n o r s — F r a n c e , J a p a n , S w e d e n , a n d t h e U n i t e d S t a t e s . Of p a r t i c u l a r c o n c e r n is their use of O f f i c i a l D e v e l o p m e n t A s s i s t a n c e ( O D A ) , the p r i m a r y f o r m of s u c h t r a n s f e r s in t h e p o s t - W o r l d W a r II p e r i o d , w h i c h h a s b e c o m e "a h i g h l y s i g n i f i c a n t a n d l o n g - l a s t i n g part of t h e f i n a n c i a l r e l a t i o n s " b e t w e e n rich a n d p o o r ( L u m s d a i n e , 1 9 9 3 : 3 4 ) . In t h e 1 9 9 0 s nearly e v e r y n a t i o n - s t a t e is p a r t i c i p a t i n g in a g l o b a l O D A r e g i m e e i t h e r as a d o n o r o r r e c i p i e n t of c o n c e s s i o n a l res o u r c e s . A l t h o u g h u n i t e d by their u s e of t h i s f o r m of f o r e i g n a s s i s t a n c e , n a t i o n - s t a t e s ' a p p l i c a t i o n of O D A v a r i e s w i d e l y in p r a c t i c e , r e f l e c t i n g t h e i n d e p e n d e n t p r e r o g a t i v e s of e a c h . T h e i r c o n t r a s t i n g b u t h i g h l y v i s i b l e b e h a v i o r in d i s p e n s i n g O D A r e v e a l s m u c h a b o u t n a t i o n a l interest and its role in g u i d i n g f o r e i g n - p o l i c y b e h a v i o r d u r i n g the p o s t w a r p e r i o d . A s w i t h any o t h e r a s p e c t of f o r e i g n policy, an e x a m i n a t i o n of n a t i o n a l interest a n d f o r e i g n a i d m u s t first b e p l a c e d w i t h i n t h e b r o a d e r c o n t e x t of i n t e r n a t i o n a l r e l a t i o n s . T h i s s t u d y t h u s b e g i n s by c o n s i d e r i n g the c o n c e p t o f n a t i o n a l i n t e r e s t , its v a r i e d c o n n o t a t i o n s a n d a p p l i c a t i o n s t h r o u g h o u t history, a n d its r o l e in c o n t e m p o r a r y w o r l d p o l i t i c s . T h e u n e a s y m a r r i a g e b e t w e e n n a t i o n a l interest a n d f o r e i g n aid is then e x p l o r e d b e f o r e I turn, in

Introduction

5

subsequent chapters, to a more concrete examination of the aid regime and the involvement of the f o u r d o n o r c o u n t r i e s in sharing their wealth with developing countries.

The Evolution of National Interest Although the concept of national interest is a relative n e w c o m e r to statecraft, it has become "an inescapable rule for the nation—a rule written in the nature of things" (Beard, 1934). Either explicitly or implicitly, leaders rely upon this concept to rationalize their actions both at home and abroad. National interest must consequently be reckoned with as states continue to play a decisive role in contemporary world politics. As C r a b b (1986: 213) observed, T h e c o n c e p t o f n a t i o n a l interest h a s e s t a b l i s h e d i t s e l f as part o f the l e x i c o n o f d i p l o m a c y a n d it c o n t i n u e s to b e u s e d w i d e l y b y the o f f i c i a l s o f the U n i t e d S t a t e s a n d o t h e r g o v e r n m e n t s a s a t e r m that c o l l e c t i v e l y d e s c r i b e s the n a t i o n ' s h i g h e s t - r a n k i n g d i p l o m a t i c g o a l s , e s p e c i a l l y as t h e s e relate to the p r o t e c t i o n o f n a t i o n a l s e c u r i t y . 3

As the f o l l o w i n g brief historical review illustrates, national interest has proven to be a very elastic concept with multiple meanings across time and space. State leaders have invoked national interest in pursuit of widely varying strategies of foreign policy, including isolationism, neutralism, regional or global hegemony, collective security, and transnational cooperation. T h e shifting r e l a t i o n s h i p s b e t w e e n c h u r c h and state, b e t w e e n state and society, between political and e c o n o m i c forces, and between states and international organizations all have influenced interpretations and applications of national interest. Though their applications of national interest have varied, the behavior of leaders has r e f l e c t e d the prevailing tenor of world politics of each historical period. Specifically, widespread conceptions of national interest have alternated cyclically b e t w e e n provincial, c o n f l i c t i v e , or e g o i s t i c strains (which inform the e v o l v i n g realist paradigm in international-relations theory), on o n e hand, and c o s m o p o l i t a n , cooperative, or altruistic strains (which collectively influence the alternative theory of idealism), on the other. As will be demonstrated in subsequent chapters, both views have f o u n d expression in the utilization of foreign assistance. Thucydides (1951 [ca. 4 0 2 B.C.]) was a m o n g the first to observe that the overriding interest of political leaders in self-protection often dictated their actions in both d o m e s t i c and f o r e i g n a f f a i r s . Further, in a world of multiple centers of p o w e r in which each possessed differing levels of economic and military resources, the primacy of self-interest would frequently

6

National Interest and Foreign Aid

lead to conflict. T h e s e elementary though p r o f o u n d insights were given expression by T h u c y d i d e s in his history of the Peloponnesian War. Leaders of both Sparta and Athens were forced to consider their incompatible claims as a basis for action. Citizens of other city-states, often caught between these two regional powers, found their options limited and largely d e f i n e d by their d o m i n a n t neighbors. As the Athenians bluntly informed the inhabitants of the island of Melos, w h o sought to remain neutral and isolated from the regional conflict: "You know as well as we do that right, as the world goes, is only a question between equals in power, while the strong do what they can and the weak suffer what they m u s t " (Thucydides, 1951: 331). This early c o n c e p t i o n , a forebearer of c o n t e m p o r a r y realist theories and definitions of national interest, was often eclipsed during the Middle A g e s by theological doctrines e m p h a s i z i n g transcendent interests of mankind in adherence to universal laws and moral codes of behavior. The Catholic C h u r c h and the Holy Roman Empire promoted these values in Europe; the doctrine of "just war" provided an ethical justification for the extension of Christian theology by violent means (Johnson, 1987). Relying on the alliance of church and state, monarchs defended their divine right to impose their will on their subjects at h o m e and their adversaries abroad. National interests were equated with universal norms during this period, a practice that, paradoxically, would be repeated by idealists of the twentieth century. 4 Beginning in the fifteenth century, the secular foundations of national interest were established as world politics entered its modern phase. The emerging basis of foreign policy, often articulated in the context of raison d'état (reason of state), guided the domestic and foreign policies of a relatively small n u m b e r of elites, w h o acted without the knowledge, assent, or involvement of their citizens. T h e notion that states maintained interests distinct from religious institutions, or indeed from universal norms, represented a f u n d a m e n t a l departure in thinking about national interest. These conceptions of the early Renaissance, articulated by Niccolo Machiavelli (1985 [1532]) and other pioneers of realpolitik, were popularly associated with the amoral pursuit of state power and survival as ends in themselves. Intended to guide the Florentine city-state through the rivalries that plagued Renaissance Italy, "Machiavelli's political writings are mantels on how to thrive in a completely chaotic and immoral world" (Forde, 1992: 64). These lessons extended beyond the Italian peninsula, touching on all sovereign territories faced with internal unrest or external encroachments. At a time when feudal structures were under assault both internally and externally and commercial ties were expanding across borders at an accelerating rate, the responsibilities of the state grew steadily. Its activities "included the establishment of a diplomatic system, a network of permanent embassies with accredited diplomats, foreign-policy analysts and advisors

Introduction

7

in addition to an elaborate structure for the rapid transport and the safe storage o f diplomatic dispatches" (Knutsen, 1992: 27). All of these developments reinforced the state's power, facilitated economic activity, and brought some degree of order, if not peace, to international relations. Among his other concerns, Machiavelli attempted to reconcile the dissonant coexistence of good and evil in both human nature and societal relations. In his view, the state served a vital mediating function, enforcing laws to moderate the egoistic consequences of its citizens' selfish passions and to prevent internal conflicts from undermining the state's authority. Differing standards of individual ethics, which had previously been beyond compromise or resolution, were to be brought under the direction of state authorities: "Moral goodness and justice were produced and could be produced only by the constraining power of the state" (Meinecke, 1957: 33). O f course, for the state to serve this mediating role, it would have to ensure its own self-preservation. Herein lay the functional basis of raison d'état, articulated most concretely by Cardinal de Richelieu in the early seventeenth century as he devised French strategy in the Thirty Years' War. Despite his adherence to Catholic theology, Richelieu rejected the notion that French policy must be driven by universal moral laws. " M a n is immortal, his salvation is hereafter," Richelieu argued. " T h e state has no immortality, its salvation is now or never." He concluded that France's survival would best be protected if it allied with Protestant forces in northern Europe, a view that gave pragmatic diplomacy priority over theological maxims. By the end of the war, France's strategy had proved successful, and it later served as a model for subsequent leaders. Richelieu's formulation of raison d'état underscored the moral paradox of state power earlier identified by Machiavelli: The state facilitates domestic order and moral behavior only through the tacitly amoral means of foreign policy. In this view, " T h e state is entirely independent but at the same time completely isolated. . . . T h e political world has lost all its connection not only with religion or metaphysics but also with all other forms of man's ethical and cultural life. It stands alone—in an empty space" (Cassirer, 1946: 140). 5 The current legal status of nation-states, vested with internal sovereignty and, in principle, protection from external threats, was most directly enunciated in the 1 6 4 8 Treaty of Westphalia, which ended the Thirty Years' War in Central Europe. The emergence of the modern state, "a selforiginating, self-empowered unit operating exclusively in pursuit of its own interests" (Poggi, 1 9 7 8 : 88), was accompanied by the gradual demise of feudalism in the West as a basis for societal organization. Expanding commercial exchanges necessitated administrative reform at the domestic level as well as steps toward the regulation of trade and colonial settlement through international law and treaties. Yet in affirming the legal rights and roles of states, Westphalia merely reinforced and formalized the anarchic nature of interstate relations. The emerging state system was likened to a

8

National Interest and Foreign Aid

"pre-political" domain in which egoistic actors were required to subordinate collective needs to the d e f e n s e and promotion of their o w n . T h e continuing absence of centralized authority at the systemic level produced the s a m e c o n s e q u e n c e s that T h o m a s H o b b e s identified at the societal level: State actors, like individuals in the ideal-typical "state of n a t u r e , " were prone to p u r s u e self-interests at the e x p e n s e of collective w e l f a r e (see Watkins, 1934). Under the nascent state system, the dictates of national interest would be d e t e r m i n e d by each sovereign, w h o s e f o r m u l a t i o n s w o u l d be based, presumably, on a rational calculation of its available resources and alternatives. Rationality, the product of modern education and the liberation of m o d e r n leaders f r o m religious d o g m a , was expected to fill the " e m p t y s p a c e " of the secular era in world politics. Whereas political philosophers such as Jean Bodin and Giovanni B o t e r o attempted to reconcile national interest with broader normative principles, most leaders considered their options m o r e narrowly. T h e y f a v o r e d the prevailing e m p h a s i s of the Enlightenment period on rationalism, which had produced theoretical breakthroughs in the fields of physics, astronomy, and biology and which seemingly could be applied to the b e h a v i o r of states. In the early nineteenth century, leaders of the great p o w e r s placed their faith in the coordinated m a i n t e n a n c e of a balance of power, or " e q u i l i b r i u m , " a m o n g nations. As Prince Metternich of Austria (quoted in Guluck, 1967: 32) noted, P o l i t i c s is the s c i e n c e o f the vital interests o f States in its w i d e s t m e a n ings. S i n c e , h o w e v e r , an isolated state no longer exists, and is f o u n d o n l y in the a n n a l s of the heathen w o r l d . . . w e must a l w a y s v i e w the s o c i e t y of states as the essential c o n d i t i o n o f the modern world. . . . T h e great axi o m s of political s c i e n c e proceed f r o m the k n o w l e d g e o f the true political interests o f all states; it is upon t h e s e general interests that rests the guarantee o f their e x i s t e n c e .

Metternich and other European leaders thus perceived the state system as an integrated, interdependent whole. T h e pursuit of national interest was to bec o m e an essentially mechanical function, and the ambitions of individual states were to be subordinated to the collective interest of systemic stability. This experiment in "concert d i p l o m a c y " by the major European states, relying as it did upon a fluid and precarious balance of power, could not be sustained indefinitely. It failed in the late nineteenth century with the rise of new p o w e r s — n a m e l y , the newly unified G e r m a n y and the United S t a t e s — a n d the concurrent decline of other powers, particularly Great Britain. Upon G e r m a n y ' s defeat of Austria and France and its unification under Otto v o n Bismarck, the notion of national interest w a s widely infused with the predatory logic of social Darwinism. National interest was reduced to survival of the fittest a m o n g the traditional and emerging great powers of the period. This view was embraced by U.S. President Theodore

Introduction

9

Roosevelt, w h o viewed national survival through military competition as a reflection of martial virtues. T h e concept of realpolitik returned to the European continent and e x p a n d e d w e s t w a r d to the A m e r i c a s and b e y o n d , w h e r e the United States carried a " b i g s t i c k " in Latin A m e r i c a and ass u m e d control of the P h i l i p p i n e s and other P a c i f i c nations. All of these changes further undermined the mechanistic basis of great-power stability and paved the way for world war in 1914. T h e simultaneous collapse of the Russian, Austro-Hungarian, and Ottoman e m p i r e s contributed to the rise of nationalism across Eurasia, resulting in the emergence of new nation-states based upon the principle of self-determination. This development after World War I prompted another reformulation of national interest. Woodrow Wilson revived cosmopolitan notions of a world order based upon universal standards of morality, democratic development, and international restraint, the latter of which was to be ensured by the collective-security provisions of the League of Nations. Wilson's prescriptions were rejected by the U.S. Senate, which preserved its constitutional prerogatives in d e f e n d i n g its perceived national interests, but were widely adopted by other nation-states. T h e effectiveness of his program in d a m p e n i n g international conflict w a s short-lived, h o w ever, as lingering animosities f r o m World War I and a prolonged e c o n o m i c depression w e a k e n e d the s e n s e of shared interests e p i t o m i z e d by the League of Nations. In Germany, Italy, and Japan these deteriorating c o n ditions encouraged fascist m o v e m e n t s predicated on the narrowest of conceptions of national interest, contributing to the onset of World War II. While the West's e x p e r i m e n t in collective security cracked u n d e r g r o w i n g strains, the newly f o r m e d Soviet Union e s p o u s e d the tenets of M a r x i s m - L e n i n i s m , which v i e w e d conventional definitions of national interest as agents for capitalist control. Soviet leaders promoted universal aspirations of solidarity a m o n g p r o p e r t y l e s s classes within industrialized countries and their overseas colonies. In the absence of worldwide support f o r these a s s u m p t i o n s and their prescriptions, which was v i e w e d as temporary, the Soviet Union segregated itself from the political and e c o n o m i c structures of the West. (Many of these structuralist assumptions gained adherents in the p o s t c o l o n i z a t i o n period and f o u n d e x p r e s s i o n within the United Nations and other international organizations, a point that will be explored further in the next chapter.) Both w o r l d wars w e r e widely v i e w e d in the 1950s as the result of naive assumptions about universal " p o w e r politics" interests and quixotic expectations about the conduct of states. Realism reemerged as the dominant theoretical paradigm of the postwar period, as theorists returned to M a c h i a v e l l i a n , Hobbesian, and B i s m a r c k i a n notions of p o w e r politics. A m o n g other scholars w h o refined a "scientific" theory of international relations, Hans Morgenthau ( 1 9 5 1 ) viewed international relations as rooted in human nature, unchanging over time and inherently conflictive (see also

10

National Interest and Foreign Aid

A r o n , 1966, and Waltz, 1964). To and moral imperatives were worse peace; they effectively encouraged ble leaders, thus giving aggressors

these analysts, transnational solutions than useless in preserving the interwar World War II by intoxicating responsia f r e e hand.

M o r g e n t h a u was j o i n e d in his critique of idealism by other realists w h o had assumed positions of power within the U.S. government. In basing U.S. foreign policy upon the objective of " c o n t a i n i n g " c o m m u n i s m in the Soviet Union, George Kennan (1951: 95) rejected the presence of "legalistic-moralistic" considerations, which "run like a red skein through our foreign policy of the last fifty years." Kennan suggested that concrete and explicit national interests, rather than normative values, should guide U.S. foreign policy. Other U.S. statesmen, particularly Henry Kissinger during the late 1960s and early 1970s, resigned t h e m s e l v e s to continuing differences between the superpowers and a world order based on the bipolar balance of power, regional alliances, nuclear deterrence, and arms control. Finally, as the Cold War began to thaw in the midst of s u p e r p o w e r détente in the 1970s, yet another f o r m u l a t i o n of national interest was widely adopted, this one r e c o g n i z i n g the i n t e r d e p e n d e n c e not only between East and West but also between North and South. According to the "world-order politics" of the 1960s and 1970s, partly a revival of Kantian and Wilsonian principles, the f a t e s of all c o u n t r i e s were inextricably linked. This worldview dictated that the centrality of the Cold War conflict give way to the s o c i o e c o n o m i c d e v e l o p m e n t of the Third World and that national interests be a c c o m m o d a t e d to transnational concerns. Most member states of the United Nations a d v a n c e d this perspective in the late 1970s, including the United States under Jimmy Carter, who departed from the earlier emphasis of U.S. foreign policy. To s o m e observers of the period, the e m e r g e n c e of transnational i n t e r d e p e n d e n c e suggested that a " m o d i f i e d Westphalia" system had emerged in which "spheres of influence, m o d i f y the principal of equality; supranational actors m o d i f y the principles of no external earthly superior authority; an ever more complex pattern of interconnectedness of decisions, events, and developments modifies the principle of independence" (Ruggie, 1972: 877). After the revival and subsequent termination of the Cold War in the 1980s and early 1990s, the UN again embraced global priorities and expanded its efforts to promote socioeconomic development in the Third World, pursuing measures to protect the environment, control population growth, and curb the proliferation of weaponry. T h e UN-sponsored Conference on Environment and Development ("Earth Summit"), which in the summer of 1992 brought together the largest assembly of world leaders in history, reflected an unusual convergence of national interests and established a basis for future collaboration. T h e UN also expanded its humanitarian-relief and p e a c e k e e p i n g efforts; though it w a s frustrated in Somalia and B o s n i a H e r z e g o v i n a , it contributed to the e s t a b l i s h m e n t of civil order in El Salvador, Nicaragua, Angola, Cambodia, and parts of the Middle East.

Introduction

11

T h e i m m e d i a t e p o s t - C o l d War p e r i o d , t h o u g h m a r k e d b y a r e s u r g e n c e of n a t i o n a l i s m a n d e t h n i c c o n f l i c t in m a n y a r e a s , a l s o w i t n e s s e d t h e d i f f u s i o n of d e m o c r a t i c p r i n c i p l e s in a g r o w i n g n u m b e r of r e g i o n s , p a r t i c u l a r l y L a t i n A m e r i c a , E a s t e r n E u r o p e , the f o r m e r S o v i e t U n i o n , a n d p a r t s of A f r i c a . In t h i s r e s p e c t , m a n y s c h o l a r s ( e . g . , R u s s e t t , 1 9 9 0 ; D o y l e , 1 9 8 6 ) a d v a n c e d e m p i r i c a l e v i d e n c e to s u p p o r t t h e e i g h t e e n t h - c e n t u r y f o r m u l a t i o n s of I m m a n u e l K a n t that d e m o c r a t i c s o c i e t i e s , in w h i c h d i s s e n t is t o l e r a t e d a n d political r i g h t s p r o t e c t e d , w o u l d b e l a r g e l y p e a c e f u l in their relations t o w a r d e a c h o t h e r (if not t o w a r d o t h e r , n o n d e m o c r a t i c s o c i e t i e s ) . I n t e r n a t i o n a l r e l a t i o n s at t h e e n d of t h e t w e n t i e t h c e n t u r y r e f l e c t t h e p r e s e n c e of b o t h t h e r e a l i s t a n d i d e a l i s t t r a d i t i o n s in w o r l d p o l i t i c s a n d their r e l a t e d a p p l i c a t i o n s of n a t i o n a l i n t e r e s t . T h e c o n t e m p o r a r y s y s t e m is f r a u g h t w i t h great volatility, a n d " e v e n t h e s l i g h t e s t f l u c t u a t i o n s can s e e m p o r t e n t o u s , w i t h e a c h s h i f t c o n f i r m i n g t h a t c h a n g e is t h e n o r m , that p a t t e r n s are f r a g i l e , a n d that e x p e c t a t i o n s c a n b e f r u s t r a t e d " ( R o s e n a u , 1990: 12). T o an u n p r e c e d e n t e d d e g r e e , the p e r c e i v e d n a t i o n a l interests of s t a t e s h a v e b e c o m e c o n d i t i o n e d u p o n the b e h a v i o r of o t h e r s t a t e s ; c o n s e q u e n t l y , single-state interests have b e c o m e aligned with transnational concerns, p r o m o t i n g c o o p e r a t i v e u n d e r t a k i n g s . In o t h e r a r e a s , t h e d i v i s i o n s b e t w e e n s t a t e s a n d s o c i e t i e s h a v e d e e p e n e d , a n d a p p e a l s to an e g o i s t i c o r i e n t a t i o n h a v e b e e n r e v i v e d . It is u n d e r s u c h c i r c u m s t a n c e s that a g r e a t e r u n d e r s t a n d i n g of n a t i o n a l i n t e r e s t a n d its c o n t e m p o r a r y m a n i f e s t a t i o n s is m o s t crucial.

National Interest: Contemporary Perspectives T h e p r e c e d i n g historical r e v i e w illustrates t h e m u l t i p l e d i m e n s i o n s of n a tional interest. M o r e i m p o r t a n t , it r e v e a l s t h e i n t i m a t e c o n n e c t i o n b e t w e e n t h e t h e o r y and p r a c t i c e of i n t e r n a t i o n a l r e l a t i o n s as t h e y h a v e d e v e l o p e d in t a n d e m f o r c e n t u r i e s . P r e v a i l i n g c o n c e p t i o n s of n a t i o n a l interest r e f l e c t e d o n g o i n g c h a n g e s in w o r l d p o l i t i c s and, in turn, i n f l u e n c e d the f o r e i g n p o l i c i e s of s t a t e s in w i d e l y v a r y i n g w a y s . T h e c o n c e p t of n a t i o n a l interest t h u s s e r v e s as a v a l u a b l e h e u r i s t i c d e v i c e f o r f o r e i g n - p o l i c y a n a l y s i s . It d r a w s a t t e n t i o n to the i m p o r t a n c e of s t a t e h o o d as a r e s p o n s e to d i s o r d e r at t h e s o c i e t a l l e v e l as w e l l as t o its o p e n - e n d e d r o l e in m e e t i n g t h e c h a l l e n g e of s y s t e m i c a n a r c h y . A t t e n t i o n m u s t be p a i d t o t h e f r e q u e n t i n v o c a t i o n of n a tional interest by s t a t e l e a d e r s , e v e n in the a b s e n c e of an a g r e e d - u p o n a n a l y t i c b a s i s of the t e r m . N o t e d C e r n y : " N o m a t t e r w h a t the d i s a g r e e m e n t s a b o u t f o r e i g n p o l i c y m a y b e , they h a v e in c o m m o n a q u i t e s p e c i f i c o p e r a t i o n a l f r a m e w o r k , w h i c h is that of the c o n c e p t of n a t i o n a l interest, w h a t e v e r t h e c o n t e n t w h i c h is e x p l i c i t l y o r i m p l i c i t l y i n c l u d e d in v a r i o u s c o n c e p t i o n s of that n a t i o n a l i n t e r e s t " ( 1 9 8 0 : 110). A s n a t i o n a l i n t e r e s t h a s b e c o m e c o m m o n d i p l o m a t i c c u r r e n c y , it h a s d r a w n c r i t i c i s m f o r its a m b i g u i t i e s a n d , in s o m e c a s e s , p e r n i c i o u s

12

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p r e s c r i p t i o n s . T o m a n y , the v e r y n o t i o n that a n a t i o n - s t a t e has a d i s c e r n i b l e n a t i o n a l interest is e m p i r i c a l l y a n d m o r a l l y d u b i o u s , " o v e r s i m p l i f i e d a n d w r o n g h e a d e d l y d o g m a t i c " ( H o f f m a n n , 1 9 7 8 : 133). T h e s e critics a r g u e that s u c h a n o t i o n c o m m i t s t h e m u l t i p l e s i n s of r e i f y i n g the i n a n i m a t e state; of p r e s u p p o s i n g a c o n s e n s u a l set of v a l u e s a n d p r i o r i t i e s that is u n t e n a b l e in a p l u r a l i s t i c s o c i e t y ; a n d of p r e s u m i n g , a c c e p t i n g , or a d v o c a t i n g c o m p e t i t i v e r a t h e r t h a n c o o p e r a t i v e f o r e i g n p o l i c i e s ( s e e C o o k and M o o s , 1 9 5 3 ) . T o s o m e , the m u l t i p l i c i t y of d o m e s t i c p r i o r i t i e s p r e v e n t s a c o h e r e n t d e f i n ition of n a t i o n a l i n t e r e s t . 6 O t h e r s c o n t e n d that the n a r r o w a d h e r e n c e to national interest in the n u c l e a r era t h r e a t e n s i n t e r n a t i o n a l stability. T h e C o l d W a r rivalry, in this v i e w , p r o v o k e d t h e s u p e r p o w e r s " t o s e c u r e r e s o u r c e s a n d p o w e r f o r o n e n a t i o n a l or r e g i o n a l s e g m e n t of the s p e c i e s w h i l e letting o t h e r s e g m e n t s of the s p e c i e s s u f f e r or d i e " ( J o h a n s e n , 1980: 3 9 1 ; s e e a l s o Barnet, 1971). T h e s e c r i t i q u e s of n a t i o n a l i n t e r e s t i l l u m i n a t e its a n a l y t i c a n d o c c a s i o n a l l y n o r m a t i v e l i m i t a t i o n s . B u t they fail to n e g a t e the c o n t i n u i n g reality that, g i v e n the utility of t h e s o v e r e i g n s t a t e as a m e c h a n i s m f o r s o c i a l , p o l i t i c a l , and e c o n o m i c o r g a n i z a t i o n , a n d g i v e n its u n i q u e c a p a c i t y f o r e x ternal p r o t e c t i o n , its p r e s e r v a t i o n a n d s e c u r i t y r e m a i n c o l l e c t i v e g o o d s f o r w h i c h its l e a d e r s a r e h e l d a c c o u n t a b l e ( O l s o n , 1971; see also R u s s e t t a n d S u l l i v a n , 1971, and R u g g i e , 1 9 7 2 ) . A c k n o w l e d g i n g the p r e s e n c e of c o l l e c t i v e i n t e r e s t s n e e d not e n t a i l t h e r e i f i c a t i o n of t h e s t a t e . T o t h e c o n t r a r y , g i v e n the f u n c t i o n a l b a s i s of i n t e r n a t i o n a l r e l a t i o n s in legally a u t o n o m o u s a n d c o m p e t i t i v e states, it is a p p r o p r i a t e to c o n c e i v e of o b j e c t i v e criteria f o r t h e s e l f - p r e s e r v a t i o n of e a c h actor. "It is by n o m e a n s the case that national i n t e r e s t has b e e n w i t h o u t v a l u e to c o n s c i e n t i o u s p o l i c y m a k e r s w h o w e r e d e t e r m i n e d to set r e a s o n a b l e o b j e c t i v e s , t o j u d g e c a r e f u l l y w h a t w a s at s t a k e in p a r t i c u l a r s i t u a t i o n s , a n d t o act p r u d e n t l y in any g i v e n s i t u a t i o n , " observed George and Keohane (1980: 218). T h i s i n t e r p r e t a t i o n of n a t i o n a l interest r e j e c t s the v i s i o n of c i t i z e n s as p u r e l y a t o m i s t i c a n d of d o m e s t i c g r o u p s as u l t i m a t e l y e x c l u s i v e . T h e s t a t e m a y i n s t e a d b e r e g a r d e d as an a u t o n o m o u s a c t o r w h o s e o b j e c t i v e s " c a n n o t b e r e d u c e d to s o m e s u m m a t i o n of p r i v a t e d e s i r e s " ( K r a s n e r , 1 9 7 8 : 5 - 6 ) . S t a t e l e a d e r s m u s t b a l a n c e a n d r e c o n c i l e c o n f l i c t i n g d o m e s t i c i n t e r e s t s , as e n v i s i o n e d by the d o m i n a n t liberal p a r a d i g m . T h o s e interests are o f t e n distorted or o v e r w h e l m e d by p o w e r f u l e c o n o m i c actors, a central p r e s u m p tion of M a r x i s m . B e y o n d t h e s e l i m i t a t i o n s , h o w e v e r , l e a d e r s p u r s u e h o l i s tic c o n c e r n s that r e g u l a t e a n d , in s o m e c a s e s , m o d e r a t e s u b n a t i o n a l i n t e r e s t s . T h e s t a t e m a y m o r e p r o d u c t i v e l y be v i e w e d as

a large group itself, with common standards of political ethics, with ties of mutual respect and appreciation (not only coinciding interests) binding its members together, and with a real common good that in the long run benefits all those within the group, in their role as members of the whole,

Introduction

13

if not a l w a y s in their c a p a c i t y o f m e m b e r s o f a s u b g r o u p . I n d i v i d u a l s in a s o c i e t y j o i n t o g e t h e r for p u r p o s e s broader than c o n v e n i e n c e and the p r o m o t i o n o f their o w n u n s h a r e d a i m s . ( C l i n t o n , 1 9 9 4 : 5 0 )

T h e coherence of these objectives, of course, relies upon the cohesion of the state. In some cases, internal divisions may be so deep that no sense of " c o m m o n g o o d " develops. The legitimacy of the state and its leaders is then brought into question, the basis of national interest is u n d e r m i n e d , and the society often falls into civil war or d i s i n t e g r a t i o n . S u c h was the case in the former Soviet Union and Yugoslavia; it also explains the recent collapse of societal order in Afghanistan, Haiti, and the A f r i c a n countries of Somalia, Liberia, and Rwanda, a m o n g others. In most other cases, however, the record is less cataclysmic. Despite the presence of crosscutting dpmestic interest groups, cultural and ethnic cleavages, and some degree of societal unrest, most modern states have inculcated a sense of collective identity in their populations and an underlying notion of shared national purpose. Leaders of these states (including the four under review in this study) frequently act upon widely shared perceptions of collective identity and conceptions about the ends and means of their s t a t e s ' i n v o l v e m e n t in foreign affairs. T h e i r o b j e c t i v e s are o f t e n distorted by the narrow interests of powerful subnational groups; governments have in countless instances sacrificed lives in ideological crusades lacking broad public support. But " b e t w e e n these extremes exist the vast majority of modern states, which seek to achieve collective objectives of national security; w e l f a r e of citizens; access to trade routes, markets, and vital resources; and s o m e t i m e s the territory of their n e i g h b o r s " (Holsti, 1988: 122). All of this presents an analytic c h a l l e n g e to students of f o r e i g n policy, w h o must discern both the transcendent interests and the related policy actions of states inductively by observing their behavior over time and across a wide range of issue areas. In some cases national interest may be limited to the Hobbesian m i n i m u m of simple survival in a hostile environment; in other cases it may encompass other values that incorporate issues of transnational w e l f a r e . T h e predisposition of states to seek either egoistic or altruistic objectives is thus highly variable, as is clear f r o m the historical record. As Morgenthau and T h o m p s o n (1985: 11) argued: T h e k i n d o f interest d e t e r m i n i n g p o l i t i c a l a c t i o n in a p a r t i c u l a r p e r i o d o f h i s t o r y d e p e n d s u p o n t h e p o l i t i c a l and c u l t u r a l c o n t e x t w i t h i n w h i c h fore i g n p o l i c y is f o r m u l a t e d . T h e g o a l s that m i g h t b e p u r s u e d by n a t i o n s in their f o r e i g n p o l i c y c a n run the w h o l e g a m u t o f o b j e c t i v e s a n y n a t i o n h a s e v e r p u r s u e d or m i g h t a c t u a l l y p u r s u e .

The number of nation-states has grown rapidly in the p o s t - W o r l d War II period, first with the b r e a k u p of the E u r o p e a n colonial e m p i r e s in the

14

National Interest and Foreign Aid

1 9 5 0 s a n d 1 9 6 0 s a n d t h e n w i t h the d i s i n t e g r a t i o n of t h e S o v i e t U n i o n in t h e early 1 9 9 0 s . N a t i o n a l interest c o n s e q u e n t l y r e m a i n s a critical a s p e c t of i n t e r n a t i o n a l life w h o s e a p p l i c a t i o n in p r a c t i c e m a y be d i s c e r n e d , if not reliably f r o m t h e r h e t o r i c of political l e a d e r s , t h e n f r o m s y s t e m a t i c o b s e r v a tion of s t a t e b e h a v i o r in s p e c i f i c a r e a s of p o l i c y . A s w e will f i n d , t h e a r e a of f o r e i g n a s s i s t a n c e p r o v i d e s s u c h an o p p o r t u n i t y .

National Interest and Foreign Aid T h e h a l f - c e n t u r y of i d e o l o g i c a l , e c o n o m i c , a n d g e o p o l i t i c a l s t r u g g l e b e t w e e n the C o l d W a r s u p e r p o w e r s p r o f o u n d l y i n f l u e n c e d the d o m e s t i c p o l itics and f o r e i g n p o l i c i e s of all n a t i o n - s t a t e s . T h o u g h it p r o d u c e d a d e g r e e o f s y s t e m i c s t a b i l i t y ( G a d d i s , 1 9 8 7 ) , t h e C o l d W a r c r e a t e d a n d in s o m e cases exacerbated regional conflicts a m o n g impoverished and politically f r a g i l e c o u n t r i e s in t h e S o u t h e r n h e m i s p h e r e , m a n y of w h i c h w e r e in t h e p r o c e s s of e x t r i c a t i n g t h e m s e l v e s f r o m c o l o n i a l d o m i n a t i o n . T h i s c o n v e r g e n c e of s u p e r p o w e r r i v a l r y a n d T h i r d W o r l d s t a t e b u i l d i n g , c o m i n g at a t i m e of u n p r e c e d e n t e d p r o s p e r i t y in the i n d u s t r i a l i z e d w o r l d , c o n t i n u e s to s h a p e r e l a t i o n s b e t w e e n N o r t h and S o u t h well b e y o n d the C o l d War. In this s e t t i n g , " e c o n o m i c s t a t e c r a f t " ( B a l d w i n , 1 9 8 5 ) has b e c o m e a vital a s p e c t of i n t e r n a t i o n a l relation;;. P r i v a t e i n v e s t m e n t f l o w s a n d t r a d e a c r o s s n a t i o n a l b o r d e r s h a v e i n c r e a s e d r a p i d l y in t h e late t w e n t i e t h c e n tury, c r i t i c a l l y a f f e c t i n g l i v i n g s t a n d a r d s a n d p o l i t i c a l r e l a t i o n s . A s t h e w o r l d e c o n o m y h a s b e c o m e m o r e t i g h t l y i n t e g r a t e d , the f o r t u n e s of m a n y L D C s h a v e i n c r e a s i n g l y d e p e n d e d u p o n t h e w i l l i n g n e s s of p r i v a t e l e n d e r s to m a k e capital a v a i l a b l e . W h e n p r i v a t e f u n d s h a v e not b e e n f o r t h c o m i n g , L D C s h a v e s o u g h t e c o n o m i c s u p p o r t f r o m the g o v e r n m e n t s of i n d u s t r i a l ized states a n d i n t e r n a t i o n a l o r g a n i z a t i o n s in t h e f o r m of f o r e i g n a i d , d e f i n e d by M o s l e y ( 1 9 8 7 : 2 1 ) as " m o n e y t r a n s f e r r e d o n c o n c e s s i o n a l t e r m s by t h e g o v e r n m e n t s of r i c h c o u n t r i e s t o t h e g o v e r n m e n t s of p o o r c o u n t r i e s . " F o r e i g n a s s i s t a n c e p r o g r a m s h a v e b e e n e s t a b l i s h e d by v i r t u a l l y e v e r y n a t i o n - s t a t e in p u r s u i t of w i d e l y v a r y i n g s h o r t - a n d l o n g - t e r m o b j e c t i v e s . W e a l t h y s t a t e s s h a r e d their f i n a n c i a l r e s o u r c e s w i t h a l l i e s l o n g b e f o r e World War II, but " t h e use of p u b l i c f u n d s o n s u b s i d i z e d t e r m s to a s sist in the d e v e l o p m e n t a n d g r o w t h of s o v e r e i g n n a t i o n s has no s i g n i f i c a n t p r e c e d e n t b e f o r e t h e M a r s h a l l P l a n " ( F r a n k a n d B a i r d , 1975: 135). O f f i c i a l D e v e l o p m e n t A s s i s t a n c e , t h e m o s t c o m m o n f o r m of e c o n o m i c a i d , i n v o l v e s b i l a t e r a l a n d m u l t i l a t e r a l t r a n s f e r s of g o o d s and s e r v i c e s f o r t h e o s t e n s i b l e p u r p o s e of p r o m o t i n g e c o n o m i c d e v e l o p m e n t in p o o r c o u n tries. L e a d e r s of i n d u s t r i a l i z e d states h a v e g e n e r a l l y a g r e e d to u p h o l d c e r tain n o r m s , a n d t h e i r O D A f l o w s h a v e b e e n s u f f i c i e n t l y c o o r d i n a t e d a n d r o u t i n i z e d so as to c o n s t i t u t e a c o h e s i v e i n t e r n a t i o n a l r e g i m e , an " i n s t i t u t i o n a l i z e d s y s t e m of c o o p e r a t i o n in a g i v e n i s s u e - a r e a " ( K e g l e y a n d

15

Introduction

W i t t k o p f , 1 9 9 3 : 3 3 ) . T o the O r g a n i z a t i o n for E c o n o m i c C o o p e r a t i o n and D e v e l o p m e n t ( O E C D ) , p u b l i c f u n d s a r e an e s s e n t i a l c o m p l e m e n t to private c a p i t a l , w h i c h o f t e n c a n n o t b e p r o f i t a b l y i n v e s t e d in L D C s a n d is thus una b l e to i m p r o v e t h e i r l i v i n g s t a n d a r d s : T h e b a s i c p r o p o s i t i o n o f i n t e r n a t i o n a l c o o p e r a t i o n for d e v e l o p m e n t has b e e n that p r e - i n d u s t r i a l and r e l a t i v e l y s t a g n a n t e c o n o m i e s c o u l d be launched on a c o u r s e o f d y n a m i c e c o n o m i c and s o c i a l t r a n s f o r m a t i o n , ult i m a t e l y s u s t a i n a b l e without p r o l o n g e d d e p e n d e n c e on c o n c e s s i o n a l aid; further, that this p r o c e s s could be set in m o t i o n , b r o a d e n e d , and a c c e l e r ated by the e f f i c i e n t use o f internal and e x t e r n a l r e s o u r c e s in c o m b i n a tions appropriate to the particular c a s e , in an e n v i r o n m e n t o f p o l i c i e s and leadership c o n d u c i v e to sustained d e v e l o p m e n t . ( O E C D , 1 9 8 5 a : 1 1 )

A s n o t e d a b o v e , d e v e l o p m e n t aid a p p e a r s to b e f o u n d e d o n a l t r u i s t i c and humanitarian principles. Upon c l o s e r inspection, a variety o f donor self-interests appear, a l o n g with subnational interests within both donor and recipient states. " A i d has a l w a y s b e e n s e e n as a tool o f p o l i c y and a p o l i c y in its o w n r i g h t , an a p p r o a c h w h i c h h a s c r e a t e d a m b i v a l e n c e a b o u t w h a t aid is a n d d o e s , " a r g u e d R i x ( 1 9 8 0 : 8 3 ) . A t a t i m e o f g r e a t i m p o r t f o r t h e e m e r g i n g f o r e i g n - a i d p r o g r a m in the U n i t e d S t a t e s , L i s k a ( 1 9 6 0 :

127)

m a d e the c a s e f o r e m b e d d i n g s u c h a s s i s t a n c e in the c o n t e x t o f f o r e i g n p o l i c y : " T h e s o l e test o f f o r e i g n aid is t h e n a t i o n a l i n t e r e s t o f t h e U n i t e d S t a t e s . F o r e i g n aid is n o t s o m e t h i n g to b e d o n e , as a G o v e r n m e n t e n t e r p r i s e , f o r its o w n s a k e o r f o r the s a k e o f o t h e r s . T h e U n i t e d S t a t e s G o v e r n m e n t is not a c h a r i t a b l e i n s t i t u t i o n , n o r is it an a p p r o p r i a t e o u t l e t f o r the c h a r i t a b l e spirit o f the A m e r i c a n p e o p l e . " T h e c o n t e m p o r a r y aid r e g i m e , i n v o l v i n g m o r e than $ 5 0 b i l l i o n in c o n cessional

transfers

transferred annually

to m o r e

than

100

developing

s t a t e s , has e x p e r i e n c e d c o n s t a n t c h a n g e s i n c e a s s u m i n g its c u r r e n t s t r u c t u r e in the 1 9 6 0 s . T h e n u m b e r o f d o n o r s a n d r e c i p i e n t s o f f o r e i g n a s s i s t a n c e s t e a d i l y i n c r e a s e d d u r i n g the a i d r e g i m e ' s f i r s t t h r e e d e c a d e s , s u b s u m i n g a l m o s t e v e r y s o v e r e i g n s t a t e in c o m p l e x , o n g o i n g aid r e l a t i o n s h i p s by the m i d - 1 9 9 0 s . C o n c u r r e n t l y ,

n o r m a t i v e a p p r o a c h e s t o w a r d aid re-

f l e c t e d the g e o p o l i t i c a l e n v i r o n m e n t o f e a c h period, as well as a c c u m u l a t e d l e s s o n s f r o m p a s t d e v e l o p m e n t e f f o r t s . F o r e i g n a s s i s t a n c e thus e x i s t s a s an a d d i t i o n a l t o o l o f f o r e i g n p o l i c y , s e r v i n g as a v e h i c l e f o r t h e d i s t i n c t i v e d o m e s t i c , r e g i o n a l , a n d g l o b a l i n t e r e s t s o f all p a r t i c i p a n t s . A s B a l d w i n ( 1 9 6 6 : 3 ) a r g u e d , " [ F ] o r e i g n aid is f i r s t and f o r e m o s t a t e c h n i q u e o f s t a t e c r a f t . It is, in o t h e r w o r d s , a m e a n s by w h i c h o n e n a t i o n t r i e s to g e t o t h e r n a t i o n s to a c t in d e s i r e d w a y s . . . . T h u s , f o r e i g n aid p o l i c y is f o r e i g n p o l i c y , a n d a s s u c h it is a s u b j e c t o f c o n t r o v e r s y in b o t h t h e i n t e r n a t i o n a l a n d the d o m e s t i c p o l i t i c a l a r e n a s . " J u s t a s the f o u n d a t i o n s o f n a t i o n a l i n t e r e s t v a r y a c r o s s c a s e s , the s i n g u l a r i n s t r u m e n t o f O D A r e f l e c t s t h e i n d i v i d u a l d e s i g n s o f d o n o r s as they

16

National

Interest

and Foreign

Aid

d i s b u r s e p u b l i c f u n d s to d i s t a n t g o v e r n m e n t s . " A c o u n t r y ' s p r o g r a m m e f o r d e v e l o p m e n t c o o p e r a t i o n is i n e v i t a b l y p a r t of its f o r e i g n p o l i c y , " w r o t e T h o r d P a l m l u n d ( 1 9 8 6 : 1 0 9 ) , a f o r m e r S w e d i s h a i d o f f i c i a l . " S o m e t i m e s it g i v e s s u b s t a n c e to p o l i c y i n t e n t i o n s b e t t e r t h a n w o r d s . " F o r e i g n a i d h a s s e r v e d a s a m i c r o c o s m of d o n o r s t a t e s ' f o r e i g n p o l i c i e s ; f o r e v e r y d o n o r , a d i f f e r e n t s t o r y c a n b e t o l d a b o u t t h e u s e of aid as an a g e n t of n a t i o n a l int e r e s t . T h e s a m e c a n b e s a i d of r e c i p i e n t s , w h o h a v e r e l i e d u p o n a n n u a l inf u s i o n s of O D A a n d i n c o r p o r a t e d this s o u r c e of f u n d i n g into their longterm fiscal p l a n n i n g and d e v e l o p m e n t strategies (see Lele a n d Nabi, 1991). R e c i p i e n t s r e c o g n i z e d t h e C o l d W a r s u p e r p o w e r s ' c o m p e t i t i o n f o r t h e i r all e g i a n c e d u r i n g t h e C o l d W a r a n d e x p l o i t e d t h e e n s u i n g " a i d r i v a l r y " to t h e i r a d v a n t a g e . T o r e c e i v e f u r t h e r a s s i s t a n c e , h o w e v e r , l e a d e r s in L D C s h a d to d e m o n s t r a t e its e f f e c t i v e n e s s a n d v a l u e in p r o m o t i n g t h e i r b e n e f a c t o r s ' s t a t e d g o a l s . In t h e 1 9 9 0 s , p o o r n a t i o n s ' d e b t s to d o n o r s t a t e s , i n t e r national organizations, and private b a n k s — a n d their r e q u i r e m e n t s f o r o n g o i n g e c o n o m i c s u p p o r t — b o u n d t h e m c l o s e l y to t h e i r c r e d i t o r s , w h o in t u r n h a d a s s u m e d a l o n g - l a s t i n g s t a k e in t h e r e c i p i e n t s ' e c o n o m i c f o r t u n e s . In t h i s w a y , f o r e i g n a s s i s t a n c e s t r e n g t h e n e d t h e s e n s e of i n t e r d e p e n d e n c e b e t w e e n N o r t h a n d S o u t h , t h e m o s t s i g n i f i c a n t a s p e c t of c o n t e m p o r a r y global relations. T h e r e l a t i o n s h i p b e t w e e n n a t i o n a l i n t e r e s t a n d f o r e i g n a i d is c o m p l e x a n d o f t e n o b s c u r e . B u t it r e p r e s e n t s a c e n t r a l f a c e t o f t h e c o n t e m p o r a r y w o r l d o r d e r , in w h i c h t h e " l o w p o l i t i c s " of s o c i a l a n d e c o n o m i c w e l f a r e h a v e b e c o m e a s s a l i e n t t o i n t e r n a t i o n a l r e l a t i o n s as t h e " h i g h p o l i t i c s " of military security ( K e o h a n e and Nye, 1989). Understanding this relations h i p b e c o m e s m o r e i m p o r t a n t as a g r o w i n g n u m b e r of s t a t e s p r o v i d e o r rec e i v e f o r e i g n a s s i s t a n c e a n d as r i c h a n d p o o r s t a t e s p u r s u e i n c r e a s i n g l y c o m m o n interests alongside their m o r e narrowly defined national interests.

Notes 1. In many LDCs, average life expectancy, per capita food consumption, and other standards of social welfare fell steadily during the decade. 2. Developing countries in Latin American owed nearly $500 billion to public and private creditors in the early 1990s, and states in sub-Saharan Africa owed nearly $200 billion. These African LDCs spent four times more public funds on interest payments than they did for health programs during the period ( T h e Economist, 1993: 52). 3. Crabb (1986: 1 1 3 - 1 1 6 ) identified several contributions of the concept of national interest to international relations. Among these, the concept "calls attention to the essentially competitive and sometimes violent nature" of world politics; it makes explicit "vital interests" of states and establishes a "scale of priorities"; it thereby renders foreign policy more consistent over time and more understandable to potential adversaries; and it creates the possibility that common interests among states may be identified.

Introduction

17

4 . A n e a r l y a r t i c u l a t i o n o f t h i s v i e w c a n b e f o u n d in S t . A u g u s t i n e ( 1 9 5 4 [ 4 2 5 ] ) . S e e a l s o V i t o r i a ( 1 9 3 4 [ 1 5 3 2 ] ) f o r a n a p p l i c a t i o n of this v i e w to S p a n i s h c o l o n i z a t i o n in t h e W e s t e r n H e m i s p h e r e . 5. Kissinger ( 1 9 9 4 ) provides a useful r e v i e w of the origins of national interest d u r i n g this p e r i o d . 6. See Dahl ( 1 9 7 1 ) for a c o n s i d e r a t i o n of this view. Also, see B a l b u s ( 1 9 7 8 ) for an a p p l i c a t i o n of M a r x i s t a n a l y s i s to t h e c o n c e p t of p u b l i c o r n a t i o n a l interest. B e a r d ( 1 9 3 4 ) and O s g o o d ( 1 9 5 3 ) are a m o n g t h e early a n a l y s t s of U . S . f o r e i g n poli c y to e x p l o r e t h e m u l t i p l i c i t y o f d o m e s t i c p r i o r i t i e s b a s e d u p o n t h e u n e v e n d i s t r i b u t i o n o f w e a l t h in t h e s o c i e t y .

2 The Setting of Development Assistance

As Chapter 1 demonstrated, both the concept of national interest and the practice of foreign aid have provoked great controversy among foreignpolicy makers and analysts. In this chapter, the structure of Official Development Assistance (ODA) is reviewed in some detail, along with conflicting normative perspectives that have been advanced regarding O D A during the post-World War II period. Familiarity with this debate will be helpful as the French, Japanese, Swedish, and U.S. O D A programs are examined respectively in the following four chapters. In its short history, ODA has become an important foreign-policy tool of donor and recipient states alike. But what constitutes ODA? How is it substantively different from commercial loans, trade, foreign investment, and other forms of international resource transfers? The answers to these seemingly straightforward questions are elusive given the overlapping objectives underlying all such exchanges and given the fungible nature of foreign aid; as Parkinson remarked, "The whole is a complicated skein of imperfect understanding, differing value j u d g e m e n t s and conflicting political aspirations" (1983: 11). Even within the single category of O D A , donor states commit funds in many forms, through many channels, under widely varying terms, and for multiple reasons. For analytic purposes, boundaries may be constructed to distinguish ODA from other forms of foreign assistance and financial flows. The twenty-onemember Development Assistance Committee (DAC), the coordinating agency of the Organization for Economic Cooperation and Development, defines ODA as those flows to developing countries and multilateral institutions provided by official agencies, including state and local governments or by their executive agencies, each transaction of which meets the following tests: a) it is administered with the promotion of the economic development and welfare of developing countries as its main objective, and b) it is concessional in character and contains a grant element of at least 25 per cent. (OECD, 1974: 115) Stated more succinctly, O D A applies to public transfers of economic resources on concessional terms for developmental purposes. Public transfers 19

20

National Interest and Foreign Aid

are those in which the resources travel f r o m the donor government to the recipient g o v e r n m e n t either directly or through transnational o r g a n i z a tions. Economic resources are distinct from military resources, which are explicitly designed to pursue the security interests of both donors and recipients. T h e terms of O D A , or subsequent obligations imposed on recipients, may be minimal in the case of grant aid or more d e m a n d i n g in the case of concessional loans, but in all cases they must be more f a v o r a b l e than the terms recipients w o u l d be able to receive on commercial capital markets. Finally, O D A involves the explicit requirement that the f u n d s be used for purposes of e c o n o m i c d e v e l o p m e n t , d e f i n e d by the World B a n k (1992: 31) as "a sustainable increase in living s t a n d a r d s that e n c o m p a s s material consumption, education, health, and environmental protection." T h e patterns of aid f l o w s fluctuated as O D A networks took shape during the 1960s and 1970s in response to shifting domestic conditions within donor states and prevailing trends in world politics. On the whole, the aggregate v o l u m e of aid grew steadily throughout the postwar period. T h e volume of ODA transfers more than doubled between 1970 and 1990 in inflation-adjusted dollars; annual f l o w s of concessional aid reached levels in excess of $50 billion by 1990. Although bilateral flows decreased slightly in the early 1990s, multilateral aid increased to a record $16.8 billion in 1992. M o r e donors entered the aid business during this period through both bilateral and multilateral channels, offering assistance to an e x p a n d ing set of recipients. W h e n private financial flows, including investments and commercial loans, are added to the picture, total resource f l o w s f r o m North to South amounted to nearly $200 billion in 1992 (OECD, 1994a: 65).' Despite the ongoing pressures of global e c o n o m i c recession, d o m e s tic political opposition, the d e m o n s t r a b l e s h o r t c o m i n g s of past aid prog r a m s , and the demise of the Cold War, w e a l t h y states consistently increased their v o l u m e s of aid to the Third World. Although s o m e m a j o r donors, most notably Saudi Arabia and other m e m b e r s of the Organization of Petroleum Exporting Countries (OPEC), reduced annual transfers in the 1980s, m e m b e r s of the D A C c o n t i n u e d to increase assistance into the 1990s. In so doing, they c o o r d i n a t e d aid policy to a considerable extent, basing O D A calculations upon widely circulated data regarding the soc i o e c o n o m i c conditions in recipient states, collaboratively reporting aid transfers, and m o n i t o r i n g their i m p l e m e n t a t i o n . Although these d o n o r s steadfastly resisted incursions against their sovereign authority to dispense public f u n d s in the f o r m of O D A , they adopted and generally adhered to "rules of the g a m e " and expected fair play on the part of others. T h i s pattern of behavior affirms the presence of a foreign-aid regime in c o n t e m p o rary world politics, one of a growing number of transnational regimes that has emerged since World War II. 2 In fact, as Wood (1986) demonstrated, a separate and distinctive O D A r e g i m e has e m e r g e d within the overall aid regime, which involves other concessional f l o w s . Each of the c o m m o n l y

The Setting of ODA

21

cited regime c o m p o n e n t s — p r i n c i p l e s , norms, rules, and d e c i s i o n m a k i n g procedures—is evident in the f o r m u l a t i o n and execution of O D A . The fundamental principle of aid giving as "the price of a f f l u e n c e " has been accepted by nearly all industrialized states, which have added the fiscal and institutional c o m p o n e n t s of foreign aid to their diplomatic arsenal. D o n o r s and recipients generally o b s e r v e a c o m p l e x set of norms regarding the minimal qualifications for aid, the preferences for market or commercial resources w h e n available, the f u n c t i o n s aid is intended to serve, and the anticipation that recipients will uphold standards of "good governm e n t , " promote e n v i r o n m e n t a l c o n s e r v a t i o n and population control, and implement fiscal r e f o r m s under the guise of "structural a d j u s t m e n t . " Explicit targets have also been a d o p t e d i n v o l v i n g the proportion of donor G N P devoted to O D A , with 0.7 percent serving as the standard for O E C D m e m b e r s . O t h e r norms involve the proportion of " t i e d " aid to overall assistance and the degree to which aid is extended in the form of grants versus low-interest loans. 3 N u m e r o u s and c o m p l e x rules exist that regulate the process by w h i c h O D A t r a n s f e r s are negotiated, d o c u m e n t e d , implem e n t e d , and m o n i t o r e d . A n d d e c i s i o n m a k i n g p r o c e d u r e s f o r all of these functions have been codified by the donors and international organizations that dispense assistance. Many additional c o m p o n e n t s of c o n t e m p o r a r y O D A are suggestive of regime behavior, including an emergent division of labor among donors and multilateral institutions, both in terms of the geographical distribution of O D A and the v a r y i n g r e p a y m e n t terms imposed upon recipients. Overall, conditions imposed upon recipients in the 1980s and 1990s f o r m a n a g i n g their social, e c o n o m i c , and political policies reflect a growing consensus within international organizations, private lending institutions, industrialized states, and L D C s . T h e c o o r d i n a t e d f l o w of c o n c e s s i o n a l aid e m e r g e d in response to widely perceived e c o n o m i c disparities b e t w e e n North and South (and, more recently, b e t w e e n the West and the f o r m e r Soviet bloc). Evolving conditionalities for aid have reflected a bias against statist m a c r o e c o n o m i c policies and in f a v o r of m a r k e t - d r i v e n , export-led growth strategies. Additionally, more recent aid programs have responded to a recognition that " h u m a n c a p i t a l " is as critical to e c o n o m i c d e v e l o p m e n t as financial and technological transfers (see Lucas, 1988). E x p e c t a t i o n s of long-term development that is sensitive to d e m o g r a p h i c , s o c i o e c o n o m i c , and environmental concerns have been emphasized in the 1990s. T h e aid r e g i m e has not displaced the f o r e i g n - p o l i c y prerogatives of donor states, w h o continue to incorporate aid programs into broader economic, political, and security relations with L D C s . In some cases, these interests have been a c k n o w l e d g e d and a c c o m m o d a t e d by the O E C D : T h e spheres of influence of s o m e O D A donors (e.g., Japan in East Asia, France in f r a n c o p h o n e A f r i c a ) have been preserved, while additional geographic c o n c e n t r a t i o n s (e.g., G e r m a n y in Eastern E u r o p e and R u s s i a ) have been

22

National Interest and Foreign

Aid

outlined in more recent O E C D deliberations. In other cases (e.g., the Japanese preference for loans rather than grants), the disparities between O E C D norms and donor practices have remained wide. T h e s e tensions between the national interests of donors and the collective standards of the ODA regime, which existed throughout the Cold War and persist in the mid-1990s, remain one of the defining features of international aid. Its m a n i f e s t a t i o n in the observable patterns of aid flows, to be examined in subsequent chapters, is a primary subject of this study.

Evolution of the ODA Regime Although ODA in its current incarnation did not exist prior to World War II, foreign assistance was not unknown to diplomats of the eighteenth or nineteenth centuries. Developed countries had long supplied allies with military equipment on concessional terms, and states often transferred funds overseas for disaster relief or other purposes. For example, French aid to the United States was critical to U.S. success in the Revolutionary War against Great Britain. Almost two centuries later U.S. military transfers to Great Britain, the Soviet Union, and other allied states tipped the balance of forces against Nazi Germany during World War II. But the elaborate, routinized ODA regime of the late twentieth century is a by-product of World War II and its immediate aftermath. The contemporary ODA regime took shape rapidly during the two decades after World War II (see Table 2.1). Its roots lie in three important and related developments that emerged after the war. First, development assistance served as a functional extension of the ideological schism between East and West that displaced European rivalries as the centerpiece of world politics after World War II. Both Cold War superpowers transferred massive amounts of economic assistance to selected LDCs, which often received military support in addition. Other donors, including Sweden and France, directed assistance as a means of preventing L D C s ' subordination to either of the superpowers. Second, and more broadly, the emergence of North-South "cooperation" reflected the growing emphasis on economic growth as a determinant of political stability in developing countries, a perspective that adopted Western liberal assumptions of a "harmony of interests" among market-driven states. In this view, economic growth was a prerequisite for democratic development in the Third World. Finally, the formation of the O D A regime coincided with the liberation of most European colonies between 1945 and 1965, an additional manifestation of the postwar international system. The dismantling of Europe's colonial empires was a priority of Franklin Roosevelt, who anticipated the support for Third World development as a postwar priority. "I am

23

The Setting of ODA

Table 2.1 1944

O r i g i n s o f the O D A R e g i m e , 1 9 4 4 - 1 9 6 5 Bretlon Woods conference establishes International Bank for Reconstruction and Development (World Bank) and International Monetary Fund (IMF) Approval of UN Charter, pledging to "employ international machinery for the promotion of the economic and social advancement of all peoples" Decolonization process begins with Philippines; India and Pakistan follow in 1947; France establishes FIDES program to support overseas territories U.S. Marshall Plan directed toward European recovery; Truman Doctrine calls for aid to Greece, Turkey, and other states resisting internal and external subversion Formation of Organization for European Economic Cooperation (OEEC), precursor to the Organization for Economic Cooperation and Development (OECD) Colombo Plan establishes a six-year aid program to L D C s in South and Southeast Asia Mutual Security Program establishes long-term basis for U.S. foreign aid Sweden appoints special minister for development assistance, beginning largescale aid program Treaty of Rome creates European Economic Community and European Development Fund for Overseas Countries and Territories Peak year of decolonization in Africa; World Bank creates International Development Association (IDA) UN proclaims "Development Decade"; U.S. president Kennedy announces Alliance for Progress; Japan creates Overseas E c o n o m i c Cooperation Fund Formation of O E C D ' s Development Assistance Committee (DAC), designed to coordinate and monitor member O D A programs First meeting of UN Conference on Trade and Development (UNCTAD); establishment of African Development Bank ( A D B ) ; Jeanneney Report published in France UN's "International Cooperation Year"; diversion of U.S. aid funds to Southeast Asia

1945 1946 1947 1948

1950 1952 1954 1957 1960 1961 1963 1964

1965

f i r m l y o f t h e b e l i e f t h a t i f w e a r e t o a r r i v e at a s t a b l e p e a c e it m u s t

involve

the d e v e l o p m e n t of b a c k w a r d countries," R o o s e v e l t told W i n s t o n

Churc-

h i l l . "I c a n ' t b e l i e v e t h a t w e c a n f i g h t a w a r a g a i n s t f a s c i s t s l a v e r y , a n d at the s a m e t i m e not w o r k to f r e e p e o p l e all o v e r t h e w o r l d f r o m a b a c k w a r d colonial

policy."

A m i d the e x p a n s i o n o f the O D A

regime, qualitative approaches

to

Third World development and O D A shifted and grew more diverse.

The

e b b s a n d f l o w s in O D A r e f l e c t e d c h a n g i n g p o l i t i c a l , m i l i t a r y , a n d

eco-

n o m i c alignments a m o n g states and a deepening intellectual

understanding

o f national d e v e l o p m e n t that c a m e w i t h e x p e r i e n c e . 4 D o n o r s o r i g i n a l l y

fo-

c u s e d o n state b u i l d i n g as a primary o b j e c t i v e o f O D A , then s h i f t e d to the p r o m o t i o n o f " b a s i c h u m a n n e e d s " in t h e 1 9 7 0 s . M a n y

LDCs

struggled

w i t h g r o w i n g f i s c a l c r i s e s in the 1 9 8 0 s , s o d o n o r s l i n k e d aid f l o w s to recipients' creation

of

market-oriented

economies

and broader forms

structural adjustment. R e s p e c t for h u m a n rights b e c a m e an additional

of

con-

d i t i o n d u r i n g this p e r i o d , a n d in t h e 1 9 9 0 s a i d p r o g r a m s w e r e d e s i g n e d

to

p r o m o t e " s u s t a i n a b l e " d e v e l o p m e n t that r e s p o n d e d to the n e e d for p o p u lation control and environmental

protection.

24

National Interest and Foreign Aid

A s the dominant international p o w e r at the end of World War II, the United States was central to the origin and development of the contemporary aid regime. 5 A m o n g its other initiatives in creating the postwar political and economic order, the T r u m a n administration identified foreign assistance as a useful means of rebuilding decimated societies and hastening their return to economic vitality. T h e European Recovery Program (ERP), more widely known as the Marshall Plan, provided for the transfer of $13 billion between 1948 and 1952. Although most of these f u n d s were transferred to Western European states, approximately $3 billion flowed to nonE u r o p e a n states (e.g., Korea, the Philippines, Taiwan, and T u r k e y ) for a variety of developmental purposes. 6 T h e Truman administration's motives u n d e r l y i n g the Marshall Plan and the subsequent "Four P o i n t s " p r o g r a m w e r e multiple, overlapping, and o f t e n a m b i g u o u s ; hence, they have bec o m e the source of e x t e n s i v e post hoc speculation a m o n g historians and political scientists. A m o n g its primary objectives, the Truman administration a t t e m p t e d to establish a p o s t w a r political and e c o n o m i c order that w o u l d encourage (and r e w a r d ) d e m o c r a t i c governments that pursued liberal macroeconomic policies. Secondary objectives included reestablishing m a r k e t s for exports f r o m the United States and Western Europe, helping d o m e s t i c manufacturers and f a r m e r s dispose of surplus stocks, bolstering allies w h o had liquidated their o v e r s e a s investments during the war and faced the impending loss of colonial possessions, and preserving the goodwill of L D C s as sources of raw materials and potential markets needed by the United States and other industrialized states. 7 This process occurred alongside coordinated efforts by the Western industrialized powers to create a postwar security system. T h e Brussels Pact of 1948 linked France, Great Britain, and the Benelux countries, and the 1949 North Atlantic Treaty O r g a n i z a t i o n ( N A T O ) brought together the United States, Canada, Iceland, and thirteen Western European states. T h e Soviet Union and its Eastern European allies subsequently established the Warsaw Pact in 1955, in large part to c o u n t e r NATO. In response, m a n y L D C s , led by Egypt and India, subsequently f o r m e d the nonaligned m o v e ment to assert their i n d e p e n d e n c e f r o m the s u p e r p o w e r s . In this critical sense, the geopolitical m a n e u v e r i n g of the Cold War coincided with the formation of the aid regime; both processes, in fact, may best be viewed as two sides of the same coin. T h e e c o n o m i c and E u r o c e n t r i c character of the early aid r e g i m e s h i f t e d in the early 1950s as U.S. c o n c e r n s s t e m m i n g f r o m the C h i n e s e Revolution and the Korean War influenced development strategies. In the United States, the newly f o r m e d Mutual Security Agency ( M S A ) assumed control of the aid effort, o v e r s e e i n g the E c o n o m i c Cooperation A d m i n i s tration (ECA), the Technical Cooperation Administration (TCA), and other agencies within the U.S. g o v e r n m e n t . Institutional refinements continued in the mid-1950s, as the Mutual Security Act of 1954 created the International

The Setting of ODA

25

Cooperation A d m i n i s t r a t i o n (ICA) to coordinate U.S. aid transfers. C o n tinuing assistance to Western Europe resulted f r o m a trans-Atlantic "dollar g a p " that threatened trade relations and heightened concern for the internal political stability of recipient states. Other industrialized states joined the aid e f f o r t in the early 1950s. Under the 1 9 5 0 C o l o m b o Plan, m e m b e r s of the British C o m m o n w e a l t h , along with the U.S. g o v e r n m e n t , provided e c o n o m i c and technical assistance to newly independent India and other developing countries in southern Asia. O t h e r aid p r o g r a m s were established in the late 1950s by the Council for Mutual E c o n o m i c A s s i s t a n c e ( C M E A ) , primarily f u n d e d by the Soviet Union. A m o n g recipients of C M E A assistance in the mid-1980s, those receiving the largest v o l u m e s included Vietnam, C u b a , M o n g o l i a , Afghanistan, Ethiopia, and India ( O E C D , 1985a: 115). Thus, the seeds of "aid rivalry" were s o w n , as the Western-led effort to assist the e c o n o m i c recovery of the industrialized world gave way to competition a m o n g Cold War blocs. 8 In the 1960s, amid continuing geopolitical tensions, O D A d o n o r s again shifted their f o c u s , this time toward supporting decolonization and state-building e f f o r t s throughout the T h i r d World, particularly in A f r i c a . Aggregate aid f l o w s doubled during this period as the institutional basis of the contemporary aid regime was established. T h e UN General Assembly proclaimed the 1960s the (first) " D e v e l o p m e n t D e c a d e " and established a target of 5 percent annual economic growth for L D C s . 9 To help them reach that target, wealthy states pledged increasing amounts of bilateral and multilateral f u n d s . Leaders of the UN named global e c o n o m i c development as one of their central objectives in supporting the process of decolonization. Through the General Assembly, which included growing numbers of newly independent Third World states, and within its various specialized units, the UN e m e r g e d as an important multilateral conduit for e c o n o m i c assistance. Developing states, through the Group of 77 (G-77) and other coalitions, used the UN as a forum to study and articulate their collective needs. A m o n g its major initiatives, the UN sponsored conferences on world hunger and population growth and declared 1965 the "International Cooperation Year." The first UN Conference on Trade and Development (UNCTAD) was held in Geneva in 1964, during which representatives of 119 countries f o r m u l a t e d c o l l a b o r a t i v e e f f o r t s to support N o r t h - S o u t h e c o n o m i c cooperation. T h e U N C T A D meetings b e c a m e routinized and " m a y well have laid the basis f o r a new constructive relationship b e t w e e n the industrialized c o u n t r i e s of the m i d d l e latitudes and the d e v e l o p i n g nations of the t r o p i c s " (Black, 1968: 11). At the s e c o n d U N C T A D m e e t i n g in 1968, m e m b e r s adopted the standard that donor states should provide at least 0.7 percent of their gross national products to d e v e l o p m e n t assistance by 1980, the first of several such targets for future aid f l o w s . This and other long-term goals were outlined in the 1969 Pearson Report, which reflected

26

National

interest

and Foreign

Aid

t h e g r o w i n g c o n s e n s u s a m o n g d o n o r s a b o u t the p r o m i s i n g i m p a c t of aid o n T h i r d World d e v e l o p m e n t . W i t h i n i n d u s t r i a l i z e d d o n o r states d u r i n g the 1960s, the O r g a n i z a t i o n f o r E u r o p e a n E c o n o m i c C o o p e r a t i o n ( O E E C ) w a s r e o r g a n i z e d as the O r ganization for Economic Cooperation and Development. T h e name change r e f l e c t e d t h e m e m b e r s ' s h i f t in e m p h a s i s f r o m E u r o p e a n p o s t w a r r e c o n s t r u c t i o n to T h i r d W o r l d d e v e l o p m e n t . 1 " In 1963, O E C D m e m b e r s f o r m e d t h e D e v e l o p m e n t A s s i s t a n c e C o m m i t t e e , t h e c o o r d i n a t i n g a g e n c y for b i lateral and m u l t i l a t e r a l t r a n s f e r s f r o m m e m b e r states. I m m e d i a t e l y upon its i n c e p t i o n , t h e D A C b e c a m e " t h e l e a d i n g f o r u m of the r i c h e r n a t i o n s f o r d i s c u s s i n g their m u t u a l i n t e r e s t s i n v o l v e d in t h e p o l i c i e s , a d m i n i s t r a t i o n , a n d e f f e c t i v e n e s s of a i d " ( R u b i n , 1 9 6 6 : 4 ) . " In the U n i t e d States, this d y n a m i s m w i t h i n the aid r e g i m e w a s r e f l e c t e d in J o h n F. K e n n e d y ' s A l l i a n c e f o r P r o g r e s s . C o n g r e s s a p p r o v e d K e n n e d y ' s f u n d i n g r e q u e s t s as well as his p r o g r a m to e s t a b l i s h the U.S. A g e n c y for Int e r n a t i o n a l D e v e l o p m e n t ( U S A I D ) , t h e P e a c e C o r p s , and o t h e r o r g a n i z a t i o n s to p r o m o t e T h i r d W o r l d d e v e l o p m e n t . W h e r e a s o t h e r O D A d o n o r s w e r e e n c o u r a g e d to f u n n e l a s s i s t a n c e to A s i a n a n d A f r i c a n r e c i p i e n t s , t h e U n i t e d S t a t e s t a r g e t e d L a t i n A m e r i c a as a p r i m a r y b e n e f i c i a r y of its A l l i a n c e f o r P r o g r e s s . T h e U.S. aid e f f o r t , h o w e v e r , b e c a m e e n t a n g l e d in t h e V i e t n a m W a r by d e c a d e ' s e n d and f u r t h e r c o m p l i c a t e d by aid rivalry w i t h t h e S o v i e t U n i o n a n d C h i n a , but the institutional r e s t r u c t u r i n g o v e r s e e n b y t h e K e n n e d y a d m i n i s t r a t i o n r e m a i n e d intact three d e c a d e s later. T h e 1 9 7 0 s w i t n e s s e d a s e v e n f o l d i n c r e a s e in c o n c e s s i o n a l f l o w s a n d a c o n t i n u i n g p r o l i f e r a t i o n of aid s o u r c e s . M e m b e r s of O P E C t u r n e d t o O D A as an o u t l e t f o r c a p i t a l s u r p l u s e s r e s u l t i n g f r o m the p r i c e s h o c k s of 1 9 7 3 - 1 9 7 4 ; by the e a r l y 1 9 8 0 s they a c c o u n t e d f o r m o r e t h a n 2 0 p e r c e n t of g l o b a l O D A f l o w s . L e d by S a u d i A r a b i a , K u w a i t , and t h e U n i t e d A r a b E m i r a t e s , t h e s e o i l - p r o d u c i n g states s u p p o r t e d a relatively small n u m b e r of d e v e l o p i n g n a t i o n s , p r e d o m i n a n t l y I s l a m i c s t a t e s s u c h as S y r i a , J o r d a n , B a h r a i n , Y e m e n , a n d S u d a n . T h e i r s e l e c t i o n in large m e a s u r e r e f l e c t e d t h e c o n t e n t i o u s p o l i t i c a l a l i g n m e n t s that t o o k s h a p e a f t e r the 1 9 7 3 O P E C oil e m b a r g o . O P E C f u n d i n g r e a c h e d a p e a k of a b o u t $ 1 0 b i l l i o n a n n u a l l y in t h e late 1 9 7 0 s , a b o u t 2 0 p e r c e n t of g l o b a l aid f l o w s , b e f o r e f a l l i n g to less t h a n $ 3 b i l l i o n in t h e e a r l y 1 9 9 0 s . A s n o t e d earlier, g r o w i n g r e c o g n i t i o n of the s h o r t c o m i n g s of past a i d p r o g r a m s , p a r t i c u l a r l y t h e f a i l u r e of l a r g e - s c a l e , c a p i t a l - i n t e n s i v e p r o j e c t s t o s t i m u l a t e e c o n o m i c g r o w t h , r e s u l t e d in a r e d i r e c t e d f o c u s o n t h e b a s i c h u m a n n e e d s of T h i r d W o r l d p o p u l a t i o n s . In 1 9 7 4 m e m b e r s of t h e G - 7 7 proposed a N e w International E c o n o m i c Order (NIEO), which called for a new way of ordering the international economic system so as to bring about, first, improved terms of trade between the present-day center and periphery countries . . . ; secondly, more control by the periphery over the

27

The Setting of ODA

world economic cycles that pass through them . . . ; and, thirdly, increased and improved trade between the periphery countries themselves. 1 2 T h e s e r e f o r m s w e r e p a s s e d in D e c e m b e r 1 9 7 4 b y t h e U N G e n e r a l A s s e m b l y as t h e C h a r t e r o f E c o n o m i c R i g h t s a n d D u t i e s o f S t a t e s . T h o u g h t h e s t i p u l a t i o n s in the c h a r t e r w e r e a d v i s o r y in n a t u r e , t h e p r o p o s e d

NIEO

i d e n t i f i e d s t r u c t u r a l p r o b l e m s in the w o r l d e c o n o m y as t h e b a s i s o f L D C u n d e r d e v e l o p m e n t a n d a r t i c u l a t e d the p r e f e r e n c e o f L D C s f o r f u n d a m e n t a l c h a n g e s in N o r t h - S o u t h r e l a t i o n s . T h e p r o p o s a l s c o v e r e d a w i d e r a n g e o f i s s u e a r e a s , i n c l u d i n g d e v e l o p m e n t a s s i s t a n c e . W h e r e a s in t h e past O D A t r a n s f e r s had b e e n d i r e c t e d t o w a r d i n d u s t r i a l i z a t i o n a n d l o n g - t e r m

eco-

nomic d e v e l o p m e n t , often involving the construction o f large g o v e r n m e n t o f f i c e b u i l d i n g s , p o w e r p l a n t s , a n d h y d r o e l e c t r i c d a m s , n e w aid p r o g r a m s w e r e d i r e c t e d t o w a r d a g r i c u l t u r a l p r o g r a m s a n d the d a y - t o - d a y n e e d s o f individuals and small villages. P r i v a t e f i n a n c i a l f l o w s , in the f o r m o f l o a n s r a t h e r than d i r e c t i n v e s t m e n t , b e c a m e m o r e c o m m o n in the late 1 9 7 0 s a n d u l t i m a t e l y e x c e e d e d the v o l u m e o f p u b l i c t r a n s f e r s . T h i s p a t t e r n c o n t i n u e d in t h e e a r l y 1 9 8 0 s , a s " r e c y c l e d " O P E C r e v e n u e s w e r e t r a n s f e r r e d to T h i r d W o r l d s t a t e s that w e r e u n w i l l i n g or u n a b l e to a p p l y f o r f u r t h e r O D A . T h e s e p r i v a t e f l o w s , p a r t i c u l a r l y to M e x i c o , B r a z i l , a n d A r g e n t i n a , e x a c e r b a t e d t h e d e b t c r i s i s o f the e a r l y 1 9 8 0 s , w h i c h in turn p r o m p t e d a n o t h e r s h i f t in the f o c u s o f the O D A regime. S t a t e c r e d i t o r s f o r m e d the P a r i s C l u b a n d p r i v a t e c r e d i t o r s t h e L o n d o n C l u b to c o o r d i n a t e t h e i r e f f o r t s in m a n a g i n g n e a r l y $ 1 t r i l l i o n in T h i r d World debt. T h r o u g h the B a k e r and B r a d y plans ( n a m e d after the U . S . treasury secretaries who promoted them), many o f these debts w e r e either r e s c h e d u l e d ( i . e . , g i v e n e x t e n d e d r e i m b u r s e m e n t p e r i o d s ) or, t o a m u c h s m a l l e r e x t e n t , f o r g i v e n o u t r i g h t . In r e t u r n f o r t h e s e c o n c e s s i o n s ,

many

T h i r d W o r l d s t a t e s a g r e e d to s u b m i t to o v e r s i g h t b y t h e W o r l d B a n k a n d International M o n e t a r y Fund ( I M F ) o f their f i s c a l , m o n e t a r y , and trade p o l i c i e s . R e c i p i e n t s w e r e e n c o u r a g e d to p u r s u e f i s c a l p o l i c i e s that p r o tected private enterprises from government intervention, preserved open m a r k e t s a n d e x p o r t - l e d g r o w t h , and d i s c o u r a g e d i n f l a t i o n a n d t h e c o n t i n ued a c c u m u l a t i o n o f t r a n s n a t i o n a l d e b t . T h e s e e f f o r t s e f f e c t i v e l y r e d u c e d the d e b t b u r d e n s o f m a n y L D C s , p a r t i c u l a r l y t h o s e in L a t i n

America,

w h e r e e c o n o m i c g r o w t h r a t e s b e g a n to a c c e l e r a t e in the e a r l y 1 9 9 0 s . M o s t African

L D C s , h o w e v e r , c o n t i n u e d to e x p e r i e n c e s t a g n a n t g r o w t h

and

sought further c o n c e s s i o n s from their public and private creditors. T h i s b r i e f o v e r v i e w o f the e v o l u t i o n o f t h e O D A r e g i m e i l l u s t r a t e s its i n t i m a t e c o n n e c t i o n to o t h e r a s p e c t s o f N o r t h - S o u t h r e l a t i o n s a n d to the intensifying c o n f l i c t b e t w e e n East and West. T o a large extent, d e v e l o p m e n t a i d f l o w s h a v e b e e n c o o r d i n a t e d w i t h o t h e r f o r m s o f f o r e i g n a i d a n d private capital transfers. T h e m a n a g e m e n t o f the resulting " d e b t o v e r h a n g , "

28

National

Interest and Foreign

Aid

which includes O D A and other capital f l o w s , has required extensive coordination a m o n g states and between private and public sectors. T h u s , O D A must not be viewed in isolation; the O D A regime is one a m o n g many that have b e c o m e involved with the management of debt, the promotion of free trade, the coordination of global monetary policies, and the resolution of social and environmental problems that cross political boundaries.

Sources and Recipients of ODA O n e of the most significant trends in postwar foreign assistance has been the ongoing proliferation of both donor and recipient states. W h e r e a s immediately after World War II foreign aid was dominated by bilateral assistance from the United States, by the 1990s assistance was widely distributed a m o n g bilateral (i.e., national), multilateral, and private sources. And w h e r e a s a handful of European states received most foreign assistance in the late 1940s, almost every developing country sought or received O D A by 1990. A m o n g bilateral donors, the United States was by far the w o r l d ' s primary supplier of military and security assistance during the p o s t - W o r l d War II period, transferring almost $400 billion to more than 120 states during the first 45 years after World War II ( U S A I D , 1991: 4). In fiscal year 1991, a time of deepening economic recession, burgeoning trade and budget deficits, and widespread domestic opposition to foreign aid, the United States transferred more than $16 billion in e c o n o m i c assistance. T h e aid f l o w s produced their own complex w e b of large and competing bureaucracies in Washington, D.C., and within recipient states, as well as a d i f f u s e spectrum of policy o b j e c t i v e s and e x p e c t a t i o n s . The U.S. share of w o r l d O D A flows declined steadily (along with its share of global G N P ) as other industrialized countries recovered f r o m the devastation of World War II and initiated their own bilateral aid programs. T h e U.S. share e x c e e d e d 90 percent in the immediate postwar period, dipped to about 6 0 percent in the 1960s, and fell below 20 percent by the 1990s. A m a j o r f a c t o r in this trend was the e m e r g e n c e of Japan as a m a j o r O D A donor. With m e m o r i e s of J a p a n ' s p r e v i o u s status as a recipient of U.S. e c o n o m i c support still in the minds of many g o v e r n m e n t o f f i c i a l s , J a p a n reached O D A parity with the United States in the late 1980s (see Figure 2.1). As it did so, its leaders pledged to broaden the distribution of J a p a n e s e d e v e l o p m e n t aid b e y o n d the P a c i f i c Rim, to direct i n c r e a s i n g a m o u n t s through multilateral organizations and regional banks, and generally to increase its a d h e r e n c e to D A C s t a n d a r d s of aid " q u a l i t y . " T h e U.S. government and other O E C D m e m b e r s strongly e n c o u r a g e d this expansion of Japanese aid, which, given the externally imposed constraints on its military p r o g r a m , represented an important means by w h i c h J a p a n could become reintegrated within the network of industrialized states.

The Setting

of

ODA

29

France attained its current status as the world's third largest donor of ODA by disbursing more than $4 billion in aid annually during the 1980s. Germany ($3.2 billion in 1981), the United Kingdom ($2.2 billion), and other Western European states also managed large-scale bilateral aid programs. As some LDCs, emulating Japan's approach to development, experienced rapid economic growth and thus "graduated" from recipient to donor status, they joined other affluent states in offering ODA packages; South Korea, for example, made such a transition and is scheduled to join the OECD in 1996. Taiwan, Singapore, Malaysia, and Thailand are expected to become aid donors by the end of the century. The World Bank (1993) hailed such cases as "models" of economic growth and published a guidebook for other LDCs entitled The East Asian Economic Miracle. Additionally, multilateral organizations such as the European Community and various components of the United Nations tripled their share of global foreign assistance between 1956 and 1980. The growth in assistance channeled through multilateral agencies paralleled the ODA regime's increased emphasis on "high-quality" aid transfers. International organizations presumably eliminate the coercive stririgs and expectations that are attached to bilateral assistance and thus can more efficiently respond to the needs of developing states. More so than bilateral aid, foreign assistance from multilateral sources was distributed to least less-developed countries (LLDCs) and carried "softer" terms for reimbursement, often requiring no reciprocal obligations from recipients. Yet despite the growth in multilateral funding, most development assistance continued to be transferred bilaterally from donor to recipient states. Although bilateral transfers were less predominant by the 1980s, they remained the primary mode of ODA transfers. Bilateral assistance from developed countries accounted for 92 percent of aid transfers in 1956, compared to 57 percent in 1980. The proportion of multilateral aid varied dramatically among donors in the late 1980s, ranging from 12 percent in the case of New Zealand to more than 60 percent in the case of Ireland (OECD, 1991a: 178). Regardless of the relative composition of bilateral and multilateral ODA flows, one must be mindful that both originate in legislative or executive bodies of the donor states and must ultimately be regarded as tools of those countries' foreign policies. And although multilateral aid is widely regarded as less "political," it must not be presumed that donor states provide these funds without regard to their use, efficacy, or domestic benefits. In some cases, multilateral ODA commitments serve the perceived national interests of donors as effectively as bilateral arrangements. Benefits include the enhanced credibility donors achieve by such collaborations. In other cases, particularly those involving environmental policy, multilateral agencies address regional or global problems of consequence to the donor states that cannot be resolved through bilateral channels. Immediately after World War II, wealthy states organized their efforts within the World Bank, one of the central institutional manifestations of

30

National

Interest

and Foreign

Aid

Figure 2.1 Donor ODA Market Share (Percentage Bilateral Transfers, 1989-1990)

Japan 16.4% Germany 9.1% Italy 5.7% United Kingdom 4.4% Canada 4.2%

USSR 4.2%

Arab Donors 6.5% Netherlands 3.8% France 13.6%

12.4% 3.1%

Source: OECD (1991a: 172)

the B r e t t o n W o o d s s y s t e m . T h e International B a n k for R e c o n s t r u c t i o n and Development ( I B R D ) was given responsibility for providing development capital to L D C s w h e n private f u n d s w e r e unavailable. T h e I B R D e m e r g e d as t h e W o r l d B a n k ' s " h a r d " l o a n w i n d o w , f r o m w h i c h it t r a n s f e r r e d l o w i n t e r e s t l o a n s o b t a i n e d o n i n t e r n a t i o n a l f i n a n c i a l m a r k e t s . Its initial o b j e c tives w e r e articulated by E u g e n e Black, World B a n k president f r o m 1 9 4 9 t o 1 9 6 2 : " T h e f u n c t i o n o f f o r e i g n a i d is to p r o m o t e a n d m a r g i n a l l y s u p p l e m e n t t h e f l o w of p r i v a t e l o a n a n d d i r e c t i n v e s t m e n t c a p i t a l to t h e d e v e l o p i n g c o u n t r i e s a n d to a s s i s t t h e s e c o u n t r i e s in m o b i l i z i n g t h e i r o w n r e sources for achieving their d e v e l o p m e n t a l goals."13 A l s o d u r i n g t h i s p e r i o d , l e a d e r s of t h e W o r l d B a n k c r e a t e d t h e I n t e r national D e v e l o p m e n t A s s o c i a t i o n ( I D A ) to p r o m o t e and c o o r d i n a t e the t r a n s f e r of " s o f t l o a n s " ( w i t h little o r n o i n t e r e s t ) f r o m i n d u s t r i a l i z e d c o u n tries to L D C s . 1 4 T h r o u g h the I D A , the World B a n k c o n t i n u e d to s e c u r e capital f o r d e v e l o p i n g c o u n t r i e s despite their g r o w i n g indebtedness and frequent d o m e s t i c crises. A f t e r receiving periodic replenishments f r o m the W o r l d B a n k ' s w e a l t h i e s t m e m b e r s , t h e I D A p r o v i d e d f u n d s to r e c i p i e n t s o n m o r e f a v o r a b l e t e r m s t h a n t h o s e e x t e n d e d t h r o u g h t h e I B R D . In a d d i t i o n , I D A f u n d s w e r e l i m i t e d t o t h e p o o r e s t of L D C s ; o n l y s t a t e s w i t h p e r c a p i t a a n n u a l i n c o m e s of l e s s t h a n $ 7 6 5 w e r e e l i g i b l e f o r I D A f u n d s in t h e

The Setting of ODA

31

mid-1990s. In addition, the World B a n k ' s International Finance Corporation (IFC) channeled aid to private industry within LDCs. This represented one of the most rapidly growing conduits of O D A in the 1980s and 1990s, as d o n o r states promoted private-sector d e v e l o p m e n t projects rather than those controlled by recipient governments. T h r o u g h the IFC, donors committed about $4 billion in 1993, almost six times more than the sum committed in the early 1980s. Finally, an increasingly important outlet for multilateral financing was the array of regional development banks that emerged in the 1960s in res p o n s e to appeals by developing states for assistance better suited to their specific needs. These included the Inter-American Development Bank, the A f r i c a n Development Bank, the Asian D e v e l o p m e n t Bank, and the Caribbean Development Bank. In addition, such consortia as the Arab Fund for E c o n o m i c and Social D e v e l o p m e n t and the Islamic D e v e l o p m e n t Bank m a d e concessional f u n d i n g available. A s noted previously, the role of private bank lending to d e v e l o p i n g states e x p a n d e d widely in the 1970s and early 1980s. W h e r e a s an almost imperceptible share of external f i n a n c i n g c a m e in the form of bank lending in the 1950s, by 1980 such transfers a c c o u n t e d for 45 percent of private capital f l o w s , replacing direct investment as the primary s o u r c e of private f u n d s . For leaders of L D C s , private capital presumably liberated them f r o m the potentially c o m p r o m i s i n g position of accepting c o n c e s sional f u n d s f r o m other nation-states, f u n d s that were often tied to imports f r o m the donors or to externally managed technical assistance projects. In an effort to avoid being subjected to the leverage of industrialized states, Third World leaders often turned to private sources of capital, w h i c h offered f u n d s with fewer strings attached regarding L D C s ' internal political structures, e c o n o m i c practices, and diplomatic positions, all of which bec a m e increasingly central to the calculations of government leaders in the 1980s and 1990s. T h e proliferation of aid sources, as noted previously, has been a c c o m panied by a w i d e n i n g population of actual and potential aid recipients. This g r o u p of recipients expanded steadily throughout the postwar period, r e f l e c t i n g the overall proliferation of nation-states in the world s y s t e m . Many of the new recipients were in sub-Saharan Africa, where political ind e p e n d e n c e did not translate into e c o n o m i c g r o w t h . To the contrary, poverty grew worse in many of these L D C s , w h i c h in turn p r o v o k e d greater d e m a n d s on their governments and undermined their political stability. As they attempted to resolve these internal problems, they increasingly relied upon f o r e i g n assistance f o r s h o r t - t e r m relief and long-term e c o n o m i c development. 1 5 In the early 1990s, with the demise of the Soviet Union and the indep e n d e n c e of its f o r m e r territories and satellite states, a new set of c a n d i dates for economic assistance emerged, including Russia, the Ukraine, the

32

National

Interest and Foreign

Aid

Baltic states, Poland, Hungary, and other f o r m e r m e m b e r s of the Warsaw Pact. Their political viability in large part depended upon rapid e c o n o m i c development, which in turn required large v o l u m e s of capital f r o m industrialized countries. S o m e analysts saw these flows as a "grand bargain" by which Western states could ensure long-term stability and create lucrative markets for f u t u r e c o m m e r c e . O E C D m e m b e r s c o n t r i b u t e d about $ 8 billion to these countries in 1991 and 1992, with G e r m a n y disbursing about half that total. A m o n g recipients, Poland and Hungary received about 60 percent of O E C D f u n d i n g in 1992, with the r e m a i n i n g aid distributed evenly a m o n g Ukraine, Belarus, and former m e m b e r s of the Warsaw Pact (World Bank, 1994: 1 2 8 - 1 3 0 ) . 1 6 The end of the Cold War did not produce the end of the aid regime, as many had predicted, but it imposed new d e m a n d s on donors and added a t r a n s f o r m e d East-West dimension to international d e v e l o p m e n t atop its continuing North-South orientation. The ability of developed countries to respond to these new d e m a n d s was limited both by their o w n d o m e s t i c e c o n o m i c problems and by preexisting c o m m i t m e n t s and long-term aid relationships that wedded donor states to recipients over an extended period of time. Enduring bilateral aid relationships would be threatened by a diversion of limited f u n d s . Thus, despite the e m e r g e n c e of new potential recipients in Eastern Europe, L D C s in s u b - S a h a r a n A f r i c a and South Asia still received nearly two-thirds of global O D A transfers in the early 1990s, with the r e m a i n i n g share b e i n g largely c o n c e n t r a t e d a m o n g recipients in East Asia and Latin America (see Figure 2.2). Foreign assistance w a s a vital source of capital for these recipients, e n c o u r a g i n g long-term bilateral O D A relationships and f u r t h e r i n g the institutionalization of the aid regime. Foreign assistance accounted for 10 to 20 percent of the gross national products of many aid recipients during this period, and in some cases the level exceeded 50 percent. Both donors and recipients d i s c o u r a g e d o n e - t i m e infusions of aid, or " q u i c k f i x e s " to resolve momentary needs, instead favoring sustained and predictable develo p m e n t support. Thus, the maintenance of O D A ties b e c a m e a central area of contact between donors and recipients. T h e diversity of bilateral aid programs w a s reflected in the multiple p u r p o s e s and terms under which resources w e r e transferred. By far the most c o m m o n f o r m of O D A in the late 1980s w a s grant aid, w h i c h constituted 70 percent of bilateral O D A in 1 9 8 9 - 1 9 9 0 . T h e rest was transferred in the form of concessional loans, technically considered O D A bec a u s e of their provisions f o r submarket interest rates and longer reimb u r s e m e n t periods than those o f f e r e d by private s o u r c e s . A m o n g the e m e r g e n t norms of the c o n t e m p o r a r y O D A r e g i m e , donors were e n c o u r aged to minimize the loan component of total O D A transfers and to extend aid on terms that did not require burdensome obligations by recipients. Interest rates for O D A loans varied across countries, with s o m e c o u n t r i e s

33

The Setting of ODA

Figure 2.2 Recipient ODA Market Share (Percentage Bilateral Transfers, 1989-1990)

East Asia 13.0%

South Asia 31.0%

Oceania 2.0% Mideast 5.0% Sub-Saharan Africa 32.0%

Latin America 12.0% - Northern Africa 5.0%

Source: O h C D (1991b: 20-21)

(e.g., Canada and D e n m a r k ) expecting no interest and others (e.g., Austria) seeking interest of a p p r o x i m a t e l y 5 percent; average interest rates during the m i d - 1 9 8 0 s were about 3 percent. Further, donor states allowed varying grace periods b e f o r e the first reimbursements on O D A loans were expected; the range e x t e n d e d f r o m 5.7 years (West G e r m a n y ) to 12.8 years ( S w i t z e r l a n d ) , with an a v e r a g e grace period of about 8 years b e i n g reported by O E C D m e m b e r s d u r i n g the m i d - 1 9 8 0 s . Finally, the a m o u n t of time recipient states were given to repay these concessional loans ranged in 1984 f r o m 13.9 years in the case of N o r w a y to 50 years in that of Canada ( O E C D , 1985a: 108). D o n o r states have long b e e n able to require that O D A r e s o u r c e s be spent on their o w n g o o d s and services, a practice known as " t y i n g " of foreign aid. In 1989, 63.5 percent of bilateral aid was at least partially tied by members of the D A C , mainly through requirements that donors be allowed to participate in technical cooperation projects f u n d e d by their O D A . Of untied aid, a p p r o x i m a t e l y half w a s transferred in the f o r m of cash to recipients, with the remainder designated for open-ended technical cooperation projects and import financing. Nearly 25 percent of foreign assistance was designated in 1 9 8 8 - 1 9 8 9 for social and political infrastructure. T h e c o n s t r u c t i o n or e x p a n s i o n of

34

National Interest and Foreign Aid

s c h o o l s , h o s p i t a l s , a n d g o v e r n m e n t o f f i c e s w e r e i n c l u d e d in this c a t e g o r y . About 22 percent was directed toward e c o n o m i c infrastructure, including t h e c o n s t r u c t i o n of utilities, r o a d s , a n d c o m m u n i c a t i o n f a c i l i t i e s . T h e rem a i n i n g b i l a t e r a l f l o w s w e r e d i r e c t e d t o w a r d , in o r d e r of m a g n i t u d e , prog r a m a s s i s t a n c e , a g r i c u l t u r e , i n d u s t r i a l p r o d u c t i o n , and f o o d aid ( O E C D , 1 9 9 1 a : 181). A s in m a n y o t h e r a r e a s of d e v e l o p m e n t aid, the p u r p o s e s for w h i c h c o n c e s s i o n a l f l o w s w e r e e x t e n d e d w e r e largely d e t e r m i n e d by d o n o r s t a t e s a n d t h u s r e f l e c t e d their o v e r a l l f o r e i g n - p o l i c y p r e r o g a t i v e s .

Foreign Assistance: Theoretical Perspectives A c e n t r a l p r e m i s e o f this s t u d y is that f o r e i g n a s s i s t a n c e m a y p r o d u c t i v e l y be v i e w e d as a m i c r o c o s m of n a t i o n - s t a t e s ' b r o a d e r e f f o r t s in f o r e i g n a f f a i r s . T h u s , it s h o u l d not be s u r p r i s i n g that i n t e r p r e t a t i o n s of f o r e i g n aid c o m m o n l y r e f l e c t t h e p a r a d i g m a t i c o r i e n t a t i o n s of a n a l y s t s t o w a r d political e c o n o m y a n d i n t e r n a t i o n a l r e l a t i o n s in g e n e r a l . In this s e c t i o n t h e s e t h e o r e t i c a l p e r s p e c t i v e s a r e b r i e f l y r e v i e w e d , a n d their a p p l i c a t i o n s to f o r e i g n a s s i s t a n c e are c o n s i d e r e d . At the risk of o v e r s i m p l i f i c a t i o n a n d of obs c u r i n g i m p o r t a n t d i v i s i o n s w i t h i n t h e s e c a t e g o r i e s , the c o m m o n d i v i s i o n of r e a l i s t , i d e a l i s t , a n d s t r u c t u r a l i s t p a r a d i g m s is a p p l i e d in c o n t r a s t i n g t h e s e t h e o r e t i c a l p e r c e p t i o n s of d e v e l o p m e n t aid (see T a b l e 2 . 2 ) . T o t h o s e a d h e r i n g to the r e a l i s t p a r a d i g m , i n t e r n a t i o n a l r e l a t i o n s a r e c o n d u c t e d in a H o b b e s i a n s t a t e of n a t u r e , a " w a r of all a g a i n s t a l l " that rem a i n s i n t r a c t a b l e g i v e n t h e i n h e r e n t f l a w s in h u m a n n a t u r e , d e e p - s e a t e d cultural d i f f e r e n c e s , and t h e a b s e n c e of an o v e r a r c h i n g s o v e r e i g n in w o r l d p o l i t i c s . I n t e r s t a t e r e l a t i o n s a r e s e e n as g e n e r a l l y c o n f l i c t i v e in this v i e w , a n d f o r e i g n p o l i c i e s are s e l f - s e r v i n g by n e c e s s i t y . Raison d'état is the o p e r a t i n g p r i n c i p l e f o r d i p l o m a t s , w h o p u r s u e n a t i o n a l s e l f - p r e s e r v a t i o n as their p r i m a r y , if not e x c l u s i v e , o b j e c t i v e . G i v e n that realists g e n e r a l l y def i n e " g o o d in t e r m s of interest r a t h e r t h a n m o r a l i t y . . . a realist e t h i c of the n a t i o n a l interest is t h e r e f o r e t y p i c a l l y b o t h statist and a m o r a l " ( D o n n e l l y , 1992: 91). F r o m the realist p e r s p e c t i v e , f o r e i g n a s s i s t a n c e s h o u l d p r i m a r i l y , if not e x c l u s i v e l y , b e d e s i g n e d to f a c i l i t a t e d o n o r i n t e r e s t s . H u m a n i t a r i a n o b j e c t i v e s a r e d e e m p h a s i z e d ; aid is v i e w e d as m i n i m a l l y r e l a t e d to r e c i p i e n t e c o n o m i c d e v e l o p m e n t . If an e f f e c t is i d e n t i f i e d , it is s i g n i f i c a n t o n l y to the e x t e n t that it i n c r e a s e s the d o n o r ' s p o l i t i c a l i n f l u e n c e , military security, t r a d e p r o g r a m s , a n d f o r e i g n i n v e s t m e n t s . F o r e i g n aid in this v i e w is " i n s e p a r a b l e f r o m the p r o b l e m of p o w e r . P o l i t i c s is the g o v e r n i n g f a c t o r , not an incidental f a c t o r w h i c h c a n b e d i s p e n s e d w i t h " ( L i s k a , 1 9 6 0 : 15). P r e s c r i p t i o n s r a n g e f r o m the e l i m i n a t i o n of aid p r o g r a m s that h a v e little b e a r ing on t h e d o n o r ' s i n t e r e s t s to q u a l i f i e d s u p p o r t f o r aid b a s e d o n d e m o n s t r a b l e b e n e f i t s to t h e d o n o r . T o S i n g e r ( 1 9 7 2 : 3 1 9 ) , d e c i s i o n m a k e r s in

The Setting

Table 2.2 Normative Perspective

of

35

ODA

Contrasting Views of Development Aid: Evaluations and Prescriptions Evaluation of Current ODA

Prescription for Future ODA

Realist

Appropriate only to a d v a n c e donor interests

Should be minimized; security assistance should take priority; e c o n o m i c f u n d s should be linked to efficiency of L D C s and "return on i n v e s t m e n t "

Idealist

Potentially beneficial in a d d r e s s i n g collective interests of d o n o r s a n d recipients

Should be expanded; "basic n e e d s " and transnational p r o b l e m s should be priorities; donor and recipient states must reform aid bureaucracies

Structuralist

Instrument by which wealthy states exploit L D C s and institutionalize their d e p e n d e n c e on the First World

Should be abolished in current f o r m ; international organizations should control redistribution of e c o n o m i c resources in pursuit of global e c o n o m i c equality

p o w e r f u l s t a t e s " a r e w e l l a w a r e that, r h e t o r i c to the c o n t r a r y , e v e r y e c o n o m i c or m i l i t a r y aid p a c k a g e is tied in p o l i t i c a l s t r i n g s . " R e l a t i n g this v i e w to early U.S. aid policy, B r o w n a n d O p i e ( 1 9 5 3 : 5 8 0 ) b e l i e v e d " t h e egalitarian p r i n c i p l e has not been in the past a n d s h o u l d not be in the f u ture the b a s i s of action in any p h a s e of A m e r i c a n f o r e i g n a s s i s t a n c e . . . . [F]oreign a s s i s t a n c e must be rooted in the interest of the United S t a t e s . " M a n y r e a l i s t s h a v e q u e s t i o n e d the a s s u m e d l i n k a g e s b e t w e e n the t r a n s f e r of f o r e i g n assistance, recipient e c o n o m i c d e v e l o p m e n t , and s u b s e quently harmonious relations between donor and recipient. Morgenthau ( 1 9 6 3 : 79), f o r e x a m p l e , f o u n d t h e s e a s s u m p t i o n s to be " b o r n e out neither by the e x p e r i e n c e s w e have had nor by general historic e x p e r i e n c e . " In his view, U.S. f o r e i g n a s s i s t a n c e could better be u n d e r s t o o d as " b r i b e s " f r o m rich to p o o r c o u n t r i e s . S i m i l a r l y , B a n f i e l d ( 1 9 6 3 : 2 6 - 2 7 ) c r i t i c i z e d the " f o g of m o r a l i z i n g " that o f t e n a c c o m p a n i e s f o r e i g n - a i d r h e t o r i c . " T h e most influential w r i t i n g s about aid d o c t r i n e are full of c l i c h e s and s w e e p ing s t a t e m e n t s that turn out o n c l o s e e x a m i n a t i o n to be m e a n i n g l e s s or else entirely u n s u p p o r t e d by e v i d e n c e . " M o r a l i s t i c analysis, he argued, "tells us h o w w e o u g h t to act in a w o r l d that is not the o n e in w h i c h w e must a c t . " Ten years later, K n o r r ( 1 9 7 3 : 166) d i s m i s s e d n o t i o n s of " g e n u i n e p h i l a n thropy or h u m a n i t a r i a n i s m " and a d d e d that " m e r e l y a small fraction of f o r eign e c o n o m i c aid c a n b e s a f e l y a t t r i b u t e d to a plain s e n s e of h u m a n solidarity or to a s i n c e r e f e e l i n g that the w e a l t h y . . . have the responsibility to s h a r e w i t h t h e d e s t i t u t e t w o - t h i r d s of m a n k i n d . " He i d e n t i f i e d a l t r u i s t i c g o a l s as o n e f a c t o r in aid c a l c u l a t i o n s but c o n s i d e r e d t h e m s u b o r d i n a t e to other motivations, including e c o n o m i c and military needs, postcolonial

36

National Interest and Foreign Aid

control, long-term stability, and bureaucratic inertia. M o r e recently, Gilpin ( 1 9 8 7 : 3 2 ) c o n c l u d e d that h u m a n i t a r i a n c o n c e r n s p l a y e d an i m p o r t a n t r o l e in f o r e i g n a s s i s t a n c e a l l o c a t i o n s , but " t h e p r i m a r y m o t i v e s f o r o f f i c i a l aid b y g o v e r n m e n t s h a v e b e e n p o l i t i c a l , m i l i t a r y , and c o m m e r c i a l . " O t h e r r e a l i s t s h a v e b a s e d t h e i r o p p o s i t i o n to f o r e i g n a s s i s t a n c e o n the i n a b i l i t y o f r e c i p i e n t s t a t e s to u t i l i z e t h e r e s o u r c e s e f f e c t i v e l y . W o l f s o n ( 1 9 7 9 ) , f o r e x a m p l e , a r g u e d that the n o n d e m o c r a t i c a n d c r i s i s - p r o n e p o l i t i c a l c u l t u r e s in m a n y L D C s limit t h e i r r e s p o n s i v e n e s s to F i r s t W o r l d e c o n o m i c m o d e l s and d e v e l o p m e n t a s s i s t a n c e . T h i s p e r s p e c t i v e

convinced

B a u e r ( 1 9 8 4 ) a n d E b e r s t a d t ( 1 9 8 8 ) , a m o n g o t h e r s , that aid p r o g r a m s m u s t b e m o r e " b u s i n e s s l i k e " a n d t h e r e f o r e l i m i t e d to r e c i p i e n t s that c o u l d e f f e c t i v e l y c o n v e r t the f u n d s i n t o s u s t a i n e d e c o n o m i c d e v e l o p m e n t . A n a s s u m p t i o n u n d e r l y i n g this v i e w is that O D A m u s t p r o v i d e s o m e return on t h e i n v e s t m e n t f o r t h e d o n o r , i n c l u d i n g the r e c i p i e n t ' s l o n g - t e r m p r e s e n c e as a m a r k e t f o r e x p o r t s a n d , t h r o u g h s u s t a i n e d g r o w t h , its d i m i n i s h e d n e e d for future c o n c e s s i o n a l financing. T h e idealist paradigm c h a l l e n g e s realist assumptions and prescriptions in v i r t u a l l y e v e r y r e s p e c t , a d v a n c i n g a v i s i o n that is m o r e p o s i t i v e r e g a r d ing the m o t i v a t i o n s o f individuals and state actors and m o r e o p t i m i s t i c about their potential for cooperative relations. T o idealists, a conception o f interstate r e l a t i o n s b a s e d upon r e l e n t l e s s c o m p e t i t i o n both ignores

the

r e c o r d o f c o o p e r a t i o n that e m e r g e d in the late t w e n t i e t h c e n t u r y and s e r v e s as a s e l f - f u l f i l l i n g prophecy o f future c o n f l i c t . T h e debate between realists a n d i d e a l i s t s , p r e d i c t a b l y , has f o u n d e x p r e s s i o n in the area o f f o r e i g n a s s i s t a n c e . In t h e v i e w o f m o s t i d e a l i s t s , n a t i o n a l i n t e r e s t s s h o u l d b e m i n i m i z e d o r e l i m i n a t e d f r o m aid c a l c u l a t i o n s , w h i c h s h o u l d instead be g u i d e d by transnational humanitarian concerns. S o m e idealist assessments (e.g., Lumsdaine, 1 9 9 3 ) have challenged t h e p r e v a l e n t v i e w that f o r e i g n aid has s e r v e d p r i m a r i l y as a v e h i c l e f o r the i n t e r e s t s o f d o n o r s a n d o n l y s e c o n d a r i l y a d d r e s s e d the

developmental

needs o f L D C populations. T h e s e v i e w s e m p h a s i z e the empirical relations h i p s b e t w e e n m a n y b i l a t e r a l aid f l o w s and the d e m o n s t r a b l e h u m a n n e e d s o f T h i r d W o r l d p o p u l a t i o n s , a s w e l l as the p r o v e n s u c c e s s o f m a n y aid p r o g r a m s in a l l e v i a t i n g p o v e r t y a n d s u f f e r i n g w i t h i n L D C s . T h e r o l e o f t h e U n i t e d S t a t e s h a s d i s t o r t e d the c r o s s n a t i o n a l r e c o r d o f d e v e l o p m e n t a s s i s tance f r o m this perspective;

w h e n the aid p o l i c i e s o f m o r e

numerous

s m a l l e r aid d o n o r s a r e c o n s i d e r e d , t h e a l t r u i s t i c d i m e n s i o n s o f g l o b a l f o r e i g n aid a r e r e v e a l e d . I d e a l i s t c r i t i q u e s o f O D A tend to f o c u s m o r e o n its e x e c u t i o n t h a n its l e g i t i m a c y , c o n d e m n i n g t h e t r a n s f e r o f aid to r e p r e s s i v e e l i t e s , l a r g e l a n d h o l d e r s , a g r i b u s i n e s s c o n c e r n s , a n d r e c i p i e n t s that o n l y m a r g i n a l l y q u a l ify as n e e d y or less d e v e l o p e d . W i d e l y cited e x a m p l e s include U . S . e c o n o m i c aid to E g y p t a n d I s r a e l , t h e l a t t e r o f w h i c h r e p o r t e d o n e o f the h i g h e s t l i v i n g s t a n d a r d s in t h e w o r l d d u r i n g the 1 9 8 0 s . J a p a n e s e a s s i s t a n c e

The Setting of ODA

37

to m i d d l e - i n c o m e r e c i p i e n t s a l o n g the P a c i f i c R i m is a l s o s e e n as v i o l a t i n g t h e p r o c l a i m e d g o a l of t h e a i d r e g i m e t o r e d u c e s u f f e r i n g in L D C s a n d L L D C s . T h e s e c r i t i q u e s o f t e n e m p h a s i z e s p e c i f i c O D A p r o g r a m s that h a v e b a c k f i r e d , b r i n g i n g m o r e h a r m t h a n g o o d to r e c i p i e n t p o p u l a t i o n s a n d p r o d u c i n g ill will b e t w e e n d o n o r s a n d r e c i p i e n t s . T o S e i t z ( 1 9 8 0 ) , U . S . polic i e s in Iran d u r i n g t h e 1 9 7 0 s m e r e l y b o u g h t r e s e n t m e n t a m o n g the r e c i p i e n t p o p u l a t i o n . C i t i n g a n o t h e r e x a m p l e , B o y d ( 1 9 8 2 : 6 3 ) c o n c l u d e d that F r e n c h O D A to its f o r m e r c o l o n i e s in A f r i c a e x a c e r b a t e d the e c o n o m i c a n d p o l i t i c a l d e p e n d e n c e of t h e s e L D C s . S i m i l a r l y , L a p p e et al. ( 1 9 8 1 ) c o n t e n d e d that m a n y aid r e l a t i o n s h i p s m e r e l y c o m p o u n d d o m e s t i c i n e q u a l i t i e s in T h i r d W o r l d s t a t e s . T h e y s t o p p e d s h o r t of c o n d e m n i n g the p r a c t i c e alt o g e t h e r b u t a r g u e d t h a t " f o r e i g n a s s i s t a n c e p r o g r a m s will h e l p t h e p o o r a n d h u n g r y a b r o a d o n l y if t h e y a t t a c k the r o o t c a u s e s of their s u f f e r i n g . " T h e i n t e g r a t i o n of m i l i t a r y a n d e c o n o m i c a s s i s t a n c e is c r i t i c i z e d by i d e a l i s t s f o r a v a r i e t y of r e a s o n s : It p r o m o t e s t h e m i l i t a r i z a t i o n of d e v e l oping countries, diverts funds otherwise available for development, subs u m e s L D C s in g r e a t - p o w e r c o n f l i c t s , a n d u n d e r m i n e s t h e d e v e l o p m e n t a l b a s i s of f o r e i g n a i d . M o s t a i d d o n o r s h a v e n o t e s t a b l i s h e d p r o g r a m s f o r m i l i t a r y a s s i s t a n c e , s o s u c h c r i t i c i s m has b e e n m o s t f r e q u e n t l y d i r e c t e d tow a r d the United S t a t e s a n d the f o r m e r S o v i e t U n i o n but in s o m e c a s e s a l s o t o w a r d F r a n c e , G r e a t B r i t a i n , a n d C h i n a . M a n y of t h e s a m e c r i t i c i s m s w e r e r a i s e d , e s p e c i a l l y d u r i n g t h e 1 9 9 0 s , r e g a r d i n g the t r a n s f e r of m i l i t a r y t e c h n o l o g y , in p a r t i c u l a r that i n v o l v i n g b i o l o g i c a l , c h e m i c a l , or n u c l e a r w e a p o n r y , to L D C s o n c o m m e r c i a l t e r m s . O t h e r s w i t h i n t h e idealist p a r a d i g m e m p h a s i z e t h e o f t e n i n e f f i c i e n t ins t i t u t i o n a l m e c h a n i s m s b y w h i c h aid p r o g r a m s a r e i m p l e m e n t e d . T h e d e c e n t r a l i z e d s t r u c t u r e f o r d i s b u r s i n g J a p a n e s e aid h a s o f t e n b e e n c r i t i c i z e d in this r e s p e c t , as h a v e t h e c u m b e r s o m e b u r e a u c r a t i c p r o c e s s e s a s s o c i a t e d w i t h the U . S . A g e n c y f o r I n t e r n a t i o n a l D e v e l o p m e n t . C r i t i c s p o i n t to t h e t e n d e n c y of b u r e a u c r a t i c inertia to d r i v e t h e s e a i d p r o g r a m s a n d of s i n g l e d e v e l o p m e n t p r o g r a m s to be reproduced within many recipient states. T h e s e critics often a d v o c a t e streamlined aid b u r e a u c r a c i e s and aid prog r a m s m o r e r e s p o n s i v e t o t h e s p e c i f i c n e e d s of e a c h r e c i p i e n t s t a t e . A s T e n d l e r ( 1 9 7 5 : 12) o b s e r v e d , The rationale behind development assistance . . . causes donor organizations to surround themselves with a protective aura of technical competence—an aura which must be maintained if they are to survive in their institutional world. This makes it difficult to generate the experimental environment necessary for their work. It also tends to result in placing the blame for failure on the wrong thing. 1 7 T h e idealist p a r a d i g m is largely r e f l e c t e d in t h e e x i s t i n g s t a n d a r d s of aid q u a l i t y that c o n t i n u e t o b e a d v a n c e d b y the O E C D a n d the U n i t e d N a t i o n s : Multilateral aid is p r e f e r a b l e to bilateral a i d , g i v e n its less " p o l i t i c a l "

38

National

Interest and Foreign

Aid

n a t u r e ; aid t r a n s f e r s s h o u l d not be tied to d o n o r g o o d s a n d s e r v i c e s ; g r a n t s a r e m o r e a p p r o p r i a t e t h a n l o w - i n t e r e s t l o a n s ; a n d aid s h o u l d be d i r e c t e d t o w a r d r e c i p i e n t s w i t h t h e g r e a t e s t d e m o n s t r a b l e h u m a n n e e d s . In t h e 1 9 9 0 s , s t a n d a r d s of " s u s t a i n a b l e " d e v e l o p m e n t h a v e b e e n a d d e d , p r o m o t i n g a i d r e l a t i o n s h i p s that r e w a r d r e c i p i e n t s that u n d e r t a k e p o p u l a t i o n c o n t r o l m e a s u r e s a n d p r e s e r v e e n v i r o n m e n t a l q u a l i t y . In a d d i t i o n , e x p e c t a t i o n s of d e m o c r a t i c p r a c t i c e w i t h i n r e c i p i e n t s t a t e s are m o s t o f t e n a d v a n c e d by idealists. S t r u c t u r a l i s t c r i t i q u e s of f o r e i g n a s s i s t a n c e a r e o f t e n b a s e d u p o n M a r x i s t - L e n i n i s t a s s u m p t i o n s a b o u t t h e r o l e of e c o n o m i c w e a l t h in e n h a n c i n g t h e political p o w e r of elites in b o t h i n d u s t r i a l i z e d a n d d e v e l o p i n g c o u n t r i e s , as w e l l as b e l i e f s a b o u t t h e f u n c t i o n of f o r e i g n aid in p r e s e r v i n g or w i d e n i n g e c o n o m i c d i s p a r i t i e s b e t w e e n w e a l t h y s t a t e s a n d L D C s . A m o n g s t r u c t u r a l i s t c r i t i q u e s of O D A , W o o d ( 1 9 8 6 : 5) f o u n d that w o r l d s y s t e m s a n a l y s i s o f f e r s a " u s e f u l starting p o i n t " in c o n s i d e r i n g a i d . 1 8 L e a d e r s of a i d - d o n a t i n g " c o r e " states, t h r o u g h their c o n t r o l of both p u b l i c a n d p r i v a t e s o u r c e s of f i n a n c i n g , are able to d i c t a t e t h e d e v e l o p m e n t s t r a t e g i e s of " p e r i p h e r a l " states in the T h i r d W o r l d . S p e c i f i c a l l y , aid d o n o r s i m p o s e " o u t w a r d , e x p o r t - o r i e n t e d " a p p r o a c h e s to g r o w t h , t h u s d e p r i v i n g L D C s of "real inward-oriented, self-reliant strategies" (Wood, 1986: 314). D o n o r s t a t e s a n d t r a n s n a t i o n a l o r g a n i z a t i o n s a r e o f t e n s e e n as e n g a g e d in c o l l u s i v e b e h a v i o r in e x t e n d i n g a i d , u n f a i r l y c o o r d i n a t i n g r e s o u r c e f l o w s to e x ploit their i n d i v i d u a l a n d c o l l e c t i v e a d v a n t a g e s ( W e i s s m a n , 1 9 7 5 ) . T h i s p e r s p e c t i v e w a s b r o a d l y shared within the G r o u p of 77, U N C T A D , a n d o t h e r i n t e r n a t i o n a l o r g a n i z a t i o n s in t h e 1 9 7 0 s . T h e i r m e m b e r s a r g u e d that a First W o r l d d i v i s i o n of labor had e m e r g e d in t h e t h r e e d e c a d e s a f t e r W o r l d W a r II in w h i c h f o r e i g n - a i d p r o g r a m s w e r e c o o r d i n a t e d by d o n o r s to p e r p e t u a t e t h e i r s t r u c t u r a l a d v a n t a g e s o v e r p o o r e r s t a t e s . " I n an e n v i r o n m e n t of e s s e n t i a l l y u n m o d e r a t e d c o m p e t i t i o n , [ d o n o r ] s t a t e s e m p l o y c o n t r o l a n d i n f l u e n c e s t r a t e g i e s in o r d e r to p r o t e c t t h e i r i n t e r e s t s a n d t h e r e b y p r e s e r v e their d o m i n a n c e , " a r g u e d M c K i n l a y ( 1 9 7 9 : 4 5 0 ) . T r a d i tional c u l t u r e s a n d p o l i t i c a l e c o n o m i e s w e r e s e e n as c o r r u p t e d by O D A rel a t i o n s h i p s ; t h e d o n o r - r e c i p i e n t ties that r e s u l t e d m e r e l y a g g r a v a t e d t h e p r e e x i s t i n g i n e q u a l i t i e s in t h e w o r l d e c o n o m y . W i t h i n r e c i p i e n t states, aid t r a n s f e r s s t r e n g t h e n e d t h e e c o n o m i c a n d p o l i t i c a l h e g e m o n y of elites, e n abling them to i m p o s e their self-serving d e v e l o p m e n t s c h e m e s on the lower classes (see Hayter and Watson, 1985). T h e p e r c e i v e d e f f e c t s of this m a n i p u l a t i o n of f o r e i g n a s s i s t a n c e inc l u d e the i n c r e a s e d r e l i a n c e of L D C s o n t h e m o n e t a r y policies, c o n s u m p tion p a t t e r n s , a n d e x p o r t p o l i c i e s of c o r e s t a t e s ; r e s t r i c t e d political a u t o n o m y a m o n g l e a d e r s in d e v e l o p i n g s t a t e s ; a n d t h e o v e r a l l s u b j u g a t i o n of L D C e c o n o m i e s to the W e s t e r n - l e d g l o b a l e c o n o m y . In short, aid p o l i c i e s f u r t h e r e n c o u r a g e t h e " d e p e n d e n t d e v e l o p m e n t " of p e r i p h e r a l s t a t e s . 1 9 T h e s e c r i t i c s f u r t h e r e m p h a s i z e that in t h e c a s e of m a n y aid p r o g r a m s , p a r t i c u l a r l y t h o s e of F r a n c e a n d G r e a t B r i t a i n , a i d is p r i m a r i l y d i r e c t e d

The Setting of ODA

39

t o w a r d f o r m e r c o l o n i e s a n d e f f e c t i v e l y s e r v e s as a m e a n s b y w h i c h t h e y retain influence over their f o r m e r colonial holdings: " T h o s e countries w h i c h h a v e had to r e l i n q u i s h c o n t r o l o v e r their e m p i r e s h a v e f o u n d in aid t h e most c o n v e n i e n t i n s t r u m e n t to p r o l o n g a n d s t r e n g t h e n their i n f l u e n c e a n d p o w e r " ( M e n d e , 1 9 7 3 : 7 1 ) . A s M a r t i n o b s e r v e d in r e l a t i o n to F r e n c h p o l i c y t o w a r d its f o r m e r c o l o n i e s in A f r i c a , " F r o m t h e v e r y b e g i n n i n g , F r a n c e ' s p r o c e s s of d e c o l o n i z a t i o n w a s d e s i g n e d in s u c h a w a y as to perpetuate d e p e n d e n c y links after i n d e p e n d e n c e " (1985: 190). J a p a n ' s conc e n t r a t i o n of aid a m o n g t h e f o r m e r m e m b e r s of its G r e a t e r East A s i a n C o P r o s p e r i t y S p h e r e is c i t e d as a n o t h e r e x a m p l e of n e o c o l o n i a l i s m , as is t h e U . S . e m p h a s i s o n b i l a t e r a l aid p r o g r a m s to C e n t r a l A m e r i c a n states, m a n y o f w h i c h c o n c u r r e n t l y r e c e i v e large i n f u s i o n s of m i l i t a r y a s s i s t a n c e ( s e e B r y n e s , 1 9 6 6 ) . T o S t e v e n ( 1 9 9 0 : 6 4 ) , " T h e m o v e m e n t a b r o a d by J a p a n e s e capital is e s s e n t i a l l y the e x t e n s i o n of a s o c i a l r e l a t i o n , in w h i c h t h e J a p a n e s e b o u r g e o i s i e f o r m s a l l i a n c e s w i t h f o r e i g n r u l i n g c l a s s e s a g a i n s t b o t h the Japanese and foreign working classes." Critics f r o m the structuralist p e r s p e c t i v e are generally pessimistic a b o u t the c a p a c i t y of a i d d o n o r s to c h a n g e u n d e r the c u r r e n t s y s t e m of d i s p e n s i n g O D A ; their h i s t o r i c a l d o m i n a t i o n of t h e w o r l d e c o n o m y p r e c l u d e s their r e h a b i l i t a t i o n into b e n e f i c e n t aid d o n o r s . For a d h e r e n t s of this v i e w , t h e i n e q u a l i t i e s w i t h i n the e x i s t i n g aid r e g i m e d e m a n d that it be a b o l i s h e d . S o m e c o n t e n d that the p r a c t i c e of d i s t r i b u t i n g f o r e i g n aid is f u n d a m e n t a l l y incompatible with international development; others believe international o r g a n i z a t i o n s m u s t a s s u m e r e s p o n s i b i l i t y f o r the r e d i s t r i b u t i o n of w e a l t h f r o m N o r t h to S o u t h . F u r t h e r r e s o u r c e s s h o u l d o n l y b e g i v e n to c o u n t r i e s t h a t d e m o n s t r a t e t h e i r w i l l i n g n e s s to u s e t h e m in an e g a l i t a r i a n m a n n e r . P r o p o n e n t s of this v i e w b e l i e v e that i n d u s t r i a l i z e d s t a t e s m u s t u l t i m a t e l y c o m m i t g r e a t l y i n c r e a s e d v o l u m e s of e c o n o m i c aid as a s t e p t o w a r d g l o b a l e c o n o m i c equality and that these transfers should be e f f e c t i v e l y disconnected from donors' self-interests. These competing views were widely debated within the United Nations, the O E C D , the W o r l d B a n k , and o t h e r multilateral a r e n a s . 2 0 T h e tenor of d e b a t e r e f l e c t e d the b r o a d e r c l i m a t e of w o r l d politics d u r i n g e a c h p e r i o d ; t h u s the C o l d War i n f u s e d the d e b a t e w i t h i d e o l o g i c a l p o l e m i c s . In a d d i t i o n , a c c u m u l a t i n g e x p e r i e n c e w i t h d e v e l o p m e n t e f f o r t s c o n t r i b u t e d to t h e aid d e b a t e . B o t h the linear d e v e l o p m e n t a l m o d e l , p r e d o m i n a n t in the 1 9 4 0 s a n d 1 9 5 0 s , and that p r e m i s e d u p o n t h e n a t i o n a l i z a t i o n of i n d u s t r i e s a n d i m p o r t s u b s t i t u t i o n s t r a t e g i e s , p o p u l a r in the 1 9 6 0 s a n d 1970s, w e r e w e a k e n e d by their f a i l e d a p p l i c a t i o n s , w h e r e a s the s u c c e s s of o t h e r a p p r o a c h e s , p a r t i c u larly the East A s i a n m o d e l of c e n t r a l l y d i r e c t e d , e x p o r t - l e d g r o w t h , g a i n e d a d h e r e n t s . T h r o u g h o u t t h e p o s t - W o r l d W a r II p e r i o d , m o u n t i n g e m p i r i c a l e v i d e n c e r e l a t i n g to p r e v i o u s e f f o r t s w a s w i d e l y c i r c u l a t e d a n d b e c a m e m a n i f e s t e d in O D A r e f o r m s a n d initiatives ( s e e T o d a r o , 1 9 7 7 ) . By the m i d - 1 9 9 0 s the O D A regime had b e c o m e so institutionalized that o n g o i n g c r i t i c i s m f r o m t h e left a n d t h e right had l i m i t e d i m p a c t o n the

40

National Interest and Foreign Aid

s c o p e a n d d i r e c t i o n o f aid f l o w s . H o w e v e r c o n t e n t i o u s the d e b a t e , a c o n s e n s u s e m e r g e d in f a v o r o f t h e e x p a n s i o n o f N o r t h - S o u t h d e v e l o p m e n t c o operation and the m a i n t e n a n c e o f qualitative standards along the lines favored by

many

idealists.

B u t the p r e s u m p t i o n s

o f realists w e r e

also

r e c o g n i z e d b y the aid r e g i m e , w h i c h a c k n o w l e d g e d the i n t r u s i o n o f d o n o r s e l f - i n t e r e s t s i n t o aid r e l a t i o n s h i p s and t h e n e e d f o r aid p r o g r a m s that w e r e i n c o r p o r a t e d i n t o " b u s i n e s s l i k e " m a c r o e c o n o m i c p o l i c i e s . In g e n e r a l , a p r a g m a t i c a p p r o a c h to O D A e m e r g e d that r e c o g n i z e d the i n s e p a r a b l e c o e x i s t e n c e o f national interests and f o r e i g n aid. A s Lairson and S k i d m o r e ( 1 9 9 3 : 2 4 9 ) concluded, G i v e n the p o l i t i c a l s t a k e s a s s o c i a t e d with aid, the p o o r ' s lack o f p a r t i c i pation in the aid p r o c e s s is hardly a c c i d e n t a l . Indeed, were aid to be ref o r m e d to f o c u s m o r e d i r e c t l y and e f f e c t i v e l y on the poor and to p r o v i d e t h e m with s u b s t a n t i a l input and c o n t r o l , aid w o u l d u n d o u b t e d l y l o s e m u c h o f the appeal it presently holds for political elites in both d o n o r and r e c i p i e n t nations. I r o n i c a l l y , t a k i n g the " p o l i t i c s " out o f foreign aid m i g h t s i m p l y undercut the m o t i v a t i o n for g o v e r n m e n t s to go on s p e n d i n g and r e c e i v i n g foreign aid, l e a d i n g to a m a s s i v e c o n t r a c t i o n o f such p r o g r a m s .

A s t h e p a r a m e t e r s o f t h e aid d e b a t e n a r r o w e d in the 1 9 8 0 s a n d 1 9 9 0 s , o n e c e n t r a l a s s u m p t i o n w a s s h a r e d b y a n a l y s t s o f all n o r m a t i v e

persua-

s i o n s : T h e relationship b e t w e e n political stability and e c o n o m i c d e v e l o p m e n t is truly s y m b i o t i c . G o v e r n m e n t s c a n n o t g o v e r n e f f e c t i v e l y o r j u d i ciously

in

the

midst

of

prolonged

economic

privation.

Conversely,

e c o n o m i c g r o w t h c a n n o t b e s u s t a i n e d in t h e m i d s t o f d e b i l i t a t i n g p o l i t i c a l t u r m o i l . C o n s e n s u s o n t h i s i s s u e has r e s u l t e d in the c o n c u r r e n t d i r e c t i o n o f O D A t o w a r d b o t h g o a l s t h r o u g h the c o n s t r u c t i o n o f l e g i s l a t u r e s , m a g i s t r a c i e s , a n d t o w n h a l l s o n t h e o n e hand a n d t h e d e l i v e r y o f f e r t i l i z e r , t r a c t o r s , and power generators on the other. D o n o r s o f O D A select recipients b a s e d o n t h e e x p e c t a t i o n that t h e r e s o u r c e s w i l l c o n t r i b u t e to b o t h p r o c e s s e s a n d that t h e i r c o m b i n e d e f f e c t w i l l r e s u l t in s u s t a i n e d p r o g r e s s that m a y l e a d the

recipient

toward

self-sufficiency

and

promote

greater

economic

integration b e t w e e n North and South. T h e interdependence o f political a n d e c o n o m i c d e v e l o p m e n t , t h e n , is a p p r e c i a t e d b y r e a l i s t s , i d e a l i s t s , a n d structuralists a l i k e , although their ultimate a s s e s s m e n t s o f and prescriptions for O D A continue to vary widely.

Four "Stories" of Development Aid T h e n e x t f o u r c h a p t e r s w i l l c o n s i d e r t h e b e h a v i o r o f the F r e n c h , J a p a n e s e , S w e d i s h , a n d U . S . g o v e r n m e n t s d u r i n g t h e 1 9 8 0 s in the a r e a o f d e v e l o p m e n t aid to L D C s a n d L L D C s . T h e h i s t o r i c a l c o n t e x t o f t h e i r aid p o l i c i e s

The Setting of ODA

41

a n d the e m p i r i c a l p a t t e r n s o f t h e i r aid f l o w s w i l l b e r e v i e w e d , a l o n g w i t h t h e i m p l i c a t i o n s f o r t h e l i n k a g e b e t w e e n n a t i o n a l i n t e r e s t a n d f o r e i g n aid. T h e s e d o n o r states w e r e s e l e c t e d on the b a s i s o f their divergent but d y n a m i c r o l e s in w o r l d p o l i t i c s d u r i n g t h e 1 9 8 0 s a n d t h e i r e q u a l l y d i s t i n c tive foreign assistance strategies and programs. T h e y represented widely v a r y i n g l e v e l s o f e c o n o m i c output a n d o t h e r i n d i c a t o r s o f e c o n o m i c a c t i v ity ( s e e T a b l e 2 . 3 ) ; e a c h e x h i b i t e d s t r e n g t h s a n d w e a k n e s s e s in d i f f e r e n t c a t e g o r i e s o f e c o n o m i c p e r f o r m a n c e . In t e r m s o f g r o s s o u t p u t , f o r e x a m p l e , the U n i t e d S t a t e s w a s the p r e p o n d e r a n t e c o n o m i c p o w e r , w i t h a G N P n e a r l y d o u b l e that o f J a p a n a n d l a r g e r t h a n t h e c o m b i n e d G N P o f J a p a n , F r a n c e , a n d S w e d e n . J a p a n e s e G N P g r o w t h w a s g r e a t e s t a m o n g the f o u r in 1 9 9 0 . S w e d e n r e p o r t e d the s l o w e s t p a c e o f e c o n o m i c g r o w t h and the g r e a t est relative l e v e l o f e x t e r n a l debt but a l s o t h e highest per c a p i t a G N P a n d the l o w e s t level o f 1 9 9 0 u n e m p l o y m e n t . F r a n c e , d e s p i t e its large s i z e and a c t i v e r e g i o n a l and g l o b a l r o l e , r e c o r d e d the l o w e s t per c a p i t a i n c o m e and s u f f e r e d the h i g h e s t u n e m p l o y m e n t . In t e r m s o f g o v e r n m e n t s p e n d i n g , an i m p o r t a n t f a c t o r in a n y d i s c u s s i o n o f f o r e i g n - a s s i s t a n c e p o l i c y , S w e d e n r e p o r t e d the g r e a t e s t s p e n d i n g rate, nearly t w i c e that o f J a p a n and the U n i t e d S t a t e s . T h e s e d i f f e r e n c e s in t h e F r e n c h , J a p a n e s e , S w e d i s h , a n d U . S .

eco-

n o m i c profiles are indicative o f the c o u n t r i e s ' broader diversity, located as t h e y a r e o n t h r e e c o n t i n e n t s a n d h a v i n g d i s t i n c t l a n g u a g e s , c u l t u r a l tradit i o n s , and military and political s y s t e m s . Yet these four nations a l s o had m u c h in c o m m o n . T h e y all a c h i e v e d u n p r e c e d e n t e d p r o s p e r i t y d u r i n g the p o s t - W o r l d W a r II p e r i o d , a n d all d i r e c t e d part o f t h e i r w e a l t h

Table 2.3

toward

Economic Profile of ODA Donors

GNP 1989 (in U.S. $ billions) Per capita-GNP (1990)

France

Japan

Sweden

United States

$958

$2,900

$188

$5,100

$21,100

$24,000

$26,000

$21,700

% GNP growth (1987-1990)

3.3

5.2

1.8

3.6

% Unemployment (1990)

9.0

2.1

1.5

5.5

Balance of payments (% 1990 GNP)

-0.7

1.2

-2.6

-1.8

Government spending (% 1989 GNP)

49.7

32.9

60.1

36.1

Source: OECD (1991a : 184)

42

National

Interest and Foreign

Aid

O D A . B y the 1 9 8 0 s their aid p r o g r a m s had b e c o m e c o m p l e x

institutionally

and far-flung geographically. To varying degrees, they generally

adhered

t o a g r e e d - u p o n n o r m s o f O D A b e h a v i o r a n d t o o k an a c t i v e r o l e w i t h i n the coalescing O D A

regime.

In e a c h c a s e , a v e r y d i f f e r e n t s t o r y m a y b e t o l d . T h e s e d o n o r s

con-

fronted f o r e i g n affairs f r o m v e r y different v a n t a g e points, r e f l e c t i n g their resources, societal traditions, political institutions, and broader

relations

with other industrialized and d e v e l o p i n g states. Their O D A programs reflected these differences and s e r v e d as e x t e n s i o n s of them, thus

both

provid-

i n g e v i d e n c e of the linkage b e t w e e n national interest and f o r e i g n aid.

Notes 1. P r i v a t e f i n a n c i a l f l o w s o f $ 9 0 . 5 b i l l i o n e x c e e d e d f o r e i g n a i d ( $ 6 7 . 2 b i l l i o n ) f o r t h e f i r s t t i m e in 1 9 9 2 . I n t e r n a t i o n a l b a n k l e n d i n g m o r e t h a n t r i p l e d b e t w e e n 1991 a n d 1 9 9 2 , f r o m $11 b i l l i o n to $ 3 7 . 7 b i l l i o n ( O E C D , 1 9 9 4 a : 6 5 ) . O n l y six y e a r s e a r l i e r , o f f i c i a l d e v e l o p m e n t f i n a n c e , o f w h i c h O D A is t h e p r i m a r y c o m p o n e n t , r e p r e s e n t e d m o r e than t w i c e the total a m o u n t of p r i v a t e i n v e s t m e n t and c o m m e r c i a l l o a n s t r a n s f e r r e d to d e v e l o p i n g c o u n t r i e s . 2. T h e m o s t w i d e l y a p p l i e d d e f i n i t i o n of an i n t e r n a t i o n a l r e g i m e w a s a r t i c u lated by K r a s n e r ( 1 9 8 2 : 186) as f o l l o w s : R e g i m e s c a n b e d e f i n e d as s e t s o f i m p l i c i t o r e x p l i c i t p r i n c i p l e s , n o r m s , rules, and decision-making p r o c e d u r e s around which actors' expectations c o n v e r g e in a g i v e n a r e a o f i n t e r n a t i o n a l r e l a t i o n s . P r i n c i p l e s a r e b e l i e f s of fact, c a u s a t i o n , and r e c t i t u d e . N o r m s a r e s t a n d a r d s of b e h a v i o r d e f i n e d in t e r m s o f r i g h t s a n d o b l i g a t i o n s . R u l e s a r e s p e c i f i c p r e s c r i p t i o n s o r p r o scriptions for action. D e c i s i o n - m a k i n g procedures are prevailing practices for m a k i n g and i m p l e m e n t i n g collective choice. 3 . D o n o r s t a t e s p l e d g e d in 1 9 7 2 t o c o m m i t o n e q u a r t e r o f O D A in g r a n t f o r m . D e s p i t e the a b s e n c e of s a n c t i o n s a t t a c h e d to this target, n e a r l y e v e r y d o n o r state h a s e x c e e d e d the 2 5 p e r c e n t level of g r a n t aid on a c o n s i s t e n t b a s i s . S o m e aid d o n o r s , including S w e d e n , h a v e o f t e n r e p o r t e d grant e l e m e n t s of 100 p e r c e n t ; the a v e r a g e r a t e a m o n g a l l D A C m e m b e r s in t h e 1 9 8 0 s e x c e e d e d 9 0 p e r c e n t . 4 . S e e W o r l d B a n k ( 1 9 9 1 : 3 3 - 3 5 ) f o r a r e v i e w o f t h e c h a n g e s in d e v e l o p m e n t thought that a c c o m p a n i e d the e v o l u t i o n of the O D A r e g i m e . 5 . P a c k e n h a m ( 1 9 7 3 ) a n d M e i e r ( 1 9 8 4 ) u s e f u l l y d e t a i l t h e m a n n e r in w h i c h t h e i n c i p i e n t U . S . a i d p r o g r a m s w e r e d e s i g n e d to p r o m o t e l e a d e r s ' v i s i o n o f a p o s t war international order. 6. T r a n s f e r s o s t e n s i b l y d e s i g n a t e d f o r W e s t e r n E u r o p e a n r e c i p i e n t s w e r e o f t e n redirected t o w a r d their colonial h o l d i n g s , such as I n d o n e s i a ( N e t h e r l a n d s ) , Indochina (France), and Malaysia (Great Britain). • 7 . A n i n f o r m a t i v e i n s i d e r ' s a c c o u n t o f t h i s p r o c e s s is p r o v i d e d b y A c h e s o n ( 1 9 6 9 ) . S e e K o l k o a n d K o l k o ( 1 9 7 2 ) f o r a c r i t i q u e of T r u m a n ' s m o t i v a t i o n s a n d p e r f o r m a n c e in c o n s t r u c t i n g t h e p o s t w a r o r d e r . 8 . A t its p e a k in t h e e a r l y 1 9 8 0 s , C M E A a s s i s t a n c e a c c o u n t e d f o r a b o u t 6 p e r cent of global O D A f l o w s .

The Setting of ODA

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9 . L D C g r o w t h r a t e s e x c e e d e d the U N g o a l of 5 p e r c e n t d u r i n g t h e 1 9 6 0 s , a v e r a g i n g 6 . 2 p e r c e n t a n n u a l l y b e f o r e s l o w i n g to 5 p e r c e n t in t h e 1 9 7 0 s a n d d e c l i n i n g f u r t h e r in t h e 1 9 8 0 s ( O E C D , 1 9 8 5 a : 2 6 3 ) . 10. M e m b e r s of t h e O E C D i n c l u d e t h e f o u r d o n o r s t a t e s u n d e r s t u d y , a l o n g with Australia, Austria, Belgium, Canada, Denmark, Finland, Germany, Greece, I c e l a n d , I r e l a n d , Italy, L u x e m b o u r g , t h e N e t h e r l a n d s , N e w Z e a l a n d , N o r w a y , P o r t u g a l , S p a i n , S w i t z e r l a n d , T u r k e y , a n d the U n i t e d K i n g d o m . 11. D A C m e m b e r s i n c l u d e all m e m b e r s of the O E C D e x c e p t G r e e c e , I c e l a n d , P o r t u g a l , a n d T u r k e y . T h e C o m m i s s i o n of t h e E u r o p e a n C o m m u n i t i e s is a l s o p a r t of t h e D A C . 12. G a l t u n g ( 1 9 9 1 : 2 8 7 ) p r o v i d e s an i n f o r m a t i v e r e t r o s p e c t i v e of t h e N I E O m o v e m e n t a n d its e x p e r i e n c e s i n c e t h e 1 9 7 0 s . 13. S e e M i k e s e l l ( 1 9 8 3 ) f o r m o r e d e t a i l s o n t h e I B R D ' s e a r l y a c t i v i t i e s . 14. S e e A y r e s ( 1 9 8 3 ) for an a n a l y s i s of t h e W o r l d B a n k ' s i n v o l v e m e n t d u r i n g t h e f o r m a t i v e y e a r s of t h e O D A r e g i m e . 15. U n t i l t h e 1 9 8 0 s , I n d i a w a s b y far t h e w o r l d ' s l e a d i n g O D A r e c i p i e n t , a c c o u n t i n g f o r n e a r l y 12 p e r c e n t of aid f l o w s ( O E C D , 1 9 8 5 a : 1 2 3 ) . A f t e r E g y p t a n d I s r a e l s i g n e d t h e C a m p D a v i d a c c o r d s in 1 9 7 9 , h o w e v e r , t h e i r s u b s e q u e n t a n n u a l i n t a k e of U . S . O D A m a d e t h e m the t o p t w o r e c i p i e n t s . In t h e 1 9 8 2 / 8 3 f i s c a l y e a r , E g y p t a n d I s r a e l a c c o u n t e d f o r 4 . 4 and 4 . 0 p e r c e n t of g l o b a l O D A r e c e i p t s , respectively. 16. S e e t h e I n s t i t u t e f o r E a s t - W e s t S e c u r i t y S t u d i e s ( 1 9 9 2 ) f o r a d e t a i l e d rev i e w of aid t r a n s f e r s to E a s t e r n E u r o p e a n s t a t e s in t h e y e a r s i m m e d i a t e l y f o l l o w i n g t h e i r s e v e r a n c e f r o m the W a r s a w P a c t . 17. S e e a l s o H a n c o c k ( 1 9 8 9 ) , H e l l i n g e r , H e l l i n g e r , a n d O ' R e g a n ( 1 9 8 8 ) , M c N e i l ( 1 9 8 1 ) , P a d d o c k and P a d d o c k ( 1 9 7 3 ) , a n d K a p l a n ( 1 9 6 7 ) . 18. S e e S h a n n o n ( 1 9 8 9 ) , T h o m p s o n ( 1 9 8 3 ) , a n d W a l l e r s t e i n ( 1 9 7 9 ) f o r d e t a i l e d e x a m i n a t i o n s of t h e w o r l d - s y s t e m p e r s p e c t i v e . 19. F o r e l a b o r a t i o n s of t h i s v i e w , s e e C h i l c o t e ( 1 9 8 4 ) , C a r d o s o ( 1 9 7 2 ) , a n d Frank (1966). 2 0 . T h i s d i v e r s i t y of v i e w s w a s a l s o r e f l e c t e d in d i s a g r e e m e n t s a m o n g p o l i t i cal e c o n o m i s t s o v e r t h e p r o c e s s of e c o n o m i c d e v e l o p m e n t in d i f f e r e n t s e t t i n g s . S o m e p e r c e i v e d a l i n e a r p r o c e s s of d e v e l o p m e n t m o r e o r l e s s c o m m o n to all e c o n o m i e s a n d n a t i o n - s t a t e s . W i t h i n t h e C a m b r i d g e S c h o o l of t h e 1 9 4 0 s a n d 1 9 5 0 s , e c o n o m i s t s f o r m u l a t e d u n i v e r s a l m o d e l s by w h i c h " i n p u t s " of f o r e i g n t e c h n o l o g y a n d c a p i t a l w o u l d l e a d , w i t h i n a s p e c i f i e d d e g r e e of v a r i a n c e , to g r e a t e r " o u t p u t s " of L D C e c o n o m i c g r o w t h ( R o s e n s t e i n - R o d a n , 1 9 4 3 ) . O t h e r s d e l i n e a t e d p r o g r e s s i v e s t a g e s of e c o n o m i c d e v e l o p m e n t a n d e n c o u r a g e d i n d u s t r i a l i z e d s t a t e s to a s s i s t L D C s in t h e i r " t a k e o f f " t o w a r d t h e s a m e g r o w t h p a t t e r n s t h e y p r e v i o u s l y e x p e r i e n c e d (Rostow, 1971). Finding fault with this " d e t e r m i n i s t i c " approach, other s c h o l a r s (e.g., M y r d a l , 1971; P r e b i s c h , 1959) a r g u e d that L D C s , especially those recently freed from colonial rule, were f u n d a m e n t a l l y different f r o m established industrial states. Not only were these L D C s e m e r g i n g from distinct historical a n d c u l t u r a l t r a d i t i o n s , but t h e i r c o n t i n u i n g e c o n o m i c a n d p o l i t i c a l s u b o r d i n a tion t o i n d u s t r i a l i z e d c o u n t r i e s c a l l e d f o r a d i f f e r e n t s e t of d e v e l o p m e n t s t r a t e g i e s . T h e s e s c h o l a r s r e c o m m e n d e d that s u c h states s h o u l d p u r s u e i n d e p e n d e n t , s e l f s u f f i c i e n t r o u t e s to e c o n o m i c d e v e l o p m e n t , w i t h e m p h a s i s o n m e e t i n g b a s i c h u m a n n e e d s a n d m i n i m i z i n g their d e p e n d e n c e o n i n d u s t r i a l i z e d c o u n t r i e s . In the a r e a of t r a d e , s e e n as i n h e r e n t l y b i a s e d in f a v o r of t h e w e a l t h y s t a t e s , t h i s led to s u p p o r t f o r a s s e r t i v e s t a t e i n t e r v e n t i o n in e c o n o m i c d e v e l o p m e n t , i m p o r t - s u b s t i t u t i o n s t r a t e g i e s d e s i g n e d to p r o m o t e s e l f - s u f f i c i e n c y , a n d t h e p r o t e c t i o n of L D C s f r o m foreign competitors.

PART 2 Country Studies

3 French ODA: The Projection of Grandeur

A l l my l i f e I h a v e thought o f F r a n c e in a c e r t a i n w a y . T h i s is inspired by s e n t i m e n t as m u c h as by r e a s o n . T h e e m o t i o n a l s i d e o f m e tends to i m a g ine F r a n c e , like the p r i n c e s s in the f a i r y s t o r i e s , o r t h e M a d o n n a in f r e s c o s , as d e d i c a t e d to an e x a l t e d and e x c e p t i o n a l d e s t i n y . I n s t i n c t i v e l y , I h a v e the f e e l i n g that P r o v i d e n c e has c r e a t e d her e i t h e r f o r c o m p l e t e s u c c e s s e s or for e x e m p l a r y m i s f o r t u n e s . If, in spite o f this, m e d i o c r i t y s h o w s in her a c t s and d e e d s , it s t r i k e s m e as an a b s u r d a n o m a l y , to b e i m p u t e d to the faults o f F r e n c h m e n , not to the g e n i u s o f the land. B u t the p o s i t i v e s i d e o f m y mind a l s o a s s u r e s m e that F r a n c e is not r e a l l y h e r s e l f u n l e s s in the front r a n k ; that o n l y v a s t e n t e r p r i s e s are c a p a b l e o f c o u n t e r b a l a n c i n g the f e r m e n t s o f d i s p e r s a l w h i c h are i n h e r e n t in her p e o p l e ; that o u r c o u n try, as it is, s u r r o u n d e d by the o t h e r s , as they are, m u s t a i m high and hold i t s e l f s t r a i g h t , on pain o f m o r t a l d a n g e r . In s h o r t , to m y m i n d , F r a n c e c a n not b e F r a n c e w i t h o u t g r e a t n e s s .

—President Charles de Gaulle

Having recovered from two world wars and foreign occupations in three decades, the French government reemerged during the 1950s as a forceful and independent actor in world politics. De Gaulle, primary architect of the Fifth Republic's constitution, paved a "third way" between the two hemispheric blocs of the postwar era, resisting both U.S. and Soviet overtures and projecting France as a bridge between the industrial countries of the North and the developing states of the South. His successors continued de Gaulle's assertive approach to foreign affairs. In addition to restoring France's social cohesion and domestic infrastructure, they pursued the objectives of détente, entente, et coopération with foreign countries to renew France's prestige as one of the great powers. France's expanding foreign-aid program served as an integral component in this effort to regain the "front-rank" status in world politics that it lost during a seventy-five-year span stretching from the Franco-Prussian War through World War II. Combined with other resources of the Fifth Republic, the foreign-assistance program served as an agent of France's "cultural nationalism" (Grosser, 1967). De Gaulle (1964: 78) declared France's "historic vocation" to assist in the "ascension of all peoples to modern civilization" and articulated these goals as being consistent with the "human

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a n d u n i v e r s a l " a s p i r a t i o n s of F r e n c h c i t i z e n s . " I n t h e m i d s t of w o r l d a l a r m s you can s e e . . . w h a t w e i g h t F r a n c e ' s will can h a v e a g a i n . " 1

The Contours of French Foreign Policy F r a n c e ' s c h a r a c t e r i s t i c a m b i t i o n to b e a m e m b e r of t h e g e o p o l i t i c a l e l i t e d a t e s b a c k s e v e r a l c e n t u r i e s , p e r s i s t i n g d e s p i t e the c o u n t r y ' s t u r b u l e n t a n d o f t e n tragic e x p e r i e n c e s in f o r e i g n a f f a i r s . H a v i n g s u f f e r e d s e v e r e losses in t h e w a r s of L o u i s X I V a n d in the S e v e n Y e a r s ' War, F r a n c e s u b s e q u e n t l y e n d u r e d the c a t a c l y s m s of the F r e n c h R e v o l u t i o n and N a p o l e o n i c w a r s , ann e x a t i o n s by G e r m a n y in t h e F r a n c o - P r u s s i a n War, G e r m a n o c c u p a t i o n d u r i n g t w o w o r l d w a r s , a n d the b r e a k d o w n of c o l o n i a l c o n t r o l in Ind o c h i n a , M a d a g a s c a r , a n d A l g e r i a . Far f r o m s u p p r e s s i n g F r a n c e ' s g l o b a l a s p i r a t i o n s , t h e s e s e t b a c k s o n l y s t r e n g t h e n e d its r e s o l v e . D u r i n g the C o l d War, F r e n c h l e a d e r s s t r u g g l e d f o r g l o b a l i n f l u e n c e e v e r m o r e t e n a c i o u s l y , e x h i b i t i n g a " d i s c r e p a n c y b e t w e e n a m b i t i o n and p o w e r [that w a s ] the m o s t s p e c t a c u l a r trait of F r e n c h p o l i c y a n d s t r a t e g y " ( M a c r i d i s , 1992: 5 0 ) . Alt h o u g h F r a n c e w a s g i v e n o n e of f i v e p e r m a n e n t s e a t s on the U N S e c u r i t y C o u n c i l , its l e a d e r s w e r e e x c l u d e d f r o m m o s t m a j o r - p o w e r d e l i b e r a t i o n s at t h e c l o s e of W o r l d W a r II, i n c l u d i n g t h e Yalta a n d P o t s d a m c o n f e r e n c e s . This treatment, particularly France's exclusion from Franklin Roosevelt's p r o p o s e d " F o u r P o l i c e m e n , " a n t a g o n i z e d de G a u l l e , w h o r e s i s t e d the d i vision of E u r o p e and the b i p o l a r b a l a n c e of global p o w e r that s e r v e d to marg i n a l i z e the c o n t i n e n t ' s role, a l o n g with that of France, in w o r l d politics. P o s t w a r F r a n c e ' s f o r e i g n policy may thus be seen as a legacy of its traditional p r e o c c u p a t i o n w i t h p r o t e c t i n g and p r o j e c t i n g its i n f l u e n c e — p o l i t i cal, e c o n o m i c , a n d c u l t u r a l — w i t h i n a h o s t i l e i n t e r n a t i o n a l s e t t i n g . D a t i n g b a c k to the c e l e b r a t e d h e r o i s m of J o a n of A r c and C h a r l e m a g n e , this e v a n gelical strain of F r e n c h political c u l t u r e inspired the r o m a n t i c u n i v e r s a l i s m of D e s c a r t e s and R o u s s e a u and f o u n d ultimate e x p r e s s i o n in t h e ideals and t e r r o r s of the F r e n c h R e v o l u t i o n . P a r a d o x i c a l l y , the u n i v e r s a l i s t t h e m e s of liberté, égalité, et fraternité w e r e a f f i x e d to the p a r t i c u l a r i s m of F r e n c h nat i o n h o o d and p e r s o n i f i e d b y a s u c c e s s i o n of F r e n c h l e a d e r s . In a t t e m p t i n g to i m p o s e F r e n c h d e s i g n s o n his E u r o p e a n n e i g h b o r s f r o m M a d r i d to M o s c o w , N a p o l e o n r e v e a l e d the e x t r e m e s to w h i c h s u c h i d e a l i s m c o u l d b e a p p l i e d w i t h p u b l i c s u p p o r t . T h e p o w e r of c h a r i s m a t i c a u t h o r i t y w a s e m b o d i e d in the i m m e d i a t e p o s t - W o r l d War II period by de G a u l l e , w h o w a s s o d o m i n a n t that in t h e 1 9 8 0 s a n d 1 9 9 0 s his " l o n g s h a d o w . . . still f a l l s o v e r the F r e n c h political t e r r a i n " ( H o f f m a n n , 1 9 8 4 - 1 9 8 5 : 38). In t h e m a k i n g of f o r e i g n p o l i c y , the e n d u r i n g c o n s e q u e n c e s of G a u l l i s m i n c l u d e d t h e p r i m a c y of the p r e s i d e n t v i s - à - v i s the F r e n c h legisl a t u r e . 2 F o r e i g n p o l i c y w a s le domaine réservé of t h e p r e s i d e n t , w h o s e r v e d a s e v e n - y e a r t e r m a n d w a s the u l t i m a t e g u a r d i a n of F r a n c e ' s s e c u rity a n d p r e s t i g e . 3 D e s p i t e t h e i r p r e e m i n e n c e in f o r e i g n p o l i c y , h o w e v e r ,

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F r e n c h p r e s i d e n t s u n d e r the F i f t h R e p u b l i c g e n e r a l l y c o n f o r m e d to a limited r a n g e of a c t i o n s that w e r e l a r g e l y d e t e r m i n e d by a n d c o n s i s t e n t w i t h t h o s e of their p r e d e c e s s o r s . I n c o m i n g F r e n c h p r e s i d e n t s o f t e n v o w e d to alter r e l a t i o n s w i t h the s u p e r p o w e r s , s h i f t d e v e l o p m e n t s t r a t e g i e s , or purs u e o t h e r d e p a r t u r e s in f o r e i g n policy, b u t i n e v i t a b l y they r e t r e a t e d to previously established positions: " W h e r e a s the internal r e f o r m s have been s w i f t , f a r - r e a c h i n g , and i n n o v a t i v e , s o f o r e i g n policy a p p e a r s c h a r a c t e r i z e d by c o n t i n u i t y " ( S m o u t s , 1983: 155). B y the m i d - 1 9 6 0 s , de G a u l l e h a d e f f e c t i v e l y r e a s s e r t e d t h e F r e n c h p r e s e n c e in w o r l d politics, s t a k i n g o u t a n i n d e p e n d e n t r o l e v i s - à - v i s the C o l d War rivals as well as a m o n g his a l l i a n c e partners in N A T O and the E u r o p e a n C o m m u n i t y . D e G a u l l e initially p r o m o t e d an a c t i v e F r e n c h r o l e within N A T O , but he s o u r e d o n the a l l i a n c e a f t e r his p r o p o s a l s f o r a tripartite " d i r e c t o r a t e " o v e r W e s t e r n s e c u r i t y ( w i t h the U n i t e d S t a t e s a n d G r e a t B r i t a i n ) w e r e r e j e c t e d . T h i s r e b u f f led to the c o n s t r u c t i o n of an i n d e p e n d e n t F r e n c h n u c l e a r p r o g r a m (the force de frappe) a n d the c o u n t r y ' s 1 9 6 6 w i t h d r a w a l f r o m t h e c o m m a n d s t r u c t u r e of N A T O . D e G a u l l e ( 1 9 6 4 : 7 7 ) d e c l a r e d that w i t h i n the " l i v i n g r e a l i t y " of t h e A t l a n t i c A l l i a n c e , " F r a n c e m u s t h a v e her o w n role in it, and her o w n p e r s o n a l i t y . . . . Her destiny, a l t h o u g h a s s o c i a t e d w i t h that of her allies, m u s t r e m a i n in her o w n h a n d s . " A related o b j e c t i v e of F r e n c h l e a d e r s d u r i n g the p o s t - W o r l d W a r II per i o d w a s to r e s t o r e F r e n c h s o c i a l a n d c u l t u r a l c o h e s i o n at h o m e . For d e G a u l l e , h o l d i n g t o g e t h e r the c h r o n i c a l l y p o l a r i z e d s e g m e n t s of F r e n c h d o m e s t i c s o c i e t y w a s j u s t as i m p o r t a n t as f l e x i n g F r e n c h m u s c l e in t h e intern a t i o n a l a r e n a . T h i s p r e o c c u p a t i o n , a b y - p r o d u c t of t h e g e o g r a p h i c a l a n d e c o n o m i c c l e a v a g e s w i t h i n t h e c o u n t r y , h a d l o n g b e e n a c r i t i c a l o n e in F r e n c h d o m e s t i c p o l i c y . D e G a u l l e a c c e p t e d the e n t r e n c h e d d i v i s i o n s bet w e e n f a r m e r s and m a n u f a c t u r e r s , s o c i a l i s t s a n d n a t i o n a l i s t s , P a r i s i a n s and r e s i d e n t s of the " p e r i p h e r y . " B u t , l o o k i n g to f o r e i g n a f f a i r s , he o v e r c a m e t h e s e r i f t s a n d e f f e c t i v e l y r a l l i e d t h e F r e n c h p o p u l a t i o n a r o u n d his o v e r s e a s i n i t i a t i v e s . B y t h e 1 9 9 0 s his l o n g - t e r m o b j e c t i v e of " c o n s e n s u a l c o h a b i t a t i o n " a m o n g rival political parties w a s largely a c h i e v e d . In this m a n ner, the d o m e s t i c t e n s i o n s in F r e n c h p o l i t i c s w e r e " c o u n t e r b a l a n c e d by an assertive foreign policy" (DePorte, 1984: 156). In t h e p o s t - d e G a u l l e e r a , s e v e r a l c o n s i s t e n t s t r a i n s w e r e e v i d e n t in F r e n c h f o r e i g n p o l i c y that r e f l e c t e d e n d u r i n g n a t i o n a l i n t e r e s t s , or, in t h e w o r d s of f o r m e r f o r e i g n m i n i s t e r C l a u d e C h e y s s o n , " c o n t i n u i t y that g o e s b e y o n d m a j o r i t i e s . " P o l i t i c s in this r e s p e c t s t o p p e d at t h e w a t e r ' s e d g e ; France's continuing penchant for domestic divisiveness would contrast w i t h its u n i t e d f r o n t t o w a r d t h e o u t s i d e w o r l d . T h i s a s p e c t of F r e n c h f o r e i g n p o l i c y p r e c e d e d the C o l d W a r a n d r e i n f o r c e d t h e implicit p r e s u m p t i o n that F r a n c e ' s r e g i o n a l s t a t u s a n d w o r l d r o l e , r e g a r d e d as g i v e n a n d t h e r e f o r e u n a l t e r a b l e , d i c t a t e d its f o r e i g n - p o l i c y i n i t i a t i v e s r a t h e r t h a n t h e r e v e r s e . A s M a r t i n o b s e r v e d , " T h e r e is n o d o u b t that an a u t o n o m o u s a n d permanent policy exists, transcending the traditional political cleavages,

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the various regimes and individual political leaders" ( 1 9 8 5 : 190). T h e main priorities of postwar French foreign policy included the promotion of French nationalism as a means to secure domestic support and project regional influence; the m a i n t e n a n c e of strong, independent military defenses, including the independent possession of nuclear w e a p o n s with a triad of air-, land-, and sea-based launching systems; 4 support for regional integration in Europe, with France as a powerful actor within the European Community (renamed the European Union in 1993) and other regional organizations; 5 and support f o r Third World states, particularly f o r m e r French colonies, in their efforts to improve domestic living standards and resist de facto subjugation to other major powers. Whereas U.S. presidents throughout the Cold War interpreted Third World instability as Soviet-inspired, French leaders consistently argued that "it is poverty, oppression, and injustice which clear a path for the Soviet Union" (Smouts, 1983: 166). A f t e r de G a u l l e ' s departure in 1969, his successors adapted foreign policy—and aid strategy—to rapidly changing global conditions. Georges P o m p i d o u , w h o served f r o m 1969 until his death in 1974, w a s more receptive to European integration than de Gaulle, and he w o r k e d actively to bring about the entry of Great Britain into the European C o m m u n i t y in 1973. But his continuation of nuclear testing in the P a c i f i c in the face of regional protests, and his criticism of U.S.-Soviet détente as s u p e r p o w e r " c o n d o m i n i u m , " reflected de G a u l l e ' s contentious a p p r o a c h . 6 T h e initiatives of President Valéry Giscard d ' E s t a i n g between 1974 and 1981 included the g r a n t i n g of i n d e p e n d e n c e to Djibouti (one of the last French possessions in Africa), rapprochement with the United States, and steppedup efforts to promote regional and global arms control. He w a s equally determined, however, to modernize French conventional and nuclear forces in the late 1970s. After his election in 1981, François Mitterrand emphasized social justice and e c o n o m i c equality, while drawing closer to the United States as the Soviet Union w e a k e n e d and ultimately collapsed. 7 In addition to furthering the progress of European integration, whose early pioneers included Frenchmen Jean Monnet and Robert Schuman, Mitterrand worked to bring Germany more closely into a Western European system of collective security. 8 Previously the leader of a socialist-communist coalition in the National A s s e m b l y , Mitterrand c o n c e n t r a t e d on d o m e s t i c r e f o r m s , adopting a p r a g m a t i c approach to f o r e i g n affairs. Of the 110 policy "propositions" advanced by Mitterrand during his 1980 c a m p a i g n for the French presidency, only 19 covered foreign-policy issues. Many of these initiatives, however, called for a greater French role in North-South relations. Mitterrand, w h o previously served as minister for overseas territories, p r o p o s e d an ambitious agenda for France's relations with developing countries. He pledged French support for the New International Economic Order, which had been proposed in the 1970s by L D C s

51

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in t h e U n i t e d N a t i o n s , a n d h e v o w e d to d o u b l e F r a n c e ' s f l o w s o f O D A a n d r e a c h the U N - p r e s c r i b e d 0 . 7 p e r c e n t / G N P l e v e l b y t h e e n d o f h i s f i r s t t e r m . M i t t e r r a n d f u r t h e r s u p p o r t e d g l o b a l n e g o t i a t i o n s f o r the r e d i s t r i b u tion o f w e a l t h f r o m N o r t h to S o u t h , s t a b i l i z a t i o n o f p r i c e s f o r r a w m a t e r i a l s , a n d l o n g - t e r m c o m m o d i t y a g r e e m e n t s a s p r o m o t e d b y L D C s in t h e G r o u p o f 7 7 . T h e s e initiatives s e r v e d the twin p u r p o s e s o f u n d e r s c o r i n g F r e n c h a u t o n o m y in f o r e i g n a f f a i r s a n d s e r v i n g as a s y m b o l o f its g o o d w i l l toward the T h i r d World. W i t h i n F r a n c e ' s m u l t i f a c e t e d aid p r o g r a m , w h i c h s t o o d a s the w o r l d ' s third largest i n t o t h e 1 9 9 0 s , O D A h a d b e c o m e an i m p o r t a n t t o o l in r e v i v i n g the c o u n t r y ' s s t a t u s a b r o a d . F r e n c h l e a d e r s c o n c e n t r a t e d o n their e x i s t i n g s p h e r e s o f i n f l u e n c e in t h e T h i r d W o r l d , p a r t i c u l a r l y in f r a n c o p h o n e A f r i c a , t h e C a r i b b e a n , a n d t h e P a c i f i c . In a d d i t i o n , t h e y lent s u p p o r t to s e v e r a l A r a b s t a t e s in N o r t h A f r i c a a n d t h e M i d d l e E a s t . T h e s e L D C s p r o vided a m u c h - n e e d e d outlet for F r a n c e ' s global aspirations. In m a n y i s s u e a r e a s , M i t t e r r a n d d e p a r t e d f r o m the f o r e i g n p o l i c i e s o f P o m p i d o u a n d G i s c a r d , w h o m he c r i t i c i z e d f o r s u b o r d i n a t i n g F r e n c h n a t i o n a l i n t e r e s t s to i d e o l o g i c a l p o s t u r i n g . M i t t e r r a n d s o u g h t a n d f o u n d a s t r a n g e b e d f e l l o w in R o n a l d R e a g a n , e l e c t e d to o f f i c e in t h e s a m e y e a r . United

by

their

opposition

to

the

Soviet

Union's

intervention

in

A f g h a n i s t a n , its o n g o i n g h e g e m o n y in E a s t e r n E u r o p e , a n d its n e w n u c l e a r w e a p o n s d e p l o y m e n t s in the r e g i o n , M i t t e r r a n d a n d R e a g a n a g r e e d that S o v i e t m i l i t a r i z a t i o n d e m a n d e d a W e s t e r n r e s p o n s e to a c h i e v e a b a l a n c e o f s t r a t e g i c p o w e r o n t h e c o n t i n e n t . M i t t e r r a n d s u c c e s s f u l l y a c h i e v e d an 1 8 p e r c e n t i n c r e a s e in t h e F r e n c h d e f e n s e b u d g e t d u r i n g his first y e a r in o f f i c e a n d w o n a p p r o v a l f o r an e x p a n s i o n o f t h e c o u n t r y ' s n u c l e a r n a v a l f l e e t and the d e v e l o p m e n t o f a m o b i l e ballistic m i s s i l e s y s t e m . T h o u g h skeptical o f the U . S . s t r a t e g i c d o c t r i n e o f e x t e n d e d d e t e r r e n c e , M i t t e r r a n d g r a d u a l l y a c c o m m o d a t e d F r e n c h p o l i c y to that o f t h e U n i t e d S t a t e s a n d N A T O . T h i s a d a p t a t i o n w a s in part d u e to M i t t e r r a n d ' s p e r c e p t i o n o f a w e a k e n i n g A t l a n t i c A l l i a n c e in t h e 1 9 8 0 s , w h i c h l e d to a h e i g h t e n e d c o m m i t m e n t b y F r a n c e a f t e r its y e a r s o f d e t a c h m e n t f r o m N A T O . In o t h e r a r e a s , h o w e v e r , M i t t e r r a n d r e m a i n e d t r u e to t h e t r a d i t i o n o f F r e n c h a u t o n o m y in f o r e i g n policy. M a n y foreign-policy initiatives, for example, were directed toward t h e U . S . s p h e r e o f i n f l u e n c e in L a t i n A m e r i c a : t h e r e c o g n i t i o n o f E l S a l vador's Revolutionary

Democratic

Front as a "representative

political

f o r c e , " t h e s a l e o f a r m s to N i c a r a g u a ' s S a n d i n i s t a g o v e r n m e n t , a b i l a t e r a l p a c t w i t h M e x i c o , a n d a p e r s o n a l a p p e a r a n c e at t h e O c t o b e r 1 9 8 1 C a n c u n C o n f e r e n c e to d i s c u s s aid and s e c u r i t y in C e n t r a l A m e r i c a . F r e n c h f o r e i g n a m b i t i o n s b e c a m e m o r e m o d e s t in t h e l a t e 1 9 8 0 s a n d e a r l y 1 9 9 0 s , a s t h e c o m b i n e d e f f e c t s o f E u r o p e a n i n t e g r a t i o n a n d the e n d o f the C o l d W a r i n f l a m e d m a n y o f the d i v i s i v e a s p e c t s o f F r e n c h p o l i t i c s . O n e c o n s e q u e n c e w a s a d e e p e n i n g t e n s i o n b e t w e e n de G a u l l e ' s g o a l o f i n d e p e n d e n c e a n d the g r o w t h o f i n t e r d e p e n d e n c e as a s a l i e n t f o r c e in i n t e r n a t i o n a l

52

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r e l a t i o n s of t h e p e r i o d . F r a n c e ' s p e r s i s t e n c e in a n u m b e r of d o m e s t i c a l l y d r i v e n e c o n o m i c i s s u e s , s u c h as its o p p o s i t i o n to a C o m m o n A g r i c u l t u r a l P o l i c y ( C A P ) i n j u r i o u s to F r e n c h f a r m e r s , o f t e n c l a s h e d w i t h p r e s s u r e s f o r t r a n s n a t i o n a l c o o r d i n a t i o n . Its a c c o m m o d a t i o n to t h e s e p r e s s u r e s d i d not, h o w e v e r , u n d e r m i n e F r a n c e ' s l o n g - s t a n d i n g n a t i o n a l i n t e r e s t in g r e a t p o w e r s t a t u s , nor d i d it d i s c o u r a g e t h e c o u n t r y ' s b r i d g e b u i l d i n g b e t w e e n North and South.

The Evolution of French Foreign Assistance A s they s h o r e d u p their c o l o n i a l h o l d i n g s i m m e d i a t e l y a f t e r W o r l d War II, French leaders also converted Marshall Plan assistance into their own r a p i d e c o n o m i c d e v e l o p m e n t e f f o r t s . W i t h n e a r l y $ 3 b i l l i o n in U . S . e c o n o m i c a i d , t h e F i f t h R e p u b l i c r e c o n s t r u c t e d its m a n u f a c t u r i n g b a s e and r e e m e r g e d as a p r o m i n e n t e c o n o m i c p o w e r o n the E u r o p e a n m a i n l a n d . D e G a u l l e c i t e d r a p i d i n d u s t r i a l i z a t i o n as a pillar of his p o s t w a r s t r a t e g y and w a s largely s u c c e s s f u l in this g o a l . C l o s e l y related to this e f f o r t w a s the int e g r a t i o n of t h e e c o n o m i e s of F r a n c e a n d f r a n c o p h o n e A f r i c a . U n d e r t h e t e r m s of t h e M a r s h a l l P l a n , F r e n c h l e a d e r s w e r e a l l o w e d to t r a n s f e r a p o r tion of U . S . aid to their c o l o n i e s in A f r i c a to s t i m u l a t e r e g i o n a l e c o n o m i c g r o w t h a n d d e v e l o p m i n e r a l r e s o u r c e s of v a l u e to F r a n c e . T h o u g h the political s t a t u s of t h e s e n e w r e c i p i e n t s w a s t r a n s f o r m e d a f t e r their i n d e p e n d e n c e b e t w e e n 1 9 5 8 a n d 1 9 6 2 , t h e i r e c o n o m i c r e l a t i o n s h i p t o the F r e n c h metropole r e m a i n e d f u n c t i o n a l l y intact. T h i s a s p e c t of F r e n c h rule w a s first s e e n in its N o r t h A m e r i c a n s e t t l e ments d u r i n g the eighteenth century. S u b s e q u e n t l y , through the postN a p o l e o n i c " l o n g p e a c e , " i m p e r i a l r i v a l r i e s w e r e r e p l a c e d by a g l o b a l div i s i o n of c o l o n i a l s p o i l s , a n d F r a n c e a c t i v e l y i n c o r p o r a t e d w i d e l y d i s p e r s e d t e r r i t o r i e s into its e m p i r e : first the t r a n s - A t l a n t i c o u t p o s t s in the C a r i b b e a n ; t h e n t h e f o r m e r O t t o m a n t e r r i t o r i e s in A l g e r i a a n d T u n i s i a ; Ind o c h i n a in t h e 1 8 6 0 s ; a n d , in t h e 1 8 9 0 s , m a n y parts of A f r i c a . T h e " s c r a m b l e f o r A f r i c a " c u l m i n a t e d in t h e c o n t i n e n t ' s s u b j u g a t i o n to E u r o p e a n p o w e r s . B e l g i u m , G e r m a n y , Italy, P o r t u g a l , a n d S p a i n o b t a i n e d s m a l l e r t e r r i t o r i e s in A f r i c a , as F r a n c e a n d G r e a t B r i t a i n b e c a m e t h e p r e e m i n e n t colonial powers. F o r F r a n c e , t h i s e f f o r t led t o c o n t r o l o v e r s i x t e e n A f r i c a n c o l o n i e s c o v e r i n g 1.8 m i l l i o n s q u a r e m i l e s . W h e r e a s t h e B r i t i s h d e c o l o n i z a t i o n process gave Third World dependencies relative autonomy f r o m London, F r e n c h l e a d e r s s t r o v e to i n c o r p o r a t e s u b j u g a t e d r e g i o n s i n t o a G r e a t e r F r e n c h F e d e r a t i o n . T h e y e x t e n d e d t h e r e a c h of t h e F r e n c h l a n g u a g e i n t o t h e s e a r e a s , a l o n g w i t h F r e n c h m e t h o d s of p o l i t i c a l a d m i n i s t r a t i o n . " L o c a l l e a d e r s c o u l d e x p r e s s t h e i r d e m a n d s e f f e c t i v e l y o n l y in a f o r e i g n e r ' s tongue, forcing upon them a significant break with their past," noted

France

53

W e i s k e l ( 1 9 8 8 : 1 1 3 ) . A s t h i s p r o c e s s u n f o l d e d , t h e F r e n c h s o u g h t to i n t e g r a t e t h e p o s t c o l o n i a l e c o n o m i e s , w i t h P a r i s s e r v i n g as t h e i r f i n a n c i a l h u b . F r e n c h o f f i c i a l s c i t e d t h e i r d e s i r e to " F r a n c i f y " t h e c o l o n i a l

populations

as j u s t i f i c a t i o n f o r t h e i r i m p o s i t i o n of F r e n c h c u s t o m s a n d i n s t i t u t i o n s . At the 1 9 4 4 B r a z z a v i l l e C o n f e r e n c e , c o n v e n e d by de G a u l l e , leaders of F r e n c h c o l o n i e s w e r e g r a n t e d n e w p o l i t i c a l f r e e d o m s b u t i n f o r m e d t h a t t h e i r f u t u r e s w o u l d still b e tied to t h a t of a G r e a t e r F r a n c e . E c o n o m i c a n d political assimilation rather than outright i n d e p e n d e n c e w o u l d be acceptable to French colonial rulers. T h i s effort w a s institutionalized politically, as 6 3 of t h e 6 0 0 s e a t s of F r a n c e ' s 1 9 4 6 N a t i o n a l A s s e m b l y w e r e r e s e r v e d f o r c o l o n i a l r e p r e s e n t a t i v e s . ( T h i s r e p r e s e n t a t i o n w a s i l l u s o r y in m a n y c a s e s , as v o t i n g r i g h t s w e r e o f t e n l i m i t e d to F r e n c h i n h a b i t a n t s . ) E l e c t o r a l rules varied widely a m o n g France's colonies, but national political leade r s e n s u r e d t h e p r e s e r v a t i o n of t h e F r e n c h E m p i r e . F r a n c e ' s p o s t w a r c o l o nial d e v e l o p m e n t plan w a s k n o w n by the a c r o n y m F I D E S , Latin f o r " f i d e l i t y , " c a r e f u l l y c h o s e n to r e f l e c t its e f f o r t " t o r e i n f o r c e t h e b o n d b e t w e e n France and her c o l o n i e s " ( M a n n i n g , 1988: 126). J u s t a g e n e r a t i o n a f t e r t h e y w e r e c r e a t e d , t h e F r e n c h f e d e r a t i o n s in A f r i c a r a p i d l y d i s i n t e g r a t e d . A t t h e s a m e t i m e , F r a n c e ' s b e s i e g e d a r m y in I n d o c h i n a w a s w i t h d r a w n a f t e r its 1 9 5 4 d e f e a t at D i e n B i e n P h u ( w i t h t h e b u r d e n of t h e o n g o i n g r e g i o n a l c o n f l i c t b e i n g f a t e f u l l y b e s t o w e d u p o n t h e U n i t e d S t a t e s ) . T h e f o l l o w i n g y e a r F r a n c e r e l i n q u i s h e d its h o l d o n T u n i s i a a n d M o r o c c o , a n d in 1 9 5 6 t h e N a t i o n a l A s s e m b l y a p p r o v e d t h e loi

cadre

( " f r a m e w o r k law"), by w h i c h the president c o u l d grant colonial independ e n c e by executive order. By 1960 de G a u l l e had accepted the independ e n c e of m o s t F r e n c h c o l o n i e s t h r o u g h o u t A f r i c a a n d s u c c e s s f u l l y i n c o r porated the e m e r g i n g

n a t i o n - s t a t e s in a F r a n c Z o n e t h r o u g h

bilateral

" c o o p e r a t i o n a g r e e m e n t s . " (It t o o k d e G a u l l e u n t i l 1 9 6 2 , h o w e v e r , t o e n d t h e d e b i l i t a t i n g s t r u g g l e a g a i n s t A l g e r i a a n d a c c e p t its i n d e p e n d e n c e . ) A f t e r r e t u r n i n g t o p o w e r in 1 9 5 8 , d e G a u l l e d e c l a r e d h i s m i s s i o n " t o r e n e w France's s u b s t a n c e and power, to restore her i n f l u e n c e abroad, and to h a v e h e r play a s i n d e p e n d e n t a n d a c t i v e a r o l e o n t h e w o r l d s t a g e a s t h e world and French resources a l l o w e d " ( H o f f m a n n , 1974: 283). D r a w i n g on t h e e x a m p l e s of R i c h e l i e u a n d L o u i s X I V , h e e m p h a s i z e d t h e i m p o r t a n c e of French national interests as a guidepost for f o r e i g n policy, one interest b e i n g t h e c o n t i n u i n g F r e n c h p r e s e n c e in T h i r d W o r l d e c o n o m i c d e v e l o p m e n t . In t h i s r e s p e c t h e d i s p l a y e d a " c o n s t a n t , a l m o s t p a t e r n a l s o l i c i t u d e for the e c o n o m i c s u f f e r i n g of the poorer c o u n t r i e s " (Willis, 1982: 7). D e Gaulle retained close relations with selected L D C s after their liberation f r o m c o l o n i a l r u l e a s a c e n t r a l p a r t o f his g e o p o l i t i c a l s t r a t e g y of o f f s e t t i n g U . S . a n d S o v i e t p r e p o n d e r a n c e . H e u s e d t h e c a r r o t of O D A t o e n c o u r a g e Third World leaders, including E g y p t ' s G a m a l Abdul Nasser and Indones i a ' s A c h e m S u k a r n o , to a v o i d s u p e r p o w e r a l i g n m e n t s d u r i n g the 1960s. O t h e r recipients of F r e n c h O D A , s t r u g g l i n g w i t h e c o n o m i c d e v e l o p m e n t

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and state-building efforts, were unable to establish sustained growth and remained dependent upon France for support. One of the g o v e r n m e n t ' s most thorough examinations of the French aid program, the 1964 Jeanneney Report, argued for a benevolent approach to foreign aid: "Even if France thought the poverty of others threatened neither her own development nor her security, she would have to assist them, simply because it would be intolerable for her to ignore their fate." Cold War considerations should be explicitly proscribed in future O D A deliberations. The Jeanneney Commission would only concede that "it was theoretically possible that, in the far distant future, aid might produce a few strategic, political, or economic advantages." 9 The report also recommended that far-flung and inefficient aid bureaucracies be centralized and that future flows be geographically diversified to include recipients beyond the Franc Zone. The French government responded to these recommendations by creating the Ministry of Cooperation and Development to oversee the aid program to former French colonies. By the early 1980s this ministry controlled the activities of more than 10,000 French citizens working in recipient countries. In addition, the government created a second organization, the Central Bank for Economic Development, to oversee the distribution of ODA loans. For other LDCs receiving French aid, the Ministry of Economy provided concessional loans and food aid, whereas the Ministry of Foreign Affairs administered technical assistance programs. Though Mitterrand departed from his predecessors' approach to the Cold War adversaries, he maintained their close ties to developing states, particularly former French colonies. This effort persisted despite growing opposition to Mitterrand's domestic agenda, which intensified under worsening economic conditions in France, Western Europe, the United States, and much of the Third World. By the early 1990s this opposition included a growing nationalist movement and the election of a prime minister from the rival Conservative Party. France remained a champion of Third World interests throughout this period, often supporting LDCs in the United Nations when they clashed with the United States and other industrialized states.

Mission Civilisatrice

and Foreign Aid

Unlike the colonial undertakings of other European powers, French involvement in Third World countries was implicitly, and often explicitly, directed toward "enlightening" their inhabitants as to republican rule, egalitarian order, and the rewards of modernity. Leaders in Paris found widespread public support for these efforts, especially as the country recovered from the traumas of world war, foreign occupation, and economic

France

55

disarray. " C u l t u r a l i m p e r i a l i s m , as o p p o s e d to military or e c o n o m i c i m p e rialism, is s o m e t h i n g of w h i c h the F r e n c h are not a s h a m e d , " a s s e r t e d H a y t e r ( 1 9 6 6 : 9). D u r i n g the d e c o l o n i z a t i o n p e r i o d , f o r m e r E u r o p e a n rulers a d o p t e d d i f f e r i n g postures t o w a r d their liberated s u b j e c t s : W h e r e a s England effectively withdrew and pursued other foreign-policy goals, F r a n c e m a i n t a i n e d its c l o s e e c o n o m i c , political, and cultural ties, largely through the v e h i c l e of f o r e i g n a s s i s t a n c e . By the early 1980s it w a s a p p a r ent that France still swaggers in Africa. Twenty years after freeing its colonies, it is the only colonial master who never went home. . . . French civil servants manage African government ministries. French businessmen are building the skyscrapers, the ports, the industry. It is possible in a dozen African cities to sit in a cafe on a boulevard named de Gaulle and scan a copy of Le Monde. (Kronholz, 1981: 1)

F r o m their i n c e p t i o n , t r a n s f e r s of O D A w e r e e x p l i c i t l y d e s i g n e d to p r o m o t e the distinctive characteristics of F r e n c h c u l t u r e , thus c o n t r i b u t i n g to its s e l f - p r o c l a i m e d mission civilisatrice. O n e aid o f f i c i a l o b s e r v e d in 1962 that French a s s i s t a n c e does not s e r v e e c o n o m i c or military interests; instead, " w e have a responsibility b e f o r e H i s t o r y . " A m o n g a b r o a d crosssection of French political elites, " t h e d i s s e m i n a t i o n of the F r e n c h w a y of life and l a n g u a g e w a s c o n c e i v e d as an important i n s t r u m e n t for e n l a r g i n g political i n f l u e n c e and a d v a n c i n g e c o n o m i c interests a b r o a d " ( K o l o d z i e j , 1974: 479). O t h e r p u b l i c s t a t e m e n t s d e m o n s t r a t e d h o w f o r e i g n a s s i s t a n c e w o u l d be p r e d i c a t e d o n " t h e belief that F r a n c e h a s s o m e t h i n g u n i q u e l y v a l u a b l e to c o n t r i b u t e to the world as a w h o l e . . . . [The p r o g r a m r e f l e c t s ] a strong p r o s e l y t i z i n g c o m p u l s i o n that d e m a n d s f r o m the e d u c a t e d F r e n c h man that he a c q u a i n t the b a r b a r i a n s with the a c h i e v e m e n t s of his c o u n t r y ' s t h o u g h t a n d c u l t u r e " ( T i n t , 1972: 164). M i t t e r r a n d , d e s p i t e his m o r e detached f o r e i g n - p o l i c y style, generally " s h a r e d de G a u l l e ' s f a i t h in F r a n c e ' s s p e c i a l m i s s i o n in the w o r l d " ( M o i s i , 1 9 8 1 - 1 9 8 2 : 3 4 7 ; s e e a l s o W i l l i s , 1982). This s e n s e of F r e n c h e x c e p t i o n a l i s m i n f o r m e d both the p r a g m a t i s m of de G a u l l e and M i t t e r r a n d a n d the m o r e idealistic p o l i c i e s of P o m p i d o u and Giscard. In a d d i t i o n to its a i d r e l a t i o n s h i p s , F r a n c e r e t a i n e d b r o a d a n d d e e p e c o n o m i c c o n t a c t s w i t h f o r m e r c o l o n i e s ; it r e m a i n e d by f a r the p r i m a r y m a r k e t for their e x p o r t s and their p r i m a r y s o u r c e of f i n i s h e d g o o d s . R i c e a n d r u b b e r w e r e i m p o r t e d f r o m I n d o c h i n a on a m a s s i v e s c a l e . A f r i c a n p e a n u t and p a l m oil w e r e widely used in the m a n u f a c t u r e of F r e n c h lubric a n t s , f u e l s , and s o a p s . In the 1980s, F r a n c e c o n t i n u e d to i m p o r t m u c h of its s t r a t e g i c m i n e r a l s u p p l y f r o m A f r i c a , i n c l u d i n g 5 0 p e r c e n t of its uran i u m and most of its p r e c i o u s m e t a l s . 1 0 It a g r e e d in F e b r u a r y 1 9 8 2 to increase oil imports f r o m Algeria, even at prices m o r e than 10 percent a b o v e the w o r l d r a t e . " In return, French m a n u f a c t u r e r s e x p o r t e d heavy e q u i p m e n t

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a n d o t h e r f i n i s h e d g o o d s to T h i r d World m a r k e t s , w h e r e a s o t h e r f i r m s provided engineering services, construction m a n a g e m e n t , and other expertise. 1 2 In e x t e n d i n g O D A , F r e n c h l e a d e r s g e n e r a l l y relied u p o n bilateral f l o w s , a n o t e w o r t h y p a t t e r n g i v e n the g r o w i n g p r o p o r t i o n of multilateral aid w i t h i n the g l o b a l O D A r e g i m e . W h i l e p r e s i d e n t , P o m p i d o u d e f e n d e d this practice as an e x t e n s i o n of the overall e f f o r t to extend F r e n c h cultural i n f l u e n c e : "It r e m a i n s t r u e that multilateral aid, in the way it is h a n d l e d in the b i g i n t e r n a t i o n a l o r g a n i s a t i o n s , e n d s u p r e i n f o r c i n g the E n g l i s h lang u a g e . And I repeat we, as F r e n c h m e n , feel a kind of need to maintain the F r e n c h l a n g u a g e . T h i s is a f u n d a m e n t a l r e a s o n f o r m a i n t a i n i n g bilateral a i d . " 1 3 P o m p i d o u a l s o a r g u e d that m u l t i l a t e r a l a s s i s t a n c e w a s g e n e r a l l y m o r e inefficient than bilateral a s s i s t a n c e b e c a u s e it involved m u l t i p l e bur e a u c r a c i e s , o f t e n with c l a s h i n g priorities. C o n t r a r y to c o n v e n t i o n a l wisd o m , he b e l i e v e d that the i n v o l v e m e n t of t r a n s n a t i o n a l a c t o r s r e n d e r e d m u l t i l a t e r a l aid e v e n m o r e political than O D A t r a n s f e r r e d b i l a t e r a l l y bet w e e n d o n o r s and r e c i p i e n t s . T h e c o n c e n t r a t i o n of F r e n c h O D A a m o n g its f o r m e r c o l o n i e s w a s ref l e c t e d in the a d m i n i s t r a t i o n of French assistance, which o v e r s a w s e p a r a t e p r o g r a m s for the m a j o r " a m b i t " recipients and other L D C s . 1 4 T h e Ministry of C o o p e r a t i o n a n d D e v e l o p m e n t , later r e g r o u p e d under the External Relations Ministry, c o o r d i n a t e d a s s i s t a n c e to the thirty recipients in s u b - S a h a r a n A f r i c a and s e v e n C a r i b b e a n states, w h i c h c o l l e c t i v e l y r e c e i v e d b e t w e e n 6 0 and 8 0 p e r c e n t of French d e v e l o p m e n t assistance. In the 1980s, as F r a n c e participated in the O E C D ' s C o n c e r t e d Plan of A c t i o n for the Dev e l o p m e n t of A f r i c a ( C A D A ) , this r e g i o n a l c o n c e n t r a t i o n i n c r e a s e d . Table 3.1 illustrates the g e o g r a p h i c a l c o n c e n t r a t i o n of French O D A in its f o r m e r c o l o n i e s and Départments d'Outre-Mer/Territoires d'Outre-Mer (Overseas D e p a r t m e n t s a n d T e r r i t o r i e s , or D O M / T O M ) . O n e - t h i r d of F r e n c h O D A w a s t r a n s f e r r e d to these recipients in the m i d - 1 9 8 0 s ( O E C D , 1987a: 119). T h e D O M / T O M r e c i p i e n t s c o n s t i t u t e d f i v e of the top six b e n e f i c i a r i e s of F r e n c h O D A ; if they w e r e e x c l u d e d , eight of the r e m a i n i n g top ten recipie n t s w e r e in f r a n c o p h o n e A f r i c a . M e a n w h i l e , the s h a r e of aid f l o w s to o t h e r r e g i o n s r e m a i n e d stable or fell, with Latin A m e r i c a and the M u s l i m s t a t e s of N o r t h A f r i c a a n d the M i d d l e East e x p e r i e n c i n g the g r e a t e s t red u c t i o n s in F r e n c h O D A . F r a n c o p h o n e A f r i c a s e r v e d a p r e d i c t a b l y vital role f o r F r a n c e , g i v e n its g e o g r a p h i c p r o x i m i t y and historic ties to Paris. T h e general a b s e n c e of o t h e r e x t e r n a l i n f l u e n c e s w i t h i n the r e g i o n , at a time w h e n m u c h of the T h i r d World was e n m e s h e d in Cold War c o m p e t i t i o n , f u r t h e r facilitated the F r e n c h strategy. F r a n c e ' s s p h e r e of i n f l u e n c e w a s largely u n c h a l l e n g e d by the s u p e r p o w e r s , thus p r o v i d i n g P a r i s with "a right of entry to the c l u b of w o r l d p o w e r s " ( S t a n i l a n d , 1987: 56). T h e s e f r a n c o p h o n e states established their o w n s y s t e m of regional e c o n o m i c c o o r d i n a t i o n d u r i n g this period, inc l u d i n g the f o r m a t i o n of the A f r i c a n a n d M a l a g a s y C o m m o n O r g a n i z a t i o n

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Table 3.1

Top Ten Recipients of French ODA, 1970-1990

1970-1971

1980-1981

Réunion Algeria Martinique Guadeloupe New Caledonia Morocco Côte d'Ivoire Tunisia Madagascar Guiana

Réunion Martinique New Caledonia French Polynesia Morocco Senegal Côte d'Ivoire Guiana Cameroon Algeria

1989-1990 A Réunion Martinique Côte d'Ivoire New Caledonia French Polynesia Guadeloupe Senegal Morocco Cameroon Madagascar

1989-1990 B Côte d'Ivoire Senegal Morocco Cameroon Madagascar Zaire China Indonesia Mali Gabon

Source: OECD (1991b: 220) Note: Fourth column (year 1989-1990B) excludes French Overseas Departments and Territories (DOM/TOM).

of 1965. M e m b e r s consistently a t t e m p t e d to i n c r e a s e c o m m e r c e with other i n d u s t r i a l i z e d c o u n t r i e s , i n c l u d i n g the U n i t e d S t a t e s , West G e r m a n y , the f o r m e r S o v i e t U n i o n , J a p a n , a n d C h i n a , but their i n t i m a t e ties to P a r i s were carefully preserved. In a d d i t i o n to p r o v i d i n g political a n d e c o n o m i c s u p p o r t , F r a n c e stationed troops in six f r a n c o p h o n e states, i n c l u d i n g the Central A f r i c a n R e public, C h a d , C ô t e d ' I v o i r e , D j i b o u t i , G a b o n , a n d S e n e g a l . French t r o o p s w e r e e n g a g e d in s u p p o r t r o l e s in C a m e r o o n , G a b o n , a n d the C e n t r a l A f r i c a n R e p u b l i c d u r i n g the 1 9 6 0 s a n d s u b s e q u e n t l y in Z a i r e and C h a d . F r a n c e also p r o v i d e d civil a d m i n i s t r a t o r s ( c o o p é r a n t s ) to the f r a n c o p h o n e states and to t h o s e in the M a g h r e b r e g i o n of N o r t h A f r i c a , including M o r o c c o , T u n i s i a , a n d A l g e r i a . A l t h o u g h c r u c i a l to F r a n c e f r o m a s t r a t e g i c p e r s p e c t i v e , the f r a n c o p h o n e states w e r e c h a r a c t e r i z e d by relatively small s i z e s a n d s p a r s e p o p u l a t i o n s . T h e y w e r e a m o n g the p o o r e s t of A f r i c a n states, with half of them f a l l i n g into the World B a n k ' s c a t e g o r y of L L D C s . T h e r e g i o n d e p e n d e d a l m o s t e n t i r e l y u p o n a g r i c u l t u r e o r m i n i n g ; only in S e n e g a l , B u r k i n a F a s o , and C ô t e d ' I v o i r e did m a n u f a c t u r i n g a c c o u n t for m o r e than 10 p e r c e n t of g r o s s national p r o d u c t . H o w e v e r , t h è s e r e c i p i e n t s o f f e r e d v a r i o u s a d v a n t a g e s to F r a n c e , inc l u d i n g reliable d e s t i n a t i o n s for e x p o r t s a n d s o u r c e s of r a w m a t e r i a l s . U n d e r the g u i d e l i n e s of the F r a n c Z o n e , F r a n c e s e r v e d as a s u p r a n a t i o n a l central b a n k t h r o u g h w h i c h a c o m m o n c u r r e n c y w a s tied to the F r e n c h f r a n c a n d g u a r a n t e e d by the F r e n c h t r e a s u r y . By w e d d i n g its o w n f i s c a l p o l i c y to that of the F r a n c Z o n e , F r a n c e a t t e m p t e d to p r e s e r v e m o n e t a r y s t a b i l i t y t h r o u g h o u t the r e g i o n . C o n c u r r e n t l y , it c o o r d i n a t e d f i n a n c i a l f l o w s w i t h i n the r e g i o n ; regulated the m e m b e r s ' b a n k i n g , credit, and fiscal policies; provided emergency credit when necessary; subsidized private

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investments to Franc Zone members; and offered tax breaks to private companies doing business in the region. For their part, member states were required to hold at least 65 percent of their monetary reserves in the French central bank. In addition, their monetary stability was linked to the often volatile exchange rates of the franc on world markets. And given the critical functions they granted to France, the African nation-states effectively sacrificed a degree of autonomy over domestic macroeconomic policy, with uncertain consequences and implications. 15 In terms of its impact on total economic activity, trade between France and its African clients was far more significant for the latter. Trade with Africa amounted to less than 3 percent of France's total commerce during the decade, and the region absorbed less than 20 percent of French foreign investment to LDCs. As for the members of the Franc Zone, however, trade with France made up about 50 percent of their total. France consistently ran a surplus in excess of 10 billion francs with these partners, of whom three—Cameroon, Cote d'lvoire, and Gabon—were involved in a preponderant share of Franco-African trade. Thus, paradoxically, commercial ties between the two regions affected the economies of Africa more significantly than that of France, but "the benefits of these interchanges [were] asymmetrical, helping the French more than the Africans" (Boyd, 1982: 46). 1 6 As some critics and the Jeanneney Report concluded, French postwar aid policy was self-limiting and needed to extend beyond francophone Africa if France were to become a champion of North-South cooperation on a global scale. Thus, efforts were made to diversify the recipients of ODA, resulting in larger transfers to Latin America, India, and Pakistan. But the geographical concentration and social-cultural orientation remained largely intact.

French ODA in Practice Let us now review the empirical record of French ODA during the 1980s and consider its relationship to the country's broader foreign-policy goals. As previously noted, French leaders accelerated their ODA efforts during the decade. After its share of global ODA flows had fallen between 1970 and 1980, French aid expanded steadily during the ensuing ten years. The 4.9 percent growth rate of French ODA, in fact, was the fourth highest among DAC members during the period (OECD, 1991a: 139), propelling France to the front rank of aid donors (see Table 3.2). Aggregate French ODA transfers during fiscal year 1989/90 were twice the 1970 level and represented a 60 percent increase from the level at the beginning of the 1980s. Its 1989-1990 ODA flows of $7.6 billion exceeded those of other European donors, including Germany ($5.1 billion), Italy ($3.2 billion), Great Britain ($2.4 billion), the Netherlands ($2.1 billion), and Sweden ($1.7 billion). 17

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As noted previously, the sustained g r o w t h of F r a n c e ' s aid p r o g r a m during the decade, in absolute as well as relative terms, reflected Mitterrand's desire to play a more active role in North-South relations, particularly at the regional level. Domestically, F r a n c e ' s more assertive approach to O D A was evident during a period in which it s u f f e r e d from a negative balance of payments and sluggish annual e c o n o m i c growth. 1 8 France experienced the lowest per capita G N P levels and the highest unemployment rates of the four d o n o r states under r e v i e w in this study (see Chapter 2). Thus, its O D A activism placed a heavier burden on its population relative to that of other donor states. As a percentage of French GNP, O D A o u t l a y s reached their highest level in the final year under review, a pattern that applied to both categories of French aid—i.e., including or e x c l u d i n g the D O M / T O M recipients, which annually received disproportionate v o l u m e s of French aid. If aid to the D O M / T O M recipients was excluded (the preferred approach for most analysts of French O D A ) , the O D A / G N P proportion rose 58 percent d u r i n g the decade. T h i s pattern was also e v i d e n t with regard to the proportion of global O D A represented by French f l o w s . In this case, the French share of O D A to n o n - D O M / T O M recipients increased by 28 percent during the 1980s, returning France to the level maintained into the 1970s of approximately 10 percent of global O D A . When D O M / T O M recipients were included, the level during the final year of the 1980s approached but did not reach the 14.8 percent peak of 1 9 7 0 - 1 9 7 1 . Figure 3.1 illustrates the disproportionate share of French O D A transferred to recipients in francophone Africa during the 1980s. Not only did the region receive the largest share of French O D A (more than 50 percent in 1990), aggregate flows during the decade steadily increased, whereas those to other regions (particularly Latin America) remained static or declined.

T a b l e 3.2

F r e n c h O D A T r a n s f e r s , 1970-1990 ODA Commitment 3

Percent GNP

Share of World ODA

1970-1971

3,782 (2,405) b

0.68 (0.43)

14.8 (9.4)

1980-1981

5,261 (3,326)

0.67 (0.43)

9.5 (6.0)

1989-1990

7,614 (5,305)

0.78 (0.55)

13.6 (9.5)

Source: OECD (1991a) Notes: a. ODA commitment in millions of current U.S. dollars b. Aid flows excluding those to Overseas Departments and Territories (DOM/TOM) listed in parentheses

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Figure 3.1 Direction of French ODA, 1980-1990 (Geographical Distribution, Percentage)

p

M

_ 1 • m ' • I

Sub-Saharan Africa

South Asia

Other Asia

Mideast, North Africa

Latin America

Legend H

1979-80

|

1984-85

¡g

1989-90

Source. OECD (1991a: 180)

When we consider the purposes to which French aid was directed, we find that technical assistance in support of political infrastructure was utilized most often during the 1980s (see Figure 3.2). The 40 percent level in 1988-1989 was the highest percentage of any DAC member for such purposes, which included engineering and construction of schools, government buildings, and other public facilities. Support for economic infrastructure (21 percent of ODA in 1988-1989) represented the secondary function of French aid, whereas efforts to promote industry and agriculture received less than 10 percent of bilateral ODA outlays and direct food aid just 1 percent. The concentration of assistance in the area of political infrastructure clearly illustrates the French government's emphasis on state building within the francophone countries; such assistance often involved the direct participation of French coopérants, 10,000 of whom fulfilled their obligatory national service in these projects annually during the 1980s. 19 As noted previously, actors within the global ODA regime monitored not only the quantity of assistance transfers but also their "quality," or the degree to which they directly addressed the basic human needs of LDC populations. Throughout the 1980s, the French government declared its intention to improve its aid quality, pledging at the 1981 UN Conference on the Least Developed Countries that it would target increasing shares of

France

F i g u r e 3.2

61

U s e s of F r e n c h O D A

( F u n c t i o n a l D i s t r i b u t i o n , 1988/1989)

I Economic Infrastructure I Political Infrastructure Agriculture

Industry

I Food Aid

Structural Adjustment or Unrestricted

Other

Source: O E C D (1991a: 181)

O D A to the p o o r e s t of s o c i e t i e s . In t h r e e of t h e f o u r c a t e g o r i e s of O D A quality, h o w e v e r , F r e n c h f l o w s at the e n d of the d e c a d e g e n e r a l l y r a n k e d b e l o w the D A C a v e r a g e ( s e e T a b l e 3.3). W h e r e a s m o s t D A C m e m b e r s g e n e r a l l y i m p r o v e d d e m o n s t r a b l e aid q u a l i t y d u r i n g the 1980s, the teny e a r pattern of F r e n c h f l o w s r e f l e c t e d a relatively static pattern. In t e r m s of the r e l a t i v e g r a n t e l e m e n t of O D A o u t l a y s , as o p p o s e d to l o w - i n t e r e s t loans, F r e n c h aid f l o w s b e g a n the 1 9 8 0 s a b o v e the D A C ave r a g e but fell b e l o w it in the latter half of the d e c a d e . W h e r e a s the g r a n t e l e m e n t of D A C f l o w s i n c r e a s e d t h r o u g h o u t t h e p e r i o d to a p e a k of 9 3 p e r c e n t at d e c a d e ' s e n d , the g r a n t e l e m e n t of F r e n c h f l o w s a c t u a l l y d e c r e a s e d b e t w e e n 1 9 8 0 a n d 1 9 8 6 b e f o r e r i s i n g in the f i n a l t h r e e y e a r s . E v e n t h e n , h o w e v e r , F r a n c e ' s g r a n t e l e m e n t fell s h o r t of the D A C a v e r a g e . In a n o t h e r c l o s e l y w a t c h e d q u a l i t a t i v e a r e a , the p r o p o r t i o n of u n t i e d F r e n c h d e v e l o p m e n t aid r e m a i n e d c o n s i s t e n t d u r i n g the p e r i o d , a v e r a g ing a b o u t 4 1 p e r c e n t . V i e w e d a n o t h e r w a y , a p p r o x i m a t e l y 6 0 p e r c e n t of F r e n c h O D A w a s tied to the a c q u i s i t i o n of F r e n c h g o o d s or s e r v i c e s in the 1 9 8 0 s . T h i s c o n s i s t e n c y w a s u n u s u a l a m o n g D A C m e m b e r s in g e n e r a l , w h o s e p r o p o r t i o n of untied O D A fell d r a m a t i c a l l y in the latter half of the d e c a d e , m a r k i n g an e x c e p t i o n to the g e n e r a l r u l e of i n c r e a s i n g O D A q u a l ity d u r i n g the p e r i o d .

62

Table 3.3

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Studies

Quality of French ODA, 1980-1989 Grant Element (% ODA)

Untied Aid (% ODA)

Multilateral Aid (% ODA)

Aid to LLDCs (% ODA)

1980

80.9 (75.2) a

42.7 (50.3)

15.3 (28.5)

16.0 (21.6)

1983

79.0 (78.8)

40.3 (45.9)

15.0 (31.3)

18.1 (21.8)

1986

78.2 (87.0)

42.2 (33.4)

18.4 (28.1)

18.2 (23.4)

1989

90.2 (92.8)

40.2 (36.5)

17.0 (27.2)

18.0 (22.4)

Sources: OECD (1982b, 1985b, 1988b, 1991b) Note: a. Figures in parentheses are DAC averages

For F r a n c e , as in o t h e r a r e a s of O D A b e h a v i o r , the t y i n g of aid w a s m a r k e d by a t w o - t r a c k p o l i c y . W h e r e a s its l e a d e r s g e n e r a l l y did not tie O D A t r a n s f e r s to F r a n c Z o n e r e c i p i e n t s , f l o w s to o t h e r r e c i p i e n t s w e r e m o r e o f t e n linked to r e c i p r o c a l o b l i g a t i o n s . A l t h o u g h aid to m e m b e r s of the F r a n c Z o n e w a s o f t e n formally untied, the w e b of fiscal, m o n e t a r y , a n d c o m m e r c i a l l i n k a g e s b e t w e e n the two r e g i o n s e f f e c t i v e l y tied their aid relationships. F r a n c e ' s p r e o c c u p a t i o n with its o v e r s e a s territories a n d F r a n c Z o n e r e c i p i e n t s w a s a l s o m a n i f e s t e d in its relatively low levels of m u l t i lateral O D A d u r i n g the 1 9 8 0 s . French multilateral t r a n s f e r s , t h o u g h r i s i n g slightly d u r i n g the p e r i o d , r e m a i n e d b e l o w the 2 0 p e r c e n t level, w h e r e a s the D A C a v e r a g e s t o o d c o n s i s t e n t l y in the r a n g e of 2 7 to 31 p e r c e n t . A s w e h a v e seen, multilateral O D A is g e n e r a l l y v i e w e d as less political than b i l a t e r a l f l o w s , w i t h r e c i p i e n t s s u b j e c t e d to less p r e s s u r e or c o e r c i o n by their O D A b e n e f a c t o r s . Finally, French O D A f l o w s to the L L D C s w e r e consistently lower than the D A C a v e r a g e t h r o u g h o u t the period under study. F r a n c e ' s c o n t r i b u t i o n to these " F o u r t h W o r l d " r e c i p i e n t s did not e x c e e d 18.2 p e r c e n t of its total O D A , w h e r e a s the D A C a v e r a g e did not fall b e l o w 21 percent. F r e n c h o f ficials, however, s o f t e n e d the terms of aid to L L D C s , w h i c h b e c a m e s u b j e c t to separate qualitative s t a n d a r d s within the aid regime. Additionally, F r e n c h aid to L L D C s w a s t r a n s f e r r e d entirely in g r a n t f o r m by the e n d of the d e c a d e . A n d in 1989, F r a n c e a n n o u n c e d it w o u l d cancel nearly $ 3 billion in o u t s t a n d i n g debts incurred by the poorest recipients in s u b - S a h a r a n A f r i c a . In s h i f t i n g our a t t e n t i o n to the r e g r e s s i o n m a t r i x ( s e e T a b l e 3.4), w e o b s e r v e most clearly the s t r o n g indication of F r e n c h e c o n o m i c interest in its O D A r e l a t i o n s h i p s . F r e n c h bilateral trade c o - v a r i e d w i t h aid f l o w s at a

63

France

s t a t i s t i c a l l y s i g n i f i c a n t l e v e l in e i g h t o f t h e t e n y e a r s u n d e r s t u d y . T h i s statistical pattern o f F r e n c h aid f o l l o w i n g F r e n c h trade p r o v i d e s f u r t h e r e v i d e n c e o f the e c o n o m i c n e x u s t h r o u g h t h e 1 9 8 0 s . France's

trading partners during this period w e r e primarily

other

m e m b e r s o f the E u r o p e a n C o m m u n i t y , w i t h W e s t G e r m a n y , Italy, B e l g i u m , and the U n i t e d K i n g d o m s e r v i n g a s t h e m a j o r r e c i p i e n t s o f F r e n c h e x p o r t s (International Monetary Fund, 1991).2,1 A m o n g developing regions, Africa conducted

the g r e a t e s t

volume

o f trade

with

France.

Morocco,

Côte

d ' I v o i r e , C a m e r o o n , S e n e g a l , a n d G a b o n — a l l a m o n g the top ten r e c i p i e n t s o f F r e n c h d e v e l o p m e n t a s s i s t a n c e — w e r e a l s o its m o s t a c t i v e T h i r d W o r l d t r a d i n g p a r t n e r s . R é u n i o n , w h i c h r e c e i v e d the l a r g e s t v o l u m e s o f F r e n c h O D A b e t w e e n 1 9 7 0 and 1 9 9 0 , w a s also a m a j o r importer o f F r e n c h g o o d s ; its total i m p o r t s a m o u n t e d to $ 4 7 0 m i l l i o n in 1 9 8 5 a n d $ 1 b i l l i o n in 1 9 8 9 . F r e n c h trade w i t h A s i a and L a t i n A m e r i c a , by c o m p a r i s i o n , r e m a i n e d r e l a t i v e l y m o d e s t until t h e e n d o f t h e d e c a d e , w h e n t h e F r e n c h g o v e r n m e n t a p p r o v e d l a r g e - s c a l e e x p o r t a g r e e m e n t s w i t h A s i a n c o u n t r i e s . F r a n c e in 1 9 8 9 e x p o r t e d a p p r o x i m a t e l y $ 1 b i l l i o n w o r t h o f g o o d s to C h i n a , I n d i a , Hong K o n g , S i n g a p o r e , S o u t h K o r e a , and Saudi Arabia. A m o n g

these

c o u n t r i e s , o n l y C h i n a w a s a m a j o r r e c i p i e n t o f F r e n c h O D A . A l s o in that y e a r , F r a n c e r e c o r d e d g r e a t l y i n c r e a s e d e x p o r t s to its L a t i n A m e r i c a n territories o f G u a d e l o u p e ( $ 9 3 8 m i l l i o n ) and Martinique ( $ 8 5 8 m i l l i o n ) , e a c h o f which received large transfers o f O D A . A negative statistical r e l a t i o n s h i p b e t w e e n F r e n c h O D A transfers and r e c i p i e n t l i f e - e x p e c t a n c y in e i g h t o f t h e t e n y e a r s s u g g e s t s t h a t F r a n c e ' s e c o n o m i c interests were c o m p a t i b l e with a concurrent humanitarian interest served by O D A t r a n s f e r s to n o n - D O M / T O M r e c i p i e n t s . F r e n c h aid was directed toward states with relatively low per capita life e x p e c t a n c i e s , a pattern that p e r s i s t e d e v e n a f t e r o t h e r p o s s i b l e c o n s i d e r a t i o n s w e r e c o n t r o l l e d for. T h e a v e r a g e l i f e e x p e c t a n c y for the top ten r e c i p i e n t s o f F r e n c h O D A w a s 5 4 . 6 y e a r s in 1 9 8 8 , m u c h l o w e r t h a n the w o r l d w i d e a v e r a g e o f 6 4 years (World B a n k , 1 9 9 0 : 1 7 8 ) . L i f e e x p e c t a n c i e s within this g r o u p o f r e c i p i e n t s r a n g e d f r o m 4 7 in t h e c a s e o f Z a i r e to 7 0 in t h e c a s e of China. T h i s r e l a t i o n s h i p is far w e a k e r , h o w e v e r , w h e n D O M / T O M n a t i o n s a r e a d d e d to t h e s e t o f p r i m a r y F r e n c h O D A r e c i p i e n t s . T h e a v e r a g e l i f e e x p e c t a n c y in t h i s c a s e w a s 6 2 . 8 y e a r s , c l o s e r to t h e w o r l d w i d e

average.

W i t h i n this g r o u p , i n h a b i t a n t s o f M a r t i n i q u e l i v e d an a v e r a g e o f 7 5 y e a r s , Guadeloupe 7 4 years, French Polynesia 7 2 years, Réunion 71 years, and N e w C a l e d o n i a 6 8 y e a r s . 2 1 T h u s , the r e l a t i o n s h i p b e t w e e n F r e n c h

ODA

a n d the h u m a n i t a r i a n n e e d s o f r e c i p i e n t s is f a r d i f f e r e n t w h e n D O M / T O M c o u n t r i e s are a c c o u n t e d for. T h i s d i s c r e p a n c y has b e e n a s o u r c e o f c o n t e n t i o n b e t w e e n t h e F r e n c h g o v e r n m e n t , w h i c h p r e f e r s to e x c l u d e

the

D O M / T O M r e c i p i e n t s f r o m its aid s t a t i s t i c s , and t h e O E C D , w h i c h d o c u ments overall French aid.

64

Table 3.4

Country

Studies

French O D A and Recipient Characteristics: Multivariate Relationships (Figures indicate standardized s l o p e coefficients) 1980

1981

1982

1983

Humanitarian-Interest Life expectancy Caloric consumption

-.40" .22

1985

1986

1987 1988

1989

Variables

-.46

-.41

-.41

-.27

-.58

-.29

-.42

-.53

-.51

.17

.14

.28

.03

.35

.06

.32

.33

.18

Security-Interest Military spending Conscripted population

1984

Variables

-.19

.17

-.09

.15

-.13

-.01

.20

.05

.61

.26

-.17

-.01

-.10

-.20

-.06

-.09

-.20

-.22

-.30

-.22

Economic-Interest

Variables

GNP Trade with France

.16

.23

.16

-.23

.10

.05

.01

-.12

-.20

.01

.58

.36

.42

.44

.35

.24

.34

.34

.25

.42

Total R 2

.51

.34

.35

.36

.19

.26

.26

.26

.53

.41

Sources: U.S. ACDA (security-interest variables); IMF (trade variable); OECD (aid transfers [dependent variables]); World Bank (all other variables) Note: a. Underlined figures indicate significance at .05 level; double-underlined figures indicate significance at .01 level

A m o n g the n o n - D O M / T O M recipients, daily per capita consumption a v e r a g e d 2,441 calories in 1989, about 11 percent below the w o r l d w i d e a v e r a g e rate of 2,711 calories. T w o of F r a n c e ' s primary recipients, Morocco (3,020) and Indonesia ( 2 , 7 5 0 ) , e x c e e d e d the w o r l d w i d e average, whereas two others, Cote d ' l v o i r e (2,577) and China (2,639), exceeded the average per capita consumption of low-income countries as defined by the World Bank. As reflected in the statistical analysis, this measure of recipient need did not relate significantly to F r a n c e ' s distribution of development assistance in the decade under study. Statistical analysis reveals no direct link b e t w e e n security interests and French O D A f l o w s . Aid transfers were not disproportionately directed to recipients with large conscription rates or levels of military spending. A m o n g the ten leading recipients of French O D A in 1 9 8 9 - 1 9 9 0 (excluding the D O M / T O M recipients), conscription rates averaged 3.1 per 1,000 citizens during the 1980s, far below the w o r l d w i d e average of 5.9 per 1,000. T h e conscription rates ranged f r o m 0.9 in the case of Cote d ' l v o i r e to 8 in the case of Gabon. In terms of absolute levels of military spending, most of these recipients spent less than $ 2 0 0 million annually on defense; the obvious exception to this pattern w a s China, which averaged $23 billion in military spending during the ten-year period. 2 2

65

France

T h e general a b s e n c e o f a relationship b e t w e e n F r e n c h O D A and rec i p i e n t m i l i t a r i z a t i o n is u n d e r s t a n d a b l e g i v e n t h e g e o g r a p h i c a l c o n c e n t r a tion o f F r e n c h O D A a m o n g s t a t e s w i t h i n F r a n c e ' s s p h e r e o f i n f l u e n c e in f r a n c o p h o n e A f r i c a . A s part o f its b r o a d e r e m b r a c e o f t h e r e g i o n , F r a n c e provided for the security o f these states, either indirectly through security g u a r a n t e e s o r d i r e c t l y t h r o u g h the p r e s e n c e o f F r e n c h t r o o p s . U n l i k e p r i m a r y r e c i p i e n t s o f U . S . O D A , w h i c h w e r e o f t e n l o c a t e d o n the f r o n t l i n e s o f regional conflicts, F r a n c e ' s primary recipients remained generally sheltered from military e n g a g e m e n t s . I m p o r t a n t l y , h u m a n i t a r i a n and e c o n o m i c l i n k a g e s to f o r e i g n a s s i s t a n c e w e r e e x p l i c i t l y s o u g h t b y F r e n c h l e a d e r s d u r i n g the e a r l y s t a g e s o f F r e n c h i n v o l v e m e n t in the O D A r e g i m e . A s t h e 1 9 7 5 Abelin

Report

( q u o t e d in

Evans, 1 9 8 9 : 1 3 6 ) stated, O u r aim is o n e o f mutual b e n e f i t ; w e must a f f i r m in f r a n k n e s s and w i t h out any s e n s e o f guilt that F r a n c e intends to d e v e l o p its c o m m e r c i a l and cultural r e l a t i o n s with t h o s e r e g i o n s o f the w o r l d w h o s e human d e v e l o p m e n t it w i s h e s to foster, not only by reason o f their raw m a t e r i a l s but also o f their human r e s o u r c e s , their g e o g r a p h i c a l i m p o r t a n c e and their historical e c h o e s .

In t h i s s e n s e , F r e n c h b e h a v i o r in t r a n s f e r r i n g d e v e l o p m e n t a s s i s t a n c e d u r i n g the 1 9 8 0 s w a s c o n s i s t e n t w i t h t h e s t a t e d o b j e c t i v e s o f its l e a d e r s , w h o o p e n l y e q u a t e d F r e n c h n a t i o n a l i n t e r e s t s w i t h t h o s e o f its aid r e c i p i e n t s and tailored aid f l o w s to serve these c o l l e c t i v e interests. French leaders g e n e r a l l y a c k n o w l e d g e d the g e o g r a p h i c and f u n c t i o n a l c o n c e n t r a t i o n s o f O D A a s w e l l a s its c r u c i a l r o l e in f u r t h e r i n g F r a n c e ' s s e l f - i n t e r e s t s .

Summary A s i l l u s t r a t e d in t h i s c h a p t e r , F r a n c e ' s p r e o c c u p a t i o n w i t h d o m e s t i c c u l tural

traditions,

a common

and

long-standing

national

characteristic,

r e e m e r g e d w i t h t h e c o u n t r y ' s p h y s i c a l v i t a l i t y in t h e f i r s t d e c a d e

after

W o r l d W a r II. T h e s e " p o l i t i c s o f g r a n d e u r " ( C e r n y , 1 9 8 0 ) f o u n d e x p r e s s i o n in t h e F r e n c h l a n g u a g e a n d w i t h i n F r a n c e ' s p o l i t i c a l , e c o n o m i c ,

educa-

tional, and religious institutions. M o r e specifically, they found expression in F r a n c e ' s p r o g r a m o f s u p p o r t i n g i m p o v e r i s h e d c o u n t r i e s t h r o u g h O D A . A s S m o u t s o b s e r v e d , " D e v e l o p m e n t aid p o l i c y a n d t h e pursuit o f a m o r e e q u i t a b l e international e c o n o m i c order represent the extension onto the o u t s i d e w o r l d o f the p o l i c y o f s o c i a l j u s t i c e p r o c l a i m e d at h o m e " ( 1 9 8 3 : 1 6 4 ) . A m o n g its m o s t i m p o r t a n t o b j e c t i v e s , t h e F i f t h R e p u b l i c s o u g h t to s e c u r e F r a n c e ' s p r o m i n e n c e a m o n g the great p o w e r s through the pursuit o f an i n d e p e n d e n t f o r e i g n p o l i c y . F r a n c e ' s n u c l e a r force fusal

to a b o l i s h

nuclear

testing

or sign

the

de frappe

( a n d its r e -

nonproliferation

treaty),

66

Country

Studies

de G a u l l e ' s appeals to French nationalism in Q u e b e c and other outposts, his early challenges to U.S. and NATO strategic doctrine, and French leade r s ' public criticism of Soviet h e g e m o n y in Eastern Europe and A f g h a n i s t a n all attest to the a u t o n o m o u s strain in French foreign policy. With regard to the Third World, France pursued a two-track aid strategy based upon its traditional interests. Its leaders actively supported French overseas territories, many of which did not s u f f e r living standards as low as those found in other LDCs, and they transferred much of their remaining O D A resources to f r a n c o p h o n e states in A f r i c a with long-standing cultural and s o c i o e c o n o m i c ties to Paris. In both cases, e c o n o m i c relationships between donor and recipient remained close, extending beyond aid to bilateral trade, to the purchase of French goods and services, and to French c o o r d i n a t i o n in their social and political d e v e l o p m e n t . Observed Boyd, " W h e t h e r aid of this sort is designed to help the people of the Third World more than it helps French firms and nationals is a debatable point, but that the French use their aid and investment policies to keep their cultural, political, and e c o n o m i c ties with the Third World viable is a c e r t a i n t y " (1982: 51). Whereas de Gaulle exhibited a paternalistic attitude toward the states of s u b - S a h a r a n A f r i c a , never personally v e n t u r i n g south of the M a g h r e b region after 1958, his successors visited f r a n c o p h o n e states on a regular basis and c o n v e n e d annual F r a n c o - A f r i c a n s u m m i t meetings to discuss matters of mutual concern. French attention to its regional sphere of influence remained a central element of its foreign policy after the Cold War ended and a new era of world politics emerged. 2 3 To Kissinger (1994), this behavior reflected a well-established historical pattern: France's penchant for associating with countries ready to accept its leadership has been a constant factor in French foreign policy since the Crimean War. Unable to dominate an alliance with Great Britain, Germany, Russia, or the United States, and considering junior status incompatible with its notions of national grandeur and its messianic role in the world, France has sought leadership in pacts with lesser powers.

From de Gaulle to Mitterrand, four French heads of state consistently applied ODA to a discernible and enduring set of national interests. In the 1980s, French O D A assumed an especially vital role in the pursuit of those interests, responding to needs a m o n g French clients f o r assistance during a time of growing economic instability in both North and South. As France continued to focus on f r a n c o p h o n e Africa in its O D A policies, newly unified Germany b e c a m e the primary donor of concessional development assistance to Russia and other incipient nation-states in Eastern Europe. Whether a long-term division of O D A resources will form along these geographical lines and what its implications will be for European foreign relations are compelling questions in the 1990s.

France

67

Notes I . Like his p r e d e c e s s o r s , de Gaulle s a w F r a n c e as "the central s o u r c e of European intellectual i n s p i r a t i o n " and c o n s e q u e n t l y v i e w e d his d i p l o m a t i c c o r p s as " l e a d e r s and g u i d e s " of the world, not " m a s t e r s or aspirants to m a s t e r y " ( D e P o r t e , 1984: 150). 2. T h e p r i m e minister, a l t h o u g h not f o r m a l l y g r a n t e d s u b s t a n t i a l f o r e i g n policy powers, is e n c o u r a g e d to speak out "in o r d e r to e n h a n c e his s t a n d i n g as a presidential c a n d i d a t e " (Clark, 1987: 135). T h u s , although the general direction of foreign policy is not usually contested, s p e c i f i c issues (e.g., treaties, military appropriations, UN positions) are openly debated in the parliament. 3. T h e p r i m a c y of the French president in foreign a f f a i r s w a s r e a f f i r m e d in 1986 in an a g r e e m e n t between Mitterrand and Prime Minister J a c q u e s Chirac. T h e two differed on a w i d e variety of issues, but M i t t e r r a n d ' s authority in foreign policy w a s a primary reason for his reelection to the presidency in 1988. 4. Toward that end, France in 1985 launched its sixth nuclear s u b m a r i n e , the L'Inflexible, w h i c h w a s equipped with multiple nuclear w a r h e a d s . T h e aerial c o m p o n e n t of the triad w a s e n h a n c e d by a new g e n e r a t i o n of M i r a g e j e t s , and the ground-based c o m p o n e n t w a s scheduled for m o d e r n i z a t i o n in the early 1990s. 5. De G a u l l e ' s repeated vision of a united E u r o p e " f r o m the A t l a n t i c to the U r a l s " was a g u i d i n g force behind this effort. 6. P o m p i d o u ' s o b s e r v a n c e of an a r m s e m b a r g o against Israel and his approval of a sale of M i r a g e fighter j e t s to Libya in 1970 f u r t h e r a n t a g o n i z e d the United States d u r i n g this period. Mitterrand's sale of Mirage 2 0 0 0 jets to India had the s a m e effect in the 1980s. 7. M i t t e r r a n d ' s rise to power included a brief tenure as minister for o v e r s e a s territories between 1950 and 1951. 8. An extension of this effort w a s a F r a n c o - G e r m a n military brigade that w a s p r o p o s e d as a c o m p l e m e n t to N A T O in the p o s t - C o l d War p e r i o d . Joint F r a n c o G e r m a n military m a n e u v e r s took place in S e p t e m b e r 1989 as the two c o u n t r i e s b e g a n discussions r e g a r d i n g collaboration in military c o n s t r u c t i o n . " T h e s e a g r e e m e n t s and the d e e p e n i n g F r a n c o - G e r m a n c o o p e r a t i o n s t r e n g t h e n e d both the F R G and France individually; they strengthened them both within the A t l a n t i c Alliance and strengthened the Alliance itself" (Macridis, 1992: 60). 9. See B e r t h e l o t ( 1 9 7 3 ) and Hayter ( 1 9 6 6 ) for detailed e l a b o r a t i o n s of this report and its long-term impact on French foreign assistance. 10. France imported much of these strategic m i n e r a l s f r o m South A f r i c a , even as it o p p o s e d its s y s t e m of racial a p a r t h e i d . By the m i d - 1 9 8 0 s , " E c o n o m i c p r a g m a t i s m is clearly p r e v a i l i n g o v e r idealism and all idea of ' s a n c t i o n s ' has d i s a p peared from o f f i c i a l p r o n o u n c e m e n t s " ( S m o u t s , 1983: 167). I I . T h e A l g e r i a n gas a g r e e m e n t "is first and f o r e m o s t political and sets the seal on a process of reconciliation with a country w h i c h France c o n s i d e r s central to any Mediterranean p o l i c y " ( S m o u t s , 1983: 165). 12. Like other colonial and postcolonial p o w e r s , France w a s p r o n e to s o m e t i m e s brutal e x p l o i t a t i o n of s u b j e c t p o p u l a t i o n s . F o r c e d labor, a " h e a d t a x " that d r e w f r o m the m e a g e r i n c o m e s of A f r i c a n w o r k e r s , and s u m m a r y j u s t i c e w e r e c o m m o n features in French colonies. But the colonization of A f r i c a n nations, the f u t u r e b e n e f i c i a r i e s of French f o r e i g n aid, w a s c l o a k e d in the rhetoric of cultural salvation. 13. See Tint ( 1 9 7 2 : 185) for an elaboration. 14. T h e ambit states included Benin, Burkina Faso, C o m o r o s , Central A f r i c a n R e p u b l i c , Chad, C o n g o , C o t e d ' l v o i r e , D j i b o u t i , G a b o n , G u i n e a , M a d a g a s c a r ,

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M a l i , M a u r i t a n i a , Niger, a n d S e n e g a l . C a m e r o o n and T o g o had b e e n a d m i n i s t e r e d by F r a n c e as U N trust t e r r i t o r i e s , and B u r u n d i , R w a n d a , and Z a i r e had b e e n B e l g i a n t e r r i t o r i e s b e f o r e b e c o m i n g part of f r a n c o p h o n e A f r i c a . 15. T w o r e g i o n a l b a n k s o p e r a t e d t h r o u g h t h e F r e n c h t r e a s u r y to s e r v e t h e s e f u n c t i o n s . A West A f r i c a n c e n t r a l b a n k r e g u l a t e d the c u r r e n c i e s of B e n i n , C ô t e d ' I v o i r e , N i g e r , S e n e g a l , and U p p e r Volta. A s e c o n d c e n t r a l b a n k p r o v i d e d t h e s a m e s e r v i c e s for F r a n c Z o n e m e m b e r s in e q u a t o r i a l A f r i c a , i n c l u d i n g C a m e r o o n , t h e C e n t r a l A f r i c a n R e p u b l i c , C h a d , C o n g o , and G a b o n . 16. D u r i n g the 1 9 8 0 s , F r e n c h trade w i t h A f r i c a b e c o m e i n c r e a s i n g l y o r i e n t e d t o w a r d e n e r g y r e s o u r c e s . F r a n c e and oil-rich A l g e r i a , in a s t e p t o w a r d r e c o n c i l i a tion a f t e r m a n y y e a r s of a n i m o s i t y , s i g n e d a C h a r t e r of E c o n o m i c C o o p e r a t i o n in J u n e of 1 9 8 2 . A s part of this a g r e e m e n t , F r a n c e w o u l d be a s s u r e d of A l g e r i a n oil, a l b e i t at a price m o r e than 13 p e r c e n t a b o v e the w o r l d m a r k e t c o s t . 17. E l e v e n o t h e r m e m b e r s of t h e D A C c o n t r i b u t e d less t h a n $1 b i l l i o n e a c h in 1 9 8 9 - 1 9 9 0 . A m o n g n o n - D A C m e m b e r s , S a u d i A r a b i a t r a n s f e r r e d $ 2 . 2 b i l l i o n a n d t h e f o r m e r S o v i e t U n i o n $ 2 . 3 b i l l i o n in d e v e l o p m e n t aid d u r i n g t h i s p e r i o d ( O E C D , 1991a: 1 7 2 ) . 18. F r e n c h m o n e t a r y p r o b l e m s w o r s e n e d as the f r a n c w a s d e v a l u e d in J u n e 1 9 8 2 to m a k e it m o r e c o m p e t i t i v e against o t h e r c u r r e n c i e s , p a r t i c u l a r l y the G e r m a n mark. 19. F r a n c e i n c r e a s e d its p r o p o r t i o n of O D A a l l o t t e d to p r o g r a m a s s i s t a n c e , largely d e v o t e d to r e c i p i e n t d e b t r e l i e f , b u d g e t s u p p o r t , and s t r u c t u r a l a d j u s t m e n t . T h e i m p e t u s f o r t h i s i n c r e a s e in p r o g r a m a s s i s t a n c e (to a b o u t 5 p e r c e n t ) w a s a d e e p e n i n g fiscal crisis in m a n y A f r i c a n s t a t e s ; a l t h o u g h not on t h e s c a l e of t h e d e b t c r i s i s c o n f r o n t i n g s e v e r a l Latin A m e r i c a n s t a t e s d u r i n g the d e c a d e , it l i m i t e d t h e A f r i c a n r e c i p i e n t s ' a b i l i t i e s to f u n c t i o n a d e q u a t e l y and e n c o u r a g e d internal s o c i a l a n d political u n r e s t t h r o u g h o u t t h e r e g i o n . In c o n j u n c t i o n with f u n d s for p o l i t i c a l i n f r a s t r u c t u r e , p r o g r a m a s s i s t a n c e w a s d e s i g n e d to p r o m o t e o n g o i n g s t a t e - b u i l d i n g e f f o r t s by the r e c i p i e n t s , o f t e n w i t h d i r e c t g u i d a n c e and o v e r s i g h t by F r e n c h

coopérants. 2 0 . T h e U n i t e d S t a t e s i m p o r t e d $ 1 1 . 3 b i l l i o n w o r t h of F r e n c h g o o d s in 1989, less t h a n West G e r m a n y ( $ 2 7 . 6 b i l l i o n ) , Italy ( $ 2 0 b i l l i o n ) , t h e U n i t e d K i n g d o m ( $ 1 6 . 5 b i l l i o n ) , and B e l g i u m ( $ 1 5 . 3 b i l l i o n ) . 21. O t h e r s o c i a l and e c o n o m i c f i g u r e s for t h e s e r e c i p i e n t s w e r e not c o m p i l e d b y t h e W o r l d B a n k b e c a u s e of t h e i r s m a l l p o p u l a t i o n s (less t h a n 1 m i l l i o n ) ; m i l i t a r y s t a t i s t i c s w e r e not p r o v i d e d by t h e U . S . A r m s C o n t r o l a n d D i s a r m a m e n t A g e n c y g i v e n their s t a t u s as t e r r i t o r i e s of F r a n c e . 2 2 . E s t i m a t e s of C h i n e s e m i l i t a r y s p e n d i n g are r e l a t i v e l y c r u d e g i v e n t h e d i f f i c u l t y in c o n v e r t i n g its s p e n d i n g to U . S . d o l l a r s . 2 3 . A f t e r m o r e than 5 0 0 , 0 0 0 R w a n d a n s w e r e k i l l e d in an e t h n i c a l l y i n s p i r e d w a r in t h e s p r i n g of 1994, f o r e x a m p l e , the F r e n c h g o v e r n m e n t t o o k a lead r o l e in b u i l d i n g a m u l t i n a t i o n a l p e a c e k e e p i n g e f f o r t in the F r e n c h - s p e a k i n g f o r m e r B e l g i a n c o l o n y . F r e n c h t r o o p s had p r e v i o u s l y i n t e r v e n e d in R w a n d a in O c t o b e r 1 9 9 0 .

4 The Geoeconomics of Japanese ODA

Like France, Japan was decimated by World War II in almost every respect and spent the first postwar decade undergoing economic and political reconstruction. Both countries received massive amounts of U.S. economic assistance during this period, and both were gradually integrated within the U.S.-led Bretton Woods regime. As their economies recovered and their new governments achieved stability and some measure of legitimacy at home and abroad, both states hastened their emergence as great powers through integration with their regional neighbors and through the selective use of foreign assistance to promote their regional interests. Japan's ascension from military defeat and global estrangement to the status of an economic superpower occurred in a forty-year period during which economic wealth became comparable to military might as a national power resource. Japanese leaders increasingly utilized ODA, among other instruments of " g e o e c o n o m i c s " (Luttwak, 1990), to promote their national interests ( k o k u e k i ) by stimulating the economic development of regional LDCs, subsidizing their own industries, and attracting goodwill from other members of the O D A regime. In 1989 Japan surpassed the United States to become the world's leading O D A donor (a distinction the United States reclaimed in 1991). Japanese officials effectively tripled aid flows between 1970 and 1990 and continued to increase aid transfers above the $ 1 0 billion level into the 1990s. Whereas in 1970 Japan was the primary donor to six recipient nation-states, it filled that role for thirty-one states in 1991. The resurgence of Japan was among the most portentous developments in world politics between World War II and the end of the Cold War. Large-scale military rearmament was precluded by Japan's U.S.-imposed constitution, which limited defense spending to 1 percent of GNP, so its revival as a world power was based almost exclusively on e c o n o m i c growth. Japan's GNP during the 1980s grew from about $1 trillion to nearly $3 trillion; its per capita income approached $ 2 4 , 0 0 0 ; and its foreign trade grew to nearly $ 5 0 0 billion, with an annual trade surplus of more than $ 5 0 billion. Along the way, both the unemployment and inflation rates were kept below 5 percent. Japanese elites "conceived a vision of economic power without military power" (Vogel, 1986: 7 5 5 ) and

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concluded that their principal enterprise, and their primary contribution to regional and global stability, would be in stimulating e c o n o m i c and technological development. As they pursued these tasks, Japanese leaders generally d e f e r r e d in regional military deliberations to the United States, whose "security umbrella" covered Japan during the Cold War. As a result, "the role played by Japan in world politics has lagged far behind its evolution as an economic s u p e r p o w e r " (Soroos, 1988: 21). W h e r e a s the central government in Japan adopted a low profile in f o r eign affairs, its approach to e c o n o m i c development directly involved the public sector. Wrote Scalapino, "Japanese foreign policy is strongly geared toward using economic instruments on behalf of perceived national interests" (1992: 207). Toward this end, Japanese leaders pursued a strategy of "guided capitalism" by which political and corporate leaders cooperatively targeted the most promising sectors of the e c o n o m y and s u p p o r t e d them through research and development subsidies, trade protection, the promotion of national savings versus consumption, and export-led growth strategies. As James Fallows put it, "The Japanese government famously intervenes at countless levels of society, applying formal and informal controls to e v e r y t h i n g f r o m b a n k - l e n d i n g policy to the n u m b e r of n o n - J a p a n e s e teachers allowed in universities and schools" (1993: 4). T h e pervasive public role in J a p a n ' s economic development prompted repeated charges of neomercantilism by scholarly and U.S. g o v e r n m e n t critics a l o n g with overseas e c o n o m i c c o m p e t i t o r s , w h o argued that the J a p a n e s e g o v e r n m e n t violated widely accepted norms of the liberal e c o nomic order that emerged after World War II. 1 A m o n g foreign countries, the United States most vigorously protested J a p a n ' s industrial policies, which restricted the flow of goods and services into Japan (particularly in the automotive sector) and thus contributed to massive U.S. trade deficits. 2 J a p a n ' s largely successful attempt to restore its p r e w a r e c o n o m i c influence, facilitated by domestic sacrifices and overseas trade, "adds up to a situation in which Japan is v i e w e d in a hostile fashion f r o m all sources. T h e A S E A N [Association of Southeast Asian Nations] states have feared that the prewar goals of establishing a Greater East-Asian Co-prosperity S p h e r e remain, with e c o n o m i c tools replacing military w e a p o n s as the means f o r achievement" (Farnsworth, 1982: 181). As in the case of France, a succession of Japanese leaders identified and pursued a consistent set of objectives during the postwar period. In the latter case, these included the preservation and promotion of cultural integrity; the restoration of e c o n o m i c vitality and sustained e c o n o m i c growth to minimize the country's dependence on external support; the promotion of regional economic integration along the Pacific Rim, with Japan serving as a model and catalyst for regional development; and the maintenance of military security through a bilateral alliance with the United States. In s o m e cases, these interests reflected extensions of long-term priorities: T h e objectives of preserving cultural integrity and e c o n o m i c

Japan

71

s e l f - s u f f i c i e n c y , f o r e x a m p l e , w e r e c e n t r a l t e n e t s o f J a p a n e s e d o m e s t i c and f o r e i g n p o l i c y prior to t h e U . S . " o p e n i n g " o f J a p a n in 1 8 5 3 a n d t h e M e i j i R e s t o r a t i o n o f 1 8 6 8 . In o t h e r r e s p e c t s t h e p o s t w a r o b j e c t i v e s a n d t h e att e n d a n t s t r a t e g i e s e m p l o y e d to a c h i e v e t h e m r e p r e s e n t e d a d e p a r t u r e f r o m the p a s t : J a p a n ' s e x t e r n a l l y i m p o s e d p a c i f i s m f o l l o w e d a f i f t y - y e a r p e r i o d d u r i n g w h i c h it d e f e a t e d C h i n a ( 1 8 9 5 ) a n d R u s s i a ( 1 9 0 5 ) , a n n e x e d K o r e a ( 1 9 1 0 ) , a n d b e g a n its q u e s t f o r r e g i o n a l h e g e m o n y w i t h the 1 9 3 1

invasion

o f M a n c h u r i a a n d the s u b s e q u e n t o c c u p a t i o n o f m u c h o f E a s t A s i a . A f t e r W o r l d W a r II, J a p a n e s e e x p a n s i o n i s m w a s r e p l a c e d by the d i s m a n t l i n g o f t h e c o u n t r y ' s a r m e d f o r c e s a n d its s u b o r d i n a t i o n to U . S . h e g e m o n y in the Pacific region. L i k e S w e d e n , but u n d e r c l e a r l y d i f f e r e n t c i r c u m s t a n c e s , J a p a n c o n v e r t e d g e o g r a p h i c a l d e t a c h m e n t and n o n m i l i t a r i s m into p o w e r r e s o u r c e s in the l a t e t w e n t i e t h c e n t u r y . U n d e r the p r o t e c t i o n o f the U . S . - J a p a n e s e M u tual S e c u r i t y T r e a t y , a p p r o v e d in 1 9 5 2 u p o n J a p a n ' s i n d e p e n d e n c e ,

its

l e a d e r s e n j o y e d u n u s u a l f r e e d o m to p u r s u e e c o n o m i c r e v i t a l i z a t i o n ; t h e y w e r e a m o n g the first to r e c o n s t i t u t e n a t i o n a l s e c u r i t y in l a r g e l y e c o n o m i c terms.3 A l o n g the way, the consensual basis o f J a p a n e s e society,

based

u p o n its S h i n t o - B u d d h i s t c u l t u r a l t r a d i t i o n s , w a s p r e s e r v e d a n d d e f e n d e d against foreign (particularly Western) encroachments. Political

stability

w a s a s s u r e d b y the t e n e t s o f its n e w c o n s t i t u t i o n , b y the c o n s t r a i n t s o f its parliamentary g o v e r n m e n t , and, most importantly, by the enduring d o m i n a t i o n o f its L i b e r a l D e m o c r a t i c Party. J a p a n ' s i n d u s t r i a l p o l i c y w a s a p p l i e d to its g r o w i n g f o r e i g n - a i d p r o g r a m , w h i c h b e c a m e a c e n t r a l e l e m e n t in its e f f o r t to r e e s t a b l i s h r e g i o n a l e c o n o m i c ties that h a d b e e n s e v e r e d i m m e d i a t e l y a f t e r W o r l d W a r I I . L i k e F r a n c e , J a p a n c o n c e n t r a t e d its aid f l o w s a m o n g n e i g h b o r i n g L D C s , w h i c h m a i n t a i n e d c l o s e t i e s to T o k y o in o t h e r a r e a s ( s e e T a b l e 4 . 1 ) . A i d t r a n s f e r s w e r e d e s i g n e d to c o m p l e m e n t J a p a n e s e f o r e i g n i n v e s t m e n t s a n d t r a d e p o l i c i e s , p a r t i c u l a r l y w i t h r e s p e c t to s t a t e s that p o s s e s s e d raw m a t e r i a l s c r i t i c a l to J a p a n ' s e c o n o m i c d e v e l o p m e n t . T h u s , J a p a n e s e aid w a s " e x p l i c i t l y r e g a r d e d as a l e g i t i m a t e arm o f national p o l i c y " ( R i x , 1 9 8 0 : 2 6 8 ) .

ODA

f l o w s , o f t e n tied to J a p a n e s e g o o d s a n d s e r v i c e s , s t i m u l a t e d d o m e s t i c p r o d u c t i o n a n d f u e l e d t h e e c o n o m i e s o f r e g i o n a l L D C s s e e n a s i n t e g r a l to J a p a n ' s long-term prosperity. Furthermore, O D A directed national attention t o w a r d e c o n o m i c r e l a t i o n s r a t h e r than t h e m i l i t a r y c o n c e r n s that p r e v a i l e d d u r i n g the y e a r s p r e c e d i n g W o r l d W a r I I . T h e J a p a n e s e p a r l i a m e n t ( D i e t ) and foreign ministry identified potential O D A recipients w h o s e e c o n o m i c growth would benefit J a p a n ' s industries and banks through o v e r s e a s loans, direct investment, and g r o w i n g markets. T h e i r application o f O D A thus s e r v e d as an a d d i t i o n a l f o r u m f o r c l o s e m a c r o e c o n o m i c c o o r d i n a t i o n b e t w e e n the public and private sectors. A s J a p a n e s e o f f i c i a l s w e r e q u i c k to e m p h a s i z e , t h e i r u t i l i z a t i o n

of

O D A was also instigated by foreign pressure. L e a d e r s o f other industrialized states, L D C s , and international organizations ( m o s t prominently, the

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Table 4.1

Studies

Top Ten Recipients of Japanese ODA, 1970-1990

1970-1971 Indonesia South Korea India Pakistan Philippines Burma Thailand Taiwan Iran Sri Lanka

1980-1981

1989-1990

Indonesia South Korea Thailand Bangladesh Philippines Burma Pakistan Egypt Malaysia India

Indonesia China Philippines Thailand Bangladesh Malaysia India Pakistan South Korea Turkey

Source: O E C D (1991a)

O E C D a n d the U N ' s d e v e l o p m e n t a g e n c i e s ) c o n s i d e r e d J a p a n a p o t e n t i a l s o u r c e of relief d u r i n g a period of p r o l o n g e d e c o n o m i c s t a g n a t i o n in o t h e r d o n o r c o u n t r i e s . J a p a n e s e leaders r e s p o n d e d to this p r e s s u r e in the 1 9 8 0 s by rapidly i n c r e a s i n g the size and s c o p e of their aid p r o g r a m s as part of a broader campaign for increased "burden sharing." They found O D A particularly attractive given its p r o v e n role in s t i m u l a t i n g T h i r d World d e v e l o p m e n t and given J a p a n ' s o w n " g r a d u a t i o n " f r o m the status of L D C (and aid recipient) d u r i n g its s e v e n years u n d e r its U.S. o c c u p a t i o n a f t e r World War II. In a d d i t i o n , J a p a n e s e political l e a d e r s w e l c o m e d the c r e d i b i l i t y they attracted by taking an a g g r e s s i v e r o l e in O D A : " S i n c e J a p a n has bec o m e a w a s h in cash, it has felt that aid is o n e w a y in w h i c h it can be seen to f u l f i l l its international r e s p o n s i b i l i t i e s w i t h o u t h a v i n g to m a k e a w k w a r d c h o i c e s a b o u t f o r e i g n policy or military s p e n d i n g " ( E m m o t t , 1989: 2 2 9 ) . J a p a n ' s g r o w i n g w e a l t h and its e x p a n d i n g i n v o l v e m e n t in N o r t h - S o u t h dev e l o p m e n t issues led to its a c t i v e role in the aid r e g i m e d u r i n g the " l o s t d e c a d e " of T h i r d World d e v e l o p m e n t .

Japanese Aid: Origin and Evolution O n l y since the 1 9 7 0 s has J a p a n been a l e a d i n g d o n o r of f o r e i g n a s s i s t a n c e , a n d only since the 1980s has its aid b e e n d i s b u r s e d b e y o n d g e o g r a p h i c a l l y a n d f u n c t i o n a l l y restricted b o u n d a r i e s . A s noted a b o v e , the r e s t o r a t i o n of the c o u n t r y ' s p h y s i c a l a n d s o c i o e c o n o m i c vitality b e c a m e the c e n t r a l obj e c t i v e of its leaders and t h o s e of the U n i t e d States, w h i c h o c c u p i e d J a p a n a f t e r the war. A s part of their e f f o r t to s t i m u l a t e the r e g i o n a l e c o n o m y ( a n d , s e c o n d a r i l y , to c o u n t e r the e x p a n s i o n of c o m m u n i s m in East A s i a ) , U . S . p o l i c y m a k e r s s o u g h t to e s t a b l i s h a s e l f - s u f f i c i e n t , m a r k e t - o r i e n t e d J a p a n e s e e c o n o m y . In a d d i t i o n to p r o v i d i n g M a r s h a l l P l a n f u n d i n g to

Japan

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Western E u r o p e , the United States transferred large s u m s of development assistance to J a p a n — $ 9 4 7 million in grants and $ 2 7 3 million in loans between 1949 and 1952. The United States disbursed an additional $999 million to Japan between 1953 and 1961 under the Mutual Security Act, along with $675 million in military assistance ( U S A I D , 1991: 76). J a p a n e s e f o r e i g n aid first took the f o r m of d e l a y e d reparation payments ( baisho ) to regional neighbors, including B u r m a (1955), the Philippines ( 1 9 5 6 ) , and Indonesia (1958). O t h e r reparation a g r e e m e n t s were reached with Laos, Malaysia, Singapore, South Vietnam, South Korea, and Thailand. Formal Japanese recognition of the P e o p l e ' s Republic of China in 1972 w a s granted in e x c h a n g e for Chinese c o n c e s s i o n s on reparations p a y m e n t s . T h e s e transfers, mostly in the f o r m of services and capital goods, established the pattern of geographical concentration in Asia, which continue to characterize J a p a n e s e aid into the 1990s. J a p a n extended its first concessional yen loan in 1958 to India, utilizing a f o r m of foreign assistance that w o u l d b e c o m e c o m m o n p l a c e in the f o l l o w i n g decades. In 1959, the J a p a n e s e government extended cash grants to Laos and Cambodia, an e x c e p t i o n in an aid p r o g r a m built largely a r o u n d concessional loans. A f t e r f o r m a l l y regaining s o v e r e i g n t y in 1952, J a p a n e s e leaders expressed a willingness to contribute to regional and global development efforts. Its representatives attended the C o l o m b o c o n f e r e n c e , along with m e m b e r s of the British C o m m o n w e a l t h and the United States, which resulted in a multilateral program of e x p a n d e d aid f l o w s . Japan joined the United Nations in 1956 and later b e c a m e active in the UN Conference on Trade and Development. T h e 1960s marked the graduation of Japan f r o m net O D A recipient to donor. Its g o v e r n m e n t established the O v e r s e a s E c o n o m i c Cooperation Fund ( O E C F ) in 1961 to serve as a conduit for bilateral aid. In 1963, Japan was a f o u n d i n g member of the O E C D ' s Development Assistance Committee. In 1964, it joined the International Monetary Fund and two years later helped e s t a b l i s h the Asian D e v e l o p m e n t Bank as a regional conduit f o r c o n c e s s i o n a l f i n a n c i n g . 4 J a p a n ' s i n v o l v e m e n t w a s closely monitored by the D A C , which permitted m e m b e r states to pursue independent aid strategies but e n c o u r a g e d them to a d h e r e to its g u i d e l i n e s f o r " q u a l i t y " O D A policies. 5 J a p a n ' s emergence as a major aid donor occurred as John F. Kennedy launched the Alliance for Progress in the early 1960s, designed to promote greater c o o p e r a t i o n b e t w e e n the United States and L D C s . T h e United States f o c u s e d its d e v e l o p m e n t e f f o r t s on Latin A m e r i c a (and later, Ind o c h i n a ) , w h e r e a s France, the s e c o n d - r a n k i n g aid d o n o r a m o n g Western states, e s t a b l i s h e d large-scale aid p r o g r a m s in f r a n c o p h o n e A f r i c a (see C h a p t e r 3). T h u s , a global division of labor e m e r g e d a m o n g the primary O D A donors, with Japan being accorded a primary role in the Pacific Rim

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region and Great Britain concentrating its aid a m o n g its former colonies in anglophone Africa and South Asia. In addition to s e e k i n g d o m e s t i c support for their d e v e l o p m e n t programs, Kennedy and his successor, Lyndon Johnson, encouraged leaders in Japan and other industrialized states to increase their annual commitments of O D A . Citing the U.S. military protection of Japan through the bilateral d e f e n s e treaty, Kennedy and J o h n s o n argued that increased economic assistance w a s s o m e t h i n g Japan could a f f o r d and should make available in large volumes. Japanese leaders were generally receptive to these appeals and a n n o u n c e d a series of explicit timetables to enlarge their aid allocations. In this sense, the c o u n t r y ' s foreign-aid program was viewed as the price of U.S. military protection and a f o r m of r e i m b u r s e m e n t for prior U.S. assistance to Japan. As it broadened its aid effort, the Japanese government established the Overseas Technical Cooperation Fund ( O T C F ) to administer the provision of technical assistance (such as training in civil engineering for recipients). T h e s e programs, which directly involved Japanese officials in the recipie n t s ' state-building efforts, were consolidated in 1974 within the Japanese International Cooperation Agency (JICA). Development aid became a central concern for the most influential ministries in the Japanese government, including finance, foreign affairs, and the Ministry of International Trade and Industry (MITI). Their divergent interests, reflecting differing domestic constituencies and international priorities, created occasional tensions within the Japanese government. But such friction, evident in most donor states, was eased by a relatively strong societal consensus on Japan's national interests and the opportunities presented by O D A to achieve them. J a p a n ' s e c o n o m y , like those of other industrialized countries, w a s strained by the twin oil-price s h o c k s of the 1970s. Given J a p a n ' s dependence on foreign oil and its vulnerability to higher petroleum prices, the oil crises slowed national e c o n o m i c growth and threatened Japan's industrial e x p a n s i o n . A m o n g their r e s p o n s e s , J a p a n e s e leaders approved exp a n d e d O D A t r a n s f e r s to L D C s in the M i d d l e East, marking a departure f r o m their regional concentration in East Asia. Japan by 1980 had b e c o m e the primary O D A donor to such Persian Gulf states as Iran, Saudi Arabia, and the United A r a b Emirates. This redirection of O D A resources also entailed a d i p l o m a t i c transfer of J a p a n e s e loyalties in many issue areas toward Islamic countries and away f r o m Israel, a shift that elicited protests f r o m the U.S. government and served to symbolize J a p a n ' s use of ODA as an instrument to p r o m o t e its national security, narrowly defined in this case as reliable access to petroleum. Even after this shift of aid, however, Japan retained its emphasis on East Asian recipients. In the late 1970s aid officials adopted a medium-term distribution plan by which fixed portions of J a p a n e s e O D A would be disbursed to Asian recipients (approximately two-thirds), with smaller shares g o i n g in roughly equal a m o u n t s to the

Japan

75

Mideast, Africa, and Latin America. Even after being identified as a relatively low priority for Japanese ODA planners, however, many LDCs received greatly increased resources in absolute terms. Sub-Saharan Africa, for example, received twice its 1980 share of Japanese ODA by the end of the decade. 6 The Japanese government further used the energy crisis to its advantage by expanding its automobile industry and concentrating on the manufacture of small, fuel-efficient vehicles, a strategy of critical importance in Japan's economic resurgence. The success of Honda, Toyota, and other Japanese automakers was reflected in their rapidly growing market share vis-à-vis the United States, which responded more slowly to the shift in consumer demand. B y 1980, Japan's market share in the global automotive industry (including both vehicles and parts) had more than doubled, in large part because of its penetration of the North American market. Its inroads in the consumer electronics sector, based upon technological innovations and relatively low labor costs, also contributed to Japan's rise as an industrial power. Whereas the contrasting policies of import substitution were widely embraced in other developing regions during the 1970s, Japan's export-led expansion became an example to be emulated by other states in East Asia. The pervasive role of the Japanese government in subsidizing selected industries and protecting them from foreign competition also was widely copied by neighboring states. Responding to widespread appeals for ODA as well as a need to "recycle" capital generated by large annual trade surpluses, Japanese officials announced a series of doubling plans for the periods 1 9 7 7 - 1 9 8 0 , 1981— 1985, and 1 9 8 5 - 1 9 9 2 , identifying specific short- and medium-term funding targets that would collectively amount to $40 billion in ODA commitments. A fifth medium-term target was announced in 1993 for the period through 1997, in which Japan pledged to transfer more than $ 7 0 billion and to increase its share of GNP devoted to development aid (Japanese Government, 1993b: 24). As Japanese ODA grew both in absolute terms and as a percentage of global ODA outlays, its leaders repeatedly promised to confront qualitative issues regarding the types and terms of ODA transfers. The Japanese government also responded to appeals by the United States to make its ODA strategies compatible with U.S. security efforts in the Pacific region. Thus, in the pursuit of "comprehensive security," large aid packages were made available to "countries bordering on areas of conflict," such as Pakistan, Thailand, and Turkey. In 1 9 8 1 , Prime Minister Zenko Suzuki recognized this new aid mission by directing ODA to "those areas which are important to the maintenance of the peace and stability of the world." Large transfers were approved for the Republic of Korea and the Philippines, among other Pacific states, despite their relatively high per capita incomes and rapid rates of economic growth. To some, this effort contradicted the spirit of Japan's nonmilitaristic foreign policy during the

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postwar era. But to Japanese leaders, the b r o a d e n e d scope of its aid e f f o r t was a necessary concession to allied pressure that Japan compensate for its perceived " f r e e - r i d e r " status in the collective security system.

O D A and the "MITI Economy" Unlike many D A C members, into the 1990s Japan did not assign ultimate responsibility over O D A to a single g o v e r n m e n t agency. Although J I C A coordinated much of the O D A effort, authority over its scope and direction fell within the purview of many ministries and specialized agencies. In addition, several private e c o n o m i c interests openly i n f l u e n c e d g o v e r n m e n t policy, both as independent e c o n o m i c actors and as members of public-private consortia. In this additional respect, the structure of J a p a n ' s O D A served as a microcosm of its broader approach to political economy. A m o n g the n u m e r o u s g o v e r n m e n t a l o r g a n i z a t i o n s with interests in foreign aid, three ministries were most closely involved with O D A during the postwar period. T h e Ministry of International Trade and Investment, a symbol of the Japanese model of industrial policy, b e c a m e highly influential throughout the period in directing aid f l o w s . MITI officials traditionally looked to aid as a vehicle for stimulating o v e r s e a s markets, boosting domestic production and exports, " r e c y c l i n g " s u r p l u s capital, and d e v e l oping reliable sources of natural resources and raw materials. MITI generally approached O D A f r o m the perspective of private business and promoted increased f l o w s on the basis of long-term trade or investment opportunities. (Tellingly, aid policy within MITI was formulated by the International Trade Policy Bureau.) Unlike other industrialized states, which tend to segregate corporate leaders and government officials, Japan openly integrated business interests within the state apparatus. W h e r e a s MITI e p i t o m i z e d the J a p a n e s e model of political economy, the Ministry of Foreign A f f a i r s ( M O F A ) adopted a more traditional role in the area of e c o n o m i c assistance. M O F A w a s r e s p o n s i b l e for i d e n t i f y i n g prospective recipients (often with help f r o m officials in foreign embassies) and evaluating requests for overseas aid. When bilateral aid packages were approved, M O F A o v e r s a w their allocation and implementation. M e m b e r s of MOFA's E c o n o m i c C o o p e r a t i o n B u r e a u ( r o u g h l y c o m p a r a b l e to the U.S. Agency for International Development) generally approached O D A as a diplomatic, political, or h u m a n i t a r i a n i n s t r u m e n t ; security c o n c e r n s or possible benefits to J a p a n ' s industries were ostensibly not part of their deliberations. T h u s , M O F A w a s r e s p o n s i v e to p r e s s u r e f r o m other D A C m e m b e r s for net increases in aid, for grants v e r s u s loans, and for assistance to hard-pressed L D C s and L L D C s . As Japan b e c a m e a leading global O D A donor, M O F A and the E c o n o m i c Cooperation Bureau b e c a m e more directly engaged in formulating and implementing aid policy. T h e Ministry

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o f F i n a n c e a l s o p l a y e d a s t r o n g , i f m o r e m u t e d r o l e in t h e J a p a n e s e a i d p r o g r a m . F i n a n c e m i n i s t e r s t r a d i t i o n a l l y l o o k e d to t h e d e m o n s t r a b l e c o s t b e n e f i t d i m e n s i o n s o f aid p r o p o s a l s , d e m a n d i n g that t r a n s f e r s c o n f o r m to a p p r o v e d b u d g e t s in pursuit o f t a n g i b l e a n d r e a l i s t i c e n d s . T h u s , m e m b e r s o f the f i n a n c e m i n i s t r y , c o n c e r n e d w i t h the o v e r a l l l e v e l s o f J a p a n ' s g o v e r n m e n t b u d g e t , o f t e n d i s c o u r a g e d O D A c o m m i t m e n t s d e s p i t e the f o r e i g n m i n i s t r y ' s a r g u m e n t s that t h e y w o u l d b e a r l o n g - t e r m b e n e f i t s t h r o u g h e x panded m a r k e t s for J a p a n e s e g o o d s , s e r v i c e s , and c a p i t a l . 7 A s h e a d o f the g o v e r n m e n t , the J a p a n e s e p r i m e m i n i s t e r w a s e m p o w e r e d to s e t t h e a g e n d a o f a i d p o l i c y b y a d v o c a t i n g g e n e r a l

development

strategies, visiting or r e c e i v i n g s e l e c t e d applicants, and e m p h a s i z i n g certain p r o p o s a l s in p u b l i c s t a t e m e n t s . L e a d e r s o f m o s t d o n o r g o v e r n m e n t s f r e q u e n t l y u s e d f o r e i g n a s s i s t a n c e a s a v a l u a b l e c a r r o t in t h e i r p e r s o n a l d i p l o m a c y ; in J a p a n a t r a d i t i o n o f " s o u v e n i r d i p l o m a c y " ( o m i y a g e

gairo)

e m e r g e d b y w h i c h the p r i m e m i n i s t e r ' s o v e r s e a s b a g g a g e o f t e n i n c l u d e d o f f e r s o f O D A . B u t the r o l e o f t h e p r i m e m i n i s t e r a n d h i s c a b i n e t

was

eclipsed by the powerful ministries o v e r s e e i n g foreign affairs, fiscal policy, a n d c o m m e r c e . T h u s , a s in the c a s e o f F r a n c e ( s e e C h a p t e r 3 ) , J a p a n e s e p r i m e m i n i s t e r s r a r e l y i n i t i a t e d f u n d a m e n t a l s h i f t s in f o r e i g n p o l i c y . T r u e to t h e s e g e n e r a l f e a t u r e s o f t h e J a p a n e s e p o l i t i c a l - e c o n o m i c

model,

O D A p o l i c y w a s s u f f i c i e n t l y b r o a d - b a s e d to c o n s t r a i n t h e p o w e r o f t h e prime minister. S i m i l a r i l y , the D i e t ' s r o l e in f o r e i g n a s s i s t a n c e w a s l i m i t e d to a p p r o v ing a i d b u d g e t s f o r m a l l y p r o p o s e d b y t h e f o r e i g n a f f a i r s m i n i s t r y . T h e D i e t ' s m a r g i n a l i n v o l v e m e n t w a s partially a result o f the early y e a r s o f J a p a n e s e O D A , w h e n aid w a s not a c r i t i c a l i s s u e a n d l e g i s l a t o r s a p p r o v e d p r o p o s e d b u d g e t s w i t h little d e b a t e . T h e y g e n e r a l l y d e f e r r e d to t h e e x p e r tise o f the aid b u r e a u c r a c y , w h i c h w a s largely c o n t r o l l e d by s e n i o r g o v e r n m e n t , c o r p o r a t e leaders, and party leaders. T h e D i e t b e c a m e m o r e assertive

in O D A p o l i c y

in t h e 1 9 9 0 s a f t e r t h e c o l l a p s e o f the

Liberal

D e m o c r a t i c P a r t y ' s ( L D P ) hold o v e r the J a p a n e s e g o v e r n m e n t . G r o w i n g e c o n o m i c p r o b l e m s in J a p a n a n d a s u c c e s s i o n o f p o l i t i c a l s c a n d a l s a l s o p r o m p t e d a m o r e o p e n d i a l o g u e a b o u t t h e a p p r o p r i a t e r o l e o f the g o v e r n ment and the future o f J a p a n ' s d e v e l o p m e n t programs. P r i o r to its f r a g m e n t a t i o n , the L D P p e r f o r m e d an i m p o r t a n t f u n c t i o n in the f o r m u l a t i o n and e x e c u t i o n o f O D A policy, a l b e i t o n e f u n d a m e n t a l l y d i f f e r e n t f r o m that o f p a r t i e s in m o s t o t h e r i n d u s t r i a l i z e d s t a t e s . T h e L D P , w h i c h c o n t r o l l e d the g o v e r n m e n t f r o m its i n c e p t i o n until the e a r l y 1 9 9 0 s , maintained

its o w n a d v i s o r y

component,

the P o l i c y

Affairs

Research

C o u n c i l , w h i c h o f t e n i n i t i a t e d aid l e g i s l a t i o n a n d o v e r s a w its p a s s a g e through

the D i e t . W h e r e a s

in o t h e r c o u n t r i e s

interparty

debate

often

s h a p e d a l l o c a t i o n s o f f o r e i g n a i d , t h i s d e b a t e o c c u r r e d w i t h i n t h e L D P in J a p a n , w h e r e c o n t e n d i n g f a c t i o n s o f t e n d i s a g r e e d o v e r the s i z e a n d d e s t i n a t i o n o f p r o p o s e d O D A p a c k a g e s . In t h i s w a y , i n t e r n a l d i v i s i o n s o v e r

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J a p a n e s e O D A were shielded f r o m p u b l i c view; the m a j o r d i s p u t e s were fought privately in L D P meetings, not a m o n g rival political parties in the glare of parliamentary debate. As noted above, an array of private actors—representing industrialists, bankers, producers, and others with potential interests in O D A transfers— also exerted an important influence on aid policy. Aside f r o m its direct involvement in public-private agencies, private industry played " p e r h a p s the d o m i n a n t role in the i m p l e m e n t a t i o n of J a p a n e s e aid p o l i c y " (Ensign, 1992: 22). Industry leaders promoted aid packages tied to exports of their products; banking officials lobbied for O D A transfers with the greatest returns; and e n g i n e e r i n g f i r m s saw to it that their services w e r e utilized in e x e c u t i n g d e v e l o p m e n t projects. T h i s involvement of the private sector, which resulted in the widespread tying of O D A to Japanese goods and services, was, of course, not unique to Japan. T h e d i f f e r e n c e w a s rather one of degree; whereas other donor states publicly diminished the influence of domestic industry in O D A calculations, Japan openly a c k n o w l e d g e d it. In addition to O D A " c o o p e r a t i o n " b e t w e e n donor and recipient, domestic cooperation b e t w e e n the public and private sectors w a s also strongly enc o u r a g e d , and the collective b e n e f i t s to J a p a n e s e m e r c h a n t s , engineers, and b a n k e r s — i n d e e d , to the overall e c o n o m y — w e r e sought alongside the welfare of LDCs. T h e general public in Japan has been relatively uninvolved in aid deliberations and decisions, as in other areas of foreign policy. Given the multiple p o w e r centers (public and private) in the O D A n e t w o r k , and in keeping with the overall pattern of J a p a n e s e central g o v e r n m e n t , much of this work w a s c o n d u c t e d behind the s c e n e s and without public debate. O D A programs generally received widespread public support, h o w e v e r — much more so than in the United States, where foreign assistance continually ranked a m o n g the most u n p o p u l a r government enterprises. Japanese leaders exploited this persistent c o n s e n s u s regarding the virtues of O D A , which were b o r n e out by a i d ' s d e m o n s t r a b l e role in s t i m u l a t i n g L D C e c o n o m i e s as well as J a p a n ' s . T h e g r o w t h of J a p a n ' s O D A p r o g r a m s was not w i t h o u t internal discord, however. As it grew in size during the 1970s and 1980s, the decentralized b u r e a u c r a t i c structures u n d e r l y i n g J a p a n e s e O D A p r o d u c e d numerous contradictions in practice. T h e lack of central control hindered the coherent m a p p i n g of aid policy, and the f u n d a m e n t a l d i f f e r e n c e s a m o n g ministers o v e r s e e i n g O D A t r a n s f e r s c o n f o u n d e d aid recipients and other donors alike (Kotani, 1985). " A i d policies and measures have not always b e e n w e l l - c o o r d i n a t e d due to c o n f l i c t i n g views and interests of the gove r n m e n t ministries and a g e n c i e s , " explained H a s e g a w a ( 1 9 7 5 : 149). For their part, Japanese officials f r e q u e n t l y cited a shortage of skilled administrators to oversee the implementation of aid programs, as well as recipie n t s ' inability to " a b s o r b " continued transfers and their frequent failure to

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meet the terms of prior aid p a c k a g e s . 8 R e g a r d l e s s of the causes of these p r o b l e m s , their c o n s e q u e n c e s included a pattern of gradual, incremental c h a n g e in the program, a c o m m o n result of b u r e a u c r a t i c inertia. As Orr (1990: 12) concluded, J a p a n e s e p o l i c y f o r m u l a t i o n f o r aid is l a r g e l y m a d e w i t h i n the g o v e r n m e n t b u r e a u c r a c y . It t e n d s to b e " r o u t i n e " rather than " c r i s i s " or " i n n o v a t i v e " p o l i c y m a k i n g a n d , a s s u c h , p r o d u c e s f e w s u r p r i s e s , and little d r a m a . In s h o r t , b a t t l e s are f o u g h t , b a r g a i n s n e g o t i a t e d , c o m p r o m i s e s m a d e , and d e c i s i o n s r e a c h e d l a r g e l y w i t h i n the f r a m e w o r k o f the a d m i n i s t r a t i v e structure.

Despite well-publicized efforts to satisfy detractors, into the 1980s the perception remained that a m o n g the D A C m e m b e r s " J a p a n e s e O D A has been most deeply tilted toward reaping selfish b e n e f i t s " (Shinsuke, 1982: 34). Although the quantity of J a p a n e s e O D A e x p a n d e d , its widely perceived qualitative shortcomings remained a contentious issue. In contrast to most other donors' O D A programs, J a p a n ' s was characterized by loans at near-market interest rates and repayment terms, by aid directed toward relatively affluent LDCs, and by aid tied to the acquisition of J a p a n e s e p r o d u c t s or services. Critics also pointed to the concentration of J a p a n ' s aid a m o n g its regional trading partners as e v i d e n c e of this self-interested basis. At the regional level, " d e e p - r o o t e d s u s p i c i o n s a m o n g Asian politicians, intellectuals, and b u s i n e s s m e n [held] that J a p a n ' s e c o n o m i c c o o p eration, far from being altruistic, is guided primarily by self-interest" (Stirling, 1981: 359). Of additional concern to O D A analysts w a s the persistence of Japanese aid transfers to recipients that violated the human or political rights of their citizens. Key e x a m p l e s included large, long-term aid transfers to Indonesia, South Korea, and the Philippines despite the presence of repressive dictatorships in these countries. Large aid packages to the communist government in the P e o p l e ' s Republic of China (PRC), even after its crackd o w n on p r o d e m o c r a c y d e m o n s t r a t o r s in 1989, served as an additional case in point, as did significant O D A transfers to repressive Middle Eastern states in the w a k e of the oil s h o c k s of the 1970s. J a p a n e s e O D A behavior in this respect differed f r o m that of many other major donors; a potential recipient's "ideological stripes [were] m u c h less important to J a p a n e s e d e c i s i o n m a k e r s than they [were] to aid planners in the United S t a t e s " (Orr, 1990: 58). J a p a n e s e leaders rejected these c h a r g e s and a d v a n c e d an alternative c o n c e p t i o n of O D A that e m p h a s i z e d recipient "responsibility." They s o u g h t to encourage attributes and patterns of behavior in recipients that w e r e c o n d u c i v e to long-term d e v e l o p m e n t . For e x a m p l e , O D A f u n d s w o u l d be transferred largely on the basis of low-interest loans rather than grants, a practice that was contrary to the O D A r e g i m e ' s preference for the

80

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latter. As Economic O f f i c e r K e n k o Sone (Japanese G o v e r n m e n t , 1994) argued in an interview, We b e l i e v e aid quality has m o r e than o n e m e a n i n g . In our v i e w , l e n d i n g m o n e y e n f o r c e s s o m e d i s c i p l i n e o n the r e c i p i e n t s and e n c o u r a g e s them to use the r e s o u r c e s m o r e p r o d u c t i v e l y than if w e just g a v e them a w a y . C o u n t r i e s s o m e t i m e s get u s e d to s i m p l y t a k i n g m o n e y . R e c e i v i n g l o a n s o f t e n m a k e s them w o r k harder and b e c o m e m o r e e f f i c i e n t . In this s e n s e w e o f t e n c o n s i d e r l o a n s as o f greater q u a l i t y than grants, particularly s i n c e through e m p h a s i z i n g l o a n s w e can m a k e m o r e m o n e y a v a i l a b l e to d e v e l o p i n g countries.

A l t h o u g h J a p a n e s e leaders a d v a n c e d an alternative conception of O D A in this and other respects, they pledged to a d h e r e to most international standards of aid quality. T h e y a c k n o w l e d g e d the fundamental norm a m o n g industrialized states that a substantial share of their country's gross national product (in absolute if not relative t e r m s ) should be directed toward the e c o n o m i c d e v e l o p m e n t of LDCs. Inescapably, the memories of J a p a n ' s subjugation of the P a c i f i c Rim during World War II lingered and infused the aid question; c o u n t r i e s that s u f f e r e d under Japanese d o m i n a tion sought ongoing c o m p e n s a t i o n long after the formal period of reparations ended. T h e rhetoric of global obligation, not u n c o m m o n a m o n g aid donors of longer standing, was frequently evident in the public statements of Japanese officials on foreign assistance. In 1967, the Ministry of Foreign A f f a i r s released a mission statement s u g g e s t i n g that J a p a n e s e foreign assistance would increase "in the belief that such e f f o r t s will contribute to the ultimate goal of establishing prosperity and peace throughout the world." Fifteen years later, Prime Minister Suzuki (quoted in Shinsuke, 1982: 30) told a Diet budget committee that " t h e economic cooperation of Japan, in principle, is intended to help the recipient countries stabilize the livelihood, and improve the welfare, of their people. We cannot extend military aid to any country." And another d e c a d e later, the Japanese government (1993a: 23) proclaimed, " T h e stability and sustained g r o w t h of developing c o u n tries are essential to the creation of a p o s t - C o l d War f r a m e w o r k for peace and security." For many J a p a n e s e o f f i c i a l s , the e n h a n c e d credibility their nation gained through O D A w a s especially v a l u a b l e w h e n c o m b i n e d with its broader role in promoting Japan as a vital " b r i d g e " between LDCs and the industrialized North. Given J a p a n ' s location and its status as a recently modernized state, it emerged as a developmental model for regional L D C s and newly industrialized c o u n t r i e s (NICs). D e s p i t e occasional c o n c e r n s about the Japanese g o v e r n m e n t ' s interference in the market, many recipients saw its aid f l o w s as a relief f r o m their previous d e p e n d e n c e on the United States. J a p a n ' s model of e c o n o m i c d e v e l o p m e n t , based upon

japan

81

export-led industrialization and the collaboration o f government and industry, was applied in other states in East Asia during the 1980s, including Hong Kong, Indonesia, Malaysia, Singapore, and Taiwan, all of which experienced accelerating rates of economic growth. 9 Japan's complex administrative structure associated with O D A reflected its leaders' broader approach to political economy and to the pursuit of perceived national interests. A societal consensus on the centrality of Japanese economic growth versus other concerns, foreign or domestic, anchored O D A policy for much of its history. Such growth was seen as a prerequisite for political stability in Japan, for the restoration of societal cohesion, and for the revival of Japan as an important regional and global actor. O D A proved to be a vehicle for three of Japan's most important postwar objectives: restoring the domestic economy, generating economic growth and integration within the Pacific Rim, and regaining credibility among industrialized states in North America and Western Europe. Japanese leaders openly acknowledged that their approach to Third World development differed from that of their Western contemporaries, arguing that Japan's expanding economy served as an engine of growth for its neighbors. Given Japan's extraordinary reliance on foreign sources of fuels and other raw materials (a point raised frequently by Japanese leaders), preserving self-sufficiency became an ongoing preoccupation. Additionally (as U.S. leaders also argued in the face of similar criticism), Japanese officials emphasized aggregate aid rather than aid in proportion to GNP. Their view "reflects the difficulty which Japan's O D A has experienced for much of its history in substantially outpacing the sustained growth of GNP in spite of a very rapid rise of O D A disbursements" ( O E C D , 1 9 7 9 : 126). The Japanese government, perhaps a victim of its own success in this regard, continued to struggle with this problem throughout the 1980s and into the 1990s.

Japanese ODA in Practice Japanese ODA during the 1980s consistently increased in every functional category, rising at an inflation-adjusted annual rate of 4 . 6 percent, nearly twice the average of the D A C as a whole. This expansion in O D A flows occurred alongside broader efforts by the Japanese government to invest surplus capital in foreign bond markets, real estate, and industrial joint ventures. Japan was in a particularly advantageous position to distribute O D A during the 1980s, a decade that witnessed economic stagnation in most other developed states and calamity in many developing regions, particularly sub-Saharan Africa. As noted in Chapter 2, Japan experienced the only balance-of-payments surplus of the four donor states under study (1.2 percent of GNP), the highest annual rate of economic growth (5.2 percent),

82

Table 4.2

1970-1980 1980-1981 1989-1990

Country

Studies

Japanese O D A Transfers, 1970-1990 ODA Commitment 3

Percent GNP

2,871 5,863 9,152

0.23 0.30 0.31

Share of World ODA 11.2 10.6 16.4

Source: OECD (1991a) Note: a. ODA commitment in millions of current U.S. dollars

a low unemployment rate (2.1 percent), exceeding only that of Sweden, per capita income ($24,000) also second only to Sweden's, and a total GNP ($2.9 trillion) second only to that of the United States. Despite its affluence, however, Japan's relative rate of domestic government spending (32.9 percent) was the lowest of the four cases and among the lowest of any industrialized country. This fact is significant in drawing attention to the relatively small pool of public resources from which ODA funds were drawn. Whereas the government generally preferred that private capital lead the way toward economic resurgence, public funds in the form of ODA proved an effective complement to this wellcoordinated effort. As its aid flows increased on an absolute level, its share of global ODA also grew (see Table 4.2). Japan's ascension to the status of the world's leading donor of ODA was also noteworthy given its previous status as a recipient of U.S. assistance, the relatively young age of its ODA program, and the fact that its overall GNP remained little more than one-half that of the United States. Japan's expanding ODA flow during the 1980s was exaggerated by the heightened value of the yen relative to the U.S. dollar and other currencies during the 1980s. 10 Even after this factor is taken into account, however, the growing presence of Japan within the ODA regime and the critical role its aid donations played in furthering the country's internal economic development are instructive. Collectively, these patterns led to a global tripolarity of ODA flows. By 1990 France, Japan, and the United States combined for nearly half of all development aid to LDCs. In addition to coordinating concessional flows through the OECD, these three donors strongly influenced the regional distribution of ODA by concentrating bilateral transfers among selected recipients of particular importance to their broader economic, political, and security interests (see Chapter 2). Its pledges to widen its geographical distribution of ODA notwithstanding, the Japanese government continued to focus its ODA efforts on neighboring states in East Asia (see Figure 4.1). More than half of Japanese development aid flowed toward this region in 1989-1990, as opposed

83

Japan

Figure 4.1 Direction of Japanese ODA, 1980-1990 (Geographical Distribution, Percentage)

Sub-Sahamn Africa

Other Asia

South Asia

Mideast, North Africa

Latin America

Legend J

1979-80

H

1984-85

|§

1989-90

Source: OECD (1991a: 180)

to 4 1 p e r c e n t a d e c a d e e a r l i e r . 1 1 C o n v e r s e l y , t h e s h a r e o f J a p a n e s e

ODA

f l o w s to S o u t h A s i a f e l l f r o m n e a r l y o n e - t h i r d o f t h e total to l e s s than 2 0 p e r c e n t d u r i n g the s a m e p e r i o d . T h i s p a t t e r n d i s p l a y e d r e m a r k a b l e c o n t i nuity d e s p i t e t h e r h e t o r i c a l e m p h a s i s p l a c e d b y J a p a n e s e l e a d e r s on d i v e r s i f y i n g its O D A f l o w s d u r i n g t h e 1 9 8 0 s . A l t h o u g h J a p a n e s e o f f i c i a l s i n c r e a s e d a g g r e g a t e aid to o t h e r r e g i o n s o f t h e T h i r d W o r l d , t h e y r e t a i n e d t h e i r o v e r a l l e m p h a s i s on A s i a . A i d b o u n d f o r A f r i c a r o s e to 1 5 p e r c e n t o f the 1 9 8 9 total, with 8 percent transferred to Latin A m e r i c a and 5 percent to t h e M i d e a s t . J a p a n e s e O D A to the p o o r e s t s t a t e s o f s u b - S a h a r a n A f r i c a , though s h o w i n g a modest increase, r e m a i n e d a small fraction o f the share d i r e c t e d t o w a r d its r e g i o n a l n e i g h b o r s . E a s t A s i a w a s a t t r a c t i v e to J a p a n e s e p o l i c y m a k e r s not o n l y b e c a u s e o f t h e r e g i o n ' s g e o g r a p h i c a l p r o x i m i t y but a l s o b e c a u s e o f its r a p i d e c o n o m i c g r o w t h r a t e s d u r i n g t h e 1 9 7 0 s and 1 9 8 0 s , p a r t i c u l a r l y a s c o m p a r e d to t h o s e o f other less developed regions. East A s i a ' s proportion o f global G N P rose f r o m 5 to 2 0 p e r c e n t , a n d its s h a r e o f w o r l d m a n u f a c t u r i n g d o u b l e d to 2 3 p e r c e n t ( W o r l d B a n k , 1 9 9 1 : 2 1 ) . Its f i n a n c i a l p o w e r g r e w p r o p o r t i o n a t e l y as the region c o m p e t e d favorably against e c o n o m i c superpowers, particul a r l y t h e U n i t e d S t a t e s , t h a n k s in part to r e l a t i v e l y l o w w a g e r a t e s , the i m portation

of

international

capital,

and

the

collaborative

relationship

84

Country

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b e t w e e n b u s i n e s s a n d g o v e r n m e n t f o u n d in J a p a n . F o r e i g n aid s e r v e d as a c a t a l y s t f o r this p r o c e s s a n d f i g u r e d p r o m i n e n t l y in the f o r e i g n p o l i c i e s of e v e r y recipient in East A s i a . I n d o n e s i a r e m a i n e d the greatest b e n e f i c i a r y of J a p a n e s e O D A t h r o u g h o u t t h e p e r i o d , a l t h o u g h its s h a r e d e c r e a s e d f r o m n e a r l y o n e - q u a r t e r of total J a p a n e s e o u t l a y s in 1 9 7 0 to a b o u t 12 p e r c e n t by 1990. P r o m i n e n t proj e c t s u n d e r t a k e n w i t h t h e a i d i n c l u d e d i m p r o v e m e n t s to the J a k a r t a w a t e r s u p p l y in 1 9 8 5 , c o n s t r u c t i o n of Bali I n t e r n a t i o n a l A i r p o r t in 1 9 8 6 , a n d s u p p o r t f o r the J a b o t a b e k A r e a R a i l w a y P r o j e c t in 1 9 8 9 . 1 2 A l s o n o t e w o r thy w a s the r a p i d i n c r e a s e in J a p a n ' s b i l a t e r a l O D A f l o w s to t h e P e o p l e ' s R e p u b l i c of C h i n a , w h i c h i n c r e a s e d f r o m $ 3 m i l l i o n in 1 9 7 9 to n e a r l y $ 4 0 0 m i l l i o n in 1 9 8 4 a n d $ 8 3 3 m i l l i o n in 1 9 8 9 ( Q u a n s h e n g , 1 9 9 3 ) . S i n c e e s t a b l i s h i n g d i p l o m a t i c r e l a t i o n s w i t h t h e P R C in 1 9 7 2 a n d s i g n i n g a bilateral p e a c e treaty six y e a r s later, J a p a n has e m e r g e d as the P R C ' s l e a d i n g aid a n d t r a d i n g p a r t n e r as w e l l as its m a i n s o u r c e of high t e c h n o l o g y a n d p r i v a t e i n v e s t m e n t c a p i t a l . J a p a n s u p p o r t e d o t h e r P a c i f i c R i m s t a t e s that e m u l a t e d its i n d u s t r i a l p o l i c i e s — i n c l u d i n g a high level of p u b l i c a n d priv a t e c o o r d i n a t i o n , t h e p r o t e c t i o n of key industrial s e c t o r s , an e m p h a s i s on e x p o r t - l e d g r o w t h , a n d t h e e n c o u r a g e m e n t of s a v i n g s rather t h a n d o m e s t i c c o n s u m p t i o n ( M c C o r d , 1 9 9 1 ) . J a p a n e s e aid to C h i n a , like that to I n d o n e sia, w a s almost e n t i r e l y in t h e f o r m of l o w - i n t e r e s t loans f o r t e c h n i c a l ass i s t a n c e . J a p a n t r a n s f e r r e d l a r g e v o l u m e s of p u b l i c r e s o u r c e s f o r s u c h proj e c t s as railway e x p a n s i o n a n d e l e c t r i f i c a t i o n , the m o d e r n i z a t i o n of p o r t s , and the r e c o n s t r u c t i o n of B e i j i n g ' s s e w a g e a n d s u b w a y s y s t e m s . O u t s i d e of E a s t A s i a , J a p a n t r a n s f e r r e d O D A to only t h r e e r e c i p i e n t s at c o m p a r a b l y h i g h l e v e l s — I n d i a , P a k i s t a n , a n d B a n g l a d e s h . A m o n g o t h e r p r i o r i t i e s , J a p a n e s e O D A w a s u s e d f o r the c o n s t r u c t i o n of p o w e r p l a n t s a n d g a s p i p e l i n e s in I n d i a ; a i d to t h e p o o r e r r e c i p i e n t s of B a n g l a d e s h and Pakistan was primarily intended for agricultural p r o g r a m s (such as the m o d e r n i z a t i o n of f e r t i l i z e r f a c t o r i e s ) , s h o r t - t e r m debt relief, a n d a s s i s t a n c e in r e s p o n d i n g to n a t u r a l d i s a s t e r s . In t h e e a r l y 1 9 9 0 s , J a p a n w a s an e a r l y a d v o c a t e within the D A C of adding the five newly i n d e p e n d e n t Central A s i a n s t a t e s of K a z a k h s t a n , K i r g h i s t a n , T a d z h i k i s t a n , T u r k m e n i s t a n , a n d U z b e k i s t a n to t h e c o m m i t t e e ' s list of L D C s s o they w o u l d b e c o m e e l i g i b l e f o r d e v e l o p m e n t aid. A s the c a s e s of I n d o n e s i a and C h i n a illustrate, the p r e p o n d e r a n t s h a r e of J a p a n e s e O D A d u r i n g t h e 1 9 8 0 s w a s d i r e c t e d t o w a r d t h e e c o n o m i c inf r a s t r u c t u r e of r e c i p i e n t s , i n c l u d i n g e n g i n e e r i n g and c o n s t r u c t i o n of t r a n s portation and c o m m u n i c a t i o n networks, p o w e r plants, and other facilities d e s i g n e d to hasten i n d u s t r i a l i z a t i o n (see F i g u r e 4.2). T h r o u g h t e c h n i c a l c o o p e r a t i o n a g r e e m e n t s , t h e J a p a n e s e g o v e r n m e n t f u r t h e r a s s i s t e d L D C s in d e v e l o p i n g work f o r c e s for such projects. To the J a p a n e s e g o v e r n m e n t ( 1 9 9 2 : 34), " e c o n o m i c c o o p e r a t i o n is a i m e d at b r i n g i n g u p p e r s o n n e l in d e v e l o p i n g c o u n t r i e s w h o a r e t e c h n i c a l l y c a p a b l e of t a k i n g a p o s i t i v e part

85

1apart

in the national task of economic and social development." 1 3 Nearly 40 percent of J a p a n e s e O D A w a s d e v o t e d to e c o n o m i c i n f r a s t r u c t u r e in 1 9 8 8 1989, more than twice the s h a r e devoted toward program assistance, political infrastructure, and other categories of development aid. Program assistance, mostly in the f o r m of c o - f i n a n c i n g with the World B a n k and regional development banks for recipient structural a d j u s t m e n t , received a modest but growing share of Japanese O D A outlays during the decade. Although its share of J a p a n ' s O D A remained less than 10 percent, Latin America played a g r o w i n g role in its aid calculations; by 1990 many South American states received more aid from Japan than f r o m any other donor. T h e wide range of f u n c t i o n s p e r f o r m e d by J a p a n e s e O D A can be discerned by reviewing its g r o w i n g role in this region d u r i n g the late 1980s. Japanese f u n d s were used to buy sports equipment for Chile's 1988 O l y m p i c team; to provide audiovisual support f o r A r g e n t i n a ' s National Cervantes Theater; and to pay for mobile libraries in Jamaica. In all three cases, the transfers were executed in grant form and were almost entirely tied to the purchase of Japanese products. Thus, they illustrate not only the w i d e n i n g applications of O D A but also the diverse w a y s in w h i c h they m a y promote the d o n o r ' s commercial interests. 1 4

Figure 4.2 Uses of Japanese ODA (Functional Distribution, 1988/1989)

30

1 •I 1HH«i l l

Political Infrastructure

Source: QECD (1991a: 181)

frastructure Agriculture

Industry

1

Food Aid

Stnioturai

1

Adjusonent or Unrestricted

other

86

Country

Japanese

ODA,

though

Studies

improving

in

some

categories,

l a g g e d b e h i n d that o f o t h e r D A C m e m b e r s in t e r m s o f

generally

OECD-defined

q u a l i t y ( s e e T a b l e 4 . 3 ) . A m a j o r r e a s o n f o r t h i s g a p w a s the J a p a n e s e g o v e r n m e n t ' s r e j e c t i o n o f m a n y O E C D s t a n d a r d s o f aid q u a l i t y . A s o b s e r v e d e a r l i e r , T o k y o c o n s i d e r e d c o n c e s s i o n a l l o a n s s u p e r i o r to g r a n t s b e c a u s e they i m p o s e d " d i s c i p l i n e " o n r e c i p i e n t s a n d s t e e r e d t h e m t o w a r d l o n g - t e r m e c o n o m i c s e l f - s u f f i c i e n c y . In o t h e r c a s e s , t h e J a p a n e s e g o v e r n m e n t

ac-

k n o w l e d g e d its s h o r t c o m i n g s in the a r e a o f aid q u a l i t y a n d p l e d g e d to i m p r o v e its p e r f o r m a n c e . T h o u g h d e f e n d i n g t h e i r c o n t i n u i n g p r e f e r e n c e f o r l o a n s , J a p a n e s e o f f i c i a l s g r a d u a l l y i n c r e a s e d t h e p r o p o r t i o n o f g r a n t aid. L e v e l s o f t e c h n i c a l a s s i s t a n c e in g r a n t f o r m g r e w r a p i d l y in a b s o l u t e t e r m s , r e a c h i n g $ 1 . 3 b i l l i o n in 1 9 8 9 . T h o u g h J a p a n d o u b l e d its g r a n t e l e m e n t f r o m 4 0 to 8 1 p e r c e n t o f all O D A f l o w s , it c o n t i n u e d to f a l l b e l o w the D A C a v e r a g e , w h i c h r o s e to a p e a k o f 9 3 p e r c e n t b y d e c a d e ' s e n d . 1 5 In t h e c a s e o f J a p a n ' s l a r g e s t b i l a t e r a l p r o g r a m s , m o r e than 9 0 p e r c e n t o f t h e f u n d s w e r e t r a n s f e r r e d in t h e f o r m o f l o w - i n t e r e s t l o a n s ( J a p a n e s e G o v e r n m e n t , 1 9 9 3 a ) . W h e r e a s l o a n s to I n d o n e s i a a m o u n t e d to $ 8 4 2 m i l lion in 1 9 8 8 , f o r e x a m p l e , g r a n t aid t o t a l e d j u s t $ 1 4 3 m i l l i o n . T h e r e s p e c tive loan a n d g r a n t f i g u r e s f o r C h i n a w e r e $ 5 1 9 m i l l i o n and $ 1 5 5 m i l l i o n d u r i n g that y e a r and, f o r the P h i l i p p i n e s , $ 4 0 4 m i l l i o n a n d $ 1 3 1

million.

W i t h i n this c a t e g o r y , p r o j e c t l o a n s c o n s t i t u t e d 6 3 p e r c e n t o f J a p a n e s e O D A loans, c o m m o d i t y loans 31 percent, and debt r e l i e f the remaining 6 percent (Japanese Government, 1992a: 71). A s n o t e d e a r l i e r , J a p a n p r o v i d e d r e c i p i e n t s w i t h g r e a t e r a u t o n o m y than m o s t o t h e r d o n o r s w i t h r e g a r d to t h e u t i l i z a t i o n o f O D A t r a n s f e r s . Its level o f u n t i e d a s s i s t a n c e ( i . e . , a i d that d o e s not o b l i g a t e r e c i p i e n t s to p u r c h a s e g o o d s o r s e r v i c e s f r o m t h e d o n o r s t a t e ) w a s h i g h e r than the D A C a v e r a g e t h r o u g h o u t t h e p e r i o d . T h i s f a c t r e f l e c t s t h e b r o a d e r J a p a n e s e O D A strate g y : H a v i n g c o n s t r a i n e d r e c i p i e n t s t h r o u g h r e l a t i v e l y s t r i c t t e r m s o f aid, J a p a n g a v e them c o n s i d e r a b l e f l e x i b i l i t y in t h e i r u s e o f the c o n c e s s i o n a l financing. Conversely, the proportion o f J a p a n e s e O D A disbursed through multilateral organizations remained b e l o w the D A C average during most o f t h e d e c a d e , as J a p a n e s e o f f i c i a l s p r e f e r r e d to c h a n n e l aid t h r o u g h their o w n m i n i s t r i e s r a t h e r than t h r o u g h i n t e r n a t i o n a l a g e n c i e s . T h e 1 9 8 0 s witn e s s e d a d e c l i n e in t h e m u l t i l a t e r a l e l e m e n t o f J a p a n e s e O D A , r e f l e c t i n g a broader trend a m o n g donors toward greater r e l i a n c e on bilateral aid. Japan a l s o b e c a m e m o r e a c t i v e at t h e r e g i o n a l l e v e l w i t h i n the A s i a n D e v e l o p m e n t B a n k a n d the I n t e r - A m e r i c a n D e v e l o p m e n t B a n k , c o n t r i b u t i n g 4 7 percent

of

the

former's

revenue

by

1989.

As

Yasutomo

concluded,

" J a p a n ' s A D B p o l i c y is a r e f l e c t i o n o f its e c o n o m i c a i d p o l i c y , a n d e c o n o m i c a i d p o l i c y is a r e f l e c t i o n o f its o v e r a l l f o r e i g n p o l i c y in t h e late 1 9 8 0 s and 1 9 9 0 s " ( 1 9 9 3 : 3 3 2 ) . F i n a l l y , J a p a n ' s a s s i s t a n c e t o L L D C s , t h e p o o r e s t o f aid r e c i p i e n t s , a l s o r e m a i n e d b e l o w t h e D A C a v e r a g e d u r i n g t h e d e c a d e . W h e r e a s the

87

Japan

Table 4.3

Quality of Japanese ODA, 1980-1989 Grant Element (% ODA)

Untied Aid (% ODA)

Multilateral Aid (% ODA)

Aid to LLDCs (% ODA)

1980

40.0 (75.2) a

53.2 (50.3)

28.0 (28.5)

18.4 (21.6)

1983

41.0 (76.3)

55.3 (45.9)

26.7 (31.3)

19.1 (21.8)

1986

62.4 (87.0)

46.9 (33.4)

30.5 (28.1)

23.6 (23.4)

1989

81.4 (92.8)

59.6 (36.5)

24.8 (27.2)

17.1 (22.4)

Sources: OECD (1982b, 1985b, 1988b, 1991b) Note: a. Figures in parentheses are DAC averages

c o m m i t t e e w i d e pattern r e m a i n e d c o n s i s t e n t , with the L L D C s h a r e r e m a i n ing at a b o u t 2 2 p e r c e n t , J a p a n a p p r o a c h e d that level b e f o r e d r o p p i n g to 17 percent in the final year. T h i s trend r e f l e c t e d the fact that J a p a n ' s p r i m a r y aid r e c i p i e n t s — i n c l u d i n g Indonesia, C h i n a , a n d the P h i l i p p i n e s — h a d relatively h i g h e r l i v i n g s t a n d a r d s than L D C s in s u b - S a h a r a n A f r i c a , Latin A m e r i c a , a n d o t h e r r e g i o n s . A n d L L D C s , u n a b l e to r e i m b u r s e J a p a n f o r c o n c e s s i o n a l O D A loans, w e r e limited to g e n e r a l l y lower a g g r e g a t e levels of grant assistance. A s i d e f r o m these indicators, the net i n c r e a s e s in J a p a n e s e O D A d u r i n g the 1 9 8 0 s c o v e r e d m o s t f u n c t i o n a l a n d g e o g r a p h i c a l c a t e g o r i e s a n d lent credibility to the p r o c l a m a t i o n s of J a p a n ' s l e a d e r s r e g a r d i n g their e x p a n d ing e f f o r t s to assist T h i r d World d e v e l o p m e n t . T h e h i g h e r O D A l e v e l s in 1988 and 1989 were consistent with J a p a n ' s highly publicized doubling plans. H o w e v e r p a r a d o x i c a l l y , J a p a n e s e l e a d e r s a l s o cited their c o u n t r y ' s rapidly increasing e c o n o m y as a primary r e a s o n f o r their p e r c e i v e d f a i l u r e s in a d d r e s s i n g q u a l i t a t i v e O D A i s s u e s : T h e g o v e r n m e n t ' s i n c r e a s e s in O D A , t h o u g h s u b s t a n t i a l o n an a b s o l u t e l e v e l , c o u l d not k e e p p a c e with the rapid g r o w t h of the national e c o n o m y b e t w e e n 1 9 7 0 a n d 1 9 9 0 . G o v e r n m e n t o f f i c i a l s f u r t h e r a r g u e d that, as they p l a c e d g r e a t e r e m p h a s i s on q u a l i t a t i v e a s p e c t s of O D A in the m i d - 1 9 8 0 s , m a n y of their m a j o r recipients had r e a c h e d their " a b s o r p t i v e c a p a c i t i e s " ; still p r e o c c u p i e d w i t h imp l e m e n t i n g d e v e l o p m e n t p r o j e c t s b e g u n in p r e v i o u s y e a r s , they w e r e unable to use f u r t h e r O D A f l o w s e f f e c t i v e l y . T h e o v e r l a p p i n g p r e s e n c e of J a p a n e s e O D A a n d b r o a d e r e c o n o m i c ties w i t h its r e c i p i e n t s is i l l u s t r a t e d in the e m p i r i c a l r e c o r d ( s e e T a b l e 4.4),

88

Country

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w h i c h reveals a significant and positive relationship b e t w e e n

Japanese

O D A a n d b i l a t e r a l t r a d e in s e v e n o f t h e t e n y e a r s u n d e r s t u d y . A l t h o u g h J a p a n r e c o r d e d its m o s t r o b u s t trade v o l u m e s w i t h i n d u s t r i a l i z e d c o u n t r i e s ( i n c l u d i n g the U n i t e d S t a t e s a n d W e s t e r n E u r o p e a n s t a t e s ) , J a p a n e s e e x p o r t s to its n e i g h b o r s in A s i a r o s e d r a m a t i c a l l y in the l a t e 1 9 8 0 s , $ 4 6 . 8 b i l l i o n in 1 9 8 5 to $ 8 2 . 6 b i l l i o n in 1 9 8 9 ( I n t e r n a t i o n a l

from

Monetary

F u n d , 1 9 9 1 ) . W i t h i n t h i s r e g i o n , J a p a n e s e e x p o r t s to C h i n a , t h e s e c o n d largest recipient o f J a p a n e s e O D A , averaged about $ 1 0 billion annually d u r i n g t h i s p e r i o d . O t h e r m a j o r aid r e c i p i e n t s in the r e g i o n that a l s o i m ported large amounts o f J a p a n e s e products

included Indonesia,

South

K o r e a , the Philippines, T h a i l a n d , and M a l a y s i a . L i n k a g e s between J a p a n e s e O D A and recipient s o c i a l - w e l f a r e condit i o n s w e r e not s t a t i s t i c a l l y s i g n i f i c a n t d u r i n g this period. A v e r a g e 1 9 8 8 l i f e e x p e c t a n c y a m o n g J a p a n ' s t o p ten O D A r e c i p i e n t s w a s 6 2 . 8 y e a r s , j u s t a y e a r l e s s t h a n the w o r l d w i d e a v e r a g e o f 6 4 y e a r s ( W o r l d B a n k , 1 7 8 - 1 7 9 ) . W i t h i n this group, C h i n a , M a l a y s i a , and S o u t h

1990:

Korea

each

recorded average life e x p e c t a n c i e s o f 7 0 years. T h e s a m e pattern was evid e n t in t h e c a t e g o r y o f d a i l y p e r c a p i t a c a l o r i c c o n s u m p t i o n ; t h e a v e r a g e 1 9 8 9 level for J a p a n ' s ten m a j o r r e c i p i e n t s w a s 2 , 5 4 1 c a l o r i e s per day, about 7 percent b e l o w the worldwide a v e r a g e o f 2,711 c a l o r i e s . Four o f Japan's primary O D A r e c i p i e n t s — T u r k e y ( 3 , 2 3 6 ) , South Korea ( 2 , 8 5 2 ) , Malaysia above

(2,774)

and

Indonesia

(2,750)—reported

consumption

rates

t h e w o r l d w i d e a v e r a g e in 1 9 8 9 ( W o r l d B a n k , 1 9 9 2 : 2 7 2 - 2 7 3 ) . S i m i l a r l y , the w e a k r e l a t i o n s h i p b e t w e e n J a p a n e s e O D A f l o w s and

m e a s u r e s o f r e c i p i e n t m i l i t a r i z a t i o n d o e s not s u g g e s t a d i r e c t s e c u r i t y o r i e n t a t i o n . A m o n g the f i v e m a j o r r e c i p i e n t s o f J a p a n e s e O D A in 1 9 8 9 - 1 9 9 0 , c o n s c r i p t i o n r a t e s d u r i n g t h e d e c a d e a v e r a g e d 3 . 2 per 1 , 0 0 0 i n h a b i t a n t s , s l i g h t l y m o r e than h a l f t h e w o r l d w i d e a v e r a g e o f 5 . 9 ( U . S . A r m s C o n t r o l a n d D i s a r m a m e n t A g e n c y , 1 9 9 0 ) . S i g n i f i c a n t e x c e p t i o n s w e r e f o u n d in the next group o f five m a j o r recipients, however, including T u r k e y ( 1 8 . 0 ) and South Korea ( 1 6 . 8 ) . A m o n g these recipients, absolute military spending during

the

1980s

varied

widely,

from

$298

million

in

the

case

of

B a n g l a d e s h to $ 2 3 b i l l i o n in t h e c a s e o f C h i n a . I f C h i n a is e x c l u d e d f r o m t h e g r o u p , a v e r a g e m i l i t a r y s p e n d i n g a m o u n t e d to $ 2 . 9 b i l l i o n in c o n s t a n t 1 9 8 9 dollars. D e s p i t e the relative a b s e n c e o f traditional defense c o n c e r n s underlyi n g J a p a n e s e O D A , f l o w s w e r e o f t e n d e p i c t e d as " s t r a t e g i c a i d " ( s e n r a l c u ) b y p o l i c y m a k e r s , g i v e n t h e b r o a d e r c o n n o t a t i o n o f n a t i o n a l s e c u r i t y in p o s t w a r J a p a n ( Y a s u t o m o , 1 9 8 6 ) . A s s h a l l b e e x p l o r e d in g r e a t e r detail in C h a p t e r 7 , J a p a n e s e O D A b e h a v i o r c o n f o r m e d to a s t r a t e g i c d i v i s i o n o f l a b o r in w h i c h its d i s p r o p o r t i o n a t e s u p p o r t f o r r e g i o n a l N I C s , m a n y o f w h i c h w e r e a l s o s e e n as vital to the W e s t ' s n e o c o n t a i n m e n t effort, w a s strongly e n c o u r a g e d by U . S . leaders. Further, like France, J a p a n identified t h e e c o n o m i c d e v e l o p m e n t o f s e l e c t e d n e i g h b o r s a s c r i t i c a l to its o w n

89

Japan

Table 4.4

Japanese ODA and Recipient Characteristics: Multivariate Relationships (Figures indicate standardized slope coefficients) 1980

1981

1982

1983

1984

Humanitarian-Interest Life expectancy Caloric consumption

.13 -.19

Total R 2

1987

1988

1989

Variables

-.01

-.01

-.04

-.05

.18

-.12

.10

-.02

-.26"

-.12

-.05

-.09

-.08

-.20

.01

-.18

-.05

Variables

.35

-.17

.45

.50

.07

.01

.41

-.04

.37

.24

-.27

.02

-.21

-^28

-.14

-.08

-J6

-.05

-.17

-.12

Economic-Interest GNP Trade with Japan

1986

-.03

Security-Interest Military spending Conscripted population

1985

Variables

-.03

.26

-.05

-.24

.22

.33

.08

.23

.16

.08

.53

.70

.38

.55

.59

.46

.19

.45

.16

.17

.53

.53

.45

.53

.58

.40

.46

.32

.59

.18

Sources: U.S. ACDA (security-interest variables); IMF (trade variable); OECD (aid transfers [dependent variables]); World Bank (all other variables) Note: a. Underlined figures indicate significance at .05 level; double-underlined figures indicate significance at .01 level

g r o w t h a n d c h a n n e l e d m o s t aid f l o w s to t h e m . B o t h c o u n t r i e s r e s p o n d e d to p r e s s u r e s f r o m w i t h i n the O D A r e g i m e to c o n s i d e r r e c i p i e n t n e e d s w h i l e a c c o m m o d a t i n g b r o a d e r political a n d s e c u r i t y i m p e r a t i v e s that p r e v a i l e d d u r i n g the C o l d War.

Summary Collectively, Japanese O D A behavior during the 1980s provides further e v i d e n c e of the l i n k a g e b e t w e e n the national interests of d o n o r states and their a p p l i c a t i o n of O D A p o l i c y . T h e e m p i r i c a l p a t t e r n s o u t l i n e d in this c h a p t e r illustrate the central role s e r v e d by O D A in p r o m o t i n g J a p a n ' s o w n e c o n o m i c d e v e l o p m e n t , the p r i m a r y v e h i c l e for its r e e m e r g e n c e as an inf l u e n t i a l p o l i t i c a l p o w e r . At the s a m e t i m e , g r o w i n g aid f l o w s f a c i l i t a t e d e c o n o m i c e x p a n s i o n a m o n g J a p a n ' s n e i g h b o r s in East A s i a a n d f u r t h e r e d the p r o c e s s of r e g i o n a l e c o n o m i c integration, w i t h J a p a n s e r v i n g as a catalyst a n d a m o d e l f o r g r o w t h . T h e largest b i l a t e r a l aid f l o w s w e r e transf e r r e d f r o m T o k y o in t h e f o r m of l o w - i n t e r e s t l o a n s a n d d i r e c t e d t o w a r d the c o n s t r u c t i o n of e c o n o m i c infrastructure (e.g., utilities and transportation n e t w o r k s ) w i t h i n r e c i p i e n t states. In the p r o c e s s , the J a p a n e s e g o v e r n m e n t

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w o r k e d closely with private industry in identifying possible O D A recipients and in e x e c u t i n g aid programs. This activity, i n c l u d i n g the g r o w i n g integration of the Pacific Rim region, contributed to the rapid expansion of J a p a n ' s o w n e c o n o m y and enhanced its c o m p e t i t i v e position relative to those of industrialized states in North America and Western Europe. 1 6 Within the aid r e g i m e and a m o n g outside analysts, J a p a n e s e f o r e i g n assistance remained controversial in the 1990s. Both the quantity and quality of Japanese O D A continued to attract strong criticism from abroad (an experience Japan shared with the United States) into the 1990s, despite efforts to a d h e r e more closely to D A C - d e f i n e d standards of aid quality. In the mid-1990s, Japanese leaders expressed a willingness to a c c o m m o d a t e these and other transnational concerns within their f o r e i g n policies. To some degree, their recognition of transnational interdependence was suggestive of the b r o a d e n i n g scope of J a p a n ' s perceived national interests. But in other respects, Japanese officials remained defiant, pointing to their rapid e c o n o m i c growth and to the many success stories along the P a c i f i c Rim as testimony to the merits of their distinctive a p p r o a c h . T h u s , although Japan continued to pledge greater adherence to the O D A r e g i m e ' s principles and norms, it remained determined to maintain its own standards of O D A quality and its own prerogatives in d e c i d i n g the direction and form of aid packages. O t h e r d e v e l o p m e n t s in the late 1980s and early 1990s promised to keep J a p a n ' s domestic interests in the minds of its policymakers. A series of political scandals revealed a pattern of corruption at the highest levels of J a p a n e s e g o v e r n m e n t . T h e c o u n t r y ' s e c o n o m i c stagnation o c c u r r e d a l o n g s i d e g r o w i n g d e m a n d s by J a p a n e s e c o n s u m e r s f o r relief f r o m the chronically high costs of living. As elsewhere in the industrialized world, these problems were accompanied by the rise of nationalist groups seeking to restore J a p a n ' s a u t o n o m y in the face of perceived incursions f r o m abroad. In addition, the end of the Cold War raised questions, both in T o k y o and in Washington, about the c o n t i n u i n g security relationship between the two countries. Without a Soviet threat to p r o v i d e a basis f o r their bilateral treaty, officials in both capitals searched for a continuing rationale f o r d e f e n s e cooperation. Moreover, Japan sought a greater role in international organizations c o m m e n s u r a t e with its e c o n o m i c power, including a permanent seat on the UN Security Council. U n d e r these g r o w i n g e c o n o m i c strains, d o m e s t i c support for f o r e i g n aid faltered in the early 1990s. Though the Japanese government continued to p l e d g e increased aid f l o w s and to improve the quality of O D A , it w a s c o n f r o n t e d by mounting pressure to move in the opposite direction on both counts: Questions have been raised whether aid was not being wasted . . . and whether the emphasis should not be redirected to such activities as

91

Japan

e d u c a t i o n , m e d i c a l c a r e , and population p l a n n i n g . B u t b e y o n d t h e s e m a t ters, it s e e m s likely that the a v e r a g e J a p a n e s e c i t i z e n will s o o n e r or later r a i s e the s a m e q u e s t i o n s b r o u g h t up in the U n i t e d S t a t e s , w h e r e f o r e i g n aid has g a r n e r e d less and less popular support. ( S c a l a p i n o , 1 9 9 2 : 2 0 6 ) T h u s , the future of J a p a n ' s foreign policies, including those for O D A , w a s s u b j e c t to c o n f l i c t i n g i n f l u e n c e s . On the o n e hand, the c o u n t r y ' s leaders w e r e a s k e d to satisfy external d e m a n d s that they a s s u m e the responsib i l i t i e s o f g l o b a l l e a d e r s h i p , i n c l u d i n g an i m p r o v e m e n t in t h e i r q u a l i t a t i v e p e r f o r m a n c e as m e m b e r s of the O D A r e g i m e . O n the other hand, internal p r e s s u r e m o u n t e d f o r J a p a n t o p l a c e its n a t i o n a l i n t e r e s t s , n a r r o w l y

de-

f i n e d , at t h e f o r e f r o n t o f its d o m e s t i c a n d f o r e i g n p o l i c i e s . T h e f u t u r e o f J a p a n ' s r o l e w i t h i n t h e a i d r e g i m e — a n d w i t h i n w o r l d p o l i t i c s in g e n e r a l — d e p e n d e d o n its l e a d e r s ' a b i l i t y t o r e c o n c i l e t h e s e c o n t r a d i c t o r y

demands.

Notes 1. F o r e x a m p l e , s e e S t e v e n ( 1 9 9 0 ) , M o r s e ( 1 9 8 7 ) , J o h n s o n ( 1 9 8 2 ) , and W h i t e (1974). 2 . In terms o f trade v o l u m e with the United S t a t e s , Japan ranked s e c o n d o n l y to C a n a d a . M o r e than one-third o f J a p a n e s e e x p o r t s went to the United S t a t e s during the 1 9 8 0 s , and the United S t a t e s w a s the s o u r c e o f nearly 2 0 p e r c e n t o f J a p a n e s e i m p o r t s . M e a n w h i l e , J a p a n e s e i n v e s t m e n t s in the United S t a t e s e x c e e d e d $ 7 5 billion by 1 9 9 0 , about h a l f o f its total foreign i n v e s t m e n t ( S c a l a p i n o , 1 9 9 2 : 2 0 3 ) . 3 . T h e e c o n o m i c b o o m b e g a n less than a d e c a d e after World War II. B e t w e e n 1 9 5 0 and 1 9 7 0 , e c o n o m i c g r o w t h a v e r a g e d about 1 0 p e r c e n t in J a p a n , far a b o v e the w o r l d a v e r a g e . 4 . G r o w i n g m u l t i l a t e r a l p r o g r a m s , h i g h l y p u b l i c i z e d by J a p a n e s e o f f i c i a l s , w e r e e x c e p t i o n s to the m o r e g e n e r a l rule o f b i l a t e r a l i s m in J a p a n e s e O D A . 5 . T h i s characteristic o f the D A C contrasted with other international government organizations, which collected aid from donor states and made relatively autonomous decisions regarding the identification o f aid recipients and the terms o f aid transfers. 6 . F o r further i n f o r m a t i o n on J a p a n e s e O D A to Latin A m e r i c a and s u b S a h a r a n A f r i c a , r e s p e c t i v e l y , s e e A n d e r s o n ( 1 9 9 3 ) and Inukai ( 1 9 9 3 ) . 7 . A fourth m i n i s t r y , the E c o n o m i c P l a n n i n g A g e n c y ( E P A ) , w a s c h a r g e d with c o o r d i n a t i n g m a n y aid p r o g r a m s but w a s v e s t e d with little f u n c t i o n a l p o w e r , its a m b i g u o u s role often attributed to the greater i n f l u e n c e a c c o r d e d o t h e r g o v e r n ment a c t o r s with c l o s e r ties to J a p a n e s e industry. 8 . A m o n g o t h e r p r o b l e m s , the J a p a n e s e aid p r o g r a m w a s o f t e n p l a g u e d by c o r r u p t i o n s c a n d a l s , i n c l u d i n g the 1 9 8 6 arrest o f a J I C A o f f i c i a l for t a k i n g b r i b e s in return for his support o f an agricultural p r o j e c t in M o r o c c o . 9 . T h e i r s h a r i n g o f the J a p a n e s e " m i r a c l e , " p a r a d o x i c a l l y , w a s often c i t e d as o n e r e a s o n for the downturn in J a p a n ' s e c o n o m i c g r o w t h in the early 1 9 9 0 s . 1 0 . W h e r e a s in 1 9 8 0 the U . S . d o l l a r w a s c o m p a r a b l e to 2 9 1 . 4 9 J a p a n e s e yen, the e x c h a n g e rate in 1 9 8 9 w a s 1 3 7 . 9 6 yen to the d o l l a r ( J a p a n e s e G o v e r n m e n t , 1992b: 93). 11. Nearly 6 0 percent o f the 3 2 , 0 3 4 J a p a n e s e t e c h n i c a l e x p e r t s w e r e dispatched to A s i a n states b e t w e e n 1 9 5 4 and 1 9 9 0 . Similarly, 5 8 . 6 percent o f foreign " t r a i n e e s " s e l e c t e d by J a p a n to r e c e i v e g u i d a n c e in technical d e v e l o p m e n t w e r e A s i a n .

92

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12. S e e J a p a n e s e G o v e r n m e n t ( 1 9 9 1 ) f o r a d e t a i l e d s u m m a r y of its t e c h n i c a l a s s i s t a n c e p r o j e c t s in t h e s e a n d o t h e r c o u n t r i e s d u r i n g this p e r i o d . 13. T h i s p a t t e r n c o n t r a s t e d m a r k e d l y w i t h the F r e n c h c a s e , in w h i c h t h e d e v e l o p m e n t of p o l i t i c a l i n f r a s t r u c t u r e w a s c o n s i s t e n t l y the t o p priority. 14. O v e r a l l , J a p a n b e c a m e m u c h m o r e a c t i v e in Latin A m e r i c a n O D A d u r i n g t h i s p e r i o d , s e r v i n g as a m e m b e r of t h e P a r t n e r s h i p in D e m o c r a c y a n d D e v e l o p m e n t and in 1 9 9 2 d i s p a t c h i n g the M i s s i o n o n E c o n o m i c and T e c h n i c a l C o o p e r a t i o n to El S a l v a d o r a n d N i c a r a g u a " t o s t u d y m e a s u r e s to aid r e c o n s t r u c t i o n and d e v e l o p m e n t and to p r o m o t e d e m o c r a t i z a t i o n " ( J a p a n e s e G o v e r n m e n t , 1 9 9 3 a : 4). 15. A p p r o x i m a t e l y t h r e e - f o u r t h s of J a p a n e s e g r a n t aid w a s t r a n s f e r r e d for g e n eral p u r p o s e s d u r i n g t h i s p e r i o d . Of t h e r e m a i n i n g f u n d s , m o s t w e r e r e s e r v e d for i n c r e a s e d f o o d p r o d u c t i o n and s u p p o r t f o r f i s h e r i e s in r e c i p i e n t c o u n t r i e s . O t h e r c a t e g o r i e s of J a p a n e s e g r a n t aid i n c l u d e d f o o d aid, d i s a s t e r r e l i e f , a n d aid for c u l tural a c t i v i t i e s ( J a p a n e s e G o v e r n m e n t , 1 9 9 2 b : 13). 16. T h i s r e g i o n a l f o c u s b e c a m e m o r e p r o n o u n c e d as t h e s e s t a t e s f o r m e d their o w n r e g i o n a l e c o n o m i c b l o c s , i n c l u d i n g t h e E u r o p e a n U n i o n a n d , in the 1 9 9 0 s , the e c o n o m i c i n t e g r a t i o n of t h e U . S . , C a n a d i a n , a n d M e x i c a n m a r k e t s u n d e r t h e N o r t h American Free Trade Agreement (NAFTA).

5 Swedish ODA: The Nordic Model Under Stress

If the situation f a c i n g the d e v e l o p i n g c o u n t r i e s , and with them the w o r l d as a w h o l e , is to be d e c i s i v e l y c h a n g e d in a m o r e favorable e c o n o m i c , s o c i a l , and e c o l o g i c a l d i r e c t i o n , l a r g e - s c a l e , w i d e - r a n g i n g , and appropriately d e s i g n e d d e v e l o p m e n t a s s i s t a n c e is c a l l e d for. . . . T h e basis o f our a s s i s t a n c e to t h o s e in greatest n e e d is a c o n v i c t i o n that all human b e i n g s are o f e q u a l w o r t h and h a v e an e q u a l right to an a c c e p t a b l e standard o f living.

—Alf Svennson, Swedish Minister for International Development Cooperation A s a lightly p o p u l a t e d m i d d l e p o w e r o n the periphery of E u r o p e , S w e d e n a s s u m e d a m o r e m o d e s t role in w o r l d politics than most o t h e r i n d u s t r i a l ized c o u n t r i e s d u r i n g the p o s t - W o r l d War II period. Yet the S w e d i s h g o v e r n m e n t m a d e an e x c e p t i o n to this rule in the case of f o r e i g n assistance. Its a g g r e s s i v e a p p r o a c h to O D A , w h i c h w a s s h a r e d by o t h e r S c a n d i n a v i a n states, s e r v e d as a p r o j e c t i o n of S w e d i s h d o m e s t i c v a l u e s and as a v e h i c l e f o r its global d e s i g n s . By the m i d - 1 9 8 0 s f o r e i g n - a i d o p e r a t i o n s a c c o u n t e d f o r m o r e than 8 0 p e r c e n t of the M i n i s t r y of F o r e i g n A f f a i r s ' s b u d g e t . In this r e s p e c t , the N o r d i c m o d e l of f o r e i g n a s s i s t a n c e as a p p l i e d b y the S w e d i s h g o v e r n m e n t p r o v i d e s an i l l u m i n a t i n g c o n t r a s t to o t h e r d o n o r s ' pursuit of national interest through f o r e i g n aid. S w e d e n ' s r e p u t a t i o n as the " d a r l i n g of the Third W o r l d " w a s r e f l e c t e d g e n e r a l l y in its f o r e i g n p o l i c i e s of the p o s t w a r era a n d s p e c i f i c a l l y in its a p p r o a c h t o w a r d f o r e i g n a s s i s t a n c e . T h e e m e r g e n t r o l e of S w e d e n as a " b e n e v o l e n t n e u t r a l " in a w o r l d of p a r t i s a n s a l l o w e d n a t i o n a l l e a d e r s to p u r s u e f o r e i g n policies with a s e e m i n g l y marginal c o n n e c t i o n to the c o u n t r y ' s g e o p o l i t i c a l or e c o n o m i c s e l f - i n t e r e s t s . T h i s role has b e e n d e s c r i b e d in several w a y s , i n c l u d i n g that of " s p l e n d i d i s o l a t i o n " f r o m the C o l d W a r realpolitik that d o m i n a t e d global p o l i t i c s f r o m 1945 t h r o u g h the 1 9 8 0 s . S w e d e n h a s s o u g h t a m i d d l e w a y — n e u t r a l i t y in war, aid to t h o s e w h o need it in p e a c e t i m e . A b r o a d as w e l l as at h o m e , it has b e e n d e t e r m i n e d to l i v e up to the standards set in arriving at a m i d d l e way, though preachm e n t s o n f o r e i g n p o l i c y by a s m a l l p o w e r in the north o f E u r o p e h a v e o f t e n s o u n d e d s e l f - r i g h t e o u s . M u c h o f its p o l i c y has b e e n c o n c e n t r a t e d

93

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on the d i v i s i o n b e t w e e n the industrialized West and the Third World. . . . T h e c o r n e r s t o n e w a s neutrality, strict and u n y i e l d i n g . ( C h i l d s , 1 9 8 0 : 1 2 0 )

L i k e t h o s e of its S c a n d i n a v i a n n e i g h b o r s , S w e d e n ' s p r o p o r t i o n a t e s h a r e of O D A has traditionally b e e n a m o n g the highest of aid d o n o r s . The first country to reach the D e v e l o p m e n t A s s i s t a n c e C o m m i t t e e ' s O D A / G N P target of 0.7 percent, S w e d e n e x c e e d e d that level t h r o u g h o u t the 1980s despite w o r s e n i n g internal e c o n o m i c c o n d i t i o n s and g r o w i n g internal dissens i o n . In m o s t c a t e g o r i e s of O D A quality, S w e d e n r a n k e d a m o n g the w o r l d ' s l e a d e r s t h r o u g h o u t t h e p o s t w a r p e r i o d . Its d i s b u r s e m e n t of O D A a l m o s t e n t i r e l y in g r a n t f o r m a n d its r e j e c t i o n of O D A " t i e d " to S w e d i s h g o o d s and s e r v i c e s set q u a l i t a t i v e s t a n d a r d s that no m a j o r d o n o r w a s able to m a t c h . F u r t h e r , S w e d i s h o f f i c i a l s m o r e a c t i v e l y i n v o l v e d the t e c h n i c i a n s , e n g i n e e r s , and civil s e r v a n t s of recipient c o u n t r i e s in d e v e l o p m e n t p r o j e c t s f u n d e d by S w e d i s h aid. 1 In their general a p p r o a c h to f o r e i g n a f f a i r s , S w e d e n ' s Social D e m o c ratic g o v e r n m e n t s p u r s u e d a d i s c e r n i b l e set of national interests f o u n d e d u p o n l o n g - s t a n d i n g , w i d e l y s h a r e d n o r m a t i v e p r i n c i p l e s r e g a r d i n g social w e l f a r e , d o m e s t i c g o v e r n a n c e , a n d f o r e i g n relations. At h o m e , they acted u p o n e g a l i t a r i a n p r i n c i p l e s in c r e a t i n g e x t e n s i v e p u b l i c s e r v i c e s , including s y s t e m s of socialized m e d i c i n e and child c a r e that b e c a m e m o d e l s f o r o t h e r i n d u s t r i a l i z e d states. In a d d i t i o n , the S w e d i s h g o v e r n m e n t a d o p t e d fiscal policies that not only e n s u r e d its p e r v a s i v e societal role but also red i s t r i b u t e d w e a l t h and p r o d u c e d a b r o a d m e a s u r e of e c o n o m i c e q u a l i t y . 2 S w e d e n ' s priorities in f o r e i g n a f f a i r s , w h i c h directly i n f o r m e d its aid policy, also r e f l e c t e d these societal n o r m s and set S w e d e n apart f r o m its Eur o p e a n n e i g h b o r s , w h i c h c o u l d less easily e s c a p e the p o l a r i z i n g i n f l u e n c e s of the C o l d War. Its leaders c o n s i s t e n t l y p u r s u e d national interests such as strategic neutrality vis-à-vis the g r e a t p o w e r s of Western E u r o p e , Asia, and North A m e r i c a ; a p a c i f i c a p p r o a c h to international c o n f l i c t resolution e m p h a s i z i n g universal c o d e s of c o n d u c t , m e d i a t i o n , a r m s control, and c o l l e c tive s e c u r i t y ; a n d the r e d r e s s i n g of e c o n o m i c i n e q u a l i t i e s b e t w e e n N o r t h and S o u t h t h r o u g h the e x t e n s i o n of social d e m o c r a t i c p r i n c i p l e s a n d p r o g r a m s to r e c e p t i v e g o v e r n m e n t s in the d e v e l o p i n g w o r l d . T h e s e interests w e r e o f t e n cited by S w e d i s h leaders as e m a n a t i n g f r o m their peripheral status in a s y s t e m of nation-states invariably d o m i n a t e d by great p o w e r s . P r i m e M i n i s t e r O l a f P a l m e , the most p r o m i n e n t of p o s t w a r S w e d i s h l e a d e r s , d e f e n d e d S w e d i s h a u t o n o m y as e s s e n t i a l f o r a m i d d l e p o w e r with global c o n c e r n s . P a l m e ( 1 9 8 2 : 2 4 4 - 2 4 5 ) identified the basis of S w e d e n ' s national interests as f o l l o w s : " t o s e c u r e , in all situations, a n d in w a y s w e c h o o s e o u r s e l v e s , o u r national f r e e d o m of action in order to pres e r v e a n d d e v e l o p o u r s o c i e t y w i t h i n o u r f r o n t i e r s a n d a c c o r d i n g to o u r v a l u e s , p o l i t i c a l l y , e c o n o m i c a l l y , a n d c u l t u r a l l y ; a n d in that c o n t e x t to strive for international d é t e n t e a n d a p e a c e f u l d e v e l o p m e n t . "

Sweden

95

M a i n t a i n i n g r e g i o n a l a n d g l o b a l neutrality b e c a m e an o v e r r i d i n g obj e c t i v e of S w e d i s h leaders u p o n the c o u n t r y ' s d e c l i n e as an imperial p o w e r in the s e v e n t e e n t h century. 3 N e u t r a l i t y s e r v e d as " m u c h m o r e than a u s e f u l f o r e i g n policy instrument; it is an integral part of their political culture a n d s t r a t e g i c t h i n k i n g , a w a y of life and the only viable political c o u r s e in the i n t e r n a t i o n a l a r e n a " ( K a r s h , 1 9 8 8 : 192). T h i s p o l i c y led to S w e d i s h d e t a c h m e n t f r o m g r e a t - p o w e r p o s t u r i n g in the n i n e t e e n t h c e n t u r y , d u r i n g both w o r l d w a r s , and t h r o u g h o u t the Cold War. In a d d i t i o n , it s h a p e d S w e d e n ' s role as an i n t e r m e d i a r y in the N o r t h - S o u t h d i a l o g u e and dictated its h a n d s - o f f a p p r o a c h t o w a r d political integration on the E u r o p e a n c o n t i n e n t . S w e d e n w a s not a party to the 1 9 5 7 Treaty of R o m e , w h i c h e s t a b l i s h e d the E u r o p e a n E c o n o m i c C o m m u n i t y , b e c a u s e of the p a c t ' s l o n g - t e r m p r o v i s i o n s for p o l i t i c a l u n i f i c a t i o n a n d , c o n s e q u e n t l y , f o r the s a c r i f i c e of Swedish sovereignty. T o S w e d i s h leaders, neutrality p r o v i d e d i n v a l u a b l e f l e x i b i l i t y — a n o p p o r t u n i t y both to avoid f o r e i g n e n t a n g l e m e n t s a n d , m o r e c o n s t r u c t i v e l y , to build b r i d g e s b e t w e e n rival b l o c s . Its neutrality did not e x c l u d e an active i n v o l v e m e n t in i n t e r n a t i o n a l a f f a i r s . To the c o n t r a r y , S w e d e n ' s a s s e r t i v e p r e s e n c e in international g o v e r n m e n t a l o r g a n i z a t i o n s and w i t h i n the O D A r e g i m e led to its r e p u t a t i o n as The Committed Neutral ( S u n d e l i u s , 1989). S w e d e n w a s a s t r o n g s u p p o r t e r of the L e a g u e of N a t i o n s and, a f t e r World War II, the U n i t e d N a t i o n s . Its a c t i v i s m i n c r e a s e d in 1 9 5 3 with the a p p o i n t m e n t of S w e d e n ' s D a g H a m m e r s k j o l d as s e c r e t a r y - g e n e r a l of the U n i t e d N a t i o n s . H a m m e r s k j o l d e p i t o m i z e d S w e d e n ' s i d e a l i s m in w o r l d p o l i t i c s ; his d e a t h on a U N p e a c e k e e p i n g m i s s i o n to the C o n g o in 1 9 6 1 o n l y s t r e n g t h e n e d the S w e d i s h p u b l i c ' s r e s o l v e to i m p r o v e N o r t h - S o u t h relations. A n e x c e p t i o n to S w e d e n ' s n o n a l i g n m e n t policy w a s the e f f o r t a m o n g S w e d i s h l e a d e r s to bolster N o r d i c c o o p e r a t i o n , primarily on e c o n o m i c and social issues. P a l m e ( 1 9 8 2 : 2 3 6 ) e m p h a s i z e d the " c o m m u n i t y of l a n g u a g e , c u l t u r e , tradition, and c o h e s i o n " that existed a m o n g S w e d e n and its neighb o r s D e n m a r k , F i n l a n d , I c e l a n d , and N o r w a y . N o r d i c c o u n t r i e s e x p l o i t e d their s h a r e d b a c k g r o u n d s a n d their d e t a c h m e n t f r o m the g r e a t p o w e r s to c r e a t e their o w n m o d e l of N o r t h - S o u t h c o o p e r a t i o n : " T h e d e s i g n a t i o n ' L i k e - M i n d e d C o u n t r i e s ' w a s c o i n e d d u r i n g the 1 9 7 0 s to d e p i c t S c a n d i n a v i a , t o g e t h e r with H o l l a n d , as T h i r d World p a r t n e r s in the e f f o r t to ref o r m the global s y s t e m t h r o u g h multilateral n e g o t i a t i o n s in several a r e n a s . T h e international stature of t h e s e small states has g r o w n as a result of this p o s i t i v e r e c o r d " ( S u n d e l i u s a n d O d o m , 1992: 324). T h e s e S c a n d i n a v i a n c o u n t r i e s t i g h t e n e d their r e g i o n a l links at a t i m e w h e n W e s t e r n E u r o p e a n s t a t e s w e r e a l s o m o v i n g t o w a r d e c o n o m i c integ r a t i o n . For S w e d e n , this r e g i o n a l e m p h a s i s w a s not u n p r e c e d e n t e d ; w h e n the c o l l e c t i v e s e c u r i t y p r o v i s i o n s of the L e a g u e of N a t i o n s d i s i n t e g r a t e d d u r i n g the i n t e r w a r p e r i o d , the S w e d i s h g o v e r n m e n t had turned to N o r d i c

96

Country Studies

d e f e n s e a g a i n s t G e r m a n f a s c i s m . I m m e d i a t e l y a f t e r W o r l d W a r II, S w e d e n a t t e m p t e d to r e t a i n a s y s t e m o f S c a n d i n a v i a n c o l l e c t i v e s e c u r i t y t h r o u g h t h e S c a n d i n a v i a n D e f e n s e A l l i a n c e , but its e f f o r t s w e r e u n s u c c e s s f u l , as D e n m a r k and N o r w a y j o i n e d N A T O and thus " t o o k s i d e s " in the C o l d W a r . Swedish

leaders were particularly

concerned

that N A T O

membership

w o u l d r u p t u r e its t e n u o u s but i m p o r t a n t r e l a t i o n s h i p s w i t h t h e

Soviet

U n i o n in t h e 1 9 5 0 s . T h e e x p e r i e n c e o f n e i g h b o r i n g F i n l a n d , w h i c h

ac-

c e p t e d S o v i e t h e g e m o n y b u t not t h e de f a c t o c o n t r o l o f M o s c o w , s e r v e d a s a c o n s t a n t r e m i n d e r to S w e d i s h l e a d e r s a b o u t t h e n e e d to r e m a i n n o n a l i g n e d a n d to s u p p o r t c o n c i l i a t i o n b e t w e e n the s u p e r p o w e r s . 4 G i v e n the f a c t that e x p o r t s a c c o u n t e d f o r a p p r o x i m a t e l y o n e - t h i r d o f its G N P into the 1 9 9 0 s , S w e d e n ' s e m p h a s i s o n e c o n o m i c a s p e c t s o f its f o r e i g n p o l i c y is not s u r p r i s i n g . C l o s e r p o l i t i c a l t i e s b e t w e e n S w e d e n a n d the E u r o p e a n mainland reflected their intimate e c o n o m i c relations: A p p r o x i m a t e l y 7 5 p e r c e n t o f S w e d i s h t r a d e w a s w i t h W e s t e r n E u r o p e a n s t a t e s in 1 9 9 0 . ( B y c o m p a r i s o n , the U n i t e d S t a t e s a c c o u n t e d f o r a p p r o x i m a t e l y

10

percent o f S w e d e n ' s trade, L D C s another 1 0 p e r c e n t . ) A founding m e m b e r o f t h e E u r o p e a n F r e e T r a d e A s s o c i a t i o n ( E F T A ) in 1 9 6 0 , S w e d e n c o m p e n s a t e d f o r its i s o l a t e d l o c a t i o n b y b e c o m i n g a c h a m p i o n o f o p e n m a r k e t s a n d t r a n s n a t i o n a l c o m m e r c e . 5 Its g o v e r n m e n t e n d o r s e d the c r e a t i o n o f the E u r o p e a n E c o n o m i c A r e a a n d , t h r o u g h the E F T A , s u b s e q u e n t l y c o n c l u d e d free-trade a g r e e m e n t s with Eastern European and B a l t i c states. S w e d e n w a s a l s o an a c t i v e s u p p o r t e r o f o p e n m a r k e t s in s u c c e s s i v e r o u n d s o f the G e n e r a l A g r e e m e n t on Tariffs and T r a d e ( G A T T ) , including the Uruguay R o u n d , w h i c h c o n c l u d e d in 1 9 9 4 . A s they pursued this f o r e i g n - p o l i c y priority, S w e d i s h leaders additionally promoted peaceful means o f conflict resolution between military rivals. T h e y r e j e c t e d p r o p o s a l s f r o m s o m e d o m e s t i c groups that S w e d e n d e v e l o p its o w n n u c l e a r d e t e r r e n t a n d i n s t e a d p r e s s e d o t h e r s t a t e s in the reg i o n to f o r m a " n u c l e a r - f r e e c l u b . " In a d d i t i o n , t h e y e n c o u r a g e d d é t e n t e b e t w e e n t h e U n i t e d S t a t e s a n d S o v i e t U n i o n a n d s u p p o r t e d e f f o r t s to r e d u c e n u c l e a r s t o c k p i l e s in b o t h c o u n t r i e s and a c r o s s E u r o p e . In 1 9 7 5 , S w e d e n j o i n e d t h e C o n f e r e n c e o n S e c u r i t y a n d C o o p e r a t i o n in E u r o p e ( C S C E ) , w h i c h it u s e d a s a p l a t f o r m to a d v a n c e t h e H e l s i n k i a c c o r d s o n rights. T h e C S C E adopted S w e d e n ' s conception o f " c o m m o n

human

security"

b a s e d on regional and global d i s a r m a m e n t . 6 P a l m e ' s 1 9 8 2 C o n f e r e n c e on C o m m o n S e c u r i t y pursued these o u t c o m e s , and the 1 9 8 4 - 1 9 8 6 S t o c k h o l m C o n f e r e n c e o n D i s a r m a m e n t in E u r o p e p r e s s e d f u r t h e r a s r e n e w e d s i g n s o f E a s t - W e s t a c c o m m o d a t i o n b e c a m e evident. S w e d i s h officials used these and other outlets to advocate restrictions on c o n v e n t i o n a l arms transfers a n d o n the d e v e l o p m e n t o f c h e m i c a l and b i o l o g i c a l w e a p o n s . In t h e U n i t e d N a t i o n s d u r i n g t h e 1 9 8 0 s a n d e a r l y 1 9 9 0 s , S w e d e n a c t i v e l y s u p p o r t e d its growing number of peacekeeping missions.

Sweden

97

Swedish ODA in Retrospect Given S w e d e n ' s physical and cultural separation f r o m continental entanglements, World War II and the Cold War served less as turning points in S w e d i s h foreign policy than as extensions of p r e v i o u s patterns. In this light, S w e d e n ' s historical experience may be better viewed as one of continuity and gradual systemic adaptation than one of turbulence and abrupt c h a n g e . This d i m e n s i o n of S w e d i s h f o r e i g n policy, of course, contrasts sharply with the cases of France, Japan, and the United States, combatants during World War II w h o s e international roles were largely transformed by the conflict and by the s u b s e q u e n t pressures of the Cold War. S w e d e n ' s Third World relations also d i f f e r e d f r o m those of industrialized states in Western Europe, w h o s e aid policies were o f t e n dictated by postcolonial c o m m i t m e n t s . From the 1800s through the 1950s, S w e d e n ' s role in the southern hemisphere was largely limited to missionary work conducted by the Lutheran Church. Swedish leaders during the 1960s shaped the first generation of O D A f l o w s to facilitate their progressive agenda in foreign affairs. Aid programs were p r e m i s e d upon a w i d e s p r e a d antipathy t o w a r d many industrialized p o w e r s ' development strategies, which were perceived by Swedish leaders as largely self-serving and tainted by Cold War p r e o c c u p a t i o n s . Policymakers were strongly influenced by the writings of the Swedish economist G u n n a r Myrdal (1960: 236), w h o argued that "a substantial increase in the bargaining power of the poor countries is necessary for attaining a new situation of world stability." With O D A as their instrument, Swedish officials pursued a "special r e l a t i o n s h i p " with a relatively small n u m b e r of L D C s that shared their c o m m i t m e n t to social d e m o c r a c y at h o m e and n o n m i l i tarism abroad. An elite and public consensus on the virtues of foreign assistance, reflecting broader societal agreement on S w e d e n ' s role in foreign affairs, ensured O D A ' s prominent role in postwar S w e d i s h foreign policy. S w e d e n ' s "social homogeneity and historical tradition [produced] c o m m o n political values embracing moderation and a willingness to c o m p r o m i s e " (Hancock, 1972: 32). T h e public was actively involved in the formulation of government policies, and its influences were felt within the parliament (Riksdag) and the O D A bureaucracies. Vigorous debates r e g a r d i n g the selection of O D A recipients, the f o r m s and terms of aid, and the f u n c t i o n of aid as a vehicle f o r recipient d e v e l o p m e n t occurred within the context of a societal c o n s e n s u s that O D A could serve a constructive role in North-South relations and that Sweden was in a favorable position to provide it. Prior to S w e d e n ' s e m e r g e n c e as a m a j o r O D A donor, n o n g o v e r n m e n tal o r g a n i z a t i o n s ( N G O s ) raised and disbursed f o r e i g n aid through the newly f o r m e d Central C o m m i t t e e f o r S w e d i s h Technical A s s i s t a n c e to

98

Country

Studies

L e s s - D e v e l o p e d Areas. T h r o u g h N G O s , S w e d i s h aid donors hoped to reach the targets of their Third World development e f f o r t s more directly. T h e y openly mistrusted political elites in many L D C s and sought " s o l i darity with the poor as o p p o s e d to their g o v e r n m e n t s " (Holmberg, 1989: 147). As the Swedish g o v e r n m e n t assumed central control over the O D A program, bilateral transfers were approved for two recipients, Ethiopia in A f r i c a and Pakistan in Asia. A third recipient, Ceylon (Sri Lanka), w a s added in the late 1950s, and many more states received bilateral assistance during the O D A "gold r u s h " of the early 1960s. T h e position of special minister for d e v e l o p m e n t assistance w a s created to m a n a g e S w e d e n ' s emerging O D A program, to consolidate public support for development assistance, and to design o n g o i n g bilateral aid packages. T h e s e early programs largely consisted of technical assistance for aid recipients, including the construction of schools and clinics and the transfer of Swedish equipment for recipient infrastructure projects such as electrification and public health. Minister Ulla Lindstrom was largely s u c c e s s f u l in this e f f o r t , and by 1961 the Central C o m m i t t e e was expanded into a broader Agency for International Assistance. In 1962, the Riksdag formally articulated the aid p r o g r a m ' s long-term scope and objectives, declaring it to be "an expression of a much deeper recognition that peace, freedom, and welfare are not exclusive national concerns, but rather something increasingly universal and indivisible." 7 General public support w a s obtained for the v o l u m e and direction of Swedish foreign assistance despite denunciations of the domestic policies of some aid recipients, most notably those of Ethiopia's Emperor Haile Selassie. T h o u g h many argued that recipients must a d h e r e to d e m o c r a t i c principles or respect human rights, others equated such requirements with the type of political interference otherwise proscribed by Swedish aid legislation. Overall, however, S w e d e n sought potential aid recipients that, in word or in deed, lived up to the country's model of social democracy. Consistent with the targets articulated by the United Nations and the DAC, the Swedish government pledged to raise O D A appropriations until they reached 1 percent of Swedish national income. This target, officially adopted in 1968 and achieved in 1975-1976, became the focal point of ongoing domestic debate. (The O D A level stood at 0.1 percent of S w e d e n ' s G N P in 1960 and 0.5 percent of G N P in 1970.) C o m m u n i s t and Liberal Party leaders advocated a more aggressive aid program, whereas m e m b e r s of the Moderate and Centrist parties generally argued for more modest appropriations. No major political group, however, questioned the basic legitimacy of foreign aid as an instrument of Swedish foreign policy. T h e Swedish government repeatedly pledged to separate the humanitarian aspirations of O D A f r o m short-term domestic e c o n o m i c interests. If S w e d e n was to derive b e n e f i t s f r o m the transfers, they were to be only a " w e l c o m e side e f f e c t , " not an ostensible motivation. Other steps w e r e

Siveden

99

taken to m a x i m i z e the quality of Swedish O D A . Aid w a s to be offered on " s o f t " terms, with a preponderant grant element; an e m p h a s i s on multilateral f l o w s w a s designed to ensure the nonpolitical, noncoercive nature of Swedish O D A . T h e goals of most international organizations involved in foreign aid w e r e "thought by many to correspond very well to a Swedish attitude of general benevolence and international solidarity, unmarred by vested interest" (Ohlin, 1973: 50). In approving the first large-scale annual O D A appropriation, the Swedish government declared that O D A would be directed toward states that were attempting to carry out s u c h structural c h a n g e s as w i l l create c o n d i t i o n s for d e v e l o p m e n t characterized by e c o n o m i c and s o c i a l e q u a l i z a t i o n . . . . A i d must not imply f o r e i g n e c o n o m i c and political interference . . . nor must questions of race and religion play any role. [ S w e d e n must d i s p l a y a] p o s i t i v e attitude t o w a r d the cultural b a c k g r o u n d and s p e c i f i c n e e d s o f recipient c o u n t r i e s . ( Q u o t e d in H e p p l i n g , 1 9 8 6 : 2 2 )

During its aid reorganization of the mid-1960s, S w e d i s h officials devised a " c o u n t r y - p r o g r a m m i n g " system by which large and sustained O D A f l o w s w o u l d be targeted to a more limited pool of recipients. T r a n s f e r s concentrated on six recipients: Ethiopia, Kenya, Tanzania, Tunisia, India, and Pakistan. Swedish officials also lent e c o n o m i c support to revolutionary r e g i m e s in the d e v e l o p i n g world such as North Vietnam, Cuba, and A n g o l a . T h e S w e d i s h strategy was later b r o a d e n e d to include seventeen "program countries," for which multifaceted, long-term plans were developed (see Table 5.1). 8 This recipient-oriented strategy allowed for more elaborate consultations between Sweden and its beneficiaries, for increased coordination a m o n g functional sectors assisted through development assistance, and for the integration of aid p r o g r a m s within the broader and longer-range d e v e l o p m e n t strategies of the selected L D C s . These states were particularly attractive to Sweden given their "equity-oriented" development policies, which broadly reflected S w e d e n ' s own societal priorities. 9 As in the other three cases, proliferating Swedish O D A was accompanied by a proliferation of government agencies involved in the aid process. A f t e r taking o v e r the task of foreign assistance f r o m N G O s in 1962, the S w e d i s h g o v e r n m e n t coordinated aid f l o w s through the S w e d i s h A g e n c y f o r International Assistance. This agency w a s e x p a n d e d three years later and r e n a m e d the S w e d i s h International D e v e l o p m e n t Authority ( S I D A ) , w h i c h gradually assumed oversight responsibility over most bilateral aid p r o g r a m s . D u r i n g this period Sweden w a s active in creating the multinational consortium of donors within the O E C D . O t h e r a g e n c i e s important to the aid process included the S w e d i s h Agency for International Technical and E c o n o m i c Cooperation (BITS), established in 1979. Through BITS, recipients were primarily responsible for p r o c u r i n g and m a n a g i n g short-term d e v e l o p m e n t p r o g r a m s . T h e Special

100

Country Studies

Table 5.1

Top Ten Recipients of Swedish ODA, 1970-1990

1970-1971

1980-1981

Pakistan

Vietnam Tanzania

India Tanzania Ethiopia Kenya Tunisia Vietnam Turkey Brazil Sri Lanka Source:

India Mozambique Zambia Bangladesh Ethiopia Sri Lanka Kenya Angola

1989-1990 India Tanzania Mozambique Nicaragua Vietnam Ethiopia Angola China Zambia Kenya

OECD (1991b: 224)

F u n d f o r Industrial C o o p e r a t i o n

with D e v e l o p i n g C o u n t r i e s

(SWED-

F U N D ) was designed to initiate j o i n t ventures and p r o m o t e private investm e n t in L D C s . F i n a l l y , the S w e d i s h A g e n c y f o r R e s e a r c h

Cooperation

with D e v e l o p i n g C o u n t r i e s ( S A R E C ) b e g a n its e f f o r t s in 1 9 7 5 to p r o m o t e r e s e a r c h and c o l l a b o r a t i o n b e t w e e n g o v e r n m e n t and industry in L D C s . A s the organizational f r a m e w o r k for distributing S w e d i s h a s s i s t a n c e o v e r s e a s took shape, the R i k s d a g retained oversight authority over the aid programs; it consistently played a central role in determining the volume, obj e c t i v e s , and organization o f S w e d i s h O D A . Primary responsibility for m a n aging the effort was p l a c e d within the Ministry o f F o r e i g n A f f a i r s , w h o s e minister for development cooperation authorized aid expenditures and o v e r saw S w e d e n ' s distribution o f O D A through S I D A and multilateral channels. A s noted previously, a national c o n s e n s u s f a v o r i n g f o r e i g n a s s i s t a n c e was repeatedly reflected in public opinion polls and surveys. Although public support for f o r e i g n a s s i s t a n c e fluctuated in other d o n o r states with the e b b s and f l o w s o f their d o m e s t i c e c o n o m i e s ,

w i d e s p r e a d support

for

S w e d i s h O D A persisted through the prosperity o f the 1 9 5 0 s as well as the d e e p e c o n o m i c r e c e s s i o n s o f the 1 9 7 0 s and 1 9 8 0 s . B e t w e e n o n e - h a l f and two-thirds o f S w e d i s h respondents consistently approved o f current aid l e v e l s or supported i n c r e a s e s ( K a r r e and S v e n s s o n , 1 9 8 9 : 2 5 9 ) . T h e r e c e p t i v e ness o f S w e d i s h c i t i z e n s toward foreign a s s i s t a n c e was largely attributable to their broad i n v o l v e m e n t in O D A policy f o r m u l a t i o n ; the g o v e r n m e n t e n listed the participation o f m a n y g r o u p s , including c h u r c h e s and c h a r i t a b l e o r g a n i z a t i o n s , in r e s e a r c h i n g , p r o p o s i n g , and i m p l e m e n t i n g aid p r o g r a m s . R e p r e s e n t a t i v e s o f these groups, as well as those from industry and political parties, often sat on the b o a r d s o f directors o f aid-disbursing a g e n c i e s . S w e d e n ' s d i s t i n c t i v e a p p r o a c h to O D A was m o d i f i e d in the 1 9 7 0 s and 1 9 8 0 s , h o w e v e r , a f t e r its e c o n o m y w a s w e a k e n e d by s t e e p i n c r e a s e s in p e t r o l e u m p r i c e s and the e n s u i n g e f f e c t on i n t e r n a t i o n a l m a r k e t s . F o r a

Sweden

101

country so dependent on e x p o r t s , S w e d e n w a s unusually vulnerable to such price s h o c k s (an e f f e c t a l s o o b s e r v e d in the c a s e o f J a p a n ) . For the first time in several decades, the S w e d i s h g o v e r n m e n t was f o r c e d to borrow m o n e y f r o m international markets during the late 1 9 7 0 s . W h e r e a s other m a j o r donors responded by d i v e r s i f y i n g aid transfers to include Mideast recipients, Swedish leaders sought to m a k e future O D A transfers more c o m p a t i b l e with domestic e c o n o m i c interests. A m o n g such reforms, the previously s c o r n e d p r a c t i c e o f tying S w e d i s h aid to the purchase o f Swedish goods or services or to prescribed f i n a n c i n g arrangements b e c a m e more a c c e p t a b l e as an element o f aid policy. T h e period b e t w e e n 1 9 7 6 and 1 9 8 2 also w i t n e s s e d the disruption o f the S o c i a l D e m o c r a t i c Party's control o f the S w e d i s h g o v e r n m e n t , which was run by a s u c c e s s i o n o f four n o n - S o c i a l i s t c o a l i t i o n s . T h i s period, regarded as a time o f crisis in S w e d i s h politics, marked the transition from the " l i b e r a l " era toward one in which e c o n o m i c f o r c e s , largely transnational in origin, constrained the autonomy o f states and curbed their ability to e f f e c t c h a n g e s through g o v e r n m e n t i n t e r v e n t i o n . A c o n s e r v a t i v e coalition took power and immediately proposed adding c o m m e r c i a l criteria to S w e d i s h aid c a l c u l a t i o n s . Country p r o g r a m m i n g was administered on the basis o f " c o n c e r n e d participation," which called for more active inv o l v e m e n t on the part o f donors and stricter terms for recipients ( E d g r e n , 1 9 8 6 : 5 1 ) . 1 0 In addition, S w e d i s h o f f i c i a l s e v a l u a t e d aid p r o g r a m s as a condition for future assistance, shifted from capital-intensive development p r o j e c t s to s m a l l e r - s c a l e o n e s , and p r o m o t e d a steady shift from multilateral to bilateral transfers. Its efforts were consistent with those o f other Nordic states that had developed large-scale aid programs o f their own and e v e n t u a l l y utilized them m o r e than they used multilateral a g e n c i e s . T h e s e g r e g a t i o n o f S w e d i s h d e v e l o p m e n t a s s i s t a n c e from private investment a l s o c a m e under scrutiny during this period in r e s p o n s e to appeals by industry that its f o r e i g n trade and e x p a n s i o n plans c o u l d be rendered c o n sistent with publicly financed development o b j e c t i v e s . In establishing the new framework for O D A , the R i k s d a g declared that S w e d i s h e c o n o m i c assistance would henceforth promote four s p e c i f i c o b j e c t i v e s : e c o n o m i c growth, e c o n o m i c and s o c i a l equality, e c o n o m i c and political independence, and d e m o c r a t i c d e v e l o p m e n t . T h e s e goals guided m o r e than a d e c a d e o f subsequent O D A t r a n s f e r s until three additional g o a l s were added in the 1 9 8 0 s : promoting e n v i r o n m e n t a l l y sensitive e c o n o m i c development, efficiently utilizing natural resources, and integrating w o m e n in d e v e l o p m e n t e f f o r t s . T h e s e latter priorities were partly a res p o n s e to the growing environmental m o v e m e n t and the recognized impact o f O D A on development patterns and social relations within L D C s . T h e aid debates o f the 1 9 7 0 s and 1 9 8 0 s e x a c e r b a t e d party fragmentation, in the p r o c e s s e x p o s i n g the divergent w o r l d v i e w s o f S w e d i s h elites. S w e d e n ' s multiparty s y s t e m resulted in d i s a g r e e m e n t over not only the

102

Country Studies

a g g r e g a t e v o l u m e o f a i d t r a n s f e r s but t h e i r d i r e c t i o n a s w e l l . L e a d e r s o f t h e S w e d i s h l e f t , f o r e x a m p l e , a d v o c a t e d c o n t i n u i n g a s s i s t a n c e to r e v o l u t i o n a r y r e g i m e s in A n g o l a , C u b a , N i c a r a g u a , a n d V i e t n a m . 1 1 T h e i d e a l s o f S w e d i s h r a d i c a l s o f t e n p r o v i d e d the i d e o l o g i c a l b a s i s o f d e v e l o p m e n t a i d ; they promoted assistance

to m o v e m e n t s

of national

liberation

and

to

g r o u p s that o p p o s e d i m p e r i a l i s m , n e o c o l o n i a l i s m , a n d r a c i a l o p p r e s s i o n . M e a n w h i l e , l i b e r a l s c o n c e n t r a t e d m o r e d i r e c t l y o n aid to r e c i p i e n t s on t h e basis o f their demonstrable human needs, whereas conservatives (through t h e M o d e r a t e P a r t y ) s o u g h t l a r g e r t r a n s f e r s to s t a t e s w i t h w h i c h S w e d e n h a d e s t a b l i s h e d trade a n d i n v e s t m e n t r e l a t i o n s h i p s . T h e w i d e n i n g g a p s b e t w e e n t h e s e p o s i t i o n s in t h e 1 9 8 0 s r e f l e c t e d a " g e n e r a l p r o c e s s o f p o l i t i c a l p o l a r i z a t i o n in S w e d e n " ( A n d e r s s o n , 1 9 8 6 : 3 1 ) . This splintering o f public opinion occurred throughout

Scandinavia

a n d in m a n y W e s t e r n E u r o p e a n c o u n t r i e s d u r i n g the p r o l o n g e d e c o n o m i c r e c e s s i o n , high u n e m p l o y m e n t , and energy c r i s e s o f the 1 9 8 0 s . T h e " l o s t d e c a d e " o f T h i r d W o r l d d e v e l o p m e n t a r o u s e d the left in S w e d e n a n d o t h e r c o u n t r i e s , w h o s e l e a d e r s " r a d i c a l l y r e j e c t e d aid p o l i c y a l t o g e t h e r , o n t h e g r o u n d s t h a t it b o l s t e r e d r e a c t i o n a r y g o v e r n m e n t s a n d a l l o w e d

useless

t e c h n i c a l a s s i s t a n c e e x p e r t s to l e a d l i v e s o f l u x u r y in t h e m i d s t o f p o v e r t y " ( O h l i n , 1 9 7 3 : 5 1 ) . C o n s e r v a t i v e g r o u p s , m e a n w h i l e , c a l l e d f o r an e n d to " a i d w e l f a r e , " a d v o c a t i n g that O D A b e c o n t i n u e d o n l y i f tied to d o m e s t i c e c o n o m i c i n t e r e s t s . S w e d e n did not w i t n e s s the e m e r g e n c e o f u l t r a n a t i o n a l i s t g r o u p s ( a s did F r a n c e , W e s t G e r m a n y , a n d o t h e r c o u n t r i e s in W e s t e r n E u r o p e ) , but a g r o w i n g a n d m o r e a s s e r t i v e part o f its p o p u l a t i o n d e m a n d e d t h a t t h e c o u n t r y ' s n a t i o n a l i n t e r e s t s not b e s a c r i f i c e d in t h e p u r s u i t

of

transnational o b j e c t i v e s . A s noted earlier, however, no significant interest g r o u p in S w e d e n a d v o c a t e d t h e o u t r i g h t a b o l i t i o n o f d e v e l o p m e n t a s s i s t a n c e ; d e b a t e s c e n t e r e d largely on the direction and terms o f O D A f l o w s r a t h e r than t h e i r l e g i t i m a c y . T h i s w i d e s p r e a d p u b l i c c o n s e n s u s in f a v o r o f c o n t i n u i n g f o r e i g n aid s t o o d in s t a r k c o n t r a s t to the s k e p t i c i s m f e l t b y t h e U . S . p u b l i c , f o r w h i c h the o u t r i g h t r e m o v a l o f a i d f r o m the f e d e r a l b u d g e t became

increasingly

popular,

i f not

likely.

Broad-based

support

for

S w e d i s h O D A w a s c o m p a r a b l e to that w h i c h p r e v a i l e d in F r a n c e a n d J a p a n despite the e c o n o m i c difficulties o f the 1 9 8 0 s and 1 9 9 0 s . A s S w e d i s h O D A d i v e r g e d f r o m its e a r l i e r " p u r i t y " a n d i n c o r p o r a t e d f e a t u r e s that w e r e c o m p a t i b l e w i t h d o m e s t i c e c o n o m i c i n t e r e s t s , c r i t i c s f e l t t h e g o v e r n m e n t h a d r e l i n q u i s h e d its s t a t u s a s a m o d e l o f r e s p o n s i b l e b e havior. T o s o m e , the penetration o f private interests signaled the subordin a t i o n o f aid p o l i c y to t h e i n t e r e s t s o f S w e d i s h c a p i t a l . In this a n d o t h e r a s pects,

the

Nordic

model

began

to

emulate

the

"OECD

model"

of

d e v e l o p m e n t a s s i s t a n c e , w h i c h for many years had o p e n l y integrated the i n t e r e s t s o f d o n o r s t a t e s w i t h t h o s e o f r e c i p i e n t s in an a t t e m p t to p r o m o t e h i g h l e v e l s o f aid f l o w s . A s T a b l e 5 . 2 i l l u s t r a t e s , t h e c h a n g i n g s c o p e a n d direction

of Swedish

O D A flows reflected differing assumptions

and

o b j e c t i v e s , w h i c h c o u l d b e d i s c e r n e d in s e v e r a l a s p e c t s o f aid b e h a v i o r . 1 2

103

Sweden

Table 5.2

iwo European Models of ODA Swedish

OECD

Objectives

International solidarity; s o c i o e c o n o m i c equality

Increased donor-recipient c o m m e r c e ; domestic e c o n o m i c growth; membership in d o n o r ' s bloc

Recipient role

Autonomous

Dependent on donor guidance

Terms o f O D A

Untied

T i e d to donor goods or s e r v i c e s

Standard form

Grants

Concessional loans

Recipient profile

L e s s or least developed; radical or social democratic; nonaligned

L e s s developed or newly industrialized; o f geopolitical or e c o n o m i c significance

Length o f commitment

Long-term

Short or medium-term

Multilateral component

Strong

Weak or moderate

Donor self-interests

Weak

Moderate or strong

A m i d this d o m e s t i c d e b a t e , r e f o r m s in S w e d i s h aid w e r e i n s t i t u t i o n alized f r o m the early 1 9 8 0 s into the 1 9 9 0 s . In 1 9 8 1 S w e d i s h o f f i c i a l s i m p l e m e n t e d a n e w c r e d i t s y s t e m under w h i c h s u b s e q u e n t O D A w o u l d b e formally tied to S w e d i s h e x p o r t s . M o r e e l a b o r a t e g u i d e l i n e s w e r e e n a c t e d that required S I D A , B I T S , and S A R E C to e v a l u a t e the e f f e c t i v e n e s s o f aid programs. And in 1 9 9 3 , the S e m i - P e r m a n e n t C o m m i t t e e f o r the E v a l u a t i o n o f S w e d i s h D e v e l o p m e n t C o o p e r a t i o n b e g a n c o n v e n i n g on a regular b a s i s . T h e s e r e f o r m s did not p r o d u c e net r e d u c t i o n s in a g g r e g a t e O D A ; a n n u a l v o l u m e s c o n t i n u e d to rise in most years, although the g o v e r n m e n t a g r e e d to l o w e r the O D A / G N P ratio b e l o w the 1 p e r c e n t l e v e l . R e v e r s i n g e a r l i e r trends, the S w e d i s h g o v e r n m e n t turned b a c k t o N G O s f o r a s s i s t a n c e in raising m o n e y and i m p l e m e n t i n g aid p r o g r a m s . A c c o r d i n g to the S w e d i s h g o v e r n m e n t ( 1 9 9 2 ) , " N G O s in S w e d e n can c o n t r i b u t e to the d e v e l o p m e n t o f trade unions, c o - o p e r a t i v e s and other population m o v e m e n t s w h i c h play a part in the growth o f d e m o c r a t i c s o c i e t i e s . . . . N G O s are often m o r e a b l e than the o f f i c i a l aid a g e n c i e s to r e a c h g r o u p s l i k e rural l a b o r e r s and t h e handicapped."

Swedish ODA and Global Solidarity R e g a r d e d as a m o n g the m o s t a l t r u i s t i c o f D A C aid p r o g r a m s , S w e d i s h O D A w a s " a n international e x p r e s s i o n o f s o c i a l v a l u e s that [ w e r e ] w i d e l y s h a r e d w i t h S w e d i s h s o c i e t y . . . . S o l i d a r i t y w i t h the u n d e r p r i v i l e g e d is

104

Country

Studies

r e g a r d e d as a moral r e s p o n s i b i l i t y " (Karre and S v e n s s o n , 1989: 231). A m o n g members of the DAC, S w e d e n ' s program stood out for its ascribed c o m m i t m e n t to the societal values of prosperity, equality, and international solidarity. In the c a s e of S w e d e n , o n e is tempted to s u g g e s t that its m o s t d i s t i n c t i v e feature is its m o r a l i s t i c or e v e n s a n c t i m o n i o u s tone. T h e r e is a t e n d e n c y , a m o n g p o l i t i c i a n s and many aid o f f i c i a l s , to suspect the m o t i v e s underlying aid p o l i c i e s in all other donor countries. . . . S w e d e n a l o n e is thought to be acting purely in the interest of the u n d e r d e v e l o p e d c o u n t r i e s , or at least o f the d e s e r v i n g o n e s . (Ohlin, 1973: 5 6 )

In making O D A decisions, Swedish officials looked for potential partners in their effort to convert their social democratic principles into political stability and broad-based prosperity abroad. Neither decimated nor enriched by the two world wars, Sweden served as a model to L D C s trying to avoid subordination to Cold War alignments. S w e d e n ' s marginal role in great-power politics "allowed plenty of room for indulgence in broad idealistic imperatives" (Holmberg, 1989: 124). A m o n g primary concerns advanced by Swedish leaders was the national liberation, rapid decolonization, and progressive governmental activism in LDCs. In this manner, the S w e d i s h g o v e r n m e n t f o u n d O D A to be a valuable asset in its pursuit of "ideological imperatives" in the Third World. 1 3 This aspect of Swedish policy was also reflected in g o v e r n m e n t spending patterns at the domestic level. In 1989, the Swedish central gove r n m e n t spent 4 0 . 6 percent of GNP, up f r o m 27.9 percent in 1972 and a m o n g the highest rates of public spending in the industrialized world. Of that total expenditure, 55.9 percent was directed toward w e l f a r e programs; just 6.7 percent was spent on national defense (World Bank, 1991: 225). In addition to promoting their o w n geopolitical independence, Palme and his predecessors served as champions of Third World efforts to maintain f r e e d o m from great-power hegemony. To Palme (1982: 245), "durable peace and detente are impossible as long as small states are s u b j e c t e d to the Realpolitik of great p o w e r s . " T h r o u g h the L e a g u e of N a t i o n s , the United Nations, and other multilateral channels, Sweden opposed the imposition of the great p o w e r s ' e c o n o m i c , military, and political h e g e m o n y and encouraged newly independent states. To Swedish officials, political self-determination was critical for the newly independent states of Africa and South Asia. Such autonomy could not be realized, they argued, if these L D C s were subject to the e c o n o m i c manipulation of industrialized states. In their view, North-South cooperation would produce the additional benefits of political and e c o n o m i c independence. S w e d e n ' s initiatives in this regard extended well beyond O D A ; it was a m o n g the earliest supporters of the movement for a New International Economic Order and of the efforts by the Group of 77 to redistribute global wealth; it e n c o u r a g e d revolutionary m o v e m e n t s in Latin A m e r i c a

Sweden

105

and subsidized the revolt against apartheid in South A f r i c a . In criticizing the hegemonic ambitions of both Cold War s u p e r p o w e r s , Swedish leaders called for the political and e c o n o m i c autonomy of Eastern Europe as well as the liberation of Third World states from U.S.-backed dictatorships. Swedish officials c o n d e m n e d the interventionism of the United States, Soviet Union, and other global powers during the Cold War, using foreign assistance to e n c o u r a g e L D C s to pursue social, m a c r o e c o n o m i c , and f o r eign p r o g r a m s similar to their o w n . Specifically, they sought prospective recipients with nonaligned f o r e i g n policies, redistributive fiscal policies, and activist social-welfare policies. In this way, S w e d e n urged recipients to r e p r o d u c e the S w e d i s h w e l f a r e system within their o w n borders. Though they avoided conditionality in most of their aid transfers, through the country-programming approach Swedish officials engaged in an "intensified policy dialogue" with recipients that " m a d e it possible in many cases to influence these countries' e c o n o m i c policies" ( O E C D , 1990a: 149). This pattern, of course, was not unique to Sweden. French aid officials attempted to reconstruct the s o c i o e c o n o m i c and cultural institutions of their metropole, and Japan rewarded states that emulated its model of political economy. In Sweden, a quest for hegemony was less evident than a quest for n o r m a t i v e assimilation; the values t r a n s f e r r e d through the aid mechanism generally reflected societal principles rather than discernible material self-interest. In S u n d e l i u s ' s view, " T h e c o m m i t m e n t to a just and equitable w o r l d order in many w a y s reflects the salient features of Swedish d o m e s t i c life" (1990: 124). T h o u g h widely regarded as altruistic, S w e d e n ' s a p p r o a c h to NorthSouth relations was not articulated entirely in these terms. S w e d i s h officials a d v a n c e d a vision of international relations by which the equitable distribution of wealth (between North and South and within states) would promote political stability, which in turn w o u l d d i s c o u r a g e military adventurism and thus benefit all nations, including S w e d e n . " E c o n o m i c and social d e v e l o p m e n t in the d e v e l o p i n g countries is also in the interests of the industrialized nations," argued Alf Svennson ( S w e d i s h G o v e r n m e n t , 1993: 4), S w e d e n ' s minister for international development cooperation and human rights issues. " A peaceful future for the world is inconceivable if we fail to eliminate mass poverty." As a trading state shorn of geopolitical rivalries, S w e d e n ' s prevailing national interests thus centered on systemic stability. And its leaders explicitly made foreign assistance one of Sweden's primary contributions to global prosperity, equality, and stability.

Swedish ODA in Practice As described in Chapter 2, S w e d e n was a m o n g the w o r l d ' s most affluent states during the period under study. Its per capita G N P of $26,000 in 1990 was the largest among the four donor states under study, and its unemployment

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Country

Studies

rate of 1.5 p e r c e n t w a s the l o w e s t . O t h e r m e a s u r e s of a f f l u e n c e , i n c l u d i n g life e x p e c t a n c y (74 for men, 80 for w o m e n ) and infant mortality (6 per 1 , 0 0 0 ) , f u r t h e r a f f i r m e d this d i m e n s i o n of S w e d e n ' s e c o n o m y a n d s o c i e t y . 1 4 H o w e v e r , t h e c o u n t r y ' s s m a l l s i z e a n d r e l a t i v e l y l o w level of e c o n o m i c o u t p u t g r e a t l y l i m i t e d its i m p a c t o n e c o n o m i c d e v e l o p m e n t b o t h w i t h i n its o w n region a n d a m o n g d e v e l o p i n g c o u n t r i e s . S w e d e n ' s $ 1 8 8 billion G N P in 1 9 8 9 w a s the s m a l l e s t of the f o u r by a l m o s t $ 7 0 0 billion, a n d S w e d e n s u f f e r e d a n e g a t i v e b a l a n c e - o f - p a y m e n t rate of - 2 . 6 p e r c e n t / G N P in 1 9 9 0 , w h i c h w a s the g r e a t e s t s u c h d e f i c i e n c y of the f o u r d o n o r s t a t e s . P u b l i c s p e n d i n g a c c o u n t e d f o r m o r e than 6 0 p e r c e n t of S w e d e n ' s g r o s s n a tional p r o d u c t , by far the largest a m o n g the f o u r s a m p l e states, e x c e e d i n g the levels of France (49.7 percent), the United States (36.1 percent), and Japan (32.9 percent). A m o n g t h e m o s t d i s t i n c t i v e a s p e c t s of S w e d e n ' s O D A p e r f o r m a n c e , its per c a p i t a aid f l o w s w e r e the h i g h e s t of the f o u r d o n o r states u n d e r rev i e w . S w e d e n ' s p e r c a p i t a O D A e x p e n d i t u r e of $ 1 5 0 w a s 5 0 p e r c e n t g r e a t e r t h a n that of J a p a n as t h e 1 9 8 0 s b e g a n , t h r e e t i m e s the J a p a n e s e rate, a n d a l m o s t f o u r t i m e s that of t h e U n i t e d S t a t e s . T h e $ 2 0 5 per c a p i t a level in 1 9 8 9 - 1 9 9 0 w a s also by far t h e largest, as the d i s p a r i t i e s b e t w e e n S w e d e n a n d the o t h e r t h r e e d o n o r s a c t u a l l y i n c r e a s e d d u r i n g the p e r i o d . T h r o u g h o u t the p o s t w a r p e r i o d a n d i n c l u d i n g the d e c a d e u n d e r study, S w e d e n g r a d u a l l y i n c r e a s e d its s h a r e of g l o b a l O D A s p e n d i n g (see T a b l e 5 . 3 ) . Net d i s b u r s e m e n t s in 1 9 8 9 - 1 9 9 0 e x c e e d e d $ 1 . 7 b i l l i o n , a 4 0 p e r c e n t i n c r e a s e a b o v e its 1 9 8 0 O D A e x p e n d i t u r e s a n d m o r e t h a n 2 5 0 p e r c e n t a b o v e the 1 9 7 0 l e v e l . S w e d i s h O D A a l s o r e p r e s e n t e d a larger s h a r e of its g r o s s n a t i o n a l p r o d u c t by 1 9 9 0 , d e s p i t e o n g o i n g internal p r e s s u r e s to s l o w o r r e v e r s e its e x p a n s i o n . In t e r m s of its s h a r e of g l o b a l d e v e l o p m e n t aid f l o w s , S w e d e n p l a y e d a larger role by the end of the d e c a d e than it did at the outset, with its 1 9 8 9 - 1 9 9 0 c o n t r i b u t i o n m o r e than 5 0 percent larger than that of t w o d e c a d e s earlier. Net d i s b u r s e m e n t s actually d e c l i n e d slightly in 1990, both in real t e r m s and as a p e r c e n t a g e of S w e d i s h GNP, b e c a u s e of the c o m pletion of v a r i o u s large-scale p r o j e c t s in the 1 9 8 9 b u d g e t year. A n a d d i t i o n a l $ 6 2 8 m i l l i o n in S w e d i s h d e v e l o p m e n t a s s i s t a n c e w a s d i s t r i b u t e d t h r o u g h m u l t i l a t e r a l a g e n c i e s d u r i n g this p e r i o d , p r i m a r i l y t h e E u r o p e a n C o m m u n i t y and o r g a n i z a t i o n s within the United Nations ( O E C D , 1 9 9 1 a : 2 3 3 ) , in p a r t i c u l a r t h e UN D e v e l o p m e n t P r o g r a m . S w e d e n a l s o r e p o r t e d s p e n d i n g $ 6 4 7 m i l l i o n in m a r k e t - t e r m p r i v a t e f i n a n c i a l f l o w s d u r i n g t h e y e a r , of w h i c h $ 4 0 7 m i l l i o n c o n s i s t e d of e x p o r t c r e d i t s and $ 2 4 0 m i l lion c o n s i s t e d of direct f o r e i g n i n v e s t m e n t ( O E C D , 1 9 9 1 a : 233). S w e d i s h aid o f f i c i a l s explicitly s e g r e g a t e d f o r e i g n a s s i s t a n c e f r o m private e c o n o m i c d e v e l o p m e n t e f f o r t s , unlike J a p a n a n d , to a lesser e x t e n t , the United S t a t e s . In t e r m s of g e o g r a p h i c a l d i s t r i b u t i o n , r e c i p i e n t s in s u b - S a h a r a n A f r i c a a n d S o u t h A s i a r e c e i v e d by f a r the largest s h a r e of S w e d e n ' s aid d i s b u r s e m e n t s ( s e e F i g u r e 5 . 1 ) . M o r e t h a n h a l f of S w e d i s h O D A w a s d i r e c t e d

Sweden

Table 5.3

1970-1971 1980-1981 1989-1990

107

Swedish ODA Transfers, 1970-1990 ODA Commitment 3

Percent GNP

Share of World ODA

493 1,251 1,746

0.40 0.80 0.93

1.9 2.3 3.1

Source: OECD (1991a) Note: a. ODA commitment in millions of constant U.S. dollars

t o w a r d A f r i c a n recipients by the m i d - 1 9 8 0 s , r e f l e c t i n g S w e d e n ' s e f f o r t to c o n c e n t r a t e aid a m o n g a r e l a t i v e l y small n u m b e r of L L D C s that c o n f o r m e d to the b a s i c - n e e d s criteria established by the S w e d i s h g o v e r n m e n t and the international aid r e g i m e . Struggling A f r i c a n states provided an ideal f o r u m for the g l o b a l i z a t i o n of S w e d e n ' s d o m e s t i c v a l u e s , with p a r t i c u l a r e m p h a s i s on "integration, solidarity, and e q u a l i t y " (Jinadu, 1984: 179). 1 5 S w e d e n ' s s i g n i f i c a n t l o n g - t e r m s u p p o r t of the g o v e r n m e n t of India w a s a n o t h e r primary e l e m e n t of its aid strategy. D u r i n g the d e c a d e , h o w ever, S w e d i s h O D A f l o w s to South Asia fell f r o m nearly o n e - q u a r t e r of the total to less than o n e - f i f t h , w h e r e a s d i s b u r s e m e n t s to r e c i p i e n t s in o t h e r parts of Asia fell f r o m 17 p e r c e n t to 11 percent. A i d f l o w s to M i d e a s t rec i p i e n t s fell during the m i d d l e part of the d e c a d e b e f o r e r e t u r n i n g to their 1 9 7 9 - 1 9 8 0 levels by 1 9 9 0 . M e a n w h i l e , d i s b u r s e m e n t s to Latin A m e r i c a n r e c i p i e n t s g r e w f r o m 4 p e r c e n t to 11 p e r c e n t of total S w e d i s h O D A o u t lays. S w e d e n ' s i n c r e a s i n g a s s i s t a n c e to Latin A m e r i c a n r e c i p i e n t s w a s in k e e p i n g with the n o r m a t i v e e m p h a s e s u n d e r l y i n g its larger and m o r e longs t a n d i n g aid p r o g r a m s f o r s u b - S a h a r a n A f r i c a : " T h e s h a r e of bilateral ass i s t a n c e to Latin A m e r i c a [was] g e a r e d to a high d e g r e e t o w a r d s d é m o c r a tisation and the p r o m o t i o n of peace in the r e g i o n " ( O E C D , 1 9 9 1 a : 148). T h e f u n c t i o n s to w h i c h S w e d i s h O D A w a s a p p l i e d d u r i n g this d e c a d e r e p r e s e n t e d a n o t h e r a s p e c t in w h i c h S w e d e n ' s p r o g r a m s t o o d a p a r t f r o m m o s t o t h e r c o u n t r i e s ' ( s e e F i g u r e 5.2). Nearly t w o - t h i r d s of S w e d i s h bilateral O D A w a s t r a n s f e r r e d to p r o g r a m countries, w h i c h w e r e given a relatively f r e e hand in a l l o c a t i n g the r e s o u r c e s . " T h e m o s t i m p o r t a n t d e c i s i o n w i t h r e s p e c t to r e c i p i e n t - o r i e n t e d a s s i s t a n c e w a s the s e l e c t i o n of the p r o g r a m c o u n t r y i t s e l f , " H o l m b e r g ( 1 9 8 9 : 138) o b s e r v e d . "It w a s a s s u m e d that the correct c h o i c e w o u l d yield results that w o u l d s u p p o r t the S w e d i s h a s s i s t a n c e g o a l s . " A b o u t o n e - f i f t h of t h e s e f u n d s w e r e d e v o t e d to l o n g t e r m c o n s t r u c t i o n of social a n d political i n f r a s t r u c t u r e , w i t h p u b l i c a d m i n istration and education b e i n g the primary areas of c o n c e n t r a t i o n within this c a t e g o r y . Additional S w e d i s h O D A w a s directed t o w a r d e m e r g e n c y relief, support for nongovernmental organizations, and short-term humanitarian aid p r o g r a m s .

108

Country

Studies

Figure 5.1 Direction of Swedish ODA, 1980-1990 (Geographical Distribution, Percentage) 60

0

Sub-Saharan Africa

Other Asia

South Asia

Mideast, North Africa

Latin America

Legend I

1984-85

Source: OECD (1991a: 180)

T h e indicators of Swedish ODA quality listed in Table 5.4 illustrate its consistent p e r f o r m a n c e above the D A C averages but also a trend toward decreased quality as the decade progressed. Only in the area of grant element versus concessional loans did S w e d e n ' s p e r f o r m a n c e and that of the D A C i m p r o v e . In this indicator of O D A quality, S w e d e n consistently ranked a m o n g the leading O D A donors; by 1989 all of its O D A was disbursed in the form of grants, with no expectations of repayment f r o m aid recipients. In terms of the tying of S w e d i s h O D A , the table s h o w s a dramatic d r o p in untied aid during the m i d d l e of the d e c a d e , f o l l o w e d by a modest increase. T h i s pattern reflected a broader m o v e m e n t a m o n g D A C members, which on average increased the level of tied aid by nearly onethird between 1980 and 1986. As in other categories, Swedish aid quality, though generally decreasing, remained above that of the D A C as a whole. This pattern was especially evident regarding the degree to which Swedish o f f i c i a l s turned to multilateral assistance as a c o m p o n e n t of their O D A mix. As noted previously, multilateral aid is generally perceived as less political than bilateral flows, with f e w e r strings imposed upon recipients by the aid donors. S w e d e n consistently transferred higher-than-average levels through multilateral channels, although these levels decreased after 1983 both for S w e d e n and for D A C m e m b e r s in general. A m o n g multilateral

Sweden

109

Figure 5.2 Uses of Swedish O D A (Functional Distribution, 1988/1989)

Economic Infrastructure Political Infrastructure

I

Industry

Agriculture

Food Aid

Source: O E C D ( 1 9 9 1 a : 1 8 1 )

conduits of Swedish

ODA,

economic

and s o c i a l

agencies

within

U n i t e d N a t i o n s played the primary role. T h e U N D e v e l o p m e n t

the

Program

( U N D P ) , C h i l d r e n ' s Fund ( U N I C E F ) , C o m m i s s i o n for R e f u g e e s , Fund for Population Activities, World Health Organization ( W H O ) , and World F o o d and Agricultural Organization ( F A O ) accounted for 6 0 percent o f S w e d i s h m u l t i l a t e r a l aid. T h e W o r l d B a n k and r e g i o n a l d e v e l o p m e n t b a n k s r e c e i v e d an a d d i t i o n a l 2 5 p e r c e n t . F i n a l l y , S w e d i s h O D A to L L D C s a l s o r e m a i n e d c o n s i s t e n t l y a b o v e t h e D A C a v e r a g e . O f the t o p ten r e c i p i e n t s o f S w e d i s h O D A in t h e 1 9 8 9 - 1 9 9 0 fiscal year, eight ( C h i n a , Ethiopia, India, K e n y a , M o z a m b i q u e , Tanzania, V i e t n a m , a n d Z a m b i a ) w e r e t e c h n i c a l l y r e g a r d e d by the O E C D as L L D C s ( c o u n t r i e s w i t h p e r c a p i t a G N P s o f l e s s than $ 7 0 0 ) ; A n g o l a ( $ 1 , 1 3 0 ) a n d N i c a r a g u a ( $ 8 5 0 ) w e r e the e x c e p t i o n s . F o u r t e e n o f t h e s e v e n t e e n p r o g r a m c o u n t r i e s t h a t r e c e i v e d s u s t a i n e d S w e d i s h O D A w e r e in t h e c a t e g o r y o f least-developed countries. S w e d i s h h u m a n i t a r i a n i n t e r e s t s in e x t e n d i n g d e v e l o p m e n t a s s i s t a n c e w e r e r e f l e c t e d in t h e n e g a t i v e s t a t i s t i c a l r e l a t i o n s h i p b e t w e e n aid t r a n s f e r s a n d r e c i p i e n t p e r c a p i t a c a l o r i c c o n s u m p t i o n in e a c h o f the ten y e a r s u n d e r study, w i t h t h e r e l a t i o n s h i p s r e a c h i n g s t a t i s t i c a l s i g n i f i c a n c e in f i v e o f t h e ten years ( s e e T a b l e 5 . 5 ) . T h e a v e r a g e daily intake o f S w e d e n ' s top ten

110

Table 5.4

Country

Studies

Quality of Swedish ODA, 1980-1989 Multilateral Aid (% ODA)

Grant Element (% ODA)

Untied Aid (% ODA)

Aid to LLDCs (% ODA)

1980

98.6 (75.2)"

86.2 (50.3)

31.7 (28.5)

42.7 (35.1)

1983

99.6 (76.3)

81.2 (45.9)

36.7 (31.3)

30.4 (21.8)

1986

99.9 (87.0)

41.6 (33.4)

32.1 (28.1)

28.7 (23.4)

1989

100.0 (92.8)

49.5 (36.5)

30.2 (27.2)

32.1 (22.4)

Sources: OECD (1982b, 1985b, 1988b, 1991b) Note: a. ODA averages listed in parentheses

r e c i p i e n t s in 1 9 8 9 w a s 2 , 0 9 7 c a l o r i e s , n e a r l y 3 0 p e r c e n t l o w e r than the w o r l d w i d e a v e r a g e of 2,711 calories. O n l y o n e of these recipients, C h i n a , r e p o r t e d per capita c o n s u m p t i o n a b o v e the 2 , 4 0 6 a v e r a g e for l o w - i n c o m e c o u n t r i e s . M a n y of t h e s e r e c i p i e n t s , i n c l u d i n g A n g o l a ( 1 , 8 0 7 c a l o r i e s ) , E t h i o p i a ( 1 , 6 6 7 ) , and M o z a m b i q u e ( 1 , 6 8 0 ) w e r e a m o n g the m o s t u n d e r n o u r i s h e d L D C s by this s t a n d a r d , w h i c h is a m o n g the most w i d e l y utilized m e a s u r e s of h u m a n need (World B a n k , 1992: 2 7 2 - 2 7 3 ) . T h e a v e r a g e 1 9 8 9 life e x p e c t a n c y in t h e s e r e c i p i e n t n a t i o n s w a s 5 6 . 4 y e a r s , f a r b e l o w t h e w o r l d w i d e a v e r a g e of 6 4 y e a r s a n d b e l o w the a v e r a g e f o r l o w - i n c o m e c o u n t r i e s of 6 0 y e a r s . W h e n S w e d e n ' s O D A f l o w s to all of its r e c i p i e n t s are c o n s i d e r e d , h o w e v e r , the statistical r e l a t i o n s h i p is w e a k e r . T h e g r o w i n g realism that p e r v a d e d the S w e d i s h O D A p r o g r a m in the 1980s w a s r e f l e c t e d in the presence of statistically s i g n i f i c a n t r e l a t i o n s h i p s b e t w e e n S w e d i s h aid f l o w s and trade patterns d u r i n g the last three years of the d e c a d e . A s n o t e d p r e v i o u s l y , S w e d i s h political a n d b u s i n e s s l e a d e r s i m p l e m e n t e d b r o a d n e w m e a s u r e s to i n c r e a s e the e f f i c i e n c y of aid p r o g r a m s and to m a k e t h e m r e s p o n s i v e to d o m e s t i c e c o n o m i c interests. A s in the c a s e of F r a n c e , S w e d i s h trade f o l l o w e d its aid in a g r o w i n g n u m b e r of c a s e s , a trend that w a s likely to c o n t i n u e a f t e r S w e d e n a n n o u n c e d new initiatives in both trade and aid with s t a t e s in Eastern and Central E u r o p e . E v e n a f t e r the g r o w t h in S w e d i s h trade with its aid recipients is t a k e n into a c c o u n t , a p r e p o n d e r a n t s h a r e of its c o m m e r c e c o n t i n u e d to be c o n d u c t e d w i t h i n d u s t r i a l i z e d states, m a i n l y in E u r o p e . Of the $ 5 1 . 5 b i l l i o n in S w e d i s h e x p o r t s in 1989, L D C s r e c e i v e d $ 5 . 9 billion in S w e d i s h g o o d s , s l i g h t l y m o r e t h a n 10 p e r c e n t of the total ( I n t e r n a t i o n a l M o n e t a r y F u n d , 1 9 9 0 : 3 6 8 - 3 6 9 ) . 1 6 T h e S w e d i s h g o v e r n m e n t t r a d i t i o n a l l y s e g r e g a t e d aid

111

Sweden

Table 5.5

Swedish ODA and Recipient Characteristics: Multivariate Relationships (Figures indicate standardized slope coefficients) 1980

1981

1982

1983

Humanitarian-Interest Life expectancy Caloric consumption

.20 -.28

-.03 -.413

Total R 2

1986

1987

1988

1989

Variables

.09

.06

.09

-.04

.08

-.04

.04

-.41

-.30

-.26

-- 4 0

-.36

-.62

-.26

-.61

Variables

-.03

.01

-.04

.07

-.00

.20

-.12

-.04

.15

.01

-.02

.01

.02

-.06

-.04

.02

.10

.08

-.11

.05

Economic-Interest GNP Trade with Sweden

1985

.12

Security-Interest Military spending Conscripted population

1984

Variables

-.03

-.41

.14

-.00

.07

.20

.21

-.03

-.12

-.14

-.03

.20

.05

.09

.08

.00

.16

.48

.44

.89

.06

.12

.11

.07

.06

.13

.11

.24

.21

.63

Sources: U.S. ACDA (security-interest variables): IMF (trade variable); O E C D (aid transfers [dependent variables]; World Bank (all other variables) Note: a. Underlined figures indicate significance at .05 level; double-underlined figures indicate significance at .01 level

policy f r o m trade and i n v e s t m e n t relations; its p r o g r a m c o u n t r i e s w e r e inv o l v e d in a small f r a c t i o n of S w e d e n ' s bilateral trade. T h i s pattern c h a n g e d as S w e d i s h leaders integrated aid f l o w s into their b r o a d e r m a c r o e c o n o m i c p o l i c i e s . E x p o r t s to India, for e x a m p l e , i n c r e a s e d f r o m $ 1 1 7 m i l l i o n in 1985 to $ 5 5 0 million in 1989. A s e x p e c t e d , S w e d i s h O D A f l o w s d u r i n g the 1 9 8 0 s w e r e not statistically l i n k e d to e i t h e r of the i n d i c a t o r s of s e c u r i t y i n t e r e s t . C o n s c r i p t i o n rates of S w e d e n ' s p r i m a r y r e c i p i e n t s a v e r a g e d 6 . 7 p e r s o n s per 1 , 0 0 0 , w h i c h is a b o u t 14 p e r c e n t a b o v e the w o r l d w i d e a v e r a g e of 5 . 9 per 1 , 0 0 0 ( U . S . A r m s Control and D i s a r m a m e n t A g e n c y , 1990). T h e s e a v e r a g e s w e r e i n f l a t e d , h o w e v e r , by the high l e v e l s of c o n s c r i p t i o n in N i c a r a g u a ( 1 8 . 2 ) a n d V i e t n a m (19.8); w h e n these c a s e s are r e m o v e d the a v e r a g e c o n s c r i p tion rate a m o n g S w e d i s h aid r e c i p i e n t s f a l l s to 3 . 7 m i l i t a r y p e r s o n n e l per 1 , 0 0 0 c i t i z e n s . M i l i t a r y s p e n d i n g by t h e s e p r i m a r y r e c i p i e n t s r a n g e d w i d e l y f r o m $ 9 0 million in the c a s e s of T a n z a n i a and M o z a m b i q u e to $ 2 3 billion in the c a s e of C h i n a . W h e n the entire pool of S w e d i s h aid recipients is c o n s i d e r e d , the r e l a t i o n s h i p b e t w e e n aid a n d military s p e n d i n g is statistically i n s i g n i f i c a n t . 1 7 T h e s e e m p i r i c a l trends c o l l e c t i v e l y illustrate b o t h the d i s t i n c t i v e n e s s of the S w e d i s h a p p r o a c h to O D A a n d its i n c r e a s i n g a d a p t a t i o n to c h a n g e s

112

Country

Studies

in t h e a i d r e g i m e d u r i n g t h e 1 9 8 0 s a n d 1 9 9 0 s . S w e d i s h o f f i c i a l s t r i e d t o k e e p O D A l e v e l s at o r a b o v e t h e 1 p e r c e n t / G N P l e v e l a n d t o m a k e O D A a v a i l a b l e e x c l u s i v e l y in t h e f o r m o f g r a n t s , b u t t h e y p e r m i t t e d t h e inc r e a s e d t y i n g of a i d p r o j e c t s to S w e d i s h g o o d s a n d s e r v i c e s as w e l l as t h e s h i f t of s o m e a i d p r o g r a m s a w a y f r o m t h e p o o r e s t s t a t e s . In t h e last t h r e e y e a r s of t h e d e c a d e , t h e s t r o n g c o n n e c t i o n b e t w e e n S w e d i s h t r a d e a n d a i d f l o w s p r o v i d e d f u r t h e r e v i d e n c e of its m o r e p r a g m a t i c a p p r o a c h to d e v e l o p m e n t a s s i s t a n c e . M o r e g e n e r a l l y , it r e f l e c t s t h e s h i f t in S w e d i s h f o r e i g n policy a w a y f r o m s e l f - s a c r i f i c i n g b e h a v i o r t o w a r d practices that b r o u g h t s o m e t a n g i b l e b e n e f i t lo S w e d i s h c i t i z e n s .

Summary A s d e s c r i b e d in t h e p r e c e d i n g p a g e s , t h e S w e d i s h g o v e r n m e n t a d o p t e d a n a p p r o a c h to foreign aid that s y m b o l i z e d the c o u n t r y ' s egalitarian and neut r a l i s t a p p r o a c h to f o r e i g n a f f a i r s . W h i l e s e r v i n g as an e x t e n s i o n of S w e d e n ' s i n d i v i d u a l c h a r a c t e r , its O D A b e h a v i o r w a s c o n s i s t e n t w i t h

the

" N o r d i c m o d e l , " w h i c h a l s o w a s f o l l o w e d b y N o r w a y a n d F i n l a n d . In t h e i r a p p r o a c h to foreign affairs, S w e d i s h and other S c a n d i n a v i a n leaders steadfastly avoided alignments amid often intense continental and global rivalr i e s , e x p l o i t i n g t h e i r s t a t u s of " s p l e n d i d i s o l a t i o n " v i s - à - v i s t h e g r e a t p o w e r s o f t h e late t w e n t i e t h c e n t u r y . In s o d o i n g , t h e y w e r e a b l e to f o c u s t h e i r e f f o r t s in f o r e i g n p o l i c y ( a n d t h e d i s t r i b u t i o n of d e v e l o p m e n t a i d ) o n n o r m a t i v e l y driven initiatives that reflected widely shared d o m e s t i c v a l u e s within their societies. S w e d e n ' s o v e r r i d i n g objective of strategic neutrality w a s a c c o m p a n i e d b y t h e p u r s u i t of n o n v i o l e n t s o l u t i o n s t o i n t e r n a t i o n a l c o n f l i c t s . A r m s control initiatives and d i s a r m a m e n t plans w e r e o f t e n proposed by S w e d i s h l e a d e r s in r e g i o n a l a n d g l o b a l f o r u m s . T h e S w e d i s h g o v e r n m e n t a v o i d e d d e v e l o p i n g a s i z e a b l e d o m e s t i c m i l i t a r y i n f r a s t r u c t u r e of its o w n , a n d its leaders, most notably Prime Minister Olaf Palme, encouraged other states to p u r s u e s i m i l a r s t r a t e g i e s . T h e s e l e a d e r s u t i l i z e d their o s t e n s i b l e p o l i t i c a l a n d m i l i t a r y d i s e n g a g e m e n t as a b a s i s f o r p r o m o t i n g e g a l i t a r i a n , s o c i a l d e m o c r a t i c d e v e l o p m e n t o v e r s e a s , l a r g e l y t h r o u g h t h e v e h i c l e of f o r e i g n a s sistance; they p r o j e c t e d their d o m e s t i c m o d e l o n t o a relatively small g r o u p of L D C s a n d L L D C s a n d o f f e r e d t h e m e c o n o m i c s u p p o r t to m e e t t h e i r c i t izens' basic needs. Holmberg summarized: In applying its welfare principles internationally, the Swedish government has acted to expand its welfare community to include recipient countries [which were] often portrayed as extensions of Sweden's political culture during debates on the aid budget. . . . The poor countries should not only receive welfare inputs from Sweden, but should—as much as p o s s i b l e — r e p r o d u c e the Swedish welfare system within their

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own borders. This extension provides an external legitimation for Sweden's domestic welfare system. (1989: 128-129; emphasis in original)

A s the record during the 1 9 8 0 s indicates, S w e d e n m a i n t a i n e d its reputation for h i g h - q u a l i t y d e v e l o p m e n t a s s i s t a n c e t h r o u g h o u t the p e r i o d , esp e c i a l l y w h e n its p e r f o r m a n c e is c o m p a r e d to that of o t h e r m a j o r d o n o r s t a t e s . S w e d e n c o n s i s t e n t l y d i r e c t e d aid t o w a r d the w o r l d ' s p o o r e s t p e o ple on t e r m s r e q u i r i n g the least a m o u n t of reciprocal s a c r i f i c e . Its aid patterns, however, reflected the adaptation of S w e d i s h aid to a troubled period in the global political e c o n o m y . W h e t h e r S w e d e n c o u l d exploit the o p p o r tunities posed by the t r a n s f o r m e d s y s t e m i c e n v i r o n m e n t , a n t i c i p a t e d w i t h relish by its leaders for half a century, r e m a i n e d d u b i o u s given the p e r s i s t e n c e of e c o n o m i c strains at the r e g i o n a l and global levels. A s the 1 9 9 0 s b e g a n , S w e d e n ' s ability to p r e s e r v e its i s o l a t i o n w a s c h a l l e n g e d by the pressures of an interdependent w o r l d e c o n o m y . S w e d e n r e s p o n d e d to these c h a l l e n g e s by b e c o m i n g m o r e a c t i v e l y e n g a g e d in r e g i o n a l e c o n o m i c activity. W i t h the end of the C o l d War, S w e d i s h o f f i c i a l s f o u n d c o n d i t i o n s m o r e f a v o r a b l e for i n v o l v e m e n t in the E u r o p e a n C o m m u n i t y ( r e n a m e d the E u r o p e a n U n i o n ) . With EU m e m b e r s h i p n o longer c o n s i d e r e d a b r e a c h of S w e d e n ' s neutrality, its g o v e r n m e n t a p p l i e d f o r a d m i s s i o n in July 1 9 9 1 and placed the question of EU m e m b e r s h i p b e f o r e the p o p u l a t i o n in a 1 9 9 4 r e f e r e n d u m . At the s a m e t i m e , the g o v e r n m e n t p l e d g e d to w o r k c l o s e l y with c o u n t r i e s in Eastern a n d Central E u r o p e in e s t a b l i s h i n g stable diplomatic, security, and e c o n o m i c relations. A s the Cold War e n d e d and a n e b u l o u s new order e m e r g e d in the early 1990s, S w e d e n ' s aid p r o g r a m u n d e r w e n t f u n d a m e n t a l r e f o r m s . In r e s p o n s e to g r o w i n g c o n c e r n s a b o u t the e f f i c i e n c y of S w e d i s h O D A a n d its relat i o n s h i p to the c o u n t r y ' s b r o a d e r p r o g r a m of e c o n o m i c d e v e l o p m e n t , the o n c e f o r m i d a b l e wall b e t w e e n S w e d i s h aid and private e n t e r p r i s e b e g a n to e r o d e . In the g o v e r n m e n t ' s p r o p o s a l s f o r the 1993 O D A p r o g r a m , explicit o b j e c t i v e s included "aid e f f e c t i v e n e s s " and " t h e d e v e l o p m e n t of a m a r k e t e c o n o m y " as w e l l as the m o r e t r a d i t i o n a l S w e d i s h c o n c e r n s f o r " h u m a n rights, d e m o c r a c y , and e q u a l o p p o r t u n i t i e s . " In a d d i t i o n , the c o n c e n t r a t i o n of O D A a m o n g the s e v e n t e e n p r o g r a m c o u n t r i e s w a s f u r t h e r r e d u c e d by S w e d e n ' s c o m m i t m e n t s to p r o v i d e c o n c e s s i o n a l f u n d i n g f o r R u s s i a , P o l a n d , and the newly i n d e p e n d e n t B a l t i c states. T h e S w e d i s h g o v e r n m e n t a g r e e d in 1 9 9 0 to divert 1 billion S w e d i s h c r o w n s ( a p p r o x i m a t e l y $ 1 8 0 m i l l i o n ) f r o m traditional s p e n d i n g c a t e g o r i e s to s u p p o r t t h e s e recently libe r a t e d states. A s this s h i f t in the t e n o r o f S w e d e n ' s aid p r o g r a m c o n t i n u e d , m a n y l i b e r a l s f e a r e d it w o u l d u n d e r m i n e t h e n o r m a t i v e v a l u e s that had b e e n a s o u r c e of S w e d i s h pride a n d p r e s t i g e in p r e v i o u s years. T h e s e s e n t i m e n t s c l a s h e d with e c o n o m i c interests, w h i c h d u r i n g the 1 9 8 0 s a t t e m p t e d to render Sweden's O D A program more compatible with domestic e c o n o m i c

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concerns. C o n s e r v a t i v e critics cited the p e r c e i v e d failures o f g o v e r n m e n t intervention in various sectors of S w e d e n ' s e c o n o m y , i n c l u d i n g health care, as w e l l as the failure of many "progressive" L D C s to establish market e c o n o m i e s and promote social d e m o c r a c y . A p o l a r i z i n g debate o c curred a c r o s s the country, as parties from both left and right f o u n d fault with the conduct of S w e d i s h O D A policy, o f t e n for different reasons. 1 8 A s the S w e d i s h variant of the N o r d i c O D A m o d e l lost s o m e o f its d i s t i n c t i v e characteristics, it appeared likely that S w e d i s h d e v e l o p m e n t aid w o u l d enter "a period of quantitative stagnation and qualitative adaptation to what is most o f t e n called e c o n o m i c realities" ( R u d e b e c k , 1 9 8 4 ) . Without a C o l d War to mediate, in the a b s e n c e of the intense i d e o l o g i c a l rivalries that had p r o v i d e d an o p p o r t u n i t y to p r o m o t e an alternative m o d e l , and in the midst o f a p r o l o n g e d e c o n o m i c s l u m p , S w e d e n f a c e d new c h a l l e n g e s and a reformulation of its national interests in the 1 9 9 0 s . T h o u g h it appeared certain that d e v e l o p m e n t a s s i s t a n c e w o u l d c o n t i n u e to play a central role in p r o m o t i n g those interests, the s p e c i f i c contours o f that role remained a m b i g u o u s and, as a l w a y s , a subject o f l i v e l y d e bate in S t o c k h o l m .

Notes 1. Only the Netherlands, Norway, and some O P E C donors in the early 1980s contributed more aid funds on a per capita basis during this period. 2. Swedish O D A represented 2.5 percent of the government's budget in the mid-1980s. 3. See Dohlman (1989) for an elaboration of Sweden's neutralist policy and its historical applications. 4 .The Swedish government maintained a modern defense force throughout this period, spending an average of 7.5 percent of its budget on military security in the 1980s. "Considerable investment has been made in a mobile air force and advanced means of intelligence collection" (Sundelius and Odom, 1992: 313). 5. Other founding members of the EFTA included Great Britain, Switzerland, Austria, Portugal, and the other Scandinavian states. 6. In these areas, the CSCE took on greater significance after the Cold War as Western European leaders looked for alternatives to NATO in pursuing regional security. 7. See Swedish Government (1962) for the full text of this bill, which is often regarded as the "bible" of Swedish ODA. In this sense it is comparable to the Jeanneney Report in France, published during the same period, which outlined the long-term structure and objectives of French aid. 8. Socialist program countries received an average of 55 percent of Swedish ODA between 1976 and 1986 (Karre and Svensson, 1989: 253). 9. The program countries, which received renewable three-year disbursements from Sweden, were Angola, Bangladesh, B o t s w a n k Ethiopia, Guinea-Bissau, India, Cape Verde, Kenya, Laos, Lesotho, Mozambique, Nicaragua, Sri Lanka, Tanzania, Vietnam, Zambia, and Zimbabwe. Cuba, Pakistan, and Tunisia were dropped as program countries in the mid-1970s for economic and political reasons.

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10. T h o u g h still the m a j o r f o c u s of S w e d i s h O D A , t h e s h a r e of aid e x p e n d i tures d i r e c t e d t o w a r d p r o g r a m c o u n t r i e s fell b e t w e e n 1975 and 1 9 8 5 f r o m 74 perc e n t to 61 p e r c e n t . 11. T h e s e g r o u p s also a d v o c a t e d large v o l u m e s of e c o n o m i c s u p p o r t for f r o n t line s t a t e s s u r r o u n d i n g S o u t h A f r i c a and f o r n o n g o v e r n m e n t a l o r g a n i z a t i o n s s u c h as t h e A f r i c a n N a t i o n a l C o n g r e s s in S o u t h A f r i c a a n d the S o u t h W e s t A f r i c a n P e o p l e s ' O r g a n i z a t i o n in N a m i b i a . 12. K a r r e a n d S v e n s s o n ( 1 9 8 9 : 2 7 1 ) a c k n o w l e d g e d t h e c o n v e r g e n c e of t h e S w e d i s h a n d O E C D m o d e l s but c o n c l u d e d that " t h e aid c o n s t i t u e n c y in S w e d e n has been c o m p a r a t i v e l y s u c c e s s f u l in d e f e n d i n g g e n u i n e d e v e l o p m e n t c o - o p e r a t i o n . T h e r e is still a ' S w e d i s h m o d e l , ' and this m o d e l is b e i n g s h a r e d and s o m e t i m e s bettered by s o m e o t h e r d o n o r s . " 13. In a d d i t i o n to p a r t i c i p a t i n g in U N a g e n c i e s , S w e d e n p l a y e d an a c t i v e role in r e g i o n a l e f f o r t s s u c h as t h e S o u t h e r n A f r i c a D e v e l o p m e n t C o o r d i n a t i o n C o n f e r e n c e , a c o o p e r a t i v e e f f o r t a m o n g N o r d i c c o u n t r i e s to i m p r o v e l i v i n g s t a n d a r d s in the r e g i o n . T h e s e e f f o r t s f u r t h e r r e f l e c t e d the " m u l t i l a t e r a l i s t e t h i c " in S w e d i s h f o r e i g n policy d u r i n g the 1 9 6 0 s and e a r l y 1970s. 14. S e e M i l n e r ( 1 9 8 9 ) f o r a d e t a i l e d s u m m a r y of S w e d e n ' s e c o n o m i c p e r f o r m a n c e d u r i n g this d e c a d e . 15. S a m u e l s o n ( 1 9 7 5 : 3 3 5 ) i d e n t i f i e d the f o l l o w i n g six v a l u e s that i n f o r m e d S w e d e n ' s w e l f a r e p o l i c i e s : h u m a n i t a r i a n i s m or m e r c y , r e s o c i a l i z a t i o n or r e h a b i l i t a t i o n , i n t e g r a t i o n , solidarity, e q u a l i t y and j u s t i c e , and social s e c u r i t y . 16. S w e d e n ' s p r i m a r y t r a d i n g p a r t n e r s d u r i n g t h e 1 9 8 0 s w e r e , in order, W e s t G e r m a n y , the U n i t e d K i n g d o m , N o r w a y , D e n m a r k , F i n l a n d , and F r a n c e . S w e d i s h e x p o r t s to A s i a n s t a t e s d o u b l e d b e t w e e n 1985 a n d 1 9 8 9 to $ 2 . 4 b i l l i o n , as S w e d i s h f i r m s g r e a t l y e x p a n d e d e x p o r t s to C h i n a , T a i w a n , S i n g a p o r e , a n d S o u t h K o r e a . S w e d i s h e x p o r t s to A f r i c a n s t a t e s , c o n v e r s e l y , r e m a i n e d m u c h s m a l l e r ; the $ 6 1 4 m i l l i o n in 1 9 8 9 e x p o r t s r e p r e s e n t e d s l i g h t l y m o r e than 1 p e r c e n t of total S w e d i s h exports. 17. In o t h e r c a s e s , i n c l u d i n g A n g o l a , N i c a r a g u a , and V i e t n a m , military s p e n d ing f i g u r e s w e r e not a v a i l a b l e d u r i n g all or part of the 1 9 8 0 s . 18. T h e f a i l u r e of m a n y c a p i t a l - i n t e n s i v e aid p r o g r a m s w a s a c k n o w l e d g e d by o b s e r v e r s a c r o s s S w e d e n ' s p o l i t i c a l s p e c t r u m . P r i m a r y e x a m p l e s w e r e the Bai B a n g p u l p and p a p e r mill in V i e t n a m , the M u f u n d i p a p e r mill in T a n z a n i a , and the K o t m a l e d a m p r o j e c t in Sri L a n k a .

6 The Geopolitics of U.S. ODA

We must e m b a r k on a bold n e w program for m a k i n g the b e n e f i t s o f our s c i e n t i f i c a d v a n c e s and industrial progress a v a i l a b l e for the i m p r o v e m e n t and g r o w t h o f u n d e r d e v e l o p e d areas. . . . T h e U n i t e d S t a t e s is p r e - e m i nent a m o n g nations in the d e v e l o p m e n t o f industrial and s c i e n t i f i c techn i q u e s . . . . D e m o c r a c y a l o n e can s u p p l y the v i t a l i z i n g f o r c e to stir the p e o p l e s of the world into triumphant action, not o n l y against their human o p p r e s s o r s , but a l s o against their ancient e n e m i e s — h u n g e r , misery, and despair.

—President

Harry S Truman

W h e n A m e r i c a n f o r c e s s o u g h t o u t s i d e a s s i s t a n c e in the R e v o l u t i o n a r y War against E n g l a n d , they turned to the French g o v e r n m e n t for s u p p o r t . French e c o n o m i c a n d m i l i t a r y a s s i s t a n c e t i p p e d the b a l a n c e in the A m e r i c a n s ' f a v o r , p r o v i d i n g an early illustration of the v a l u e of f o r e i g n aid. G i v e n this historical p r e c e d e n t , it s h o u l d not be s u r p r i s i n g that the U n i t e d States b e c a m e a p r o l i f i c aid d o n o r in the late twentieth c e n t u r y . T h e F r e n c h p r e c e d e n t is illustrative in a s e c o n d r e s p e c t . F r e n c h military assistance w a s quite o b v i o u s l y not p r o v i d e d f o r altruistic r e a s o n s , the r h e t o r i c of its l e a d e r s r e g a r d i n g the need to s u p p o r t liberty n o t w i t h s t a n d ing. T h e t e r m i n a t i o n of B r i t a i n ' s h e g e m o n y in N o r t h A m e r i c a , w h i c h had s t r e n g t h e n e d a f t e r the S e v e n Years' War ( 1 7 5 6 - 1 7 6 3 ) , a n d the d i s r u p t i o n of its c o n t r o l of A t l a n t i c s h i p p i n g l a n e s w e r e l o n g - s t a n d i n g g e o p o l i t i c a l o b j e c t i v e s of the F r e n c h m o n a r c h y , o b j e c t i v e s that w e r e s e r v e d by the colonial c h a l l e n g e . T h u s , the role of f o r e i g n aid in p r o m o t i n g d o n o r interests, e v e n as it b e n e f i t e d its recipients, w a s c l e a r f o r all to s e e . A s noted in C h a p t e r 2, the U.S. g o v e r n m e n t w a s the p r i m a r y f o r c e b e hind the c r e a t i o n of the liberal international e c o n o m i c o r d e r that e m e r g e d a f t e r World War II. T h r o u g h the t h r e e p i l l a r s of the B r e t t o n W o o d s s y s t e m — t h e World B a n k , the I n t e r n a t i o n a l M o n e t a r y F u n d , a n d the G e n e r a l A g r e e m e n t on T a r i f f s a n d T r a d e — t h e U n i t e d States took a d v a n t a g e of its p o s t w a r p r e d o m i n a n c e to recast m u c h of the g l o b a l e c o n o m y in its image. A n d through extensive programs of bilateral economic and military assistance, the United States supported almost every country outside of the Soviet U n i o n ' s sphere of influence. By 1990, the U.S. g o v e r n m e n t had t r a n s f e r r e d

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$374 billion in loans and grants to m o r e than 100 L D C s , $ 2 3 3 billion in the form of e c o n o m i c assistance. T h e U.S. Agency for International Development (USAID), with approximately 4,300 employees in 1990, maintained permanent offices in ninety countries. U.S. O D A extended to much of the former Second World in the mid-1990s to recipients that had previously been adversaries in the Cold War. As in the other cases, a c o n t i n u o u s tension existed between the humanitarian functions of U.S. foreign aid in improving social welfare conditions in LDCs and the narrower imperatives of U.S. self-interests. At one level, generosity by the United States toward i m p o v e r i s h e d peoples was consistent with its historical self-image as a messianic "city on the hill." 1 At another level, however, U.S. aid w a s inconsistent with the s e l f - h e l p principles of many Americans, as reflected in their traditional distrust of government and their dislike of social welfare programs. In order to garner support for foreign aid f r o m a skeptical public, the U.S. government consistently identified national interest as a primary rationale for transferring public resources to the Third World. As Undersecretary of State William Clayton argued in 1947, "Let us admit right off that our objective has its background in the needs and interests of the people of the United States. We need markets—big markets—in which to buy and sell." Almost half a century later, U S A I D (1992: 1), in a report entitled Why Foreign Aid? answered this question bluntly: " B e c a u s e it is in the United States' o w n interest." W h e r e a s early U.S. aid e f f o r t s in the p o s t - W o r l d War II period f o cused on the reconstruction of industrialized states and the establishment of a global alliance of anticommunist states, beginning in the 1960s the social and e c o n o m i c aspects of decolonization and Third World state building were also cited as major reasons. As a result, the "objectives of official U.S. foreign assistance have gradually b l u r r e d " ( U S A I D , 1989: 1). With the end of the Cold War, and in the midst of a r e a s s e s s m e n t of the U.S. role in world politics (a recurrent preoccupation of the U.S. government), leaders again attempted to reconcile national interests with the foreign-aid program, calling for continued aid f l o w s as an instrument of "preventive diplomacy." U S A I D officials launched this e f f o r t as the United States was suffering f r o m chronic budget and trade deficits; a s k y r o c k e t i n g national debt; faltering education, welfare, and health care systems; and a crime rate that was a m o n g the highest in the world. Under the leadership of Bill Clinton, w h o admitted to being relatively disinterested in f o r e i g n affairs when he took o f f i c e in January 1993, the U.S. public appeared less inclined than ever to support new initiatives in foreign aid. Thus, the level of U.S. O D A as a percentage of its GNP, already o n e of the lowest in the world, w a s likely to slip even lower in the mid-1990s.

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National Interest in U.S. Foreign Policy The U.S. foreign-aid program reflects the tension between the competing strains of idealism and realism that has coexisted uneasily through much of its history, defining the "American style of foreign policy" (Spanier and Hook, 1995). As noted in Chapter 1, these traditions were reflected in the cyclical shifts between parochial and universal conceptions of national interest. Whereas one or the other of these conceptions generally prevailed at any given time or place, both were present to a great degree in the United States. Early U.S. leaders acknowledged the centrality of self-interest in guiding behavior. To George Washington, "A small knowledge of human nature will convince us that, with far the greatest part of mankind, interest is the g o v e r n i n g principle." A l e x a n d e r Hamilton e x t e n d e d this argument to the policies of governments, drawing a moral line between individual and state action: " A n individual may, on numerous occasions, meritoriously indulge the e m o t i o n s of generosity and b e n e v o l e n c e , not only without an eye to, but even at the expense of, his own interest. But a government can rarely, if at all, be justifiable in pursuing a similar course." In Federal Paper 10, James Madison (1938 [1787]: 56) noted that competing interests are "sewn in the nature of m a n " and r e c o m m e n d e d that the federal g o v e r n m e n t be based upon "the regulation of these various and interfering interests." 2 These principles were applied to the early formulation and conduct of U.S. foreign policy. Leaders of the United States believed its geographic position, abundant natural resources, and cultural values delineated a set of national interests that, if d e f e n d e d consistently, w o u l d protect the country during its infancy. " E u r o p e has a set of primary interests which to us have none or a very remote relation," Washington (quoted in Rappaport, 1966: 29) o b s e r v e d in his f a r e w e l l address of 1796. " O u r d e t a c h e d and distant situation invites and enables us to pursue a different course." T h r o u g h o u t the nineteenth century, U.S. foreign policy reflected this resistance to " o v e r s e a s e n t a n g l e m e n t s . " S u c c e s s i v e a d m i n i s t r a t i o n s focused on internal d e v e l o p m e n t , both e c o n o m i c and political. T h e separation of the United States f r o m the Old World w a s codified by the M o n r o e D o c t r i n e of 1823, e s t a b l i s h i n g the basis of U.S. h e m i s p h e r i c h e g e m o n y that has continued t h r o u g h o u t the twentieth century. Continental e x p a n sion, which included the slaughter and expulsion of Native A m e r i c a n s and the c o n q u e s t of northern Mexico, was j u s t i f i e d on the basis of the c o u n try's " m a n i f e s t destiny" to extend its cultural and political values. In these instances, policies that s e e m e d consistent with Old World standards of realpolitik were instead attributed to idealistic motives. This was a characteristic trait of U.S. f o r e i g n policy that b e m u s e d o v e r s e a s leaders, w h o often did not feel it necessary to cloak their pursuit of national interests in moral justifications.

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A f t e r the internal cohesion of the United States was threatened but ultimately preserved in the Civil War, its previous e m p h a s i s on political and e c o n o m i c development and detachment f r o m great-power politics was revived in the era of reconstruction. T h e rise of the United States as an industrial power coincided with the collapse of order in Europe and the convulsions of two world wars. In the a f t e r m a t h of World War I, W o o d r o w Wilson equated U.S. interests with universal values of democracy, self-determination, and collective security (see Chapter 1). This formula was rejected by the U.S. Senate, however, and the League of Nations (absent the United States) failed to prevent or punish a g g r e s s i o n . A f t e r the United States w a s again drawn into world war, both in Europe and in the Pacific, and a f t e r it prevailed on both fronts, an activist f o r e i g n policy w a s ensured. T h e ideological a n t a g o n i s m between the United States and the Soviet Union, which split the w o r l d into two hostile blocs and p r o d u c e d nearly a half-century of Cold War, served as the basis of U.S. globalism. Postwar realists such as George Kennan and Hans Morgenthau blamed the failures of U.S. foreign policy during the interwar period on the subordination of national interests to universal moral aspirations. In the 1950s and 1960s, U.S. leaders a d v a n c e d their geopolitical interests in tandem with those of its allies in all c o r n e r s of the w o r l d . Richard Nixon, influenced by another p r o m i n e n t p o s t w a r realist, National Security A d v i s o r Henry Kissinger, explicitly placed the concept of national interest at the fulcrum of U.S. foreign policy in the early 1970s by stating that "interests must shape our c o m m i t m e n t s , rather than the other way around." This approach led Nixon to pursue détente with the Soviet Union and to n o r m a l ize relations with the P e o p l e ' s Republic of China despite continuing ideological divisions between East and West. Given its t r a n s f o r m e d role in the international s y s t e m , the United States pursued a broader range of interests in the postwar period. T h e s e included the preservation and dissemination of cultural values such as limited but representative g o v e r n m e n t , respect f o r individual political liberties, and religious tolerance; the promotion of e c o n o m i c growth through market-oriented development and support for a liberal international trading system; and the protection of U.S. territory and the security of its allies through the establishment of military d e f e n s e s , bilateral and multilateral security arrangements, and selective intervention in overseas conflicts. Reflecting this expanded scope, as well as the moralism that animated previo u s c o n c e p t i o n s of U.S. national interest, R o s t o w ( 1 9 6 0 : 5 4 3 ) o b s e r v e d , "It is the American interest to maintain a world environment for the United States within which A m e r i c a n society can continue to d e v e l o p in c o n f o r mity with the humanistic principles which are its f o u n d a t i o n . " T h r o u g h out the Cold War, all of these goals were intimately associated with the effort by the United States to contain c o m m u n i s t e x p a n s i o n , a central p r e o c c u p a t i o n that w a s applied to all aspects of U.S. f o r e i g n policy, including the allocation of development assistance.

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U.S. Aid as an Agent of Containment Prior to the Cold War, U.S. foreign aid generally "consisted of admonition and was consequently neither expensive nor e f f e c t i v e " (O'Leary, 1967: 5). E x a m p l e s of early U.S. initiatives included its d i s b u r s e m e n t of private f u n d s to assist Santo D o m i n g a n r e f u g e e s in 1793, security assistance for Greek nationalists in the 1820s, and disaster aid f o r victims of I r e l a n d ' s famine in the 1840s. In the early stages of World War II, the flow of U.S. military h a r d w a r e to Great Britain, Russia, and other allies bolstered the collective d e f e n s e against Nazi Germany. But it was after this war that the U.S. aid program assumed global proportions. T h r o u g h the Marshall Plan, "the high-water mark of U.S. foreign aid" ( U S A I D , 1989: 17), the United States helped rebuild decimated states in Western Europe and Asia. 3 And through the military aid programs that derived f r o m the Truman Doctrine, the United States utilized a second f o r m of foreign assistance in the pursuit of its t r a n s f o r m e d national interests. Western European states received most Marshall Plan f u n d i n g ($13.6 billion in e c o n o m i c and $7.8 billion in military assistance). A m o n g these recipients, F r a n c e ($5.9 billion) received the largest share, f o l l o w e d by Great Britain ($3.8 billion), West G e r m a n y ($2.9 billion), Italy ($2.4 billion), and the Netherlands ($1.8 billion). 4 At the s a m e time, the United States transferred large v o l u m e s of aid to other regions. East Asian states received $3.9 billion in both types of assistance, and states in the N e a r East and South Asia received $2.5 billion ( U S A I D , 1990: 7, 69). 5 A f t e r the completion of the Marshall Plan, U.S. foreign assistance w a s redirected t o w a r d the geopolitical o b j e c t i v e of c o m m u n i s t c o n t a i n m e n t . Aid f l o w s w e r e coordinated with other e f f o r t s by the U.S. g o v e r n m e n t to support L D C s along the periphery of the Soviet Union and China, many of which ( i n c l u d i n g the Philippines, South Korea, Pakistan, and T u r k e y ) j o i n e d the U n i t e d States in a n t i c o m m u n i s t security alliances. Under the 1951 Mutual Security Act, subsequent U.S. aid f l o w s were dominated by military rather than e c o n o m i c t r a n s f e r s . M a n y L D C s reached aid a g r e e m e n t s with the Soviet Union and China, thus initiating an "aid r i v a l r y " a m o n g the s u p e r p o w e r s that w o u l d i n t e n s i f y in s u b s e q u e n t years. Yet in urging C o n g r e s s to increase aid f l o w s to the T h i r d World, E i s e n h o w e r (quoted in Treverton, 1987: 73) c o n t i n u e d to f r a m e his proposals in humanitarian language: " T h e purposes of this great work would be: To help other peoples to develop the underdeveloped areas of the world, to stimulate profitable and fair world trade, to assist all peoples to know the blessings of productive f r e e d o m . " During the ten-year life of the Mutual Security Act, the United States transferred about 5 0 percent more foreign assistance than it had under the Marshall Plan. T h e Eisenhower administration directed aid f l o w s to strategic allies in the Third World, many of which w e r e not a m o n g the most imp o v e r i s h e d , and allowed " m a r k e t f o r c e s " to dictate support for e c o n o m i c

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development. Rather than e m p h a s i z i n g development aid in these latter e f forts, Eisenhower relied on multinational corporations and bilateral trade a g r e e m e n t s to promote capitalism (Cingranelli, 1993: 138). 6 In the early 1960s, Kennedy redirected U.S. O D A toward broader dev e l o p m e n t a l goals. T h e Foreign Assistance Act of 1961, the Alliance for Progress, the Peace Corps, and other initiatives were aimed at promoting political and s o c i o e c o n o m i c d e v e l o p m e n t in L D C s , particularly in Latin A m e r i c a . U.S. aid f l o w s e x t e n d e d b e y o n d the Soviet periphery and w e r e a c c o m p a n i e d by direct g u i d a n c e in public works, agricultural techniques, and the establishment of stable, nominally d e m o c r a t i c governments. In the revised calculations of aid officials, the peaceful and prosperous development of L D C s was ultimately tied to that of the United States. T h u s , for the Kennedy administration, which v o w e d to fight c o m m u n i s m as vigorously as it c h a m p i o n e d the cause of N o r t h - S o u t h c o o p e r a t i o n , the s e e m ingly distinct motivations of h u m a n i t a r i a n i s m and self-interest were rendered c o m p l e m e n t a r y in the " d e c a d e of d e v e l o p m e n t . " A n a l y s e s of U.S. foreign aid were often infused with idealistic language about its potential to hasten the liberation of L D C populations. To Cropsey (1963: 130), " O u r duty to lighten the load of human misery is derivative from, indeed it is the reflex of our duty to bear ourselves as a great nation." A f t e r Lyndon J o h n s o n s u c c e e d e d Kennedy, U.S. O D A w a s again diverted toward Cold War imperatives, this time in Southeast Asia. T h e central themes of K e n n e d y ' s Alliance for P r o g r e s s — l o n g - t e r m d e v e l o p m e n t , nation building, an e m p h a s i s on L D C s and L L D C s — w e r e largely discarded as the United States b e c a m e mired in the Vietnam War. A preponderant share of resources, more than $ 2 0 billion in mostly military grants, w a s transferred to South Vietnam to support its e f f o r t s against the Viet Minh. By the late 1960s, Vietnam received nearly half of U.S. O D A and most of its military assistance ( U S A I D , 1991: 85). U.S. aid to Southeast Asia continued after the United States withdrew its forces in keeping with Richard N i x o n ' s "Vietnamization" strategy of shifting the onus of political stability and military d e f e n s e to recipients. After U.S. military involvement in Indochina ended in the mid-1970s, the U.S. aid program underwent new shifts in geographic distribution, content, and bureaucratic structure. Under the New Directions initiative, o f f i cials attempted to make U S A I D more responsive to rapidly changing conditions and basic needs in L D C s . C o n g r e s s r e s p o n d e d to the a p p e a l s f o r such reforms, including an a m e n d m e n t to the 1973 Foreign Assistance Act that redirected f u t u r e O D A to " g i v e the highest priority to u n d e r t a k i n g s s u b m i t t e d by host g o v e r n m e n t s w h i c h directly improve the lives of the poorest of their people and their capacity to participate in the development of their countries." W h e r e a s previous aid programs had emphasized capital-intensive projects such as d a m s and power plants, those under the New Directions mandate focused instead on small-scale farming, nutrition, literacy, and population planning.

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Jimmy Carter emerged in the late 1970s as a strong proponent of U.S. O D A , which he regarded first as a tool to p r o m o t e Third World development and observance of human rights, later as a means to protect U.S. interests in the face of heightened competition f r o m the Soviet Union, and finally as an instrument to maintain stability in the M i d d l e East. A m o n g the r e c o m m e n d a t i o n s of C a r t e r ' s D e v e l o p m e n t C o o r d i n a t i n g C o m m i t t e e was a renewed emphasis on human-needs concerns in U.S. aid allocations and the formation of an International D e v e l o p m e n t C o o p e r a t i o n A g e n c y ( I D C A ) to coordinate the multifaceted U.S. p r o g r a m . 7 But as before, the tidal fluctuations in U.S. aid policy revealed themselves. Like the Alliance for Progress, the effort by the Carter administration to lessen the security d i m e n s i o n of U.S. foreign aid was curtailed in the late 1970s under the strains of renewed Cold War tensions. Carter r e s p o n d e d to the Soviet U n i o n ' s invasion of Afghanistan and other d e v e l o p m e n t s by requesting inc r e a s e s in U.S. d e f e n s e s p e n d i n g and the restoration of many militaryassistance programs he had previously s u s p e n d e d . His decisions marked the a b a n d o n m e n t of his earlier foreign-policy goals, which had included the shift of emphasis from East-West relations to those between North and South (see Rosati, 1987). Meanwhile, Carter was sympathetic to arguments that the peaceful coexistence of Egypt and Israel would require ongoing, large-scale financial support from the United States. The result was an annual U.S. commitment of $5 billion to the two countries. This aspect of the C a m p David accords contributed to stability along the Israeli-Egyptian frontier, but it overshadowed U.S. aid practices in other areas. Aid to Israel served a variety of domestic and global U.S interests, including the protection of an ally in the M i d d l e East—a region v i e w e d as a " v i t a l " U.S. interest since the Eisenhower administration. As for Egypt, U.S. aid f l o w s served less apparent interests and were hence more controversial. A m o n g the objectives cited was the need for an ongoing U.S. presence in the A r a b world and the weaning of Egypt f r o m Soviet e c o n o m i c and political influence. Neither recipient fit the profile of an LDC, so aid on such a massive scale could not be justified on a human-needs basis; thus, Carter and subsequent presidents were f o r c e d to defend the aid f l o w s on other grounds. With Ronald R e a g a n ' s election to the U.S. presidency in 1980, the ren e w e d Cold War was r e f l e c t e d in aid policy. T h o u g h c o n s t r a i n e d by the massive aid commitments to Israel and Egypt, Reagan directed additional f u n d s toward states pivotal in his neocontainment strategy, many of which w e r e in Central America (see Table 6.1). As f o r recipients not f a c i n g an i m m i n e n t threat of c o m m u n i s t takeover, R e a g a n (1981: 1185) advocated l i n k i n g aid to free-market e c o n o m i c r e f o r m s : "History d e m o n s t r a t e s that t i m e and time again, in place after place, e c o n o m i c g r o w t h and human p r o g r e s s make their greatest strides in countries that encourage economic f r e e d o m . " During this period, Secretary of State G e o r g e S c h u l t z (1984: 17) argued that international stability f o u n d e d on e c o n o m i c development

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w o u l d be a primary objective of the administration and that "threats to stability impede d e v e l o p m e n t . " M o r e so than other presidents, Reagan attempted to influence the foreign-policy behavior of aid recipients. Like previous administrations, the Reagan team attempted to get U.S. clients during the Cold War to support U.S. military initiatives and U.S. positions in international organizations. During his second term, Reagan attempted to tie assistance transfers to the v o t i n g b e h a v i o r of recipients in the United Nations, w h e r e a d h e r e n c e to U.S. policy positions had fallen steadily during the previous three decades. This effort failed, however, as aid recipients continued to vote against the United States on most resolutions in the UN General A s s e m b l y . It is rev e a l i n g that U.S. aid to these recipients generally c o n t i n u e d at previous levels or was increased (see Kegley and Hook, 1991). For this and other reasons, R e a g a n ' s foreign-aid program was scrutinized by Congress, which threatened to reduce d e v e l o p m e n t aid f l o w s to recipients that could not demonstrate sufficient levels of human need. Reagan r e s p o n d e d by a p p o i n t i n g the Carlucci C o m m i s s i o n on Security and E c o n o m i c Assistance. Like g r o u p s that had previously e x a m i n e d the aid program, the Carlucci C o m m i s s i o n called for a structural reorganization of U S A I D . Its proposal for a Mutual Development and Security Administration designed to integrate the aid programs more efficiently was not acted u p o n by C o n g r e s s . T h i s and other r e c o m m e n d a t i o n s were greeted with tepid enthusiasm within U S A I D and other aid-dispensing agencies, w h e r e "there was a tendency to view the initiative as just the latest of the ' d e v e l o p m e n t f a d s ' which emerge at the beginning of each new administration" ( M c G u i r e and Ruttan, 1990: 142).« R e a g a n ' s e f f o r t to press U.S. O D A into the service of the Cold War w a s exemplified by his support for the government of El Salvador despite widely reported instances of human rights violations in that Central A m e r ican country. Congress required the administration to verify that the Salv a d o r a n g o v e r n m e n t w a s m a k i n g progress in protecting h u m a n rights b e f o r e new O D A f u n d s were approved; although atrocities continued, sufficient support for aid existed in Congress to keep the f u n d s flowing. Further, the administration's support for antigovernment rebels in Nicaragua, a n o t h e r aspect of its n e o c o n t a i n m e n t e f f o r t , p r o d u c e d a m a j o r political scandal after it was revealed that f u n d i n g for the insurgents, prohibited by C o n g r e s s under strong domestic opposition, had been continued with profits f r o m the secret sale of w e a p o n s to Iran in e x c h a n g e for the release of U.S. hostages. T h e scandal was a m o n g the only drains on R e a g a n ' s otherwise strong level of public support. G e o r g e Bush largely maintained R e a g a n ' s O D A policies during a period in w h i c h C o n g r e s s and the U.S. public g r e w increasingly skeptical about the aid program. G r o w i n g budget and trade deficits and a prolonged e c o n o m i c recession e x a c e r b a t e d these c o n c e r n s . Under B u s h , U S A I D

United

Table 6.1

Top Ten Recipients of U.S. ODA, 1970-1990

1970-1971 India Vietnam Indonesia Pakistan South Korea Brazil Turkey Colombia Israel Laos Source:

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1989-1990

Egypt Israel India Turkey Bangladesh Indonesia Pakistan El Salvador Peru Portugal

Egyp' Israel Pakistan El Salvador Philippines Honduras Bangladesh India Sudan Costa Rica

O E C D (1991b: 225)

e n c o u r a g e d aid r e c i p i e n t s to a b a n d o n statist m a c r o e c o n o m i c s t r a t e g i e s — i n c l u d i n g the n a t i o n a l i z a t i o n of key i n d u s t r i e s , s u b s i d i e s and p r i c e s u p p o r t s , and the p u r s u i t of i m p o r t - s u b s t i t u t i o n t r a d e s t r a t e g i e s — a n d to e s t a b l i s h m a r k e t - d r i v e n p r o g r a m s for a c c e l e r a t i n g e c o n o m i c g r o w t h . T h e d e m i s e of the C o l d War b e t w e e n 1 9 8 9 and 1991 f u r t h e r d e p r i v e d m a n y bilateral aid p r o g r a m s — a n d U.S. f o r e i g n p o l i c y in g e n e r a l — o f their p r e v i o u s l y stated r a t i o n a l e s . C o n t a i n i n g c o m m u n i s m c o u l d no l o n g e r s e r v e as the g u i d i n g p r i n c i p l e b e h i n d U.S. p o l i c y ; t h u s , n e w d o u b t s a r o s e a b o u t m a n y e s t a b l i s h e d O D A p r o g r a m s . M o r e o v e r , the d e v e l o p m e n t a l n e e d s of the f o r m e r Soviet U n i o n a n d its Eastern E u r o p e a n clients i m p o s e d new d e m a n d s on the aid r e s o u r c e s of the United S t a t e s a n d other m e m b e r s of the O D A regime. U n d e r the C l i n t o n a d m i n i s t r a t i o n , U S A I D r a p i d l y a l i g n e d its o b j e c t i v e s w i t h t h o s e of the U n i t e d N a t i o n s a n d o t h e r i n t e r n a t i o n a l o r g a n i z a tions, p l e d g i n g to use f u t u r e aid f l o w s to p r o m o t e s u s t a i n a b l e d e v e l o p m e n t a n d d e m o c r a c y in the d e v e l o p i n g w o r l d . A s they f r e q u e n t l y had in the past, U S A I D o f f i c i a l s p r o p o s e d to r e d e f i n e the a g e n c y ' s m i s s i o n ; in a d d i t i o n , t h e y a n n o u n c e d p l a n s to c u r t a i l aid f l o w s to r e p r e s s i v e T h i r d W o r l d r e g i m e s and to s h i f t the m o s t s e c u r i t y - o r i e n t e d O D A p r o g r a m s , i n c l u d i n g t h o s e for Egypt and Israel, to other f u n d i n g c a t e g o r i e s (see C h a p t e r 7). T h e o v e r a l l e f f o r t w a s d e s i g n e d to r e f l e c t the c h a n g i n g b a s i s of U.S. n a t i o n a l i n t e r e s t s in the p o s t - C o l d War p e r i o d and to r e n d e r O D A p r o g r a m s m o r e c o n s i s t e n t with e m e r g i n g t r a n s n a t i o n a l interests.

U.S. Foreign Aid: The Security Dimension A l t h o u g h this s t u d y is d i r e c t e d t o w a r d b e t t e r u n d e r s t a n d i n g d e v e l o p m e n t assistance as an instrument of donors' national interests, the U.S. g o v e r n m e n t ' s

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extension of military assistance to L D C s must also be considered. As Table 6.2 illustrates, the United States transferred foreign military assistance to each of its m a j o r O D A recipients b e t w e e n 1962 and 1989, the period in which the United States allocated development aid as part of the contemporary aid regime. Overall, the United States t r a n s f e r r e d $ 1 0 4 billion worth of military assistance to more than 100 foreign countries during the twenty-seven-year period, compared to the $175 billion in e c o n o m i c assistance allocated by the U.S. government. Of this total, $66 billion in military aid was provided in grant form; the additional assistance was extended in the f o r m of lowinterest loans. T h e military-assistance figures do not include governmentsanctioned sales of U.S. military h a r d w a r e at market prices, many of which w e r e made to m i d d l e - or l o w - i n c o m e recipients (see Klare, 1987; and Pierre, 1982). Recipients in the Near E a s t - S o u t h Asia region, which includes the M i d d l e East, received more than half ($58 billion) of U.S. military assistance. T h e United States provided $32 billion in military assistance to recipients in East Asia, half of which went to South Vietnam during the 1960s and early 1970s. Another $3.5 billion was transferred to Latin American states, $3.1 billion to those in Africa (particularly Morocco and Tunisia), and $4.7 million to European recipients (particularly Portugal and Spain), many of which received c o n t i n u i n g U.S. O D A after the Marshall Plan period. T h e largest proportion of military grant aid was provided through the Military Assistance Program ( M A P ) and used for military equipment, supplies, and support services. T w e n t y - s e v e n nations received M A P f u n d i n g in 1989. Although M A P grants represented the largest dollar v o l u m e of any U.S. military-assistance initiative, most countries received U.S. support through the International Military E d u c a t i o n and Training ( I M E T ) p r o g r a m . In 1989, the United States p r o v i d e d assistance to eighty-six countries through IMET, which provided "grants of instruction and training services to military and related civilian personnel of friendly countries" (USAID, 1993a: 4). In most cases, including the primary U.S. O D A recipients of B a n g l a d e s h , India, S u d a n , and Costa Rica, these aid f l o w s a m o u n t e d to less than $1 million, but they still provided for a U.S. presence in each of the recipient states. 9 U.S. military assistance w a s generally provided for explicit security reasons related to its leading role in containing communism during the Cold War; thus, the ambiguities regarding its intent did not pertain as in the case of development aid. It is instructive to note, however, that most O D A recipients were simultaneously receiving annual disbursements of U.S. military assistance during m u c h of the p o s t - W o r l d War II period. T h e other three O D A donor states reviewed in this study did not provide substantial volumes of military assistance; only France provided such aid, as part of its effort to provide protection to many of its allies in francophone A f r i c a . 1 0

United

Table 6.2

127

States

U.S. Military Assistance to Major ODA Recipients

Major ODA Recipient (1989-1990)

U.S. Military Assistance, 1962-1988 3

U.S. Military Assistance, 1989 a

Egyp' Israel Pakistan El Salvador Philippines Honduras Bangladesh India Sudan Costa Rica

10,674 25,834 1,983 869 1,206 428 3 147 328 39

1,301 1,800 231 81 128 41 0.3 0.3 0.9 0.2

Source: USAID (1993) Note: a. Figures represent millions of current U.S. dollars

In these respects, U.S. O D A m u s t not be c o n s i d e r e d in isolation f r o m its b r o a d e r f o r e i g n r e l a t i o n s w i t h L D C s ; d e v e l o p m e n t and security a s s i s tance m a y b e v i e w e d as t w o sides of the s a m e coin. M o r e broadly, f o r e i g n aid r e p r e s e n t e d o n e e l e m e n t of a b r o a d p a t t e r n t h r o u g h o u t the C o l d War of U.S. intervention in L D C s w h e r e s u c c e s s i v e presidents c l a i m e d vital national interests to be at stake (see S c h r a e d e r , 1992). A s the e m p i r i c a l patt e r n s b e l o w indicate, e v e n w i t h i n the n a r r o w s p e c t r u m of U.S. d e v e l o p m e n t assistance, the pursuit of security interests w a s e v i d e n t .

U.S. ODA and Domestic Politics W h e n s e c u r i t y and e c o n o m i c a s s i s t a n c e p r o g r a m s are b o t h taken into a c c o u n t , the U.S. aid e f f o r t d u r i n g the p o s t - W o r l d War II period w a s by far the largest in the w o r l d . G i v e n its s t e a d i l y i n c r e a s i n g s c o p e , it is not surp r i s i n g that the U.S. aid p r o g r a m p r o d u c e d a large a n d c o m p l e x institutional f r a m e w o r k that e x e r t e d its o w n i m p a c t o n the v o l u m e , direction, and t e r m s of aid f l o w s . A m o n g the c o n s e q u e n c e s of this b u r e a u c r a t i z a t i o n w a s o n g o i n g c o n f u s i o n o v e r t h e o b j e c t i v e s of the m y r i a d p r o g r a m s a n d c o n s t a n t c l a s h e s b e t w e e n f e d e r a l a g e n c i e s in p l a n n i n g , i m p l e m e n t i n g , a n d m o n i t o r i n g aid. In this respect, the U . S . O D A p r o g r a m w a s w i d e l y v i e w e d as " a b y - p r o d u c t of the A m e r i c a n political s y s t e m , a highly b u r e a u c r a t i z e d n e t w o r k of actors that clash o v e r r e s o u r c e s and the authority (or t u r f ) to inf l u e n c e p o l i c y . . . . T h e m a k i n g a n d e x e c u t i o n of f o r e i g n aid p o l i c y has b e e n c h a r a c t e r i z e d by i n t e n s e c o n f u s i o n o v e r b o t h o b j e c t i v e s and e v a l u a tive c r i t e r i a " ( G u e s s , 1987: 2).

128

Country

Studies

T h i s p a t t e r n w a s e v i d e n t e a r l y in t h e e v o l u t i o n o f the U . S . O D A p r o gram, w h e n M o n t g o m e r y ( 1 9 6 2 : 1 9 7 ) noted, " T h e survival o f foreign aid is t h e r e s u l t o f a s e r i e s o f u n c e r t a i n p o l i t i c a l c o m p r o m i s e s . " T h i s p a t t e r n led in s u c e s s i v e a d m i n i s t r a t i o n s to a g r o w i n g d e t a c h m e n t o f U . S .

ODA

flows from stated foreign-policy goals, many of which extended beyond the c o n t a i n m e n t o f c o m m u n i s m . U . S . aid p r o g r a m s b e c a m e

increasingly

v u l n e r a b l e to i n t r a g o v e r n m e n t a l c o n f l i c t s a n d c o m p r o m i s e s . In the m i d 1 9 7 0 s , a m i d g r e a t u n c e r t a i n t y o v e r t h e f u t u r e o f U . S . f o r e i g n a s s i s t a n c e in the p o s t - V i e t n a m e r a , U S A I D c o n t i n u e d to b e " s u b j e c t to the s l i n g s a n d arr o w s o f the rest o f the g o v e r n m e n t to w h i c h it b e l o n g s " ( T e n d l e r , 1 9 7 5 : 4 ) . T h i s b u r e a u c r a t i c t a n g l e m u s t b e a p p r e c i a t e d in a n y a s s e s s m e n t

of

U . S . O D A . In a d d i t i o n to U S A I D , o t h e r f e d e r a l a g e n c i e s w i t h a r o l e in f o r e i g n a s s i s t a n c e i n c l u d e d the E x p o r t - I m p o r t B a n k , the O v e r s e a s P r i v a t e I n v e s t m e n t C o r p o r a t i o n , the T r a d e D e v e l o p m e n t P r o g r a m , the U . S . I n f o r m a tion A g e n c y , a n d t h e O f f i c e o f t h e U . S . T r a d e R e p r e s e n t a t i v e . cabinet-level

a g e n c i e s , the A g r i c u l t u r e D e p a r t m e n t

Among

managed Food

for

P e a c e and o t h e r p r o g r a m s i n v o l v i n g the transfer o f farm surpluses; the Commerce

Department

coordinated

U.S.

aid r e l a t i o n s h i p s

with

other

d o n o r - r e c i p i e n t e c o n o m i c ties; the D e f e n s e D e p a r t m e n t m a n a g e d the t r a n s f e r o f m i l i t a r y a s s i s t a n c e a n d m a n y f o r m s o f e c o n o m i c a i d ; the S t a t e D e p a r t m e n t o v e r s a w the a c t i v i t i e s o f U S A I D ; a n d t h e T r e a s u r y D e p a r t m e n t p l a y e d a k e y r o l e in f o r m u l a t i n g U . S . p o l i c y t o w a r d m u l t i l a t e r a l b a n k s a n d in c o o r d i n a t i n g t h e d e b t s c h e d u l e s o f a i d r e c i p i e n t s ( s e e B a k e r , 1 9 8 4 ; a n d D e m o n g e o t , 1 9 8 4 ) . T h e p r o b l e m o f c o o r d i n a t i n g the f a r - f l u n g

foreign-

a s s i s t a n c e p r o g r a m s in the 1 9 8 0 s p r o m p t e d U S A I D ( 1 9 8 9 : 9 ) to a s k r h e t o r i c a l l y , " I s it p o s s i b l e to e v e n t a l k a b o u t a u n i f i e d d e v e l o p m e n t

strategy

w h e n a s s i s t a n c e is r o u t e d t h r o u g h s o m a n y i n d e p e n d e n t , a n d o f t e n c o m peting, g o v e r n m e n t departments and a g e n c i e s ? " C o o r d i n a t i o n o f U . S . aid w a s c o m p l i c a t e d not o n l y by the i n v o l v e m e n t o f s e v e r a l e x e c u t i v e - b r a n c h a g e n c i e s but a l s o b y c o n f l i c t b e t w e e n t h e s e a g e n c i e s a n d C o n g r e s s . G i v e n its c o n s t i t u t i o n a l " p o w e r o f the p u r s e , " C o n g r e s s e x e r c i s e d a c r i t i c a l r o l e in t h e g r a n t i n g o f f o r e i g n a s s i s t a n c e , m a k ing t h i s o n e o f f e w i s s u e a r e a s in w h i c h t h e l e g i s l a t i v e b r a n c h

could

c o m p e t e w i t h t h e W h i t e H o u s e . A l t h o u g h o v e r a l l aid l e v e l s c o n s i s t e n t l y inc r e a s e d t h r o u g h o u t the p o s t w a r p e r i o d , f r e q u e n t d e b a t e s b e t w e e n C o n g r e s s and the e x e c u t i v e b r a n c h c e n t e r e d o n the s p e c i f i c u s e s o f d e v e l o p m e n t a i d . " W i t h r a r e e x c e p t i o n s , d e b a t e is a c r i m o n i o u s , f i n a l a c t i o n is u s u a l l y n o t t a k e n until t h e s e s s i o n is n e a r i n g a d j o u r n m e n t , a n d p r o g r a m c u t s a r e t h e rule," observed Lewis ( 1 9 8 4 : 28). T h i s contentious relationship hindered e f f o r t s b y U S A I D to i m p l e m e n t a i d p r o g r a m s , but e f f e c t i v e n e s s w a s h a m p e r e d e v e n f u r t h e r b y t h e c o n s t a n t l y s h i f t i n g aid m a n d a t e s that o r i g i n a t e d from new presidential administrations and c o n g r e s s i o n a l

majorities.11

W i t h i n C o n g r e s s , the c o m p l e x i t y o f f o r e i g n a s s i s t a n c e w a s i l l u s t r a t e d b y t h e n u m e r o u s c o m m i t t e e s w i t h a v o i c e in d e c i s i o n s o v e r aid t r a n s f e r s .

United

States

129

T h e Senate Foreign R e l a t i o n s C o m m i t t e e and the H o u s e Foreign A f f a i r s Committee exercised primary jurisdiction over bilateral O D A ; the agriculture c o m m i t t e e s of both houses, a l o n g with the H o u s e Foreign A f f a i r s Committee, supervised food aid; and the House B a n k i n g Committee considered multilateral packages in consultation with the Senate Foreign Relations C o m m i t t e e . Within and b e t w e e n these congressional bodies there were f r e q u e n t d i s a g r e e m e n t s over the s h a p e of U.S. f o r e i g n assistance (Gimlin, 1988: 472). As a result of this d i f f u s i o n of O D A authority, m e m b e r s of Congress often w e r e able to achieve a p p r o v a l of particular aid p r o j e c t s by " e a r marking" appropriation bills. T h e s e projects were often of as much interest to p o l i t i c i a n ' s constituents, w h o provided the g o o d s or services that were m a d e available to recipient c o u n t r i e s , as they were to the L D C s themselves. In this manner the 535 m e m b e r s of Congress pursued "multiple goals and detailed spending mandates that frequently conflict" (Doherty, 1992: 1356). 1 2 Congress further encouraged this pattern by passing foreignaid bills with little or no debate in the form of continuing resolutions. As U.S. aid programs were refined and expanded throughout the postwar era, o n e pattern r e m a i n e d constant: the lack of public e n t h u s i a s m about them. "In few areas of American public life is there so little national c o n s e n s u s on p u r p o s e s as in f o r e i g n aid," M o n t g o m e r y argued (1962: 197). T h e s e p r o b l e m s had not subsided a d e c a d e later, w h e n Huntington ( 1 9 7 0 - 1 9 7 1 : 162) noted: " T h e continuing quest for a rationale for foreign aid is one of its distinguishing characteristics as an area of public policy." In public opinion surveys conducted in the late 1970s, nearly 70 percent of respondents felt the U.S. g o v e r n m e n t was s p e n d i n g too m u c h on foreign assistance, w h e r e a s less than 4 percent b e l i e v e d aid levels were insufficient. T h e two most prevalent r e a s o n s f o r this v i e w were: (1) "We have problems of our own here at h o m e and should s p e n d the money here instead of o v e r s e a s " ; and (2) " M o s t of the e c o n o m i c aid w e provide never gets to the people w h o need it" (Roper, 1979: 6 5 0 - 6 5 3 ) . P u b l i c disdain for f o r e i g n assistance intensified in the late 1980s as g r o w i n g b u d g e t and trade deficits w e r e a c c o m p a n i e d by slow e c o n o m i c growth and high unemployment. By the late 1980s the political popularity of foreign aid had fallen even below the chronically low levels of earlier p e r i o d s . 1 3 A s i d e f r o m their support f o r s p e c i f i c m e a s u r e s that were of value to their districts or states, m e m b e r s of C o n g r e s s o f t e n granted f o r eign aid the lowest priority in their s p e n d i n g p r e f e r e n c e s . "It is the program their c o n s t i t u e n t s most want to see c u t , " e x p l a i n e d O b e y and Lancaster (1988: 146). 1 4 T h e debilitating i n t r a g o v e r n m e n t s t r u g g l e s led to e v e r - w o r s e n i n g morale a m o n g U S A I D administrators, w h o were o f t e n unable to propose innovative projects f o r fear of f u r t h e r a r o u s i n g public and congressional criticism. According to the U.S. General A c c o u n t i n g Office (1983: 5), "the

130

Country

Studies

A g e n c y ' s sensitivity to this situation has resulted in an operating style that is excessively cautious to the point of hindering the achievement of U.S. objectives." In the 1980s, these criticisms only diminished the Reagan administration's already low regard for the foreign-aid program and further inflamed public opposition. A congressional task force chaired by Representative Lee Hamilton reviewed the c o u n t r y ' s foreign-aid programs and concluded that "it is time to start a n e w " (U.S. House of Representatives, 1989: 29).

U.S. O D A in Practice As noted above, the United States played an important but d i m i n i s h i n g role in the global O D A regime during the 1980s. Whereas in the 1950s and 1960s the United States disbursed b e t w e e n 60 and 90 percent of all foreign-aid flows, the U.S. contribution represented less than one-sixth of world O D A by 1989, the year in which Japan, with a G N P roughly half that of the United States, had a higher net aid c o m m i t m e n t . On an a b s o l u t e level, U.S. O D A rose marginally b e t w e e n 1970 and 1990, but as a percentage of U.S. G N P aid flows decreased throughout the post-World War II era (see Table 6.3). Whereas foreign aid accounted for 3.2 percent of U.S. G N P in 1949, it represented less than 0.2 percent of U.S. G N P in the late 1980s, a m o n g the lowest relative O D A c o m m i t m e n t s of the w o r l d ' s m a j o r donors. Ironically, it was about the time that the UN and O E C D identified the 0.7 percent O D A / G N P level as the benchmark of aid quality that the U.S. share fell below that level. T h e United States was the w o r l d ' s leading donor on an absolute level during the 1980s, and it retained this status in the early 1990s. T h e decreasing relative U.S. contribution was attributed by officials to the country's disproportionate burden in regional and global defense efforts, to the disappointing results of past development projects, and to the need to address domestic priorities during an extended period of stagnant e c o n o m i c g r o w t h . Under the Reagan administration, military rather than e c o n o m i c assistance b e c a m e the p r e f e r r e d means of t r a n s f e r r i n g resources abroad, and nearly half of the O D A budget was claimed by Egypt and Israel as a result of the C a m p David accords. T h e r e m a i n i n g f u n d s for Third World development w e r e largely directed toward strategic allies whose c o m p l i ance the U.S. sought in the revived Cold War of the 1980s. T h e United States p o s s e s s e d by far the w o r l d ' s largest G N P through the 1980s, a m o u n t i n g to m o r e than $5 trillion in 1989. A l t h o u g h the U.S. e c o n o m y e x p a n d e d consistently throughout the decade, per capita U.S. G N P fell below that of many other industrialized states in Western Europe and East Asia, including Sweden and Japan. As its productivity and e c o n o m i c g r o w t h stagnated, the U.S. g o v e r n m e n t steadily a m a s s e d a

United

Tabic 6.3

131

States

U . S . O D A Transfers, 1 9 7 0 - 1 9 9 0 ODA Commitment 3

Percent GNP

Share of World O D A

1970-1971

8,618

0.30

33.7

1980-1981

9,128

0.23

16.5

1989-1990

9,292

0.18

16.6

Source: O E C D (1991a) Note: a. O D A commitment in millions of current U.S dollars

balance-of-payments deficit ( - 1 . 8 percent/GNP in 1990) that rendered interest payments the fastest-growing element of the federal budget. During the 1980s, the largest segment of U.S. O D A was directed toward recipients in the Middle E a s t - N o r t h Africa region, particularly Egypt and Israel (see Figure 6.1). Total O D A to this region a c c o u n t e d for approximately half of U.S. transfers. Having brokered the a g r e e m e n t that created peaceful coexistence between Israel and Egypt, the United States was committed to nurturing the peace by providing billions of dollars annually to both states. Recipients in Latin A m e r i c a received the s e c o n d largest share of U.S. O D A d i s b u r s e m e n t s during this period. As noted above, the R e a g a n administration identified Central A m e r i c a as a key strategic interest in the 1980s and reshaped the O D A p r o g r a m to a c c o m modate that interest (see Robinson, 1991; and B l a c h m a n , Leogrande, and Sharpe, 1987). A m o n g South Asian recipients, Pakistan rose to become the third greatest b e n e f i c i a r y of U.S. O D A in the world, eclipsing India and Bangladesh. 1 5 African countries (not including Egypt), of which more than forty were U.S. O D A recipients during the period, received much smaller amounts. Only in 1 9 8 9 - 1 9 9 0 did an African LDC, Sudan, rank a m o n g the top ten U.S. O D A recipients. A m o n g the f u n c t i o n a l a p p l i c a t i o n s of U.S. d e v e l o p m e n t aid, the largest single category during the 1980s was that of unrestricted assistance (Figure 6.2). This category, in which the U.S. share was twice the average of D e v e l o p m e n t A s s i s t a n c e C o m m i t t e e m e m b e r s , r e p r e s e n t e d to a large degree the f l o w s transferred through the Economic Support Fund (ESF) to strategically important states, w h o w e r e given direct control over the spending of these resources (see O E C D , 1991a: 152). 1 6 This was the f o r m taken by most bilateral t r a n s f e r s to Egypt and Israel. T h e s e f u n d s , most o f t e n transferred in cash, w e r e also used to ease i m m e d i a t e b a l a n c e - o f p a y m e n t p r o b l e m s f a c e d by L D C s and, to a g r o w i n g degree, m i d d l e - i n c o m e countries ( M I C s ) such as Mexico, Brazil, and Argentina. T h e second largest share of U.S. O D A was directed toward the development of political

132

Country

Studies

Figure 6.1 Direction of U.S. ODA, 1980-1990 (Geographical Distribution, Percentage)

0

Other Asia

South Asia

Sub-Saharan Africa

Mideast, North Africa

Latin America

Legend H

1979-80

J

1984-85

H

1989-90

Source: OECD (1991a: 180)

i n f r a s t r u c t u r e of recipient states, w h o o f t e n used U.S. r e s o u r c e s to c o n struct civil and administrative facilities in unstable settings. In three of the four categories of O D A quality, the United States fell below D A C averages, with overall qualitative indicators in 1989 lower than those at the beginning of the decade (see Table 6.4). Only in the category of proportionate grant aid did the United States improve, and only in this category did it exceed D A C averages during the 1980s. About half of U.S. O D A consisted of grants in the 1960s, but that proportion rose to a b o v e 90 percent by 1989. T h i s shift, consistent with a trend a m o n g all D A C donors, brought praise f r o m the United Nations and other international organizations, w h i c h had consistently urged aid d o n o r s to provide assistance on the softest terms possible. According to Wood, " N o issue has been more prominent in the debate on foreign aid than the loan-grant controversy" (1986: 67). T h e relative increase in U.S. grant aid w a s partly a r e s p o n s e to the debt crisis of the late 1980s, which hampered the ability of aid recipients to reimburse the U.S. government for medium- and long-term concessional loans. Many aid recipients had also accrued large debts to international org a n i z a t i o n s and c o m m e r c i a l b a n k s , e x a c e r b a t i n g the debt crisis and p r o m p t i n g the B a k e r and Brady plans, which r e s c h e d u l e d or " f o r g a v e "

United

133

States

F i g u r e 6.2 U s e s of U . S . O D A ( F u n c t i o n a l D i s t r i b u t i o n , 1988/1989)

Political Infrastructure

Agriculture

Food Aid

Adjustment or

other

Unrestricted

Source: O E C D (1991a: 181)

much of the T h i r d World debt. A c o n s e n s u s on the U.S. r e s p o n s e to this crisis e m e r g e d : " B o t h C o n g r e s s a n d the e x e c u t i v e b r a n c h s u p p o r t e d the view that f o r e i g n aid should not add to the already e x i s t i n g debt burden carried by these countries" (Congressional Research Service, 1992: 11). T h e United States c o n t i n u e d to tie a h i g h e r - t h a n - D A C - a v e r a g e proportion of O D A transfers to the acquisition of g o o d s a n d services, o n e closely watched indicator of aid quality. T h e country's 1989 level of untied O D A (30.9 percent) represented a significant decrease f r o m the 1980 level and mirrored an overall growth in tying of aid a m o n g D A C donors during the decade. In the United States, the tying of aid packages was viewed as essential f o r the continuation of programs in the face of g r o w i n g political opposition. In "selling" foreign assistance to a wary public, U.S. officials often e m p h a s i z e d the fact that most aid packages were tied to the procurement U.S. goods and services (Congressional Research Service, 1992: 9). About 9 0 percent of military aid was used to purchase U.S. military equipment and training, and about one-half of bilateral O D A w a s spent in the United States. 1 7 As noted elsewhere, donor states generally utilize bilateral transfers to promote their foreign-policy interests, so a high proportion of multilateral aid is often regarded as evidence of a high-quality aid p r o g r a m . T h e United

134

Table 6.4

1980 1983 1986 1989

Country

Studies

Quality of U.S. ODA, 1980-1989 Grant Element (% ODA)

Untied Aid (% ODA)

Multilateral Aid (% ODA)

Aid to LLDCs (% ODA)

72.6 (75.2) a 81.6 (76.3) 97.0 (87.0) 92.5 (88.9)

38.8 (50.3) 36.8 (45.9) 26.3 (33.4) 30.9 (36.5)

25.6 (28.5) 35.0 (31-3) 21.1 (28.1) 20.2 (27.2)

40.7 (35.1) 17.4 (21.8) 15.4 (23.4)\ 15.5 (22.4)

Sources: OECD (1982b, 1985b, 1988b, 1991b) Note: a. D A C averages listed in parentheses

States allocated a diminishing share of its O D A flows to multilateral agencies d u r i n g the 1980s, with the p r o p o r t i o n in the final y e a r falling to about onef i f t h . U.S. o f f i c i a l s j u s t i f i e d the i n c r e a s e in bilateral f l o w s on g r o u n d s of e f f i c i e n c y . A s f o r m e r S e c r e t a r y of S t a t e A l e x a n d e r H a i g ( 1 9 8 1 : 21) o b s e r v e d , "It has b e e n our e x p e r i e n c e that w e a c h i e v e greater precision a n d g r e a t e r v a l u e to the A m e r i c a n t a x p a y e r s if w e e m p h a s i z e bilateral assist a n c e . " T e s t i f y i n g b e f o r e C o n g r e s s , D e p u t y S e c r e t a r y of S t a t e C l i f t o n W h a r t o n ( 1 9 9 3 : 5 2 8 ) reiterated H a i g ' s c o n t e n t i o n that bilateral aid s e r v e s U.S. national interests better than multilateral aid: " U S A I D p r o v i d e s a direct l i n k a g e b e t w e e n U.S. f o r e i g n p o l i c y g o a l s in o u r bilateral r e l a t i o n s . Multilateral a g e n c i e s d o not n e c e s s a r i l y reflect U.S. f o r e i g n policy in their p r o g r a m s and a c t i v i t i e s . " Finally, the s h a r e of U . S . O D A a l l o c a t e d to t h e p o o r e s t of r e c i p i e n t states, o r L L D C s , fell by m o r e than half d u r i n g the d e c a d e , f r o m about 4 1 percent to 16 percent. A s in the o t h e r c a t e g o r i e s of quality, the U.S. pattern w a s c o n s i s t e n t w i t h that of D A C m e m b e r s in g e n e r a l , w h o d r a m a t i c a l l y d e c r e a s e d the p r o p o r t i o n of O D A f l o w s to the p o o r e s t recipient states. Especially in this category, overall p a t t e r n s w e r e s k e w e d by U.S. O D A f l o w s to E g y p t a n d Israel, g i v e n their s t a t u s as m i d d l e - i n c o m e states. With such a large s h a r e of U.S. f u n d s d e s i g n a t e d f o r t h o s e t w o recipients, r e m a i n i n g f u n d s f o r p o o r e r p o p u l a t i o n s w e r e l i m i t e d . C o n s e q u e n t l y , in 1 9 8 9 f i v e of the t o p ten r e c i p i e n t s of U.S. O D A w e r e d e s i g n a t e d by the W o r l d B a n k ( 1 9 9 1 ) as l o w e r - m i d d l e - i n c o m e s t a t e s , w h e r e a s f o u r w e r e in the lowi n c o m e c a t e g o r y and o n e , Israel, w a s c o n s i d e r e d an u p p e r - m i d d l e i n c o m e state. 1 8 U.S. O D A f l o w s w e r e statistically linked to both security-interest variables d u r i n g m u c h of this period ( s e e Table 6.5). U . S . O D A t r a n s f e r s w e r e related to levels of recipient military s p e n d i n g in six of the ten years under

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study and to relative militarization—the proportion of recipient population enlisted in the armed f o r c e s — i n five of the ten years. T h e s e patterns illustrate the centrality of security c o n c e r n s within the O D A p r o g r a m , quite apart from the military-aid relationships the United States had established with many of the same LDCs. As in m a n y aspects of the U.S. O D A p r o g r a m , the p r e p o n d e r a n c e of U.S. assistance transferred to Israel and Egypt skewed this relationship between aid flows and levels of recipient militarization. With an average rate of 48.5 military personnel per 1,000 citizens and an average annual defense expenditure of $6.3 billion during the 1980s, Israel w a s a m o n g the w o r l d ' s most heavily militarized countries. E g y p t ' s average conscription rate of 9.6 per 1,000 was also a b o v e the world a v e r a g e , and higher than those of the other top ten recipients of U.S. O D A in the 1 9 8 8 - 1 9 8 9 fiscal year. The Egyptian government spent an annual average of $6.3 billion on defense during the 1980s, one of the highest net spending rates a m o n g developing countries (U.S. A C D A , 1991). Both countries spent much of their O D A f u n d s on U.S.-made military equipment and on civilian goods and services tied to aid transferred through the E c o n o m i c Support Fund. D u r i n g the f i v e - y e a r period f r o m 1985 through 1989, Israel purchased $6.1 billion in U.S. military e q u i p m e n t ,

Table 6.5

U.S. O D A a n d R e c i p i e n t Characteristics: M u l t i v a r i a t e R e l a t i o n s h i p s (Figures indicate s t a n d a r d i z e d s l o p e coefficients) 1980

1981I

1982

1983

Humanitarian-Interest Life expectancy Caloric consumption

Total R 2

1986

1987

1988

1989

Variables

-.13

.19

-.07

-.06

.12

.02

.02

-.04

.07

.17

.08

.04

-.09

.04

-.19

-.08

-.17

.03

-.06

Variables

.24

.35

.27

.39 a

.55

.97

.60

.14

.46

.71

.14

.32

.33

.48

.22

-.02

.30

-.44

.27

.19

Economic-Interest GNP Trade with USA

1985

-.13

Security-Interest Military spending % population in military

1984

Variables

-.10

-.26

-.16

-.28

-.44

-.42

-.57

-.16

-.38

-.60

.01

.07

.01

.07

.10

-.05

.20

.13

.06

.04

.10

.23

.19

.35

.27

.60

.34

.19

.22

.27

Sources: U.S. ACDA (security-interest variables); IMF (trade variable); OECD (aid transfers [dependent variables]); World Bank (all other variables) Note: a. Underlined figures indicate significance at .05 level; double-underlined figures indicate significance at .01 level

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Egypt an additional $2.9 billion. Pakistan, the other m a j o r O D A recipient with a concurrent status as a major customer of U.S. arms, spent $925 million during the five-year period. A m o n g other major recipients of U.S. O D A , India reported the third highest average rate of military s p e n d i n g ($7.3 billion). Aside f r o m Pakistan, with a ten-year average of $1.8 billion, the other recipients in the t o p ten spent less than $ 7 0 0 million annually on d e f e n s e . El S a l v a d o r ' s c o n scription rate of 7.8 per 1,000 citizens ranked it a m o n g the most militarized of states, but in most other cases the rates were less than half the Salvadoran average. Clearly, the disproportionate share of U.S. O D A flows to Israel and Egypt explains much of the security orientation of the U.S. program, which, as noted earlier, is a primary reason U S A I D has proposed disconnecting the Economic Support Fund from other, more development-oriented bilateral aid programs. W h a t e v e r budgetary form these transactions take, however, the future of concessional aid to Israel and Egypt appears secure, given these countries' centrality to U.S. interests in the Middle East. No statistical relationship was evident between U.S. aid transfers and the social w e l f a r e conditions of recipient states. Neither life e x p e c t a n c y nor c o n s u m p t i o n rates in recipient countries co-varied significantly with U.S. O D A f l o w s . In the f o r m e r category, life e x p e c t a n c y in the top ten U.S. O D A recipients in 1989 a v e r a g e d 62.4 years, slightly less than the w o r l d w i d e average of 64 years (World Bank, 1990). In the latter category, inhabitants of these states c o n s u m e d an average of 2,447 calories per day, c o m p a r e d to the w o r l d w i d e a v e r a g e of 2,711 c a l o r i e s . (Israeli citizens lived an average of 76 years and c o n s u m e d an a v e r a g e of 3,174 calories per day, placing them a m o n g the most affluent states in both categories.) Similarly, economic factors appeared to have little relationship to aid patterns. N o n e of the m a j o r recipients of U.S. O D A p r o d u c e d relatively large v o l u m e s of goods and services during the 1980s. India's 1988 G N P of $ 2 3 8 billion was the largest in this group; the other nine m a j o r recipients recorded a total G N P of less than $ 2 0 0 billion (World Bank, 1990). T h e United States conducted far less trade with these recipients than with industrialized states in Western E u r o p e and J a p a n . It also recorded large volumes of trade with neighboring Canada and Mexico; the latter, although widely considered a developing country, received a relatively small share of U.S. O D A c o m m i t m e n t s (an a v e r a g e of $ 3 6 million a year during the period 1 9 8 6 - 1 9 8 9 ) . As noted previously, the large share of U.S. O D A f l o w s to Egypt and Israel strongly influenced the overall relationships between the c o u n t r y ' s aid and its foreign-policy priorities. To demonstrate the impact of the disp r o p o r t i o n a t e aid f l o w s to Egypt and Israel, U.S. O D A patterns in the 1980s may be further examined by removing these recipients from the statistical sample and observing the residual relationships.

137

United States

As Table 6.6 illustrates, the picture is very different w h e n Egypt and Israel are r e m o v e d f r o m the analysis. T w o m a j o r c h a n g e s are evident. First, the security orientation of U.S. O D A disappears f r o m view; the statistical relationship b e t w e e n aid f l o w s and recipient militarization (both absolute and relative) is insignificant throughout the decade. Second, aid flows are more generally concentrated a m o n g recipients with lower levels of per capita caloric c o n s u m p t i o n , an indicator of social w e l f a r e needs. These patterns were evident in f i v e of the final six years under consideration. T h u s , it may be inferred that, in the absence of O D A transfers to Egypt and Israel, the U.S. development aid program was less related to security considerations and more oriented to humanitarian concerns. This i n f e r e n c e must be heavily q u a l i f i e d , however, f o r two primary reasons. First, as noted above, the U.S. O D A program has been intimately connected with its p r o g r a m s f o r t r a n s f e r r i n g military assistance, and the fungibility of the two types of aid discounts their linkage to U.S. foreignpolicy goals in isolation. Second, the c o m m i t m e n t of such large a m o u n t s of U.S. O D A to Egypt and Israel limited available funding for other bilateral or multilateral programs, clearly reflecting U.S. foreign-policy priorities in

Table 6.6

U.S. O D A a n d R e c i p i e n t Characteristics: M u l t i v a r i a t e R e l a t i o n s h i p s , E g y p t a n d Israel E x c l u d e d (Figures indicate s t a n d a r d i z e d s l o p e coefficients) 1980

1981

1982

1983

Humanitarian-Interest Life expectancy Caloric consumption

.13

.19

.15

.26

-.17

-.22

-.16

-.31

-.35

Total R 2

1986

1987 1988

1989

,40 a -.60

.30

.24

-.15

.34

-.38

-.39

-.28

-.51

Variables

-.47

-.16

-.17

-.11

-.09

.15

-.17

-.07

.04

-.10

.16

.02

-.01

.05

.01

.03

.02

.07

.04

-.02

Economic-Interest GNP Trade with USA

1985

Variables

.08

Security-Interest Military spending Conscripted population

1984

Variables

.76

.39

.38

.24

.23

.06

.21

.05

.03

.13

-.33

-.23

-.29

-.12

-.17

-.06

-.04

-.04

-.09

-.10

.14

.07

.08

.07

.10

.16

.08

.08

.05

.12

Sources: U.S. ACDA (security-interest variables); IMF (trade variable); OECD (aid transfers [dependent variables]); World Bank (all other variables) Note: a. Underlined figures indicate significance at .05 level; double-underlined figures indicate significance at .01 level

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the 1980s. Such arguments cannot so easily be dismissed through statistical manipulation. In this respect, one must consider the overall record and consider its implications for foreign policy.

Summary In the aftermath of World War II, the United States established and institutionalized a global e c o n o m i c order based on market principles and oriented toward the preservation of existing capitalist e c o n o m i e s a n d likem i n d e d r e g i m e s in the d e v e l o p i n g world through trade c o n c e s s i o n s and e c o n o m i c assistance. Concurrently, the Cold War's security e m p h a s e s , including rearmament on a massive scale and the global pursuit of bilateral and multilateral alliances, led to the expansion of concessional transfers of military assistance to L D C s that supported U.S. geopolitical objectives. As the patterns reviewed in this chapter demonstrate, the U.S. development aid program was intimately connected to the broader effort during the Cold War to contain c o m m u n i s m and promote compliant states, primarily in Latin A m e r i c a , Southeast Asia, and the Near East. This g e o p o litical orientation, which reflected the preponderant U.S. role in advancing Western political and economic interests, differed from the three cases previously reviewed. In varying ways, leaders of France, Japan, and S w e d e n portrayed their states as "bridges" between North and South and their development strategies as alternatives to the subordination of LDCs to either Cold War s u p e r p o w e r . T h e U.S. g o v e r n m e n t , by contrast, could not use L D C solidarity in the f a c e of superpower e n c r o a c h m e n t s as a basis f o r ext e n d i n g f o r e i g n aid, and the global s c o p e of its c o n t a i n m e n t e f f o r t prevented the consistent regional focus that characterized French and Japanese O D A into the 1990s. U.S. aid f l o w e d to virtually every LDC, though the predominant share of bilateral transfers shifted over time in r e s p o n s e to c h a n g i n g circumstances in world politics. As in the 1960s (McKinlay and Little, 1979), security interests were evident in U.S. O D A calculations through the 1980s, suggesting that the c o u n t r y ' s aid strategy displayed strong continuity during the i n t e r v e n i n g period. This static pattern transcended the periodic fluctuations in U.S. O D A policy resulting f r o m the differing ideological postures of successive administrations. Whether the rhetorical emphasis of U.S. development aid w a s on e n c o u r a g i n g d e v e l o p m e n t in Latin A m e r i c a , containing c o m m u nism in Southeast Asia, promoting h u m a n rights in A f r i c a , or s e c u r i n g p e a c e b e t w e e n Egypt and Israel, the underlying security d i m e n s i o n remained extant. 1 9 These findings are particularly noteworthy given the differences in the geopolitical e n v i r o n m e n t of the 1980s c o m p a r e d to that of t w o d e c a d e s earlier, w h e n c o n c e r n s during the " h i g h " Cold War d o m i n a t e d f o r e i g n

United States

139

p o l i c y in general and aid p o l i c y in particular. T h e m i d - to late 1 9 8 0 s w i t n e s s e d rapidly d i m i n i s h i n g t e n s i o n s b e t w e e n the C o l d War s u p e r p o w e r s and, ultimately, the e n d o f the c o n f l i c t itself. Yet the structure and c o n t e n t of m o s t U . S . aid p r o g r a m s r e m a i n e d largely intact. T h e s l o w r e s p o n s e by the U n i t e d S t a t e s to the f u n d a m e n t a l c h a n g e s in the international s y s t e m w a s typical o f a g o v e r n m e n t p r o g r a m p r o p e l l e d by b u r e a u c r a t i c inertia ( Z i m m e r m a n , 1 9 9 3 ) . In the m i d - 1 9 9 0 s , the C l i n t o n a d m i n i s t r a t i o n att e m p t e d to r e f o r m u l a t e U . S . f o r e i g n p o l i c y — a n d the a p p r o a c h to f o r e i g n a i d — i n light o f t h e s e d e v e l o p m e n t s . Future a n a l y s i s w i l l d e t e r m i n e to w h a t d e g r e e n e w g e o p o l i t i c a l r e a l i t i e s w e r e r e f l e c t e d in the d e l i v e r y o f U . S . f o r e i g n aid.

Notes 1. To one such observer, "It is in the underdeveloped countries . . . that s o m e Americans have seen the opportunity to do great things, to alter the world in great ways" (Westwood, 1966: 3). 2. See Good (1960) for a detailed examination of this principle. 3. The Marshall Plan was widely regarded as one of the most successful efforts in the history of U.S. foreign policy. To Huntington ( 1 9 7 0 - 1 9 7 1 ) , the Marshall Plan was so successful because it was "(a) directed to specific and well-defined goals; (b) limited to a g e o g r a p h i c area of vital concern to the U.S.; and (c) designed for a limited period of time." 4. U.S. officials tentatively included East European states and the Soviet Union in its postwar e c o n o m i c aid p r o g r a m . T h e Soviets were required to meet several requirements, however, including the removal of its troops f r o m Eastern Europe. The collapse of these negotiations was one of several steps leading to the Cold War, which in turn served as a basis for expanding U.S. aid flows. See Paterson (1974) for a detailed examination of this period. 5. T h e primary recipients in East Asia were Japan, Korea, and the Philippines. In the Near E a s t - S o u t h Asia region, recipients that received the most U.S. assistance included Greece, Turkey, and newly independent India. 6. See Rostow ( 1 9 8 5 ) for an examination of the U.S. aid program under Eisenhower and Kennedy. 7. Like other aspects of the Carter presidency, however, these r e c o m m e n d a tions "foundered in interagency bureaucratic politics" (McGuire and Ruttan, 1990: 138). Although the IDCA was established in 1979, its authority overlapped almost entirely with that of U S A I D , and its independent role was " m o r e apparent than real" (U.S. General Accounting Office, 1983: 15). 8. See Wilhelm and Feinstein (1984) for a transcript and elaboration of the c o m m i s s i o n ' s report. 9. Among recipients of U.S. foreign aid, those receiving U.S. military-training p r o g r a m s included every state in the Near E a s t - S o u t h Asia region except A f g h a n i s t a n , Bhutan, Cyprus, and Israel; every Latin American state except Barbados, Nicaragua, P a n a m a , and T r i n i d a d - T o b a g o ; every East Asian state except Laos and Western Samoa; and every African state except Angola, Comoros, Congo, Ethiopia, Mauritius, Mozambique, South Africa, and Zambia. 10. T h e French government established technical military assistance c o n v e n tions with twenty-five LDCs during the 1980s, which provided for French military

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t r a i n i n g a n d a s s i s t a n c e t h r o u g h a F r e n c h R a p i d A c t i o n F o r c e in the e v e n t of m i l i tary c o n f l i c t . 11. In 1989, U S A I D ( 1 9 8 9 : 2 5 ) listed t h i r t y - o n e d i s t i n c t i n t e r e s t s to be s e r v e d by d e v e l o p m e n t aid, m a n y of w h i c h a p p e a r e d c o n t r a d i c t o r y . 12. S e e H a l p e r i n ( 1 9 7 4 ) a n d A l l i s o n ( 1 9 7 1 ) f o r e l a b o r a t i o n s on b u r e a u c r a t i c p o l i t i c s and f o r e i g n policy. 13. T h e s e v i e w s w e r e e x p r e s s e d by m o s t r e s p o n d e n t s in s u r v e y s c o n d u c t e d b y the N e w York P u b l i c A g e n d a F o u n d a t i o n a n d the C h i c a g o C o u n c i l on F o r e i g n R e lations. 14. S e e Z a h a r i a d i s , T r a v i s , and D i e h l ( 1 9 9 0 ) for an a n a l y s i s of p u b l i c o p i n i o n and U.S. foreign assistance. 15. U.S. s u p p o r t for P a k i s t a n w a s s u s p e n d e d in the e a r l y 1 9 9 0 s , h o w e v e r , b e c a u s e of c o n c e r n s o v e r its n u c l e a r w e a p o n s p r o g r a m . 16. T h e E c o n o m i c S u p p o r t F u n d , w h i c h w a s largely d r i v e n by U . S . s e c u r i t y c o n c e r n s , w a s o n e of t h r e e p r i m a r y f o r m s of U . S . aid c o n s i d e r e d O D A by t h e O E C D . T h e o t h e r m a j o r c a t e g o r y w a s that of d e v e l o p m e n t a s s i s t a n c e , d e s i g n e d to " o v e r c o m e s e v e r e c o n s t r a i n t s in s u c h a r e a s as a g r i c u l t u r e , e n e r g y , h e a l t h , and f a m ily p l a n n i n g , and in b u i l d i n g the i n s t i t u t i o n s n e c e s s a r y for s u s t a i n a b l e g r o w t h . " Finally, in the 1980s U S A I D s u b s i d i z e d f o o d e x p o r t s to m o r e t h a n sixty L D C s u n d e r t h e P u b l i c L a w 4 8 0 p r o g r a m . D e s p i t e t h e h u m a n i t a r i a n r h e t o r i c s u r r o u n d i n g this p r o g r a m , " t h e g o a l of e s t a b l i s h i n g and m a i n t a i n i n g c o m m e r c i a l m a r k e t s for U . S . p r o d u c t s r e m a i n s t h e u n d e r l y i n g o b j e c t i v e of the f o o d aid p r o g r a m " ( U . S . G e n e r a l A c c o u n t i n g O f f i c e , 1983: 16). 17. In a w e l l - c o o r d i n a t e d p u b l i c - i n f o r m a t i o n c a m p a i g n , U S A I D f u r t h e r d e m o n s t r a t e d that L D C s , m o s t of w h o m w e r e aid r e c i p i e n t s , p u r c h a s e d m o r e than $ 1 2 5 billion w o r t h of U . S . p r o d u c t s in 1 9 9 0 . 18. Israel, w i t h a p o p u l a t i o n of 4 . 3 m i l l i o n in m i d - 1 9 8 6 , had a per c a p i t a G N P of $ 6 , 2 1 0 d u r i n g that year. Life e x p e c t a n c y in Israel w a s 7 5 y e a r s , o n e of the h i g h est in t h e w o r l d , a n d o t h e r i n d i c a t o r s of s o c i a l w e l f a r e , s u c h as d a i l y p e r c a p i t a c a l o r i c i n t a k e ( 3 , 0 1 9 ) , w e r e also a m o n g t h e w o r l d ' s h i g h e s t ( W o r l d B a n k , 1988). 19. F o r e l a b o r a t i o n s , s e e M c C o r m i c k a n d M i t c h e l l ( 1 9 8 9 ) , C i n g r a n e l l i and P a s q u a r e l l o ( 1 9 8 5 ) , and C a r l e t o n and S t o h l ( 1 9 8 5 ) .

PART 3 Patterns and Prospects

7 The Comparative Record

As the previous four chapters have d e m o n s t r a t e d , the French, J a p a n e s e , Swedish, and U.S. governments transferred large amounts of foreign aid to d e v e l o p i n g countries in pursuit of widely v a r y i n g o b j e c t i v e s throughout the p o s t - W o r l d War II period. T h e historical and political settings of their development aid programs have been reviewed in detail, along with their relationships to the d o n o r ' s broader foreign policies. T h e direction and assigned functions of each d o n o r ' s aid flows were also examined along with their p e r f o r m a n c e in relation to the O D A r e g i m e ' s qualitative standards. This chapter contrasts the performances of these donors from a variety of perspectives: in the context of the three potential foreign-policy interests outlined in previous chapters; in terms of the relationship between the quantity and quality of aid f l o w s ; f r o m the standpoint of state b e h a v i o r within an international regime; and f r o m systemic and domestic levels of analysis. Each perspective p r o v i d e s distinct insights into the foreign-aid policies of these donors; collectively, they strengthen our understanding of the intimate relationship between national interest and foreign aid.

Donor Interests and ODA Patterns: A Summary T h e basic needs of impoverished peoples ostensibly represent the basis of contemporary development assistance, as reflected in the proclamations of donor states and multilateral aid organizations. T h e s e aid providers most often emphasize the narrowing of economic disparities between the w o r l d ' s rich and poor, the alleviation of short-term suffering within LDCs, and the b e n e f i t s derived f r o m long-term e c o n o m i c , social, and political development. Within the O D A regime, aid f l o w s have been c o m m o n l y characterized as a moral obligation of the world's wealthy toward the less fortunate. As previously o b s e r v e d , in an attempt to c o d i f y these humanitarian objectives, the D e v e l o p m e n t Assistance C o m m i t t e e of the O E C D has established a series of qualitative standards f o r aid f l o w s . T h e s e s t a n d a r d s involve m i n i m u m proportions of O D A f l o w s relative to d o n o r GNP, the appropriate recipients of aid, the mode of aid delivery, and the terms upon

143

144

Patterns and Prospects

w h i c h aid is e x t e n d e d . A l t h o u g h O E C D m e m b e r s h a v e not a l w a y s e m b r a c e d these standards and have often acted upon their own c o n c e p t i o n s o f aid quality, the O D A n o r m s c o n t i n u e to r e f l e c t w i d e s p r e a d p r e s u m p t i o n s about the humanitarian b a s i s o f d e v e l o p m e n t aid. A m o n g the four d o n o r s t a t e s under study, the S w e d i s h g o v e r n m e n t most c l o s e l y adhered to t h e s e q u a l i t a t i v e standards during the 1 9 8 0 s . M o r e s o than the o t h e r three d o n o r s , S w e d e n d i s t r i b u t e d aid to the p o o r e s t rec i p i e n t s and on the terms most f a v o r a b l e to them ( o f t e n e x c l u s i v e l y in the form o f g r a n t s ) . T h e statistical a n a l y s e s r e v e a l e d a c o n s i s t e n t e m p h a s i s on h u m a n i t a r i a n interests in S w e d i s h O D A d i s b u r s e m e n t s . F r a n c e ' s

ODA

f l o w s , w h i c h w e r e c o n c e n t r a t e d a m o n g its f o r m e r c o l o n i e s and o v e r s e a s territories, w e r e also found to b e related to the s o c i a l w e l f a r e c o n d i t i o n s o f its recipients. In the c a s e o f J a p a n , no s i g n i f i c a n t statistical relationship b e tween O D A f l o w s and s o c i a l - w e l f a r e c o n d i t i o n s within recipient states w a s f o u n d . T h e U n i t e d S t a t e s ' aid p r o g r a m a l s o l a c k e d s u c h a r e l a t i o n s h i p w h e n all r e c i p i e n t s w e r e c o n s i d e r e d ; w h e n the t w o primary recipients ( I s rael and E g y p t ) w e r e e l i m i n a t e d from the a n a l y s i s , U . S . O D A f l o w s w e r e found to be statistically related to humanitarian interests during f i v e o f the final six years o f the d e c a d e . In c h a l l e n g i n g the O E C D ' s q u a l i t a t i v e s t a n d a r d s , l e a d e r s o f m a j o r d o n o r states o f t e n a d v a n c e d a l t e r n a t i v e c o n c e p t i o n s o f r e c i p i e n t h u m a n i tarian interests. T h e e m p h a s e s o f their O D A p r o g r a m s — i n c l u d i n g regional e c o n o m i c d e v e l o p m e n t r e l a t e d to b i l a t e r a l trade and m i l i t a r y support in support o f g e o p o l i t i c a l g o a l s — w e r e s e e n as c o m p a t i b l e with the l o n g - t e r m human n e e d s o f L D C s . In the J a p a n e s e c a s e , for e x a m p l e , leaders argued that their o w n robust e c o n o m i c growth served as a m o d e l and as a catalyst f o r d e v e l o p m e n t within n e i g h b o r i n g L D C s , w h o thus i m p r o v e d their living s t a n d a r d s m o r e e f f e c t i v e l y and m o r e e n d u r i n g l y than they w o u l d h a v e through the receipt o f e c o n o m i c aid b a s e d e x c l u s i v e l y on their social w e l f a r e n e e d s . A n d in the c a s e o f the U n i t e d S t a t e s , the p r o t e c t i o n o f a l l i e s and m a n y L D C s from c o m m u n i s t infiltration w a s e x p r e s s e d in humanitarian t e r m s ; the p r e s e r v a t i o n o f p o l i t i c a l f r e e d o m s w a s v i e w e d as a m o r a l undertaking c o m p a r a b l e to that o f p r o m o t i n g s o c i o e c o n o m i c w e l f a r e in the T h i r d W o r l d . N e i t h e r o f t h e s e c o n c e p t i o n s o f h u m a n i t a r i a n interest w a s m a i n t a i n e d by m o s t o t h e r d o n o r s t a t e s or by the O D A r e g i m e in g e n e r a l , w h i c h c o n t i n u e d to e m p h a s i z e m o r e i m m e d i a t e r e s p o n s e s to b a s i c human needs as the e s s e n t i a l i m p e r a t i v e o f d e v e l o p m e n t aid. T h e p r e c e d i n g d i s c u s s i o n r e l a t e s d i r e c t l y to the l i n k a g e s

between

O D A f l o w s and d o n o r e c o n o m i c i n t e r e s t s . S i g n i f i c a n t e m p i r i c a l r e l a t i o n ships b e t w e e n the two e x i s t e d in the c a s e o f J a p a n and, to a lesser d e g r e e , in that o f F r a n c e ; both c o u n t r i e s ' O D A f l o w s w e r e d i s p r o p o r t i o n a t e l y dir e c t e d t o w a r d r e c i p i e n t s with w h i c h they m a i n t a i n e d c l o s e bilateral trade ties. A s J a p a n e s e leaders a c k n o w l e d g e d , not only did d o m e s t i c e c o n o m i c growth stimulate that o f n e i g h b o r i n g countries, but the p r o c e s s o f sustained

The Comparative

Record

145

regional growth served J a p a n ' s own long-term e c o n o m i c interests as well. France similarly integrated its aid and trade relationships as part of an effort to e n h a n c e its o w n e c o n o m i c interests through the g r o w t h of the regional e c o n o m y in f r a n c o p h o n e Africa and a m o n g its overseas territories. T h e trading networks were more important to L D C e c o n o m i e s than to that of France, but collectively they provided crucial sources of raw materials and destinations for finished products and investment capital. No such relationships were evident in the c a s e s of S w e d e n or the United States. More so than other donors, S w e d i s h o f f i c i a l s f r a m e d aid policy in the context of transnational e c o n o m i c redistribution and of reducing long-standing material inequalities between the affluent North and the impoverished South. This focus could be readily observed in the concentration of Swedish O D A a m o n g a small n u m b e r of Third World recipie n t s — m o s t of them in s u b - S a h a r a n A f r i c a and m a n y of them a m o n g the poorest of d e v e l o p i n g c o u n t r i e s — w i t h little e c o n o m i c c o n n e c t i o n to S t o c k h o l m . 1 U.S. leaders, meanwhile, e m p h a s i z e d market-driven g r o w t h strategies as the best means for L D C s to achieve prosperity and close the g a p b e t w e e n North and South. Many influential o b s e r v e r s of U.S. O D A (e.g., Eberstadt, 1988), reflecting the conventional w i s d o m of government officials, believed U.S. technical assistance should primarily be directed not toward addressing basic needs in the poorest L D C s but instead toward e n c o u r a g i n g leaders of L D C s to stimulate private enterprise and attract foreign investment. As Baldwin (1985: 324) observed, A m e r i c a n p o l i c y m a k e r s h a v e repeatedly g o n e to great l e n g t h s to e m p h a s i z e that e c o n o m i c d e v e l o p m e n t is primarily a matter o f d o m e s t i c e f f o r t and that external a s s i s t a n c e can m e r e l y s u p p l e m e n t s u c h efforts. B o t h e x p l i c i t l y and i m p l i c i t l y A m e r i c a n p o l i c y h a s r e f l e c t e d the b e l i e f that dev e l o p m e n t must c o m e from w i t h i n and c a n n o t be i m p o s e d from o u t s i d e .

T h e relationship b e t w e e n donor s t a t e s ' e c o n o m i c interests and O D A may be illuminated f u r t h e r by considering aid f l o w s in the context of the e c o n o m i c systems maintained by recipient countries. 2 In Africa, the region with the largest number of recipients and the only one in which all four aid d o n o r s maintained e x t e n s i v e bilateral O D A ties, France, Japan, and the United States directed more than 70 percent of their O D A f l o w s to states with capitalist e c o n o m i e s , whereas 8 0 percent of S w e d i s h aid w a s transf e r r e d to states with Marxist or socialist e c o n o m i e s (see Table 7.1). Alt h o u g h U.S. aid f l o w s w e r e not statistically related to trade ties with recipients, the United States distributed the highest percentage of O D A ( 8 8 percent) a m o n g the f o u r donors to capitalist states in Africa. This fact suggests that e c o n o m i c interests may be expressed in various w a y s by donor states. In addition, it d e m o n s t r a t e s the t e n d e n c y of d o n o r s to direct aid f l o w s to recipient countries with e c o n o m i c systems similar to their o w n . 3

146

Table 7.1

Patterns and Prospects

Patterns of Donor ODA Flows to African Recipients, Percentage of Total Commitments, 1980-1989 Recipient Economic System

Donor

Capitalist

Marxist

Socialist

France

77

13

10

Japan

71

9

20

Sweden

20

43

37

United States

88

6

6

Source:

U.S. Department of Stale

T h e r e l a t i o n s h i p b e t w e e n d e v e l o p m e n t aid a n d d o n o r s t a t e s ' s e c u r i t y interests has been r e n d e r e d increasingly a m b i g u o u s given the s h i f t i n g b a s e s of s e c u r i t y in an era of " e c o n o m i c s t a t e c r a f t . " T h i s s t u d y r e l i e d o n t h e t r a d i t i o n a l c o n c e p t i o n of s e c u r i t y i n t e r e s t s , w h i c h w e r e r e l a t e d to r e c i p i e n t s ' l e v e l s of m i l i t a r i z a t i o n o n a r e l a t i v e a n d a b s o l u t e l e v e l . Its u n d e r l y i n g a s s u m p t i o n h a s b e e n that s e l e c t i v e e c o n o m i c s u p p o r t to m i l i t a r i z e d L D C s s e r v e s i n d i r e c t l y to p r o j e c t t h e s e c u r i t y i n t e r e s t s of a i d donors. M o s t s i g n i f i c a n t in this r e s p e c t w a s t h e c o n s i s t e n t c o r r e s p o n d e n c e b e t w e e n t h e f l o w of U . S . O D A a n d b o t h a b s o l u t e a n d r e l a t i v e i n d i c a t o r s of r e c i p i e n t m i l i t a r i z a t i o n . T h i s r e l a t i o n s h i p w a s p r i n c i p a l l y a b y - p r o d u c t of t h e c o n c e n t r a t i o n of U . S . a s s i s t a n c e to E g y p t a n d Israel. T h e s e c u r i t y e m p h a s i s , c o n s i s t e n t w i t h t h e n a t i o n ' s b r o a d e r a p p r o a c h to f o r e i g n p o l i c y as o n e of t h e t w o C o l d W a r s u p e r p o w e r s , w a s m a g n i f i e d by t h e t r a n s f e r of U . S . m i l i t a r y a s s i s t a n c e to m a n y of t h e s a m e L D C s that r e c e i v e d a n n u a l i n f u s i o n s of U . S . O D A . In n o n e of the o t h e r c a s e s w e r e s e c u r i t y i n t e r e s t s s i g n i f i c a n t l y r e l a t e d to b i l a t e r a l O D A t r a n s f e r s . F r a n c e ' s s e c u r i t y a g r e e m e n t s w i t h m o s t of its aid r e c i p i e n t s in f r a n c o p h o n e A f r i c a a l l o w e d f o r F r e n c h a s s i s t a n c e in t i m e s of c r i s i s but o t h e r w i s e d i s c o u r a g e d m i l i t a r i z a t i o n w i t h i n the r e g i o n . J a p a n e s e m i l i t a r i z a t i o n w a s p r o s c r i b e d by t h e c o u n t r y ' s U . S . - i m p o s e d c o n s t i t u t i o n , a n d its m i l i t a r y s e c u r i t y w a s a s s u r e d b y its b i l a t e r a l d e f e n s e t r e a t y w i t h t h e U n i t e d S t a t e s , f a c t o r s that w e r e r e f l e c t e d in the a b s e n c e of s e c u rity c o n s i d e r a t i o n s in its O D A p o l i c i e s . Finally, the S w e d i s h g o v e r n m e n t b a s e d its national security o n neutrality and the pursuit of p a c i f i c r e s o l u t i o n of i n t e r n a t i o n a l c o n f l i c t s ; m i l i t a r y c o n s i d e r a t i o n s w e r e e x p l i c i t l y o m i t t e d f r o m S w e d i s h O D A c a l c u l a t i o n s and w e r e not e v i d e n t in aid p a t t e r n s d u r ing t h e 1 9 8 0 s .

The Comparative

Record

14 7

L i k e S w e d i s h l e a d e r s , t h o s e in F r a n c e a n d J a p a n d i s t a n c e d t r a d i t i o n a l s e c u r i t y o b j e c t i v e s f r o m t h e i r O D A c a l c u l a t i o n s but a c k n o w l e d g e d that t h e i r aid r e l a t i o n s h i p s e n h a n c e d t h e i r o w n s e c u r i t y , m o r e b r o a d l y d e f i n e d . A l l t h r e e o f t h e s e d o n o r s c h a r a c t e r i z e d t h e m s e l v e s d u r i n g the 1 9 8 0 s a s " b r i d g e s " b e t w e e n the C o l d W a r s u p e r p o w e r s a n d p o r t r a y e d the e c o n o m i c a n d s o c i a l d e v e l o p m e n t o f t h e i r s e l e c t e d a i d r e c i p i e n t s a s a m e a n s to r e duce the latters' d e p e n d e n c e on either superpower. T h r o u g h the d e v e l o p ment o f L D C s , these donors presumed, their o w n security would be enh a n c e d . A s o n e o f the s u p e r p o w e r s , h o w e v e r , t h e U n i t e d S t a t e s s u b s u m e d its a i d f l o w s w i t h i n a b r o a d e r s e c u r i t y o r i e n t a t i o n . I t s c o n c e p t i o n o f n a tional security was most congruent with traditional standards o f military p r e p a r e d n e s s , b o t h at h o m e and w i t h i n its a l l i e s , and t h e s e n o r m s w e r e r e f l e c t e d in t h e f l o w o f U . S . aid, b o t h m i l i t a r y a n d e c o n o m i c , to s u p p o r t i v e L D C s throughout the world.

ODA Performance: Quantity Versus Quality A s noted a b o v e , O D A p r o g r a m s are g e n e r a l l y e v a l u a t e d on the b a s i s o f t w o c r i t e r i a : f i r s t , the q u a n t i t a t i v e o r a g g r e g a t e v o l u m e o f aid o u t l a y s ; a n d , s e c o n d , their q u a l i t a t i v e c h a r a c t e r i s t i c s as d e f i n e d b y t h e D e v e l o p m e n t A s s i s t a n c e C o m m i t t e e . T o m a n y a n a l y s t s o f f o r e i g n aid, p e r c a p i t a aid f l o w s , t h e i r p r o p o r t i o n to d o n o r G N P , a n d the a d h e r e n c e o f d o n o r s to o t h e r q u a l i t a t i v e s t a n d a r d s s e r v e a s b e t t e r r e f l e c t i o n s o f the c o m m i t m e n t o f d o n o r s to T h i r d W o r l d d e v e l o p m e n t than d o t h e a b s o l u t e s u m s o f a i d t r a n s f e r r e d o v e r s e a s . It is f o r t h i s r e a s o n that t h e U . S . a i d p r o g r a m , a l t h o u g h

the

l a r g e s t in a b s o l u t e t e r m s t h r o u g h o u t t h e C o l d W a r , w a s r e g u l a r l y c r i t i c i z e d f o r its q u a l i t a t i v e s h o r t c o m i n g s . A n inverse relationship b e t w e e n the quantity o f aid f l o w s and their q u a l i t y w a s e v i d e n t in t h e a l l o c a t i o n s o f F r a n c e , J a p a n , S w e d e n , a n d t h e U n i t e d S t a t e s d u r i n g t h e 1 9 8 0 s a n d f o r all m e m b e r s o f t h e O E C D d u r i n g the final year o f the analysis (see T a b l e 7 . 2 ) . T h e m a j o r donors o f O D A on an a b s o l u t e l e v e l , p a r t i c u l a r l y the U n i t e d S t a t e s a n d J a p a n , r a n k e d a m o n g the s o u r c e s o f lowest-quality aid. Concurrently, those transferring lesser net amounts, such as the Netherlands, Norway, and S w e d e n , w e r e a m o n g t h e l e a d e r s in t e r m s o f q u a l i t y . T h e s e n e g a t i v e r e l a t i o n s h i p s w e r e s t r o n g e s t w h e n the top ten O D A donors were considered; the c o r r e l a t i o n s w e r e nega t i v e a n d s i g n i f i c a n t in all f o u r c a s e s , p a r t i c u l a r l y v i s - à - v i s a i d to t h e p o o r e s t L D C s . W h e n all e i g h t e e n m e m b e r s o f t h e D A C w e r e i n c l u d e d t h e r e l a t i o n s h i p b e t w e e n O D A f l o w s and the top t w o c a t e g o r i e s o f aid quality w e r e p o s i t i v e b u t i n s i g n i f i c a n t , w h e r e a s t h e r e l a t i o n s h i p b e t w e e n aid a n d t h e f i n a l t w o c a t e g o r i e s w a s n e g a t i v e and o f m o d e r a t e s i g n i f i c a n c e . T h e s e patterns d e m o n s t r a t e that the tension b e t w e e n O D A quantity and quality

148

Patterns and Prospects

e x t e n d s b e y o n d the f o u r c o u n t r i e s r e v i e w e d in this study and r e p r e s e n t s a g e n e r a l t e n d e n c y a m o n g aid d o n o r s . T h e d i s c r e p a n c y h a s p r o p e l l e d an o n g o i n g d e b a t e w i t h i n the O D A r e g i m e r e g a r d i n g a p p r o p r i a t e s t a n d a r d s of c o n d u c t in this i s s u e a r e a : D o n o r s of relatively small v o l u m e s of aid routinely criticize m a j o r d o n o r s , n a m e l y the United States a n d J a p a n , for c o n t r i b u t i n g less on a p r o p o r t i o n ate or per capita basis than they s e e m i n g l y c a n a f f o r d a n d for v i o l a t i n g the n o r m s of aid quality as articulated by the D A C . M a j o r d o n o r s , c o n v e r s e l y , e m p h a s i z e their large a g g r e g a t e v o l u m e s , d i s m i s s c e r t a i n D A C q u a l i t a t i v e s t a n d a r d s as invalid, a n d point to their l e a d e r s h i p in s t i m u l a t i n g r e g i o n a l a n d g l o b a l e c o n o m i c g r o w t h , p r o v i d i n g f o r the m i l i t a r y security of o v e r s e a s allies, a n d so f o r t h . T h e d e b a t e , o f t e n c o n d u c t e d in p u b l i c f o r u m s , c o n t i n u e d t h r o u g h the 1 9 8 0 s and into the 1 9 9 0 s as d o n o r states large a n d small struggled with s l u g g i s h d o m e s t i c g r o w t h rates, g r o w i n g d o m e s t i c dem a n d s for fiscal austerity, and o n g o i n g p r e s s u r e f r o m L D C s for c o n t i n u e d or g r o w i n g a m o u n t s of d e v e l o p m e n t assistance. In a b s o l u t e t e r m s , the U n i t e d States c o n s i s t e n t l y o p e r a t e d the largest O D A p r o g r a m d u r i n g the p o s t - W o r l d War II p e r i o d ; its p r e p o n d e r a n t role in g l o b a l f o r e i g n aid is m a g n i f i e d w h e n U.S. m i l i t a r y a s s i s t a n c e is t a k e n into a c c o u n t . T h i s pattern c o n t i n u e d t h r o u g h o u t the t w o d e c a d e s b e t w e e n 1 9 7 0 a n d 1990, d u r i n g w h i c h annual U.S. O D A f l o w s a v e r a g e d about $ 8 . 5 billion ( s e e F i g u r e 7.1). T h e v o l u m e of J a p a n e s e O D A increased t h r e e f o l d d u r i n g the s a m e t w e n t y - y e a r p e r i o d , f r o m about $ 3 billion to more than $ 9 billion. J a p a n e s e O D A , w h i c h w a s not a c c o m p a n i e d by military assistance, u l t i m a t e l y r e a c h e d a n d e x c e e d e d U.S. l e v e l s , a l t h o u g h its h i g h e r l e v e l s w e r e in part a r e f l e c t i o n of a s t r o n g e r yen d u r i n g t h e 1 9 8 0 s . F r a n c e a n d S w e d e n r e p o r t e d s i m i l a r g r o w t h rates, but their a g g r e g a t e f l o w s w e r e f a r s m a l l e r than t h o s e of the o t h e r t w o d o n o r s . For the D A C as a w h o l e , inf l a t i o n - a d j u s t e d aid o u t l a y s g r e w f r o m $ 2 5 . 5 billion in 1 9 7 0 - 1 9 7 1 to $ 4 7 . 6 b i l l i o n t w o d e c a d e s later, an o v e r a l l i n c r e a s e of n e a r l y 9 0 p e r c e n t . T h i s q u a n t i t a t i v e i n c r e a s e c o i n c i d e d with the e x p a n s i o n b o t h of bilateral a n d multilateral s o u r c e s of O D A a n d of aid r e c i p i e n t s . 4

Table 7.2

Quantity Versus Quality of ODA Flows, 1989-19903

Measure of ODA Quality ODA/GNP Per-Capita ODA Percentage ODA in Grants Percentage ODA to LLDCs

Ten Largest OECD Economies

All OECD Economies

-.59 -.75 -.71 -.84

.13 .09 -.34 -.47

Sources: World Bank (1991), OECD (1991a) Note: a. Figures represent Spearman's rho rank-order correlations

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Record

Figure 7.1 Donors' Net ODA Transfers (1970-1990)

Japan

Sweden

United States

Legend H

1970-71

|

1980-81

Ü

1989-90

Source: O E C D ( 1 9 9 1 a : 172)

A m o n g qualitative indicators o f O D A performance, the O D A / G N P ratio is most widely considered to be indicative o f a donor state's commitment to Third World social welfare and e c o n o m i c development. At the 1 9 6 8 UNCTAD meeting, members of the D A C pledged to dispense at least 0.7 percent of their G N P s in the form o f O D A . This became the accepted benchmark o f aid quality. Sweden, the first country to reach and e x c e e d this level, frequently transferred a full 1 percent o f its G N P in e c o n o m i c assistance; its government was unable to maintain these levels in the early 1 9 9 0 s , however, amid continuing economic austerity and growing dissension over the direction and terms of aid flows. In the French case, ongoing disputes over whether its overseas territories should be considered O D A recipients were closely related to its performance in this category o f aid quality. Excluding these recipients, French O D A averaged about 0 . 5 5 percent o f French G N P ; if they were included, the average approached 0 . 8 percent throughout the 1 9 8 0 s . In the same time span, the high absolute levels of O D A from the United States and Japan contrasted with their relatively low levels o f proportionate aid flows. Although the share of national product allocated to O D A rose marginally in the Japanese case, it fell in that of the United States, reflecting a longrange pattern that continued into the m i d - 1 9 9 0 s (see Figure 7 . 2 ) .

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Patterns and Prospects

Similarly, Japan and the United States contributed less O D A on a per capita basis than France or S w e d e n (see Figure 7.3). Per capita outlays rose during the 1980s in every case except that of the United States during the decade. The greatest proportionate increases were reported by Sweden, w h o s e per capita f l o w s j u m p e d f r o m about $ 1 5 0 to $205, and by France, w h o s e per capita f l o w s grew f r o m $ 9 8 to $ 1 3 5 in 1989 dollars. J a p a n e s e per capita O D A f l o w s increased f r o m $ 5 0 to $ 7 4 d u r i n g the decade, w h e r e a s U.S. f l o w s declined slightly f r o m $ 4 0 to $37. As previously o b s e r v e d , per capita O D A was one of the few categories in which aid quality generally i m p r o v e d during the 1980s. A m o n g the eighteen D A C m e m b e r s , per capita aid f l o w s increased in twelve cases, with the greatest proportional increase reported by Finland, which tripled per capita flows, f r o m $43 to $143. Decreases were reported by Australia, Belgium, New Zealand, and the United Kingdom, along with the United States. Another closely watched indicator of O D A quality was the degree to which resources were o f f e r e d in the form of grants rather than c o n c e s sional loans. M e m b e r s of the c o n t e m p o r a r y O D A r e g i m e collectively increased the relative grant element during the 1980s, r e s p o n d i n g to the

Figure 7.2 Donors' ODA as a Percentage of GNP (1977-1990 Averages)

r United States

Japan

France*

Legend H

Source: O E C D (1991a: 171) Note: *Excludes overseas possessions

i977 8

" '

H

1982-86

JÜ

1989-90

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F i g u r e 7.3 225

151

Donors' Per Capita O D A (1980-1990)

-

tsi D

1135 e

3

e o 2,

90

Sweden

France

•

Legend 1980-81

H§

1989-90

Source: O E C D (1991a. 175)

emergent norm that L D C recipients should not take on reciprocal burdens in e x c h a n g e f o r O D A . S w e d e n , for e x a m p l e , adhered to its s t a n d a r d of nearly 100 percent grants, and French and U.S. leaders gradually increased their grant p r o p o r t i o n s (to 85 and 99 percent, respectively). Japan, however, maintained relatively greater levels of concessional loans in the name of recipient " d i s c i p l i n e . " But even in this case, the grant level grew c o n siderably during the decade. Figure 7.4 further illustrates the effort by the Swedish government to conduct a high-quality O D A program. T h e share of Swedish O D A directed to L L D C s , w h i c h m e a s u r e d 33 percent of outlays in 1990, respectively, w a s nearly twice the 1989 French and J a p a n e s e levels ( 1 8 percent) and nearly three times the U.S. level (13 percent). A m o n g the two m a j o r donors, the c o n c e n t r a t i o n of J a p a n ' s f l o w s to newly industrialized countries along the P a c i f i c Rim limited its contribution to L L D C s , and the disproportionate share of U.S. O D A directed to Egypt and Israel had a similar effect. Overall, D A C m e m b e r s reduced their relative disbursements of O D A to the poorest subset of recipients f r o m 25 to 22 percent during the 1980s. Their p e r f o r m a n c e in this regard reflected the general decrease in aid quality over the decade.

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Patterns and Prospects

Figure 7.4 ODA to Poorest Countries (Percentage of ODA to LLDCs)

France

Japan

•

Sweden

U.S.A.

Legend 1979-80

gH

1990

Source O E C D (1991a: 214)

T h e s e patterns have been reviewed collectively to illustrate the wide variations in aid behavior a m o n g these few donors. Further, they have reinforced the inverse r e l a t i o n s h i p b e t w e e n the quantity and quality of aid flows, the latter of which is monitored by the O D A regime in several categories.

Systemic Dimensions of ODA Behavior T h e inverse relationship between O D A quantity and quality, which reflects the broader variation in the absolute scale of d o n o r e c o n o m i e s , suggests that s y s t e m i c f a c t o r s are closely related to their b e h a v i o r in this area of foreign policy. More broadly, it calls attention to the general importance of systemic factors in influencing state actions. In contrast to unit-level factors (incorporating both societal and governmental characteristics), s y s t e m i c e x p l a n a t i o n s " a c c o u n t for state behavior on the basis of attributes of the system as a w h o l e " ( K e o h a n e , 1984a: 25). Such explanations are not intended to deny the importance of such unit-level factors, nor do they presume a narrowly deterministic relationship between systemic factors and state behavior. Instead, they sug-

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gest that analysis of foreign policy should begin with a look at the broader milieu of state action and its impact on the calculations of foreign policy. As o p p o s e d to deterministic models, environmental possibilism (Sprout and Sprout, 1969: 4 4 ) " p o s t u l a t e s some set of limits that a f f e c t the outcomes of any attempted course of action." Analysts of international relations have long argued that the distribution of state resources is a salient determinant of military stability within the international system. T h e y have disagreed as to w h e t h e r a bipolar (Waltz, 1964) or a multipolar (Deutsch and Singer, 1964) distribution of power is more war-prone, but they have shared the underlying presumption that "outside-in" interpretations are instructive in the study of world politics. By contrast, the systemic sources of states' foreign e c o n o m i c policies, in areas that include the transfer of foreign aid, have received less attention. As in the case of security issues, however, e c o n o m i c policies are not created in a v a c u u m ; they reflect the relative capabilities and more general roles of each state in the international s y s t e m . In this view, " t h e f o r e i g n economic policy of any individual country is affected both by the international e c o n o m i c structure . . . and by the state's position within it" (Lake, 1983: 5 2 3 - 5 2 4 ) . 5 T h e importance of systemic factors in influencing the v o l u m e and direction of donor aid f l o w s begs the larger question of what systemic roles have been played by individual aid donors and how their roles have been reflected in foreign-policy behavior in general and aid policy in particular. A m o n g early analysts of systemic roles and foreign policy, K. J. Holsti p r o v i d e d a typology of roles that may b e usefully applied to this important d i m e n s i o n of world politics (see Table 7.3). Holsti ( 1 9 7 0 : 3 0 7 ) defined the role concept as an "analytical tool for explaining certain ranges or patterns of foreign policy decisions and actions." T h e s e systemic roles, as a p p r e h e n d e d by political leaders and translated into political action, shape the long-term objectives of nation-states and must be considered in any c o m p r e h e n s i v e effort to understand c o m p a r a t i v e f o r e i g n - p o l i c y behavior (see Walker, 1987; and Wish, 1987). A p p l y i n g Holsti's typology to the four donor states during the 1980s, the behavior of France was most characteristic of a systemic "active independent," which is prone to " e m p h a s i z e at once independence, self-determination, p o s s i b l e mediation f u n c t i o n s , a n d active p r o g r a m s to e x t e n d diplomatic and commercial relations to diverse areas of the w o r l d " (Holsti, 1970: 262). A consistent relationship was evident b e t w e e n this s y s t e m i c role and France's overall approach toward foreign affairs as well as its actions in transferring O D A . French leaders' pursuit of autonomy in foreign a f f a i r s , their identification of French interests with those of their f r a n c o p h o n e neighbors, and their active involvement in international organizations reinforced this aspect of France's systemic role. In the area of O D A , F r a n c e e x t e n d e d concessional f i n a n c i n g as part of an orchestrated e f f o r t

154

Table 7.3

Patterns arid Prospects

Systemic Roles, National Interests, and ODA Behavior

Donor

Systemic Role

National Interests

Geographical Concentration

Significant Relationships

Functional Concentration

France

Active independent

Strategic Francophone Africa, Humanitarian, independence; overseas economic regional hegemony territories

Political infrastructure

Japan

Regionalsubsystem collaborator

Economic development

Pacific Rim

Economic

Economic infrastructure

Sweden

Mediator

Neutralism; nonmilitarism

None

Humanitarian

"Country programming"

United States

Bloc leader

Globalism; bloc security

Near East, Central America

Security

Unrestricted (Economic Support Fund)

Source: Holsti (1970)

to serve as a b r i d g e both b e t w e e n N o r t h and South and b e t w e e n East and West a n d to e n h a n c e its r e g i o n a l i n f l u e n c e and prestige. Meanwhile, Japan's foreign-policy performance was most characteristic of a " r e g i o n a l - s u b s y s t e m c o l l a b o r a t o r , " w h i c h d e l i b e r a t e l y e s c h e w s a global role and u n d e r t a k e s " c o m m i t m e n t s to c o o p e r a t i v e e f f o r t s with other states to b u i l d w i d e r c o m m u n i t i e s " ( H o l s t i , 1970: 265). A s n o t e d earlier, a f t e r World War II J a p a n e s e military r e a r m a m e n t w a s p r e c l u d e d u n d e r its c o n s t i t u t i o n , w h i c h limited its d e f e n s e s p e n d i n g to 1 p e r c e n t of GNP, a n d its territorial s e c u r i t y has b e e n p r o t e c t e d e v e r s i n c e t h r o u g h its bilateral treaty with the United States. J a p a n ' s n a r r o w f o c u s on t i g h t e n i n g e c o n o m i c r e l a t i o n s w i t h i n the P a c i f i c R i m , e x t e n d i n g b e y o n d O D A p o l i c y to t r a d e and p r i v a t e i n v e s t m e n t , w a s c o n s i s t e n t w i t h this s y s t e m i c r o l e . R e g i o n a l i n t e g r a t i o n w a s c o m p l i c a t e d by J a p a n ' s p r e v i o u s i m p e r i a l a m b i t i o n s in East A s i a , but it r e m a i n e d an e x p l i c i t g o a l of J a p a n ' s l e a d e r s h i p into the 1 9 9 0 s and f o u n d e x p r e s s i o n in the i n t e r r e l a t i o n s h i p s b e t w e e n J a p a n e s e O D A f l o w s , t r a d e ties, a n d p a t t e r n s of o v e r s e a s private i n v e s t m e n t . S w e d e n ' s d i s a v o w a l of p o l i t i c a l a n d s e c u r i t y a l i g n m e n t s , its p r e f e r e n c e f o r p a c i f i c m e a n s of c o n f l i c t r e s o l u t i o n , and its p r o m o t i o n of likem i n d e d L D C s e x e m p l i f i e d the b e h a v i o r of a s y s t e m i c " m e d i a t o r " (Holsti, 1970: 255). S u c h a state c h a r a c t e r i s t i c a l l y ventures to c r e a t e an " i n t e r p o s i tion into b l o c c o n f l i c t s " a n d p r o v i d e s a f o r u m for n e g o t i a t e d s e t t l e m e n t s and integration. S w e d i s h leaders o f t e n e m p h a s i z e d both the c o n s t r a i n t s a n d o p p o r t u n i t i e s posed by their c o u n t r y ' s role as a small p o w e r in the midst of s t r o n g e r states. In this respect, P r i m e M i n i s t e r P a l m e o f t e n r e f e r r e d to the " s m a l l - s t a t e d o c t r i n e " that g u i d e d S w e d i s h f o r e i g n p o l i c y . T h i s e f f o r t

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entailed support for other small p o w e r s , particularly those sharing S w e d e n ' s social and political values, a l o n g with the application of those instruments of foreign policy that most " e q u a l i z e d " the influence of states: international organizations, international law, and, if concentrated toward a f e w key recipients ( " p r o g r a m c o u n t r i e s " ) , d e v e l o p m e n t assistance. Its neutralist foreign policy entailed a d e f e n s i v e military capability and the avoidance of formal alliances. To Sundelius (1990: 122), these strategies exploited the natural advantages of a " c o m m i t t e d neutral": By keeping a distance from both sides, the S w e d e indicates a commitment to impartiality in any political conflict between these sets of values. Through such reasoning, the neutral position can be justified in positive terms. It provides a foundation for a unique and valuable mediating role between two alien antagonists. This stand is identified with a vital systemic function and is thus transformed from a strategy of political necessity to a moral imperative. In such a perspective a neutral democracy is clearly not morally compromised. On the contrary, it represents reason and a concern for the overriding interests of the international community (emphasis added).

T h e United States, by contrast, a s s u m e d the role of " b l o c l e a d e r " throughout this period, described by Holsti ( 1 9 7 0 : 255) as o n e based on ideology, systemic predominance, active resistance to perceived external threats, and the maintenance of "bloc c o h e s i o n . " T h e U.S. preoccupation with military security, which was evident in its patterns of military and e c o n o m i c assistance, was typical of a great power, which attempts to establish and retain global influence in the f a c e of perceived threats f r o m other great powers. T h e s e role profiles call attention to the importance of each s t a t e ' s broader role within the international system in shaping its foreign policies. In all four cases, the documented patterns of O D A behavior were consistent with the expectations of Holsti's analysis. T h e consideration of systemic roles as a source of foreign-policy behavior focuses on the relative attributes of each state and their impact on s h a p i n g policy. T h e question may be probed a step further by e x a m i n i n g the relationship b e t w e e n a s t a t e ' s absolute r e s o u r c e base and its b e h a v i o r in distributing O D A . As noted previously, states that provided the most O D A were less likely to adhere to D A C standards of aid quality; of additional interest is whether the wealthiest states, as measured by GNP, varied in their qualitative O D A behavior in a similar manner. T h e e v i d e n c e f r o m the year 1 9 8 9 - 1 9 9 0 suggests that they do. W h e n the ten largest O E C D e c o n o m i e s are ranked f o r their performance in four areas of aid quality, the negative rank-order correlations range f r o m - . 3 2 to - . 7 2 . T h i s pattern is also evident w h e n all eighteen members of the D A C are considered, although the negative correlations are weaker in each case (see Table 7.4).

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Patterns and Prospects

Table 7.4

Wealth of Aid Donors Versus Quality of Aid Flows, 1989-1990 a

Measures of ODA Quality

Ten Largest OECD Economies

All OECD Economies

ODA/GNP

-.32

-.23

Per capita ODA

-.45

-.20

-.67

-.43

-.72

-.61

Percentage ODA in grants Percentage ODA to LLDCs

Sources: World Bank (1991), OECD (1991a) Note: a. Figures represent Spearman's rho rank-order correlations

C o l l e c t i v e l y , t h e s e p a t t e r n s d e m o n s t r a t e t h e r e l a t i o n s h i p b e t w e e n the s i z e o f a d o n o r s t a t e ' s e c o n o m y , a k e y a s p e c t o f its s y s t e m i c r o l e , a n d its b e h a v i o r in p r o v i d i n g a s s i s t a n c e to L D C s . T h e s e f i n d i n g s are c o n s i s t e n t w i t h t h o s e a d v a n c e d b y R u g g i e , w h o f o u n d that the a m o u n t o f e c o n o m i c r e s o u r c e s a v a i l a b l e to a i d d o n o r s w a s i n v e r s e l y p r o p o r t i o n a t e to t h e e x t e n t to w h i c h t h e y p r o v i d e d aid t h r o u g h m u l t i l a t e r a l c h a n n e l s . T h u s , " t h e c o n d i t i o n o f p o s s e s s i n g a c e r t a i n l e v e l o f n a t i o n a l r e s o u r c e s s e e m s to b e r e l a t e d to a s t a t e ' s p r o p e n s i t y to o r g a n i z e t h e p e r f o r m a n c e o f a task i n t e r n a t i o n a l l y " ( R u g g i e , 1 9 7 2 : 8 8 3 ) . T h i s relationship has profound implications f o r t h e f u t u r e v o l u m e , d i r e c t i o n , a n d q u a l i t y o f a i d f l o w s under the r a p i d l y s h i f t i n g s y s t e m i c c o n d i t i o n s o f t h e 1 9 9 0 s . O b s e r v e r s o f aid p o l i c y

may

w i s h to c o n s i d e r the e m e r g i n g roles o f states, b a s e d on both relative and a b s o l u t e s t a n d a r d s , in a t t e m p t i n g to u n d e r s t a n d c u r r e n t aid s t r a t e g i e s o r a n ticipate future patterns.

Donor Behavior Within the ODA Regime T h o u g h s y s t e m i c f a c t o r s h a v e m o s t o f t e n b e e n r e l a t e d to the i n t e r n a t i o n a l s y s t e m ' s p r o p e n s i t y f o r a r m e d c o n f l i c t a n d to t h e b e h a v i o r o f states in m a t t e r s o f w a r a n d p e a c e , t h e y h a v e i n c r e a s i n g l y b e e n a p p l i e d to o t h e r a s p e c t s o f s t a t e b e h a v i o r in e c o n o m i c a f f a i r s . K i n d l e b e r g e r ( 1 9 7 3 ) a n d

Gilpin

( 1 9 7 5 ) , a m o n g others, have d e v e l o p e d and refined the theory of h e g e m o n i c s t a b i l i t y , w h i c h a r g u e s that t h e p r e s e r v a t i o n o f a l i b e r a l i n t e r n a t i o n a l e c o n o m i c o r d e r is f a c i l i t a t e d b y t h e p r e s e n c e o f a p r e p o n d e r a n t

economic

p o w e r . In this v i e w , the a b s e n c e o f a g l o b a l h e g e m o n d u r i n g the p e r i o d b e t w e e n t h e w o r l d w a r s c o n t r i b u t e d to w i d e n i n g e c o n o m i c w a r f a r e a n d t h e c o l l a p s e o f m a n y i n d u s t r i a l i z e d e c o n o m i e s . C o n v e r s e l y , p o s t - W o r l d W a r II

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Record

157

U . S . p r e p o n d e r a n c e in b o t h e c o n o m i c a n d s e c u r i t y a r e a s p r e s u m a b l y s u s tained global e c o n o m i c stability. Current debates over h e g e m o n i c stability c o n c e r n t h e p r o s p e c t s f o r a v i a b l e m o n e t a r y a n d t r a d i n g s y s t e m in t h e a b s e n c e o f a h e g e m o n . T h e r e l a t i v e d e c l i n e o f the U n i t e d S t a t e s ( w h o s e s h a r e o f g l o b a l G N P f e l l f r o m a b o u t 5 0 p e r c e n t in 1 9 4 5 to a b o u t 2 2 p e r c e n t in 1 9 9 4 ) a n d the c o n c u r r e n t a s c e n s i o n o f J a p a n , N I C s , and m e m b e r s o f the E u r o p e a n U n i o n s i n c e the 1 9 7 0 s h a v e p r o v i d e d the i m p e t u s f o r t h e s e d e b a t e s . It

is w i d e l y

presumed

that

many

of

the

economic

regimes

that

e m e r g e d a s part o f the l i b e r a l i n t e r n a t i o n a l e c o n o m i c o r d e r ( L I E O ) i m m e d i a t e l y a f t e r W o r l d W a r II w e r e m a n i f e s t a t i o n s o f U . S . h e g e m o n y . C o n t r a r y to t h e e x p e c t a t i o n s o f h e g e m o n i c - s t a b i l i t y t h e o r i s t s , t h e e r o s i o n o f U . S . h e g e m o n y has n o t b e e n a c c o m p a n i e d b y t h e b r e a k d o w n o f m o s t t r a n s n a t i o n a l e c o n o m i c r e g i m e s . M a n y m i d d l e - i n c o m e s t a t e s c o n t i n u e to v i o l a t e p r i n c i p l e s o f the L I E O , " f r e e - r i d i n g " under the e c o n o m i c a n d s e c u r i t y prot e c t i o n o f the U n i t e d S t a t e s , yet the p o s t w a r o r d e r has r e m a i n e d l a r g e l y int a c t . R e c e n t e v i d e n c e f o r this c o h e s i o n w a s the c o n c l u s i o n in e a r l y 1 9 9 4 o f t h e U r u g u a y R o u n d o f the G A T T t a l k s , at w h i c h d e l e g a t e s a g r e e d on m a n y m e a s u r e s to f u r t h e r c o o r d i n a t e and l i b e r a l i z e t h e i r m a c r o e c o n o m i c p o l i c i e s a n d to i n s t i t u t i o n a l i z e g l o b a l trade w i t h i n t h e W o r l d T r a d e O r g a n i z a t i o n . 6 T o K e o h a n e ( 1 9 8 4 a : 2 1 5 ) a n d o t h e r s , t h e p e r s i s t e n c e o f m a n y r e g i m e s is d u e to t h e e n d u r a n c e o f the n o r m s , p r i n c i p l e s , a n d p r o c e d u r e s that w e r e e s tablished under conditions o f h e g e m o n i c influence: "International regimes p e r f o r m f u n c t i o n s d e m a n d e d by states having shared interests; w h e n the r e g i m e s a l r e a d y e x i s t , they c a n b e m a i n t a i n e d e v e n a f t e r t h e o r i g i n a l c o n ditions for their c r e a t i o n have d i s a p p e a r e d . " T h e f o u n d a t i o n s o f the O D A r e g i m e w e r e e s t a b l i s h e d d u r i n g t h e p e a k o f U . S . h e g e m o n y a n d r e f l e c t e d the d e v e l o p m e n t a l p r i n c i p l e s o f G A T T , t h e W o r l d B a n k , and the International M o n e t a r y F u n d . A l t h o u g h the current i n s t i t u t i o n a l f r a m e w o r k did not t a k e s h a p e until a f t e r t h e p r o c e s s o f d e c o l o n i z a t i o n h a d l a r g e l y c o n c l u d e d in t h e e a r l y 1 9 6 0 s ( s e e C h a p t e r 2 ) , w h e n t h e d e c l i n e o f t h e r e l a t i v e U . S . p o s i t i o n w a s w e l l u n d e r w a y , the d e v e l o p m e n t a l m o d e l s c o n c e i v e d in the 1 9 4 0 s a n d 1 9 5 0 s w e r e l a r g e l y a d o p t e d b y t h e O E C D and its D e v e l o p m e n t A s s i s t a n c e C o m m i t t e e . L i k e o t h e r t r a n s n a tional r e g i m e s , that w h i c h c o o r d i n a t e d O D A r e f l e c t e d the prerogatives o f its m o s t p o w e r f u l m e m b e r s , i n c l u d i n g t h o s e p r o v i d i n g t h e g r e a t e s t a g g r e gate v o l u m e s o f aid. D A C m e m b e r s agreed upon the c o l l e c t i v e interests a n d b r o a d o b j e c t i v e s to b e s e r v e d b y t h e O D A r e g i m e — t o e a s e t h e s u f f e r i n g o f t h e w o r l d ' s p o o r a n d to p r o m o t e m a r k e t - o r i e n t e d e c o n o m i c g r o w t h — b u t t h e i r s e l f - i n t e r e s t s w e r e a c c o m m o d a t e d a n d w e r e e v i d e n t in b o t h t h e i r b i l a t e r a l a n d m u l t i l a t e r a l aid f l o w s . In a d d i t i o n t o b e i n g r e f l e c t e d in t h e d e l i b e r a t i o n s o f s t a t e l e a d e r s a n d their proclamations o f shared interests and c o l l e c t i v e actions, international r e g i m e b e h a v i o r m a y further be demonstrated b y the c o o r d i n a t e d activity o f s t a t e s in a r e a s n o t i m m e d i a t e l y a p p a r e n t . In d i s t r i b u t i n g d e v e l o p m e n t

158

Patterns and Prospects

a s s i s t a n c e , f o r e x a m p l e , d o n o r s t a t e s c o n c e n t r a t e d aid f l o w s a l o n g g e o graphical

lines;

they

identified Third

World

recipients

of

particular

s a l i e n c e to t h e i r o w n n a t i o n a l i n t e r e s t s and d i r e c t e d a d i s p r o p o r t i o n a t e share o f aid f l o w s to t h e m . R e c a l l i n g that the U n i t e d S t a t e s , J a p a n , and F r a n c e represented the three top d o n o r s o f O D A during the 1 9 8 0 s , their g e o g r a p h i c a l c o n c e n t r a t i o n s e f f e c t i v e l y a m o u n t e d to a d i v i s i o n o f l a b o r in g l o b a l O D A f l o w s ( s e e A p p e n d i x 2 ) . F r a n c e s e r v e d a n n u a l l y as the primary s o u r c e o f aid to L D C s in f r a n c o p h o n e A f r i c a ; J a p a n p l a y e d that role f o r its P a c i f i c R i m n e i g h b o r s ( a n d i n c r e a s i n g l y to East A f r i c a and S o u t h A m e r i c a ) ; and the U n i t e d S t a t e s p r o v i d e d most c o n c e s s i o n a l r e s o u r c e s to Central A m e r i c a n r e c i p i e n t s and t h o s e in the eastern M e d i t e r r a n e a n , particularly E g y p t and Israel ( a n d to a far lesser d e g r e e O m a n and C y p r u s ) . 7 S h i f t s in g e o g r a p h i c a l O D A c o n c e n t r a t i o n r e f l e c t e d broader c h a n g e s in the d o n o r s ' f o r e i g n p o l i c i e s during the d e c a d e , particularly in recent years as the C o l d War ended and the international s y s t e m e x p e r i e n c e d a f u n d a m e n tal t r a n s f o r m a t i o n . 8 D o n o r s t a t e s c o o r d i n a t e d the v o l u m e and d i r e c t i o n o f O D A f l o w s in many o t h e r r e s p e c t s . D u r i n g the height o f the C o l d War, f o r e x a m p l e , the U . S . g o v e r n m e n t urged J a p a n to s u p p l e m e n t its o w n e c o n o m i c support for many P a c i f i c states that w e r e c o n s i d e r e d strategically important in the f a c e o f p e r c e i v e d internal c h a l l e n g e s . " J a p a n ' s f o r e i g n aid has b e c o m e inseparably i n c o r p o r a t e d into the w o r l d s t r a t e g y o f the U n i t e d S t a t e s , " argued S h i n s u k e ( 1 9 8 2 : 3 2 ) . P r o m i n e n t e x a m p l e s o f J a p a n e s e aid initiatives that w e r e at least partially d r i v e n by C o l d War c o n c e r n s i n c l u d e d aid to Ind o n e s i a f o l l o w i n g the departure o f A c h e m S u k a r n o ( 1 9 6 6 ) , to T h a i l a n d during the V i e t n a m War ( 1 9 6 8 ) , and to the P h i l i p p i n e s at the peak o f the Ferdinand M a r c o s d i c t a t o r s h i p ( 1 9 6 9 ) . U . S . pressure on J a p a n e s e aid polic i e s was w i d e l y a c k n o w l e d g e d . A s A k i r a ( 1 9 8 5 : 1 4 1 ) put it, " J a p a n is responding to A m e r i c a n w i s h e s in its a l l o c a t i o n o f O D A . A n d in this s e n s e the J a p a n e s e m o t i v a t i o n in g i v i n g f o r e i g n aid l a c k s the b a s i c h u m a n i s m that a n i m a t e s m o s t international aid o r g a n i z a t i o n s . " T h e e m p i r i c a l patterns o u t l i n e d a b o v e are largely c o n s i s t e n t with theo r e t i c a l e x p e c t a t i o n s o f r e g i m e b e h a v i o r under c o n d i t i o n s o f h e g e m o n y . S p e c i f i c a l l y , the security o r i e n t a t i o n o f U . S . e c o n o m i c and military aid ref l e c t e d the c o u n t r y ' s preponderant role in providing for the security o f its allies throughout the C o l d War. T h e patterns o f F r e n c h and J a p a n e s e O D A f l o w s , w h i c h w e r e s t a t i s t i c a l l y r e l a t e d to t h e i r o w n e c o n o m i c

interests,

w e r e c o n s i s t e n t with the a n t i c i p a t e d b e h a v i o r o f s m a l l e r states, w h i c h , in the area o f trade policy, w e r e g i v e n to " f r e e - r i d i n g " within the L I E O . T h i s patterned c r o s s n a t i o n a l b e h a v i o r w a s c o n s i s t e n t with that e x p e c t e d o f an international e c o n o m i c r e g i m e , in w h i c h p e r s i s t e n t c o m p e t i t i o n

among

states is r e g u l a t e d and c o o r d i n a t e d p o l i c y b e h a v i o r e n s u r e s e a c h p a r t i c i pant s o m e b e n e f i t . T h e g l o b a l O D A d i v i s i o n o f labor thus adds e m p i r i c a l evidence o f r e g i m e behavior in foreign assistance, a fact that is o f particular

The Comparative

Record

159

merit given the limited n u m b e r o f international e c o n o m i c r e g i m e s availa b l e f o r s t u d y . F u r t h e r , the c o o r d i n a t i o n o f O D A f l o w s w i t h b r o a d e r a s p e c t s o f d o n o r f o r e i g n p o l i c i e s r e f l e c t e d the c o h e s i o n o f t h e O D A r e g i m e in its f i r s t t h r e e d e c a d e s . 9

Domestic Sources of ODA Behavior A l t h o u g h t h e e m p h a s i s in this d i s c u s s i o n h a s b e e n o n t h e i n f l u e n c e o f s y s t e m i c f a c t o r s in s h a p i n g d o n o r O D A p o l i c i e s , t h e s e p o l i c i e s m u s t not b e c o n s i d e r e d in i s o l a t i o n . In e a c h c a s e , i n t e r n a l s o c i e t a l v a l u e s s t r o n g l y inf l u e n c e d d o n o r a p p r o a c h e s to f o r e i g n aid a n d f o r e i g n p o l i c y in g e n e r a l , and the i n s t i t u t i o n a l m e c h a n i s m s b y w h i c h aid p o l i c i e s w e r e i m p l e m e n t e d also exerted a powerful impact. S y s t e m i c c o n t e x t may be a useful starting p o i n t in c r o s s - n a t i o n a l a n a l y s i s , but a c o m p r e h e n s i v e u n d e r s t a n d i n g

of

s t a t e b e h a v i o r r e q u i r e s an a d d i t i o n a l a s s e s s m e n t o f t h e r o l e o f u n i t - l e v e l c h a r a c t e r i s t i c s t h a t b r i d g e the g a p b e t w e e n s y s t e m i c c o n t e x t a n d o b s e r v able behavior. A review o f these d o m e s t i c factors strengthens our understanding o f donor states' behavior (see Table 7 . 5 ) . In t h e U n i t e d S t a t e s , the b r o a d s c o p e o f its f o r e i g n - a i d p r o g r a m led to the c r e a t i o n o f a c o m p l e x b u r e a u c r a c y , g i v i n g d o m e s t i c p o l i t i c s a p r e v a l e n t r o l e in the s h a p i n g o f U . S . aid p o l i c y . W i t h i n U S A I D , a d m i n i s t r a t o r s o f t e n c l a s h e d o v e r t h e o b j e c t i v e s o f s p e c i f i c b i l a t e r a l aid p r o g r a m s and t h e g e n eral s t r a t e g y o f a c h i e v i n g U . S . n a t i o n a l i n t e r e s t s t h r o u g h b i l a t e r a l and m u l tilateral aid. T h e s e debates w e r e e x a c e r b a t e d by the c o n c u r r e n t f l o w s o f U . S . military a s s i s t a n c e , c o o r d i n a t e d by the D e p a r t m e n t o f D e f e n s e , to many o f the s a m e L D C s r e c e i v i n g O D A . T h e arena f o r d o m e s t i c politics f u r t h e r i n v o l v e d C o n g r e s s , w h o s e " p o w e r o f t h e p u r s e " p r o v i d e d it w i t h s t r o n g l e v e r a g e in d i r e c t i n g t h e f l o w o f f o r e i g n a s s i s t a n c e . C o n g r e s s , o f c o u r s e , w a s f a r f r o m a unitary a c t o r in t h i s r e g a r d ; its m e m b e r s r e f l e c t e d the i n t e r e s t s o f t h e i r d i s p a r a t e d i s t r i c t a n d s t a t e c o n s t i t u e n t s a n d a d v a n c e d the p r e r o g a t i v e s o f a wide array o f c o m m i t t e e s and s u b c o m m i t t e e s . T h e c o n t i n u i t y in m a n y b i l a t e r a l aid p r o g r a m s e v e n s p a n n e d s u c c e s s i v e p r e s i dential administrations pursuing widely varying foreign policies, reflecting the s t r o n g r o l e s o f C o n g r e s s and the aid b u r e a u c r a c y , w h i c h c o l l e c t i v e l y s e r v e d to m i t i g a t e t h e f u n d a m e n t a l s h i f t s in aid s t r a t e g y p r o p o s e d b y t h e White House. T h e p r e v a l e n c e o f d o m e s t i c p o l i t i c s in the U . S . O D A p r o g r a m w a s in large part a b y - p r o d u c t o f the a b s e n c e o f public support f o r f o r e i g n a s s i s t a n c e . O v e r s e a s aid w a s c o n s i s t e n t l y a m o n g the l e a s t p o p u l a r f e d e r a l p r o g r a m s , a n d it w a s f a r l e s s p o p u l a r in t h e U n i t e d S t a t e s t h a n in t h e o t h e r t h r e e c o u n t r i e s u n d e r r e v i e w in t h i s s t u d y . T h i s f a c t w a s r e f l e c t e d in t h e r e l a t i v e l y s m a l l a m o u n t s o f per c a p i t a U . S . O D A , the r e l a t i v e l y s m a l l p e r c e n t a g e o f U . S . G N P d e v o t e d to O D A , a n d the l o w l e v e l o f U . S . aid q u a l i t y a s

160

Table 7.5

Patterns

and

Prospects

ODA and Domestic Politics: Crossnational Comparisons France

Japan

Sweden

United States

Conflictive

Consensual

Consensual

Conflictive

Role of chief executive

Strong

Weak

Moderate

Moderate

Role of legislature

Weak

Weak

Strong

Strong

Level of public support

Moderate

High

High

Low

Role of private industry

Strong

Strong

Moderate

Moderate

Political culture

d e f i n e d by the D A C . Yet U.S. aid t r a n s f e r s , both e c o n o m i c and military, c o n t i n u e d to g r o w t h r o u g h o u t the period in absolute terms, and collectively they represented the largest f l o w s of f o r e i g n aid by any s i n g l e donor. T h e i m p e t u s for U.S. aid, t h e r e f o r e , must be f o u n d o u t s i d e the r e a l m of p u b l i c o p i n i o n — a n d inside the institutional f r a m e w o r k of the federal g o v e r n m e n t . A s d e m o n s t r a t e d in the statistical a n a l y s i s , the aid p r o g r a m s w e r e largely related to U.S. security interests t h r o u g h o u t the C o l d War, s e r v i n g as e x t e n s i o n s of the overall e f f o r t by the United States to m a i n t a i n its leade r s h i p role as a " b l o c l e a d e r . " W h e n they did appeal to the g e n e r a l p u b l i c for s u p p o r t , influential political leaders j u s t i f i e d aid p r o g r a m s on the basis of their c o n t r i b u t i o n to the b r o a d e r e f f o r t of c o n t a i n i n g c o m m u n i s m a n d p r e s e r v i n g U.S. i n f l u e n c e in o v e r s e a s r e g i o n s of "vital interest." T h e large v o l u m e of U.S. O D A t r a n s f e r r e d to E g y p t and Israel, w h i c h s e r v e d m a n y d o m e s t i c c o n s t i t u e n c i e s as well as the U . S . interest in M i d d l e East stability, r e f l e c t e d this s e c u r i t y o r i e n t a t i o n — o n e that w a s r e l a t i v e l y d i s t i n c t f r o m C o l d War c o n c e r n s . T h e large J a p a n e s e O D A p r o g r a m w a s also driven by d o m e s t i c politics but u n d e r very d i f f e r e n t c i r c u m s t a n c e s . In c o n t r a s t to their U . S . c o u n t e r parts, neither the chief e x e c u t i v e nor the legislative branch of the J a p a n e s e g o v e r n m e n t p l a y e d a s t r o n g role in f o r m u l a t i n g and e x e c u t i n g aid policy. I n s t e a d , aid policy w a s largely d r i v e n by d e c e n t r a l i z e d g o v e r n m e n t m i n istries, m a n y of w h i c h p u r s u e d p a r o c h i a l f o r e i g n - p o l i c y i n t e r e s t s . A s O r r n o t e d , " T h e r e e x i s t s a g r e a t e r d e g r e e of d e l e g a t i o n of a u t h o r i t y by the [ J a p a n e s e ] legislative b r a n c h to the a d m i n i s t r a t i v e b r a n c h . C a r e e r g o v e r n m e n t o f f i c i a l s play a l a r g e r r o l e in m a k i n g f o r e i g n p o l i c y t h a n d o their c o u n t e r p a r t s in the U n i t e d S t a t e s " ( 1 9 9 0 : 1 1 - 1 2 ) . T h i s f a c e t of J a p a n e s e politics helps to e x p l a i n w h y s u c c e s s i v e p r i m e m i n i s t e r s ' f r e q u e n t p l e d g e s to d i v e r s i f y the d i r e c t i o n of J a p a n e s e aid f l o w s a n d increase its D A C - d e f i n e d quality w e r e largely u n f u l f i l l e d .

The Comparative Record

161

Though the general public widely supported Japanese ODA, its influence over the volume and direction of aid flows was relatively modest. Instead, its general assent provided a mandate for the rapid growth of the aid program, whose specific applications were determined within government ministries. These bodies, particularly the Ministry of International Trade and Industry, comprised both political leaders and powerful economic actors. In this environment, the economic basis of Japanese postwar national interests found expression in bilateral aid packages to LDCs that maintained strong economic relations with Tokyo in other areas, including foreign investment and the expansion of multinational corporations. Japanese officials acknowledged the role of ODA flows in tightening their broader economic links to regional LDCs along the Pacific Rim and in furthering their own economy, which was viewed as an engine of regional growth. In this respect, they differed with OECD standards of aid quality and emphasized the successful application of Japanese ODA in promoting the ascension of many aid recipients from LDC status to that of NICs. During the postwar period, French presidents and the general public held widely varying ideological orientations and advocated disparate national objectives, reflecting the country's conflictive political culture. This discord existed to a lesser degree in the area of foreign policy, however; a general consensus existed on France's role within the "front rank" of major powers and, more specifically, on the continuing concentration of French influence within the developing regions formerly under its colonial control. French presidents, who maintained broad authority over foreign policy under the political system designed by de Gaulle, shared these objectives and ensured the continuities in French foreign policy, including the distribution of development assistance. The French legislature, though formally empowered to approve the president's specific policy initiatives, generally deferred to the chief executive as the "guarantor" of French national interests. In this respect, France's cultural tradition served as a strong and consistent impetus for its relations with developing countries, which in turn served as a primary vehicle of the country's overseas ambitions. As Cerny put it, "French policy was always dominated by a cultural element which put cultural values . . . before a search for either economic wealth or pure military power" (1980: 75). In aid policy, French leaders declared their mission civilisatrice in maintaining close relations with former African colonies that were connected to Paris through monetary integration, trade ties, and ongoing ODA transfers. The French government also maintained close security relationships with many of these states, but its influence was generally limited to providing material and logistical support in times of crisis. The Swedish aid program was also sustained by high levels of public support, which, in contrast to the French case, extended to other aspects of

162

Patterns and Prospects

Swedish public policy, both foreign and domestic. T h e c o u n t r y ' s consensual political culture w a s based upon widespread and enduring social values. In d o m e s t i c policy, these involved the promotion of s o c i o e c o n o m i c equality and the observance of social democratic principles; in foreign policy, they entailed the pursuit of geopolitical neutrality and active support for peaceful conflict resolution a m o n g great powers. As in the F r e n c h case, the S w e d i s h g o v e r n m e n t e n d e a v o r e d to use foreign-aid relationships to project these societal values, i d e n t i f y i n g and r e w a r d i n g L D C s that e m u l a t e d the Swedish system of social d e m o c r a c y . In many cases, S w e d e n supported r e g i m e s that were e m e r g i n g f r o m wars of national liberation—such as C u b a , Vietnam, Angola, and N i c a r a g u a — and that had e s t a b l i s h e d socialist or Marxist systems. S w e d i s h leaders h o p e d their " t h i r d w a y " of e c o n o m i c and political d e v e l o p m e n t w o u l d provide an alternative to the d e p e n d e n c e of these L D C s on either of the Cold War s u p e r p o w e r s . Given the strong societal c o n s e n s u s that endured in S w e d e n through two world wars and within the bipolar system of the late twentieth century, the e x e c u t i v e and legislative branches played a relatively m o d e s t role in a f f e c t i n g S w e d i s h f o r e i g n policy in general and aid policy in particular. T h e c o u n t r y ' s aid strategy epitomized the "Nordic model," f o u n d e d upon explicitly humanitarian interests, support for LLDCs, the transfer of f u n d s exclusively in the f o r m of grants, and relatively high per capita aid and O D A / G N P ratios. T h e distinctive aspects of Swedish O D A policy were m o d i f i e d in the late 1980s, however, in response to d o m e s t i c e c o n o m i c strains and g r o w i n g p r e f e r e n c e s f o r greater " r e a l i s m " in a d v a n c i n g S w e d i s h e c o n o m i c interests through foreign-aid f l o w s . T h e s e m o d i f i c a tions were reflected in the presence of economic interests in Swedish O D A during the final three years of the d e c a d e . But the qualitative aspects of S w e d i s h aid, and the overall thrust of S w e d e n ' s foreign policy and approach to North-South relations, were largely retained. T h e relation of domestic politics to the development and pursuit of national interest is complex and, in most cases, ambiguous. As the American Federalists ( M a d i s o n , 1938 [1787]: 56) a c k n o w l e d g e d , d o m e s t i c politics are invariably divisive based on the presence of contending e c o n o m i c factions: "a landed interest, a m a n u f a c t u r i n g interest, a mercantile interest, a moneyed interest, with many lesser interests, grow up of necessity in civilized nations." In other respects, d o m e s t i c divisions are sustained a l o n g religious, linguistic, or ethnic lines. W h e n these divisions b e c o m e pred o m i n a n t and o v e r w h e l m the ability of central g o v e r n m e n t s to reconcile them, states fall prey to civil war and disintegration. More often, and in the case of the four countries under study, a sense of holistic identity and purpose transcends parochial concerns, thus providing the basis of national interest that is expressed in foreign policy.

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In all o f t h e s e w a y s , the national interests and f o r e i g n - a i d p o l i c i e s o f t h e s e d o n o r s t a t e s w e r e i n f l u e n c e d by s o c i e t a l v a l u e s a n d g o v e r n m e n t practices. D e s p i t e their m a n y internal d i f f e r e n c e s a n d s y s t e m i c roles, t h e s e states w e r e i n f l u e n t i a l in c r e a t i n g a n d m a i n t a i n i n g the O D A r e g i m e for m o r e than three d e c a d e s . T h e i r c o n t i n u i n g i n v o l v e m e n t in t r a n s f e r r i n g O D A in the 1 9 9 0 s — a period in w h i c h their r e l a t i o n s h i p s w i t h m a n y L D C s w e r e r e s h a p e d b y the e n d o f the C o l d War and in w h i c h e c o n o m i c strains p l a c e d l i m i t s o n their i n v o l v e m e n t in f o r e i g n a f f a i r s — p r e s a g e s the e n durance o f the r e g i m e w e l l into the future. C h a l l e n g e s to the O D A r e g i m e c o n t i n u e to b e e x p r e s s e d by its m e m bers, and l o n g - s t a n d i n g d i s p u t e s o v e r aid quality a n d other i s s u e s r e m a i n u n r e s o l v e d . T h e s e t e n s i o n s w i l l b e e x p l o r e d in the final chapter, a l o n g w i t h the future p r o s p e c t s f o r d e v e l o p m e n t aid. In a d d i t i o n , e m e r g i n g c o n c e p tions o f national interest w i l l b e e x a m i n e d as w o r l d p o l i t i c s m o v e s further a w a y f r o m the C o l d War and t o w a r d an uncertain n e w m i l l e n n i u m .

Notes 1. Another aspect in which this differing emphasis was observable was in the Swedish practice of promoting agricultural development in LDCs. 2. 1 acknowledge the assistance provided by Peter J. Schraeder in suggesting this avenue of inquiry and providing background information regarding the African O D A recipients. 3. These distinctions were based upon the e c o n o m i c systems of African states as defined by their leaders and reported by the U.S. State Department during the 1980s. Of the forty African states (excluding Egypt) documented, twenty-six maintained capitalist e c o n o m i e s , w h e r e a s seven maintained Marxist and socialist economies. Only one state, Uganda, was reported to have changed economic systems d u r i n g the d e c a d e (from capitalist to socialist in 1986). Many other states moved from Marxist or socialist to capitalist systems in the 1990s. 4. Several states established aid programs in the 1970s, particularly members of the Organization of Petroleum Exporting States ( O P E C ) . Led by Saudi Arabia, O P E C outlays reached $12.7 billion in 1 9 8 0 - 1 9 8 1 before plummeting to about $3 billion by the end of the decade. 5. See also Lake (1988) for an elaboration of this thesis with regard to U.S. trade policy. 6. More than thirty LDCs " h a v e notified the GATT of comprehensive tariff ref o r m " as part of the Uruguay Round and have agreed to lower many nontariff barriers (Richards, 1992: 23). 7. France retained its primary role in t r a n s f e r r i n g O D A to its f o r m e r Near Eastern dependencies, Syria and Lebanon. 8. Sweden, without a regional O D A concentration, served as the primary aid donor to Angola, M o z a m b i q u e , Vietnam, and Nicaragua. The German government served this role for Lesotho and Swaziland in A f r i c a , Ecuador in South America, and India, Iran, and Yemen in Asia. Italy was the primary O D A donor to Ethiopia and Somalia in Africa and Cuba and Peru in Latin America. The United Kingdom provided the most development aid to three African LDCs: Gambia, Malawi, and

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U g a n d a . A n o t e w o r t h y e x c e p t i o n to this g e o g r a p h i c a l c o n c e n t r a t i o n w a s t h e s t a t u s of F r a n c e as t h e p r i m a r y O D A d o n o r to M e x i c o and C o l o m b i a in Latin A m e r i c a . 9 . P a r a d o x i c a l l y , g i v e n t h e i r n e g l e c t of m a n y of t h e q u a l i t a t i v e s t a n d a r d s of t h e O D A r e g i m e , b o t h t h e U n i t e d S t a t e s and J a p a n m a y be said to h a v e b e e n " f r e e r i d e r s . " O E C D m e m b e r s w i t h s m a l l e r e c o n o m i e s , p r e s u m a b l y less c a p a b l e of a f f o r d i n g O D A o u t l a y s , a c c e p t e d g r e a t e r s a c r i f i c e s in t r a n s f e r r i n g aid. T h u s , t h e p a t tern of r e g i m e b e h a v i o r in t h e a r e a of O D A is t h e r e v e r s e of t h a t w h i c h a n a l y s t s h a v e f o u n d in the area of trade, in w h i c h the w e a l t h i e r p o w e r s a s s u m e d g r e a t e r s a c r i f i c e s . In both c a s e s , h o w e v e r , d o n o r s t a t e s r e j e c t e d t h e s e q u a l i t a t i v e s t a n d a r d s and a r g u e d that they a s s u m e d r e s p o n s i b i l i t i e s a n d s e r v e d the i n t e r e s t s of r e c i p i e n t s in other respects.

8 National Interest and Foreign Aid: Toward the Millennium

In this book I have sought both to enhance our substantive understanding of French, Japanese, Swedish, and U.S. aid strategies and to suggest w a y s in which the differences a m o n g them may be reconciled. Four objectives, as outlined in the preface, were pursued. I examined national interest as an orienting principle in international relations, its multiple faces over time and across boundaries, its manifestations in the routine practice of foreign policy, and m o r e specifically its p r e s e n c e in the transfer of d e v e l o p m e n t assistance from rich states to poor states. As demonstrated in the previous chapters, observable variations in the volume, direction, and terms of aid flows mirrored d o n o r s ' national interests and general behavior in foreign affairs since World War II. As noted in C h a p t e r 2, d e v e l o p m e n t aid w a s by no m e a n s the primary m e d i u m of financial f l o w s f r o m North to South during this period. Private i n v e s t m e n t , trade, and c o m m e r c i a l b a n k l e n d i n g c o n t r i b u t e d more capital to many L D C s than did O D A by the early 1990s. M o r e so than t h e s e o t h e r f i n a n c i a l f l o w s , h o w e v e r , the w i d e s p r e a d t r a n s f e r of O D A challenged long-standing a s s u m p t i o n s about the b e h a v i o r of states in a c o m p e t i t i v e global e n v i r o n m e n t . D e v e l o p m e n t aid s e r v e d as a crucial s u p p l e m e n t to private c a p i t a l , p l a y i n g an i n f l u e n t i a l role in L D C s ' broader relations with industrialized states. In this capacity, O D A served as an e f f e c t i v e vehicle for the pursuit of donor national interests h o w e v e r they w e r e d e f i n e d . As the U.S. General A c c o u n t i n g O f f i c e ( 1 9 8 3 : 1) ack n o w l e d g e d , aid donors " c o n s i d e r their bilateral d e v e l o p m e n t assistance to be an instrument of f o r e i g n policy w h i c h takes into account political, e c o n o m i c , cultural, and d e v e l o p m e n t a l o b j e c t i v e s of both d o n o r and recipient c o u n t r i e s . " This study has been directed t o w a r d m o v i n g b e y o n d this axiom of contemporary world politics and toward identifying more concretely these donor o b j e c t i v e s as they w e r e revealed in practice. A l o n g the way, this study has sought empirical support for the " p r e - t h e o r e t i c a l " a s s u m p t i o n s of Morgenthau (1963: 88), w h o believed a coherent understanding of foreign assistance must presuppose a political basis:

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The problem of foreign aid is insoluble if it is considered as a self-sufficient technical enterprise of a primarily economic nature. It is soluble only if it is considered an integral part of the political policies of the giving country, which must be devised in view of the political conditions, and for its effects on the political situation, in the receiving country. T h e c o m p a r a t i v e a s s e s s m e n t in C h a p t e r 7 s u g g e s t e d that the b r o a d n o r m a t i v e a p p r o a c h e s to u n d e r s t a n d i n g f o r e i g n p o l i c y a n d f o r e i g n a i d , w h i c h w e r e r e v i e w e d in t h e f i r s t t w o c h a p t e r s of t h i s b o o k , d i d not a d e q u a t e l y a c c o u n t f o r t h e a c t i o n s of t h e s e d o n o r s t a t e s d u r i n g the p e r i o d u n d e r s t u d y . T h e o b s e r v a b l e b e h a v i o r of t h e s e d o n o r s d i v e r g e d in m a n y i m p o r t a n t w a y s , as c l o s e r e x a m i n a t i o n m a d e e v i d e n t . F o r e i g n - a i d b e h a v i o r w a s h i g h l y c o n t i n g e n t u p o n m u l t i p l e internal a n d e x t e r n a l f a c t o r s a n d w a s t h e r e f o r e not a m e n a b l e to i n t e r p r e t a t i o n t h r o u g h a s i n g l e a n a l y t i c l e n s . T h o u g h t h e o r e t i c a l p a r a d i g m s h e l p us u n d e r s t a n d t h e d i f f e r i n g m a n n e r s in w h i c h p o l i t i c a l b e h a v i o r is p e r c e i v e d , a n d t h o u g h t h e y i l l u m i n a t e c o n t e n d ing v i s i o n s f o r h o w p o l i t i c a l a c t o r s ought to b e h a v e , t h e i r a p p l i c a t i o n to s p e c i f i c c a s e s d e m a n d s a t t e n t i o n to c o n t e x t u a l f a c t o r s that pertain to e a c h case.1 T h i s critical point m a y be c l a r i f i e d by c o n s i d e r i n g t h e varied i m p a c t of t r a n s n a t i o n a l i n t e r d e p e n d e n c e o n t h e f o r e i g n p o l i c i e s of d o n o r s t a t e s . W h e r e a s the m a j o r d o n o r s m a y b e s a i d to h a v e b e e n " s i t u a t i o n a l l y i n t e r d e p e n d e n t " o n o t h e r states, largely b e c a u s e " i m p r o v e m e n t s in o t h e r s ' w e l f a r e i m p r o v e their o w n , " s m a l l e r i n d u s t r i a l i z e d s t a t e s d e m o n s t r a t e d " e m p a t h e t i c i n t e r d e p e n d e n c e " and w e r e t h u s m o r e " i n t e r e s t e d in the w e l f a r e of o t h e r s f o r their o w n s a k e , e v e n if this has n o e f f e c t o n their o w n m a t e r i a l w e l l - b e i n g o r s e c u r i t y " ( K e o h a n e , 1 9 8 4 a : 123). T h i s a s p e c t of state b e h a v ior h e l p s e x p l a i n b o t h t h e i n v e r s e r e l a t i o n s h i p b e t w e e n t h e q u a n t i t y a n d q u a l i t y of aid f l o w s a n d t h e p r o p e n s i t y of m a j o r p o w e r s to p u r s u e s e c u r i t y or e c o n o m i c interests through O D A more a g g r e s s i v e l y than other aid d o n o r s . In a s i m i l a r m a n n e r , these v a r i a t i o n s r e f l e c t e d the levels of " s e n s i t i v i t y " a n d " v u l n e r a b i l i t y " ( K e o h a n e a n d N y e , 1 9 8 9 : 1 2 - 1 3 ) — o r the r e l a tive c a p a c i t i e s to s u r m o u n t threats p o s e d by i n t e r d e p e n d e n t r e l a t i o n s h i p s — p r e s e n t in e a c h c a s e . T h e b e h a v i o r of aid d o n o r s w a s c o n t i n g e n t u p o n their b r o a d e r c a p a b i l i t i e s — p o l i t i c a l a n d e c o n o m i c — w i t h i n t h e interstate s y s t e m . Finally, t h e v a r i a t i o n s u n d e r s c o r e the i m p o r t a n c e of p l a c i n g state p o l i c y in the c o n t e x t of d i f f e r e n t i s s u e a r e a s , w h i c h " g e n e r a t e d i f f e r e n t c o a l i t i o n s , b o t h w i t h i n g o v e r n m e n t s and a c r o s s t h e m , and i n v o l v e d i f f e r e n t d e g r e e s of c o n f l i c t " ( K e o h a n e and N y e , 1 9 8 9 : 25). In D a v i d C l i n t o n ' s w o r d s : The security of a state in a self-help system, the balance between its power and its commitments, goes far toward delimiting its "moral opportunity"—that is, the degree to which it is safe in trying to realize its domestic principles in its international actions. Because of their circumstances, some states are safer than others and can devote more of their

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resources to the promotion of their ideals. Others, in a less secure setting, may believe that they lack the luxury of participating in reformist efforts and must focus their attention solely on their material interests. (1994: 56) Such an e m p h a s i s on the context of state action calls attention to the linkages between states' foreign-policy behavior in specific issue areas and their broader involvement in world politics. As noted in Chapter 1, the perceived national interests of states are also highly variable across time and space. In the former sense they responded to prevalent systemic conditions and norms of behavior; in the latter sense they reflected states' d o m e s t i c values and institutions, their physical resources, and their broader ties to other states. Although behavior in some respects was most consistent with realist models, in other cases it affirmed the expectations of political idealism. Further, the aid patterns reinforce structuralist assumptions that international political behavior is highly contingent upon the locus of decisionmaking within the world economy, although it departs from Marxist or Leninist assumptions about the primacy of historical materialism, the internal cohesion of the " m o d e r n world s y s t e m , " and the inability of NorthSouth financial f l o w s to produce sustained e c o n o m i c d e v e l o p m e n t under some c i r c u m s t a n c e s in l o w - i n c o m e societies. Ultimately, this conclusion calls upon the analyst to contrast the relative presence of "opportunity and willingness" (Most and Starr, 1989: 17) in foreign policy and to recognize that "the most general q u e s t i o n s or p r o p o s i t i o n s might not hold b e c a u s e there are at least [some] partitioning factors that might limit their general applicability" (emphasis in original). In short, foreign aid takes the shape of its container.

The Record of Third World Development As e m p h a s i z e d t h r o u g h o u t this b o o k , the O D A r e g i m e is a tangible byproduct of the p o s t - W o r l d War II international s y s t e m . T h e first m a j o r f l o w s of economic assistance originated in the United States and were distributed mainly a m o n g Western industrial states a t t e m p t i n g to recover f r o m the w a r ' s d e v a s t a t i o n . Within t w o d e c a d e s , the d e c o l o n i z a t i o n of many T h i r d World regions and the e m e r g e n c e of dozens of new nationstates recast the scope, direction, and p u r p o s e s of e c o n o m i c assistance. North-South relations emerged during this period as an important aspect of world politics, to be tangled within the conflicted web of East-West rivalry during the Cold War. In the 1960s, the U N ' s " f i r s t " Development Decade, more than a dozen industrialized states coordinated O D A f l o w s to newly decolonized LDCs to support their political stability and economic growth. This d e v e l o p m e n t effort achieved mixed results, substantially improving social welfare conditions in many countries but also leading to frustrations

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and d i s a p p o i n t m e n t s that f o l l o w e d the failure of many d e v e l o p m e n t p r o g r a m s and the growing economic gaps b e t w e e n the most impoverished regions of the South and the industrialized regions of the North. Among indicators of sustained economic development in the Third World, growth rates in the 1960s averaged 6.2 percent in the 1960s, well above the U N ' s target of 5 percent annual growth for the first Development Decade. Average life expectancy in LDCs increased rapidly between 1950 and 1980, from 43 to 59 years; average L D C literacy rates increased from 33 to 59 percent; and the rate of child mortality fell by more than two-thirds (OECD, 1985a: 270). The problem of overpopulation was widely publicized and led to rapid reductions in birthrates in many regions and the establishment of effective family-planning programs. These trends were acknowledged at the UNsponsored Conference on Population and Development in the summer of 1994, similar in scope to the "Earth Summit" of 1992. Progress in L D C population control and general living conditions varied widely, however, and many L D C s did not share in the e c o n o m i c growth that occurred elsewhere. As has been widely documented, many inhabitants of East Asia and, to a lesser extent, Latin America experienced considerable improvements in social w e l f a r e during this period, but those in sub-Saharan Africa and parts of South Asia suffered f r o m deteriorating social and e c o n o m i c conditions. F u r t h e r m o r e , the e c o n o m i c g r o w t h enj o y e d by many L D C s in the 1960s and 1970s s l o w e d considerably in the 1980s, the "lost d e c a d e " of Third World development; by 1990, social welf a r e indicators such as life expectancy and per capita i n c o m e had fallen below their levels of a decade earlier in many areas. Famines in Ethiopia, Sudan, and Somalia attracted worldwide attention in the 1980s and 1990s, but the growing overall disparity between the Third and " F o u r t h " Worlds w a s equally portentous. 2 T h e O D A regime began its development efforts in the 1960s with very limited consensus and expertise in promoting e c o n o m i c growth and social stability in the w o r l d ' s poorest regions. Industrialized states, a d o p t i n g prevalent a s s u m p t i o n s of linear e c o n o m i c d e v e l o p m e n t through predictable "stages of g r o w t h , " often imposed their own developmental models on Third World states. But even within t h o s e states, substantial disagreement existed regarding the most e f f e c t i v e means available to reduce poverty and stimulate e c o n o m i c development in the South (see Chapter 2). With the b e n e f i t of e x p e r i e n c e , leaders and d e v e l o p m e n t experts in the 1980s and 1990s were able to draw upon the past and consider new w a y s to hasten e c o n o m i c growth and relieve social distress within LDCs. T h e i r successes and failures in distributing O D A were central aspects of this assessment. In the early 1980s, the O E C D ( 1 9 8 5 a ) reviewed its record in coordinating O D A f l o w s . T h e D A C ' s Expert G r o u p on Aid Evaluation reco m m e n d e d that recipient populations be actively engaged in development p r o j e c t s and prepared to m a n a g e them p e r m a n e n t l y in the a b s e n c e of

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advisers f r o m d o n o r countries; that aid p r o j e c t s be better suited to the varying c o n d i t i o n s and needs of recipient c o m m u n i t i e s , m e a n i n g that labor-intensive rather than capital-intensive techniques should be applied more often; and that attention be redirected to agricultural rather than industrial production given the f o r m e r ' s immediate benefits to local populations and greater compatibility with their existing resources. 3 In general, the D A C urged aid donors to abandon their "urban bias" in promoting large-scale, capital-intensive industrial projects. Its f i n d i n g s recalled those of O D A critics during the 1970s w h o called for greater attention to basic h u m a n needs in the T h i r d World; they also anticipated the subsequent c o n s e n s u s a m o n g participants in the 1992 UN C o n f e r e n c e on Environment and D e v e l o p m e n t , w h o generally agreed that f u t u r e O D A f l o w s should p r o m o t e "sustainable d e v e l o p m e n t " based upon sensitivity to local conditions and needs, population control, environmental protection, demilitarization, and d e m o c r a t i c d e v e l o p m e n t (or, more generally, " g o o d government"). T h e repetition of such studies, the consistency of their f i n d i n g s , and the widely p e r c e i v e d potential for industrialized states to act upon them suggested that a c o n s t r u c t i v e new period in N o r t h - S o u t h relations had emerged in the mid-1990s. T h e disappearance of Cold War tensions, which had previously o v e r w h e l m e d these relations and the internal development of many LDCs, provided a further basis for this expectation. In their place arose a growing sense of shared problems and opportunities for collective action in a variety of issue areas. M a n y national d e v e l o p m e n t programs, including that of the United States, c h a n g e d e m p h a s i s to align broadly with the stated objectives of the United Nations and the O E C D . At the s a m e time, many donors, under g r o w i n g d o m e s t i c e c o n o m i c strain, announced that they had reached their limits in making O D A available. Bilateral O D A f l o w s by m e m b e r s of the O E C D , which grew steadily during the 1980s, fell in 1992 by about $4 billion in real terms to $38.5 billion, and aid f r o m n o n - O E C D countries c o n t i n u e d to dwindle ( O E C D , 1994a: 6 4 - 6 5 ) . During the same period, multilateral O D A f l o w s increased only slightly, f r o m $15.2 billion to $16.8 billion. Of the eighteen members of the DAC, nine reported lower levels of O D A disbursements in real terms. T h o u g h pledging to continue North-South cooperation through develo p m e n t assistance, leaders of donor states stated that f u t u r e aid f l o w s would also be increasingly contingent upon the ability of recipients to use the resources productively. Past abuses, in w h i c h m a n y f u n d s w e r e embezzled by recipient elites or directed toward extravagant municipal projects, had o f t e n b e e n tolerated b e c a u s e these aid relationships f u r t h e r e d d o n o r interests d u r i n g the Cold War. With the Cold W a r ' s d e m i s e , and under intensifying d o m e s t i c pressures, donors were more explicit in conditioning aid r e s o u r c e s upon the p e r f o r m a n c e of recipients in r e d r e s s i n g s o c i o e c o n o m i c disparities and establishing sustained e c o n o m i c growth.

170

Patterns and

Prospects

Challenges to the ODA Regime To an u n p r e c e d e n t e d degree, major aid d o n o r s expressed widely shared c o n c e r n s and e x p e c t a t i o n s about global e c o n o m i c d e v e l o p m e n t in the 1990s and adopted new norms and principles for future O D A allocations. As always, however, they resisted incursions against their prerogatives as sovereign states, and they continued to fashion ODA programs to accomm o d a t e their p e r c e i v e d national interests. L o n g - s t a n d i n g d i s a g r e e m e n t s within the O D A regime continued to fester, and the collective response of these states to the c h a n g e s in the international system was inhibited in several respects. A m o n g these, four may be identified. First, "sustainable d e v e l o p m e n t " proved to be a slippery concept with a variety of meanings, both among donors and recipients. Under the terms of Agenda 21, the long-range development plan adopted by participants of the "Earth S u m m i t " in Brazil, North-South relations were to be redirected toward global problems such as population control and environmental protection. Signatories to the document did not specify the costs and policy ramifications of Agenda 21, however; these were ultimately left to m e m ber states to interpret on their own. As a result, conditionalities attached to aid packages were often ambiguous, inconsistent, and difficult to enforce. Second, u n r e s o l v e d debates over the m e a n i n g and c o n n o t a t i o n s of "democratic d e v e l o p m e n t " were revived in the 1990s, particularly over the issue of whether social-political or e c o n o m i c criteria were to be param o u n t . As in the past, S c a n d i n a v i a n c o u n t r i e s and many socialist L D C s considered socioeconomic equality a primary component of democratic society. To the United States, Japan, Great Britain, and to a lesser degree other industrialized states, civil and political liberties were given primacy; indeed, state e n f o r c e m e n t of equality w a s viewed as an infringement on political f r e e d o m . This debate, which was an extension of a centuries-old disagreement over the basis and function of democracy, had important implications for the direction and quality of aid flows, which continued to reflect the dispositions of their donors. In a related manner, the linkage b e t w e e n these largely political considerations and the e c o n o m i c p e r f o r m a n c e of LDCs remained problematic. During the 1970s and 1980s, the countries with the most rapidly expanding e c o n o m i e s — J a p a n , China, South Korea, and T a i w a n — o p e n l y violated standards of " g o o d g o v e r n m e n t " as defined by the United Nations and the O D A regime. Yet to many LDCs along the Pacific Rim and beyond, and in many World Bank reports exalting the East Asian " m i r a c l e , " these countries provided a blueprint for m o d e r n i z a t i o n and e c o n o m i c integration within the industrialized world. Thus, the tension between these examples and the political requirements of good g o v e r n m e n t — m u l t i p l e political parties, direct elections, and widespread political participation—was obvious.

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To m a n y leaders of LDCs, the b e n e f i t s of e c o n o m i c g r o w t h outweighed the costs of domestic political repression. In their view, such costs would only be necessary in the short term, until material a f f l u e n c e led to the societal stability that w o u l d e n a b l e these leaders to liberalize their political systems. In the meantime, market-oriented e c o n o m i c growth would not be possible in a pluralistic political environment. 4 Critics of this view questioned both its normative presumptions and its optimistic expectation that authoritarian rule would necessarily yield, in the presence of improving e c o n o m i c conditions, to representative g o v e r n m e n t . For every case of such a transformation in the Third World, there were many more in which authoritarian rulers were incapable of stimulating broad-based economic growth, m u c h less of relinquishing their hold on p o w e r to political opponents. T h e third o n g o i n g source of c o n t e n t i o n within the O D A regime involved the p e r c e p t i o n within many L D C s that industrialized states were hypocritical in d e m a n d i n g global "responsibility" of Third World states in the early stages of industrialization. A m o n g c o m m o n l y raised examples of the schism b e t w e e n words and deeds was the United States. T h o u g h it was the w o r l d ' s greatest consumer of fossil f u e l s , a primary source of air and water pollution, one of the most militarized societies in the world, and one of the most p r o l i f i c m a n u f a c t u r e r s and e x p o r t e r s of lethal w e a p o n r y , the United States urged environmental and military restraint a m o n g recipients. 5 Continuing transfers of large a m o u n t s of foreign aid to resource-rich but repressive r e g i m e s (e.g., Indonesia f r o m J a p a n ) and strategically important, heavily militarized, relatively affluent states (e.g., Egypt and Israel f r o m the United States) was seen as f u r t h e r e v i d e n c e of hypocrisy a m o n g m a j o r aid donors. Finally, disputes continued over the definition of O D A "quality." T h e D A C c o n t i n u e d to advance its standards, which reflected a c o n s e n s u s a m o n g most of its members. As noted previously, Japanese officials questioned many of these qualitative standards, particularly the D A C ' s preference for grant aid rather than concessional loans. In the view of the Japanese g o v e r n m e n t , loans forced a measure of fiscal discipline on recipients that was lacking w h e n they received grants with no reciprocal obligations. As in other areas, Japan's leaders pointed to the e c o n o m i c growth of its recipients as e v i d e n c e of the superiority of this interpretation. T h e United Slates, meanwhile, moved further below the D A C standard of 0.7 percent O D A / G N P . T h e anticipated shift of E c o n o m i c Support Fund outlays for Egypt and Israel away from the category of O D A was e x p e c t e d to lower the U.S. proportion even further. T h e U.S. g o v e r n m e n t , however, continued to draw attention to its large a g g r e g a t e aid f l o w s , its large contributions to the United Nations and other international organizations, and its continuing role in providing military security for its allies.

172

Patterns and

Prospects

Dissension c o n t i n u e d not only within the O D A r e g i m e d u r i n g the 1990s but also more broadly b e t w e e n North and South. T h e ideological cleavages and regional conflicts that grew out of the Cold War produced a legacy of distrust a m o n g states, and the transparent i n f l u e n c e of d o n o r self-interests in past aid p r o g r a m s left recipients skeptical about the sincerity of current e f f o r t s . T h e c o n t i n u i n g tensions b e t w e e n d o n o r and recipient states were likely to m a k e the new objectives of the O D A regime more difficult to realize. As Moore and Robinson (1994: 153) observed, T h e r e is c o n f u s i o n of v a r i o u s kinds, and little b a s i s on w h i c h the d o n o r s can validly claim to h a v e b e e n a c t i n g e t h i c a l l y in i m p l e m e n t i n g a p o l i c y that ultimately can o n l y be j u s t i f i e d in ethical terms. For the intervention by aid donors in the internal affairs of other states . . . can o n l y be justified if the d o n o r s can r e a s o n a b l y argue that they are acting in g o o d faith to enure that d e v e l o p m e n t aid is u s e d for the interests o f the i n t e n d e d b e n e f i c i a r i e s — t h e poor.

Yet, importantly, none of these challenges threatened the long-term viability of the O D A regime. Under some models, systemic volatility may be a precursor to the demise of regime cohesion (see Keohane, 1980). But in the case of the O D A regime, which had demonstrated great malleability in responding to shifts in donor objectives and the developmental needs of recipients, the framework persevered amid the seismic shifts in world politics in the 1980s and early 1990s. Rather than being withheld in the face of fiscal austerity, aid flowed each year from more sources, in more forms, to more recipients. The end of the Cold War relieved many tensions but produced new strains as the foreign policies of all states were reoriented. Future analysis will determine how these strains will be manifested in aid policy.

Future Prospects T h e status and f u t u r e prospects of d o n o r aid strategies may now be considered, as all four states c o n f r o n t a rapidly c h a n g i n g and volatile global environment. Systemic upheavals in the 1980s corresponded with observable shifts in the d o n o r s ' O D A policies as they adapted to the new conditions. These shifts and their possible implications will be explored in each case before the study concludes with a more general assessment of the future of national interest and foreign aid. France A s the 1990s began, François Mitterrand w e l c o m e d the end of Cold War bipolarity and the corresponding division of Europe, outcomes that French

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l e a d e r s h a d a c t i v e l y s o u g h t s i n c e W o r l d W a r II. T h e e m e r g i n g o r d e r p r o v i d e d an o p e n i n g f o r F r a n c e , w h i c h had b e e n o v e r s h a d o w e d b y the c o m p e t i t i o n b e t w e e n t h e U n i t e d S t a t e s a n d S o v i e t U n i o n , to r e a s s e r t its i n f l u e n c e a s a g l o b a l p o w e r . F r a n c e ' s a b i l i t y to e x p l o i t this s i t u a t i o n , h o w e v e r , w a s l i m i t e d b y its o n g o i n g e c o n o m i c p r o b l e m s a n d g r o w i n g d o m e s t i c f i s s u r e s . T h e a m o r p h o u s b a l a n c e o f p o w e r that e m e r g e d a f t e r t h e C o l d W a r further raised doubts about F r a n c e ' s role. Paradoxically, though

France

w a s n o l o n g e r c o n s t r a i n e d b y t h e s u p e r p o w e r s , it w a s l i k e w i s e u n a b l e to c o n t i n u e p r o m o t i n g i t s e l f to the d e v e l o p i n g w o r l d a s a b r i d g e b e t w e e n the ideological competitors. F r a n c e served as both a catalyst o f the Euro-integration process and a p o t e n t i a l o b s t a c l e to it b e c a u s e o f g r o w i n g n a t i o n a l i s t s e n t i m e n t s a m o n g e c o n o m i c a l l y d e p r e s s e d s e c t o r s o f the p o p u l a t i o n . In S e p t e m b e r 1 9 9 2 , v o t ers n a r r o w l y a p p r o v e d the M a a s t r i c h t a c c o r d s , w h i c h c a l l e d f o r g r e a t e r c o ordination among

EU

members

in f o r e i g n p o l i c y , b u t t h e

referendum

r e v e a l e d w i d e s p r e a d public s k e p t i c i s m o f the m o v e t o w a r d greater integ r a t i o n . In J u n e 1 9 9 4 , M i t t e r r a n d ' s S o c i a l i s t P a r t y m a d e a w e a k s h o w i n g in v o t i n g f o r the E u r o p e a n P a r l i a m e n t , s u g g e s t i n g that it w o u l d not retain t h e F r e n c h p r e s i d e n c y in t h e 1 9 9 5 g e n e r a l e l e c t i o n ( R i d i n g , 1 9 9 4 : A 4 ) . F r e n c h d o m e s t i c p o l i t i c s — a l w a y s d i v i s i v e and p o l a r i z e d — a p p e a r e d e v e n m o r e s o a s t h e G a u l l i s t Party, the U n i o n f o r F r e n c h D e m o c r a c y , the R a l l y f o r t h e R e p u b l i c Party, and the r i g h t i s t N a t i o n a l F r o n t all r e c e i v e d s t r o n g s u p p o r t at t h e p o l l s . A s noted previously, domestic fragmentation

has traditionally

not

threatened the otherwise strong national c o n s e n s u s regarding F r a n c e ' s fore i g n a f f a i r s ; p o l i t i c s h a s t r a d i t i o n a l l y s t o p p e d at t h e w a t e r ' s e d g e . B u t in the 1 9 9 0 s d o u b t s w e r e r a i s e d e v e n in this r e g a r d . M a n y o b s e r v e r s b e l i e v e d that, as a m i d d l e - s i z e d p o w e r with c h r o n i c internal d i f f i c u l t i e s and

stag-

nant p o p u l a t i o n g r o w t h , F r a n c e m u s t m o d e r a t e its g l o b a l a m b i t i o n s a n d e x p l o i t its r o l e as a r e g i o n a l p o w e r . 6 F r a n c e ' s f o r e i g n - a s s i s t a n c e p r o g r a m , h o w e v e r , c o n t i n u e d to s e r v e a v i t a l f u n c t i o n in t h e s e r v i c e o f its p e r c e i v e d n a t i o n a l i n t e r e s t s . O D A f l o w s i n c r e a s e d i n t o the 1 9 9 0 s ; t h e $ 8 . 3 b i l l i o n in F r e n c h t r a n s f e r s in 1 9 9 2 r e p r e s e n t e d a 2 . 3 p e r c e n t r i s e in r e a l t e r m s f r o m t h e y e a r b e f o r e

(OECD,

1 9 9 4 a ) . N e a r l y all o f t h i s i n c r e a s e w a s r e c o r d e d in t h e c a t e g o r y o f m u l t i l a t e r a l a s s i s t a n c e , a l t h o u g h m o r e than 7 5 p e r c e n t o f F r e n c h O D A w a s d i s b u r s e d d i r e c t l y to L D C g o v e r n m e n t s . T h e o v e r a l l g r o w t h o f F r e n c h O D A in t h e e a r l y 1 9 9 0 s c o n t r a s t e d w i t h t h e d e c r e a s i n g a i d f l o w s f r o m o t h e r m a j o r donors, including the United S t a t e s . B e y o n d s o m e marginal shifts, t h e t h r e e - t i e r e d p a t t e r n o f F r e n c h aid r e m a i n e d i n t a c t , w i t h t h e largest b i l a t e r a l p a c k a g e s d i s b u r s e d to o v e r s e a s t e r r i t o r i e s , the s e c o n d largest to f o r m e r c o l o n i e s , and the relatively small a m o u n t o f r e m a i n i n g funds transferred to other developing countries.

174

Patterns and Prospects

Throughout

the p o s t - W o r l d

War

II p e r i o d ,

the p r e p o n d e r a n c e

of

F r e n c h aid f l o w s to o v e r s e a s t e r r i t o r i e s s u c h a s R é u n i o n , G u a d e l o u p e , and M a r t i n i q u e w a s not lost o n the O E C D a n d o t h e r i n t e r n a t i o n a l aid a g e n c i e s , w h i c h i n s i s t e d that F r a n c e a c c o u n t f o r t h e s e aid f l o w s in a s e p a r a t e c a t e g o r y f r o m its o t h e r O D A c o m m i t m e n t s . T h i s i s s u e r e m a i n e d c o n t e n t i o u s i n t o the 1 9 9 0 s ; in r e s p o n s e to u n r e s t in d i s t a n t N e w C a l e d o n i a , t h e F r e n c h g o v e r n m e n t a g r e e d to p e r m i t a r e f e r e n d u m o n i n d e p e n d e n c e in 1 9 9 9 but w o u l d r e t a i n c o n t r o l o v e r the t e r r i t o r y until t h e n . In a d d i t i o n , F r e n c h r e l a t i o n s w i t h f r a n c o p h o n e A f r i c a w e r e r u p t u r e d in e a r l y 1 9 9 4 w h e n the g o v e r n m e n t , r e s p o n d i n g to g r o w i n g f i s c a l s t r a i n s w i t h i n its f o r m e r c o l o n i e s , devalued the F r a n c Z o n e c u r r e n c y by 5 0 percent. T h i s action served to b o t h a n t a g o n i z e l e a d e r s in f r a n c o p h o n e A f r i c a a n d d e m o n s t r a t e

further

their continuing dependence on Paris for sustained development. T h o u g h F r e n c h O D A i n c r e a s e d in t h e e a r l y 1 9 9 0 s , the p e r c e i v e d f a i l ures o f m a n y S o c i a l i s t p o l i c i e s , c o n t i n u i n g d o m e s t i c e c o n o m i c s t a g n a t i o n , a n d the a s c e n d a n c e o f n a t i o n a l i s t s e n t i m e n t s t h r e a t e n e d to c u r t a i l f l o w s to t h e T h i r d W o r l d in t h e late 1 9 9 0 s . A s in t h e c a s e o f t h e U n i t e d

States

t h r o u g h o u t the C o l d W a r a n d in S w e d e n d u r i n g the 1 9 8 0 s , " t h e e v o l u t i o n o f French co-operation with d e v e l o p i n g countries may depend on the ability o f g o v e r n m e n t s to c o n v i n c e p u b l i c o p i n i o n that T h i r d W o r l d d e v e l o p m e n t aid is at least as i m p o r t a n t as a s s i s t a n c e to the r e l a t i v e l y p o o r r e g i o n s o f metropolitan F r a n c e " (Evans, 1 9 8 9 :

143).

O f paramount importance, given the integration o f the F r a n c o - A f r i c a n p o l i t i c a l e c o n o m i e s , w a s t h e i r c o m b i n e d a b i l i t y to w i t h s t a n d a p r o l o n g e d r e c e s s i o n in t h e i n d u s t r i a l i z e d w o r l d a n d a f i f t e e n - y e a r p e r i o d o f l o w o r n e g a t i v e e c o n o m i c g r o w t h in t h e T h i r d W o r l d . 7 A l s o c r i t i c a l f o r F r a n c e w a s its r e s p o n s e to t h e r i s e o f I s l a m i c f u n d a m e n t a l i s m in A l g e r i a a n d the i m p a c t o f this trend o n r e l a t i o n s b e t w e e n F r a n c e and t h e M a g h r e b s t a t e s o f North A f r i c a ( B a l t a , 1 9 8 6 ) . E c o n o m i c stagnation and I s l a m i c f u n d a m e n t a l i s m b o t h e x a c e r b a t e d d o m e s t i c t e n s i o n s in F r a n c e , w h e r e n a t i o n a l i s t i c sentiments gained strength during the 1 9 8 0 s . M e a n w h i l e , s o m e critics obj e c t e d to t h e e x p e n s i v e m o d e r n i z a t i o n o f F r e n c h m i l i t a r y f o r c e s i n i t i a t e d by G i s c a r d and continued by Mitterrand. A s Howorth ( 1 9 8 6 : 8 0 )

con-

cluded, " F r a n c e cannot afford nuclear superpower status (even o f the s e c o n d r a n k ) a n d a m e a n i n g f u l c o n t r i b u t i o n to the c o n v e n t i o n a l d e f e n s e o f w e s t e r n E u r o p e a n d a t r o u b l e - s h o o t i n g w o r l d r o l e . B u t its ' g r e a t - p o w e r ' s e l f - p e r c e p t i o n is s o d e e p l y r o o t e d that it w i l l h a v e e n o r m o u s d i f f i c u l t y in abandoning any o f these r o l e s . "

Japan T h e c a s e o f Japan further illustrates how O D A flows may b e incorporated to f u r t h e r a s t a t e ' s s h i f t i n g o b j e c t i v e s . " J a p a n h a s e x p a n d e d its p o s t w a r e c o n o m y b y u t i l i z i n g to m a x i m u m e f f e c t t h e dual t o o l s o f f i n a n c e a n d trade o f f e r e d b y e c o n o m i c a i d , " o b s e r v e d S h i n s u k e ( 1 9 8 2 : 3 4 ) . Its d i s t i n c t i v e

Toward the Millennium

a p p r o a c h to d e v e l o p m e n t a i d , c o m b i n e d w i t h its c o n t i n u i n g

175

economic

g r o w t h d u r i n g a p e r i o d o f g l o b a l r e c e s s i o n , i n c i t e d r e p e a t e d c h a r g e s o f aid m e r c a n t i l i s m . J a p a n r e c o r d e d a $ 4 0 b i l l i o n t r a d e s u r p l u s w i t h its E a s t A s i a n n e i g h b o r s in the late 1 9 8 0 s , m a n y o f w h i c h w e r e p r i m a r y r e c i p i e n t s o f J a p a n e s e O D A . To s o m e analysts, these statistics provided evidence o f J a p a n ' s " n e w i m p e r i a l i s m " ( S t e v e n , 1 9 9 0 ) . J o h n s o n a d d e d , " J a p a n ' s not yet f u l l y r e v e a l e d g o a l f o r the e n d o f this c e n t u r y a p p e a r s to b e the r e c o n s t i t u tion o f the G r e a t e r E a s t A s i a C o - P r o s p e r i t y S p h e r e — b u t this t i m e b a s e d on real p r o s p e r i t y a n d not c r e a t e d at the point o f a b a y o n e t " ( 1 9 9 3 : 2 7 ) . A f t e r a prolonged period o f stability and prosperity, J a p a n suffered f r o m e c o n o m i c r e c e s s i o n a n d p o l i t i c a l c r i s i s in t h e m i d - 1 9 9 0 s . T h e s u d den halt in t h e c o u n t r y ' s r a p i d e c o n o m i c g r o w t h e x a c e r b a t e d p o l i t i c a l t e n s i o n s , l e a d i n g to t h e d i s l o d g i n g o f t h e L i b e r a l D e m o c r a t i c P a r t y f r o m the J a p a n e s e D i e t f o r the first t i m e s i n c e W o r l d W a r II and t h e e l e c t i o n in 1 9 9 4 o f a S o c i a l i s t - l e d g o v e r n m e n t . A c o a l i t i o n o f n e w l e a d e r s v o w e d to r e v i v e the e c o n o m y a n d r e f o r m g o v e r n m e n t m i n i s t r i e s , w h o s e i n t i m a t e l i n k s w i t h J a p a n e s e i n d u s t r y led to n u m e r o u s c o r r u p t i o n s c a n d a l s , i n c l u d i n g the " R e c r u i t " c o n t r o v e r s y that b r o u g h t d o w n P r i m e M i n i s t e r N o b o r u T a k e s h i t a in 1 9 8 9 . A n d t h e g e n e r a l p u b l i c , w h i c h had p r e v i o u s l y b e e n q u i e s c e n t a m i d the c o u n t r y ' s e c o n o m i c b o o m , b e c a m e m o r e c r i t i c a l o f t h e c r a m p e d l i v i n g c o n d i t i o n s a n d high c o n s u m e r p r i c e s in T o k y o a n d o t h e r l a r g e c i t i e s . J a p a n in t h e e a r l y 1 9 9 0 s b e g a n to e x h i b i t t h e s a m e s y m p t o m s o f " a i d f a t i g u e " e x p e r i e n c e d by W e s t e r n E u r o p e a n a n d U . S . d o n o r s in the 1 9 8 0 s . J a p a n e s e O D A f l o w s in 1 9 9 2 f e l l in real t e r m s b y 6 p e r c e n t t o $ 1 1 . 2 b i l lion, and bilateral loans dropped by 2 2 percent to $ 4 . 6 billion

(OECD,

1 9 9 4 a ) . A s a percentage o f J a p a n e s e GNP, aid f l o w s slipped from 0 . 3 2 perc e n t to 0 . 3 0 p e r c e n t . T h e J a p a n e s e g o v e r n m e n t c o n t i n u e d to m e e t

its

m e d i u m - t e r m t a r g e t s f o r O D A , h o w e v e r , a n d p l e d g e d to i n c r e a s e aid f l o w s a g a i n a f t e r t h e f i s c a l p r o b l e m s o f the e a r l y 1 9 9 0 s w e r e r e s o l v e d . T h e s e c i r c u m s t a n c e s s u g g e s t e d a s t a t i c p a t t e r n f o r f u t u r e J a p a n e s e f l o w s , at l e a s t r e l a t i v e to t h e r o b u s t g r o w t h o f the t h i r t y - y e a r p e r i o d p r i o r to 1 9 9 0 . In r e s p o n s e to o n g o i n g c r i t i c i s m o f t h e i r O D A p r o g r a m , J a p a n ' s l e a d e r s c o n t i n u e d to p l e d g e g r e a t e r a g g r e g a t e v o l u m e s a n d h i g h e r l e v e l s o f a i d quality

in t h e m i d - 1 9 9 0 s . T h e i r e f f o r t s r e f l e c t e d a c o n t i n u i n g

interest

a m o n g J a p a n e s e l e a d e r s t o a t t a i n r e c o g n i t i o n as a g l o b a l p o w e r a n d to attract g r e a t e r c r e d i b i l i t y w i t h i n t h e p o s t - C o l d W a r O D A r e g i m e . C o n t i n u i n g t h i s e f f o r t at i m p r o v i n g t h e p u b l i c p e r c e p t i o n o f J a p a n e s e a i d , t h e J a p a n e s e g o v e r n m e n t ( 1 9 9 2 b ) released an O D A " c h a r t e r " on J u n e

30,

1 9 9 2 , i d e n t i f y i n g its " b a s i c p h i l o s o p h y " a n d o b j e c t i v e s that w o u l d s u b s e q u e n t l y b e p u r s u e d t h r o u g h O D A t r a n s f e r s : " I t is an i m p o r t a n t m i s s i o n f o r J a p a n , a s a p e a c e - l o v i n g n a t i o n , to p l a y a r o l e c o m m e n s u r a t e w i t h its p o s i t i o n in t h e w o r l d to m a i n t a i n w o r l d p e a c e a n d e n s u r e g l o b a l p r o s p e r i t y . . . . S u c h a s s i s t a n c e is e x p e c t e d to f u r t h e r p r o m o t e the e x i s t i n g f r i e n d l y rel a t i o n s b e t w e e n J a p a n a n d all o t h e r c o u n t r i e s , e s p e c i a l l y t h o s e in t h e d e veloping world."

176

Patterns and Prospects

In a n n o u n c i n g t h e c h a r t e r , f o r m e r p r i m e m i n i s t e r K i i c h i

Miyazawa

i d e n t i f i e d f o u r o b j e c t i v e s to b e p u r s u e d t h r o u g h f u t u r e O D A f l o w s : p e a c e , f r e e d o m , d e m o c r a c y , and sustainable d e v e l o p m e n t . N e w criteria regarding r e c i p i e n t b e h a v i o r w e r e p l a c e d a l o n g s i d e o t h e r s that had b e e n p r e d o m i n a n t in e a r l i e r J a p a n e s e O D A c a l c u l a t i o n s , s u c h a s past p e r f o r m a n c e in m a n a g ing aid f l o w s , a b i l i t y to u t i l i z e f u t u r e a i d e f f e c t i v e l y , a n d l o n g - t e r m t r a d e relations with J a p a n . J a p a n e s e leaders e m b r a c e d the e n v i r o n m e n t a l g o a l s o f the U N C o n f e r e n c e on E n v i r o n m e n t and D e v e l o p m e n t ( U N C E D ) ; further, they p r o p o s e d l i n k i n g D A C aid f l o w s to limits on l e v e l s o f r e c i p i e n t m i l i t a r i z a t i o n . A n d to d e m o n s t r a t e its g r o w i n g c o n c e r n f o r d e m o c r a t i z a t i o n in rec i p i e n t s t a t e s , the J a p a n e s e g o v e r n m e n t r e s c i n d e d aid f l o w s to M y a n m a r in 1 9 8 8 a n d to Haiti in 1 9 9 1 a f t e r m i l i t a r y c o u p s d ' é t a t . D u r i n g the s a m e p e riod, they " r e w a r d e d " s t e p s t o w a r d d e m o c r a c y in N i c a r a g u a and El S a l v a d o r after y e a r s o f c i v i l c o n f l i c t b y a p p r o v i n g f u n d s f o r their r e c o n s t r u c t i o n . F o r e i g n a s s i s t a n c e w a s i n t i m a t e l y r e l a t e d to b r o a d e r a s p e c t s o f U . S . J a p a n e s e r e l a t i o n s d u r i n g the p o s t w a r p e r i o d . U . S . s e c u r i t y g u a r a n t e e s p r o v i d e d J a p a n w i t h c o n s i d e r a b l e l e v e r a g e to p u r s u e its e c o n o m i c i n t e r e s t s , w h i c h w e r e f u r t h e r e d t h r o u g h its aid n e t w o r k s , but a l s o g a v e rise to b i t t e r t e n s i o n s r e g a r d i n g J a p a n ' s p r o t e c t i o n i s t trade p o l i c i e s a n d the trade i m b a l a n c e that p e r s i s t e d b e t w e e n t h e t w o s t a t e s . A s U . S . trade d e f i c i t s c o n t i n u e d to w i d e n in the 1 9 9 0 s , t h e s e t e n s i o n s i n c r e a s e d , a n d the s e c u r i t y r e l a t i o n s h i p c a m e u n d e r s c r u t i n y . U . S . l e a d e r s e n c o u r a g e d J a p a n to s u p p o r t t h e i r s e c u r i t y e f f o r t s in the n a m e o f g r e a t e r " b u r d e n s h a r i n g . " T h e J a p a n e s e g o v e r n m e n t r e s p o n d e d by p r o v i d i n g f u n d i n g , but not m i l i t a r y p e r s o n n e l , to the growing

number o f United Nations peacekeeping

efforts. The

United

S t a t e s f u r t h e r urged J a p a n to m a i n t a i n high l e v e l s o f e c o n o m i c a s s i s t a n c e at a t i m e w h e n the U . S . O D A p r o g r a m f a c e d s t r o n g d o m e s t i c o p p o s i t i o n . It w a s w i d e l y b e l i e v e d that J a p a n e s e " r e s p o n s i v e n e s s o n f o r e i g n aid will h e l p to d e f l e c t t r a d e f r i c t i o n w i t h W a s h i n g t o n " ( O r r , 1 9 8 7 : 6 1 ) . J a p a n ' s m o d e l o f " g u i d e d c a p i t a l i s m " s e r v e d as an e x a m p l e to N I C s in an e r a o f i n t e n s i f y i n g g l o b a l e c o n o m i c c o m p e t i t i o n . T h e s u c c e s s o f J a p a n e s e l e a d e r s in e n g i n e e r i n g t h e i r o w n c o u n t r y ' s e c o n o m i c d e v e l o p m e n t a n d s t i m u l a t i n g r a p i d g r o w t h a m o n g its E a s t A s i a n n e i g h b o r s w a s a m o n g t h e most noteworthy d e v e l o p m e n t s o f the three decades and represented a potential m o d e l for other O D A donors. " A s the political rationale for many o l d e r a i d p r o g r a m s in t h e T h i r d W o r l d c o l l a p s e s , J a p a n ' s m o r e e c o n o m i c a l l y m o t i v a t e d a s s i s t a n c e m a y b e o n e o f the f e w d o n o r p r o g r a m s to g r o w during the 1 9 9 0 s " ( E n s i g n , 1 9 9 2 : 4 ) .

Sweden As the 1 9 9 0 s b e g a n , S w e d e n ' s " r e c i p i e n t - o r i e n t e d " O D A program cernibly

shifted toward greater sensitivity

to d o m e s t i c

interests.

disThis

c h a n g e w a s d u e to w o r s e n i n g e c o n o m i c c o n d i t i o n s a n d to t h e p e r c e i v e d

177

Toward the Millennium

f a i l u r e s o f r e c i p i e n t s t a t e s to i m p l e m e n t p r e v i o u s aid p a c k a g e s e f f e c t i v e l y . A s n o t e d in C h a p t e r 5 , m o d e r a t e a n d c o n s e r v a t i v e p r e s s u r e g r o u p s s u c c e s s f u l l y pressed for " c o n c e r n e d p a r t i c i p a t i o n " by S w e d i s h aid o f f i c i a l s and f o r greater a c c o u n t a b i l i t y a m o n g r e c i p i e n t s . T h e g r o w i n g r e a l i s m o f S w e d i s h O D A w a s r e f l e c t e d in t h e s t a t i s t i c a l l i n k a g e s b e t w e e n its O D A f l o w s a n d its b i l a t e r a l t r a d e r e l a t i o n s h i p s in the late 1 9 8 0 s . F o r r e c i p i e n t s , " t h e h a r d e n i n g o f t e r m s a n d c o n d i t i o n s in t h e aid p r o g r a m m e o f a d o n o r w h o h a d b e e n n o t e d f o r g e n e r o s i t y and f l e x i b i l i t y h a s b e e n r e c e i v e d w i t h u n d e r s t a n d i n g , but h a r d l y p l e a s u r e " ( E d g r e n , 1 9 8 6 : 6 2 ) . T h u s

Sweden's

foreign-aid policies, o n c e praised for their untarnished character, b e c a m e s u b j e c t to " a c o n t i n u o u s s t r u g g l e to f i n d a n d u p h o l d t h e e x t r e m e l y f r a g i l e b a l a n c e b e t w e e n c o n t i n u e d r e s p e c t f o r t h e c o n s e n s u s o n purity o f aid m o t i v e s a n d the g r o w i n g c l a i m s o f n a t i o n a l e c o n o m i c a n d c o m m e r c i a l

inter-

ests" (Jacoby, 1986: 88). W i t h its a i d r e f o r m s l a r g e l y in p l a c e b y 1 9 9 0 , a n d w i t h t h e e a s i n g o f its e c o n o m i c

difficulties,

which

extended

throughout

the

1980s,

the

S w e d i s h g o v e r n m e n t r e p o r t e d a 1 0 p e r c e n t i n c r e a s e in O D A f l o w s b e t w e e n 1 9 9 1 a n d 1 9 9 2 ( O E C D , 1 9 9 4 a ) . S w e d e n t r a n s f e r r e d $ 2 . 5 b i l l i o n in real t e r m s in t h e latter y e a r , a n d its O D A / G N P r a t i o i n c r e a s e d f r o m . 9 0 to 1 . 0 3 p e r c e n t , p l a c i n g it s e c o n d o n l y to N o r w a y in this c l o s e l y w a t c h e d i n d i c a tor o f aid q u a l i t y . S w e d e n t r a n s f e r r e d $ 1 . 8 b i l l i o n d i r e c t l y to L D C s a n d an additional $ 7 0 0 million through multilateral organizations. S w e d i s h leaders maintained their active role within the O D A regime, p a r t i c i p a t i n g in g l o b a l n e g o t i a t i o n s o v e r r e s o u r c e d i s t r i b u t i o n , a r m s c o n trol, e c o l o g i c a l destruction, and other e m e r g i n g issues. T h e y s u c c e s s f u l l y a v o i d e d a c t i v e e n g a g e m e n t in t r a n s n a t i o n a l c o n f l i c t s a n d c o n t i n u e d to dir e c t t h e i r e n e r g i e s t o w a r d t h e U n i t e d N a t i o n s , t h e C o n f e r e n c e on S e c u r i t y C o o p e r a t i o n in E u r o p e , a n d o t h e r i n t e r n a t i o n a l o r g a n i z a t i o n s . T h e g r o w i n g r e g i o n a l i n t e g r a t i o n o f S w e d i s h e c o n o m i c a c t i v i t y w a s r e f l e c t e d in its p r o p o s e d e n t r y into t h e E u r o p e a n U n i o n in 1 9 9 5 . W i t h t h e C o l d W a r h a v i n g e n d e d , t h e S w e d i s h g o v e r n m e n t a r g u e d that its m e m b e r s h i p in t h i s a n d o t h e r r e g i o n a l o r g a n i z a t i o n s w o u l d not v i o l a t e t h e c o u n t r y ' s n e u t r a l i t y . In a d d i t i o n , t h e g o v e r n m e n t a n n o u n c e d p l a n s to e s t a b l i s h c l o s e r e c o n o m i c ties with Eastern European states, many o f which received development a s s i s t a n c e f r o m S w e d e n in t h e e a r l y 1 9 9 0 s . A l l o f t h e s e c h a n g e s s u g g e s t e d that S w e d e n ' s e r a o f " s p l e n d i d i s o l a t i o n " had c o m e to an e n d . Its p r e v i o u s r o l e in r e p r e s e n t i n g a " t h i r d w a y " as an a l t e r n a t i v e to s u p e r p o w e r c o m p e t i t i o n e n d e d w i t h t h e c o l l a p s e o f t h e S o v i e t U n i o n in 1 9 9 1 . B u t its m o d e l o f s o c i a l d e m o c r a c y , r e f i n e d b y t h e influence o f " r e a l i s m " and e c o n o m i c reform, remained on display for dev e l o p i n g c o u n t r i e s . W i t h t h e r e t u r n to p o w e r o f t h e S o c i a l D e m o c r a t s in S e p t e m b e r 1 9 9 4 , s o m e r e t u r n to p a s t p r a c t i c e s c o u l d e x p e c t e d .

Ingvar

C a r l s s o n , head o f the S o c i a l D e m o c r a t i c Party, retained the post o f p r i m e m i n i s t e r , w h i c h h e h e l d f r o m 1 9 8 6 to 1 9 9 1 b e f o r e b e i n g d e f e a t e d b y a

178

Patterns and Prospects

conservative coalition headed by Carl Bildt. T h e more liberal coalition was expected to limit w e l f a r e cuts and raise i n c o m e taxes for many S w e d e s while retaining many of the pro-business r e f o r m s undertaken by the conservatives. The prospects for foreign aid were less clear b e y o n d the ongoing c o n s e n s u s that f u t u r e O D A c o m m i t m e n t s must be m o r e " r a t i o n a l " (Swedish Government, 1994). The United

States

Despite the chronic unpopularity of its foreign-aid p r o g r a m , the United States regained its status in 1991 and 1992 as the largest donor of ODA, which it lost to Japan in 1989. H o w e v e r , its proportion of aid relative to U.S. G N P (0.20 percent) r e m a i n e d one of the lowest a m o n g D A C members. U.S. O D A f l o w s in 1992 a m o u n t e d to $11.7 billion, of which $7.9 billion was in the form of bilateral aid and $3.8 billion w a s distributed through multilateral channels ( O E C D , 1994a). T h e s e aid f l o w s were among the last to be approved by Congress before a broad reassessment of U S A I D was undertaken by the i n c o m i n g administration of President Bill Clinton. Increasingly, the United States sought to coordinate its e c o n o m i c assistance program with those of other m a j o r donors in the 1990s. T h e United States approved aid packages to Russia, m e m b e r s of the C o m m o n wealth of Independent States, and several Eastern European countries, primarily Poland and Hungary, but left it to other donors, particularly Germany, to provide most of the d e v e l o p m e n t assistance to this region. In addition, the United States s o u g h t c o n t r i b u t i o n s f r o m m a n y countries to implement the 1993 peace treaty b e t w e e n Israel and the Palestinian Liberation O r g a n i z a t i o n . Aid d o n o r s a t t e n d e d a c o n f e r e n c e in Washington in September 1993 and committed more than $2 billion for e c o n o m i c develo p m e n t in the region. " T h e m o n e y is the carrot for s i g n i n g the peace agreement with Israel," observed Hassan Abu Libdah (quoted in Ibrahim, 1994: A3), deputy chairman of the Palestinian E c o n o m i c Council for Development and R e c o n s t r u c t i o n . 8 In O c t o b e r 1994, other U.S. foreign-aid "carrots" were directed toward the post-apartheid regime in South Africa and the Haitian government upon the U.S. occupation of the country (see Greenhouse, 1994: A4). Further, the passage of a peace agreement between Israel and Jordan raised the prospect of increased U.S. assistance to the Jordanian government. T h e effectiveness of U.S. O D A c a m e under intensified scrutiny during this period as critics argued that previous aid packages, which were largely driven by security c o n c e r n s , had b e c o m e obsolete in the p o s t - C o l d War era. Many detractors suggested that U.S. O D A be made more responsive to macroeconomic market forces and rendered more compatible with the activities of multinational c o r p o r a t i o n s , trading interests, and private U.S.

179

Toward the Millennium

i n v e s t o r s . 9 A n a l y s e s in the e a r l y 1 9 9 0 s w e r e r e p l e t e w i t h s u g g e s t i o n s f o r f u n d a m e n t a l r e f o r m o f U . S . f o r e i g n a s s i s t a n c e . S o m e c a l l e d f o r the C l i n ton a d m i n i s t r a t i o n to " s c u t t l e A m e r i c a ' s b i l a t e r a l a i d p r o g r a m a n d b e g i n a n e w w i t h a c o n c i s e , c l e a r l y d e f i n e d i n i t i a t i v e to p r o m o t e e n v i r o n m e n t a l l y sound f o r m s o f e c o n o m i c g r o w t h " ( C l a d and S t o n e , 1 9 9 3 : 1 9 6 ) . T h e s e p r o p o s a l s , r e m i n i s c e n t o f e a r l i e r c a l l s to r e c o n c i l e U . S . aid w i t h T h i r d W o r l d d e v e l o p m e n t i n t e r e s t s , i n i t i a l l y m e t w i t h little r e s p o n s e g i v e n the g o v e r n m e n t ' s p r e o c c u p a t i o n w i t h d o m e s t i c e c o n o m i c p r o b l e m s . P u b l i c f r u s t r a t i o n r e f l e c t e d the c h r o n i c d i s s a t i s f a c t i o n w i t h U . S . T h i r d W o r l d f o r e i g n p o l i c y that e m e r g e d during the V i e t n a m War. A s S c h r a e d e r

(1993:

2 1 5 - 2 1 6 ) o b s e r v e d , " A f r a g m e n t e d U . S . p o l i t i c a l c u l t u r e is n o l o n g e r c o n tent, a s it w a s d u r i n g the 1 9 5 0 s a n d 1 9 6 0 s , to f o l l o w t h e l e a d o f the e x e c u t i v e b r a n c h in s u p p o r t o f an i n t e r v e n t i o n i s t f o r e i g n p o l i c y . " B i l l C l i n t o n , w h o a s a p r e s i d e n t i a l c a n d i d a t e did not e x p r e s s a s t r o n g i n t e r e s t in f o r e i g n a f f a i r s , e c h o e d t h i s d i s s a t i s f a c t i o n w i t h U . S . C o l d W a r p o l i c i e s but f a i l e d to a r t i c u l a t e c l e a r l y an a l t e r n a t i v e s t r a t e g y . H i s e a r l y s e t b a c k s in S o m a l i a , B o s n i a , a n d H a i t i w e r e w i d e l y s e e n a s a r e s u l t o f his l a c k o f r e s o l v e . T h e U . S . i n t e r v e n t i o n in Haiti late in 1 9 9 4 w a s p a r t l y an a t t e m p t b y C l i n t o n to m a t c h his w o r d s w i t h d e e d s . B u t he had y e t to c o n v i n c e a s k e p t i c a l p u b l i c — a n d C o n g r e s s — t h a t the a c t i o n w a s e i t h e r in t h e U . S . n a t i o n a l i n t e r e s t o r that it w o u l d y i e l d the r e s u l t s s o u g h t b y t h e C l i n t o n a d m i n i s t r a t i o n a n d s u p p o r t e r s o f t h e a c t i o n w i t h i n the U n i t e d N a t i o n s . F o r U . S . a i d a d m i n i s t r a t o r s , the c e n t r a l t a s k b e c a m e to c o n v i n c e C o n g r e s s a n d t h e g e n e r a l p u b l i c that aid f l o w s c o u l d s e r v e n a t i o n a l i n t e r e s t s that e n d u r e d b e y o n d the C o l d War. In that e f f o r t , t h e y e m p h a s i z e d t h e o n g o i n g political and security interests served by foreign assistance noted ominously:

"While communism

is s h a t t e r e d ,

its d e b r i s

and

remains

t o x i c . I f p r o g r e s s is not m a d e , r e v e r s i o n t o t o t a l i t a r i a n i s m is p o s s i b l e " ( U S A I D , 1992: 21). A m o n g t h e e a r l y s i g n s o f a d a p t a t i o n to n e w g l o b a l c o n d i t i o n s ,

the

U n i t e d S t a t e s u n d e r the C l i n t o n a d m i n i s t r a t i o n a c k n o w l e d g e d that t r a n s n a t i o n a l p r o b l e m s h a d e m e r g e d as the p r i m a r y t h r e a t s to U . S . n a t i o n a l i n t e r e s t s . U S A I D a d m i n i s t r a t o r J . B r i a n A t w o o d p r o p o s e d to r e d i r e c t t h e U . S . aid p r o g r a m in t h e n a m e o f " p r e v e n t i v e d i p l o m a c y . " T o A t w o o d ( q u o t e d in K i r s c h t e n , 1 9 9 3 : 2 3 7 0 ) , " U S A I D ' s r e l e v a n c y in t h e p o s t - C o l d W a r p e r i o d w i l l b e its e f f e c t i v e n e s s in d e a l i n g w i t h t h e n e w s t r a t e g i c t h r e a t s t o t h e U n i t e d S t a t e s . " R a t h e r than S o v i e t s u b v e r s i o n , t h e s e n e w t h r e a t s w e r e s e e n as r e s u l t i n g f r o m p r o b l e m s largely n e g l e c t e d during the C o l d War: the rapid growth o f the world's population, degradation o f the global environm e n t , p o l i t i c a l r e p r e s s i o n in m a n y T h i r d W o r l d c o u n t r i e s , a n d the c o n t i n uing o b s t a c l e s to global e c o n o m i c growth. T h e r e f o r m s proposed by A t w o o d were endorsed by S e c r e t a r y o f State Warren C h r i s t o p h e r ( 1 9 9 3 ) , who reiterated the c o n t i n u i n g need for U . S . O D A a n d t e s t i f i e d b e f o r e C o n g r e s s that " w e m u s t n o w t a r g e t o u r a s s i s t a n c e

180

Patterns

and

Prospects

to address today's priorities." In addition to their proposals to redirect U.S. O D A toward promoting sustainable development, Atwood and Christopher called for reducing the number of U.S. bilateral aid programs and the n u m ber of staffed overseas missions, twenty-one of which were identified for possible closure by fiscal year 1996. 1 0 A t w o o d also proposed to lower the ratio of Washington-based U S A I D e m p l o y e e s to agents s e r v i n g o v e r s e a s and to improve the system by which U S A I D procures domestic goods and services, which many critics argued had been tainted by c o r r u p t i o n . Ref l e c t i n g these strategic shifts, s p e n d i n g categories for U S A I D w e r e reorganized under such titles as " P r o m o t i n g Sustainable D e v e l o p m e n t , " " B u i l d i n g D e m o c r a c y , " " P r o m o t i n g U.S. Prosperity," and " A d v a n c i n g D i p l o m a c y . " Finally, U S A I D p r o p o s e d s h i f t i n g the E c o n o m i c S u p p o r t Fund, which had pursued security-oriented concerns, out of the development assistance program and into a new functional category entitled " P r o m o t i n g Peace." As noted in C h a p t e r 6, the a p p r o x i m a t e l y $5 billion in annual ESF transfers to Egypt and Israel were primarily r e s p o n s i b l e for the statistical linkages between U.S. O D A and U.S. security interests. In addition to eliminating these linkages, however, the a b s e n c e of O D A transfers to Egypt and Israel would have the additional effect of greatly red u c i n g both the a g g r e g a t e quantity of U.S. O D A and the already low qualitative measures of per capita O D A and O D A as a percentage of U.S. GNP. These measures were collectively designed to streamline U S A I D and to limit its attention to international e c o n o m i c development, leaving other objectives of U.S. foreign policy to be pursued elsewhere. In many important respects, the proposals of agency officials suggested an alignment of U.S. priorities with those of the United Nations and the O E C D . " T h o u g h m a n y w e l c o m e d this reorientation, it s u g g e s t e d that the U.S. public and federal government would be asked to provide public f u n d s for p u r p o s e s less narrowly related to national self-interest. In an era of g r o w i n g fiscal austerity and of continuing doubts about the U.S. world role, uncertainties r e m a i n e d about w h e t h e r sufficient support could be a c h i e v e d to sustain U.S. O D A at even these greatly reduced levels.

Other Stories of National Interest and Foreign Aid By c o m p a r i n g the aid policies of France, Japan, S w e d e n , and the United States f r o m these vantage points, I have raised many issues in hopes of provoking future cross-national analysis of this important topic. T h e intimate relationship between the national interests and foreign-aid programs of these countries is evident in other cases as well, and it reveals m u c h about their general approach to world politics. Further systematic analysis

181

Toward the Millennium

m a y b e a r out t h e s e l i n k a g e s a n d m o r e t h o r o u g h l y test t h e c o n c l u s i o n s a n d i n f e r e n c e s d r a w n in this study. S o m e e x a m p l e s m a y b e r e v i e w e d b r i e f l y as possible avenues for future research. M e m b e r s o f the O r g a n i z a t i o n o f P e t r o l e u m E x p o r t i n g C o u n t r i e s asc e n d e d f r o m aid r e c i p i e n t s to d o n o r s w i t h the r i s e o f oil p r i c e s in the 1 9 7 0 s a n d e s t a b l i s h e d l a r g e b i l a t e r a l a n d m u l t i l a t e r a l aid p r o g r a m s o f their o w n . 1 2 T h e s e d o n o r s , w h i c h r e m a i n e d s e p a r a t e f r o m the O E C D a n d its a t t e n d a n t aid r e g i m e , o f t e n l i m i t e d aid to I s l a m i c c o u n t r i e s o r t h o s e that s u p p o r t e d O P E C p o s i t i o n s o n h i g h l y c h a r g e d i s s u e s s u c h as t h e r e c o g n i t i o n o f I s r a e l , r e c o g n i t i o n o f t h e P a l e s t i n i a n L i b e r a t i o n O r g a n i z a t i o n , a n d o p p o s i t i o n to U . S . p o s i t i o n s in t h e U n i t e d N a t i o n s . T h e O P E C c o u n t r i e s , w h o s e p e t r o l e u m c a r t e l f u e l e d h o p e s a m o n g L D C s f o r t h e i r o w n e f f o r t s in m a n i p u l a t i n g c o m m o d i t y p r i c e s a n d s u p p l i e s in o t h e r s e c t o r s , f r e q u e n t l y " u s e d aid as a principal instrument o f their security and foreign p o l i c i e s " (Hunter, 1 9 8 4 : 7; see also M e r t z and Mertz, 1 9 8 3 ) . O P E C f o r e i g n a s s i s t a n c e , w h i c h e x c e e d e d 2 0 p e r c e n t o f g l o b a l aid f l o w s in 1 9 8 0 , f e l l d r a m a t i c a l l y t h r o u g h o u t the e n s u i n g d e c a d e a s a result o f f a l l i n g oil r e v e n u e s a n d g r o w i n g internal d e m a n d s f o r p u b l i c r e s o u r c e s . A s a r e s u l t , w i d e s p r e a d e x p e c t a t i o n s that O P E C w o u l d s e r v e a s a l o n g - t e r m s o u r c e o f f o r e i g n aid w e r e not r e a l i z e d . T h e P e o p l e ' s R e p u b l i c o f C h i n a a l s o p r o v i d e d e c o n o m i c r e s o u r c e s to carefully s e l e c t e d T h i r d World states during this period. T h e C h i n e s e g o v e r n m e n t o f t e n " r e c y c l e d " aid it r e c e i v e d f r o m the S o v i e t U n i o n , a p r a c t i c e that e n d e d w i t h t h e b r e a k b e t w e e n t h e t w o c o m m u n i s t s u p e r p o w e r s in the e a r l y 1 9 6 0 s . T h e r e a f t e r , C h i n e s e a n d S o v i e t o f f i c i a l s e n g a g e d in an aid riv a l r y a s t h e y a p p e a l e d to p r o s p e c t i v e T h i r d W o r l d c l i e n t s . S u p p o r t i n g r e v o l u t i o n a r y r e g i m e s i n v o l v e d in w a r s o f n a t i o n a l l i b e r a t i o n , C h i n e s e l e a d e r s o f f e r e d f o r e i g n a s s i s t a n c e as a m e a n s o f p r o m o t i n g t h e i r m o d e l o f c o m munism (see Cooper,

1 9 7 6 ; Horvath, 1 9 7 6 ; and B a r t k e ,

1 9 7 5 ) . In t h e

1 9 8 0 s and 1 9 9 0 s , the P R C a c c e p t e d g r o w i n g v o l u m e s o f J a p a n e s e

ODA

e v e n a s it c o n t i n u e d to s e r v e a s an a i d d o n o r to o t h e r d e v e l o p i n g c o u n t r i e s . Its r a p i d e c o n o m i c g r o w t h s u g g e s t e d that, l i k e J a p a n a n d S o u t h K o r e a b e f o r e it, t h e P R C w o u l d s o o n " g r a d u a t e " f r o m the s t a t u s o f net O D A r e c i p ient a n d a s s u m e an a c t i v e r o l e in t r a n s f e r r i n g d e v e l o p m e n t

assistance

a b r o a d . C h i n a h a d a l r e a d y a s s u m e d a p r o m i n e n t r o l e in the a r e a o f m i l i t a r y t r a n s f e r s , e x p o r t i n g w e a p o n r y in r e c o r d v o l u m e s in t h e e a r l y 1 9 9 0 s w h i l e e x p a n d i n g its o w n m i l i t a r y s p e n d i n g b y an a n n u a l a v e r a g e o f 1 0 p e r c e n t . A n o t h e r i l l u s t r a t i v e e x a m p l e is that o f t h e U n i t e d K i n g d o m , w h i c h , l i k e F r a n c e , u t i l i z e d O D A as a f u n c t i o n a l s u b s t i t u t e f o r its c o l o n i a l e m p i r e . T h e U K a n n u a l l y s e n t m o r e than t w o - t h i r d s o f its d e v e l o p m e n t f u n d i n g to m e m b e r s o f the C o m m o n w e a l t h or S t e r l i n g A r e a . India, o n c e the " c r o w n jewel"

o f the British

Empire,

annually

received

the

largest share

of

Britain's development assistance. " T h e guiding m o t i f has been political d i s e n g a g e m e n t f r o m the o l d e m p i r e , w i t h t h e o b j e c t i v e o f r e p l a c i n g d i r e c t

182

Patterns and Prospects

British power with stable regional arrangements," observed Byrd (1991: 5 7 ; s e e a l s o M o r t o n , 1 9 7 3 ) . R e f l e c t i n g their g e n e r a l d i s p o s i t i o n in f o r e i g n policy, B r i t i s h l e a d e r s f a v o r e d bilateral r a t h e r than m u l t i l a t e r a l O D A c h a n n e l s to the T h i r d W o r l d ( D i n w i d d y , 1 9 7 3 b ) . T h e British O D A p r o g r a m w a s t h e target of o n g o i n g c r i t i c i s m in M a r g a r e t T h a t c h e r ' s c o n s e r v a t i v e p a r l i a m e n t , e s p e c i a l l y as d o m e s t i c w e l f a r e p r o g r a m s w e r e b e i n g t r i m m e d . A s in t h e c a s e of o t h e r d o n o r s t a t e s , o b s e r v e r s of B r i t a i n f o u n d its aid p e r f o r m a n c e in t h e 1 9 8 0 s fall in t h e g r a y a r e a " b e t w e e n i d e a l i s m a n d s e l f interest" (Bose and Burnell, 1991). D u r i n g t h i s p e r i o d , o f f i c i a l s f r o m t h e F e d e r a l R e p u b l i c of G e r m a n y u s e d c o n c e s s i o n a l t r a n s f e r s to e n c o u r a g e s e l f - s u f f i c i e n t T h i r d W o r l d e c o n o m i e s , t a r g e t i n g r e c i p i e n t s that p o s s e s s e d large r e s e r v e s of s t r a t e g i c r a w m a t e r i a l s o r p o t e n t i a l m a r k e t s f o r West G e r m a n e x p o r t s ( S c h u l z a n d H a n s e n , 1 9 8 4 ) . In a d d i t i o n , West G e r m a n y p r o m o t e d r e g i o n a l s t a b i l i t y in t h e T h i r d W o r l d t h r o u g h s e l e c t i v e aid a l l o c a t i o n s , a c e n t r a l t h r u s t of its p o s t w a r f o r e i g n p o l i c y ( H o l b i k and M y e r s , 1968; K n u s e l , 1 9 6 8 ) . Its g e n eral d i m i n u t i o n of C o l d W a r c o n s i d e r a t i o n s in t a r g e t i n g O D A w a s s h a r e d b y C a n a d a , a n o t h e r U . S . ally that u s e d its p r o t e c t i o n w i t h i n N A T O to purs u e aid p o l i c i e s b a s e d l a r g e l y u p o n s o c i a l a n d e c o n o m i c c o n s i d e r a t i o n s ( S p i c e r , 1 9 6 5 ) . U p o n its u n i f i c a t i o n in 1990, the G e r m a n g o v e r n m e n t und e r t o o k a m a s s i v e p r o g r a m of e c o n o m i c s u p p o r t f o r not o n l y its o w n citiz e n s in the f o r m e r East G e r m a n y , but f o r those in Eastern E u r o p e a n d R u s sia. G e r m a n y ' s aid c o m m i t m e n t s , the largest a m o n g D A C m e m b e r s f o r this r e g i o n , c o n t r i b u t e d to the stunted g r o w t h of the G e r m a n e c o n o m y a n d , given its i m p o r t a n c e to regional stability, to strained relations w i t h i n the E U . Its c o n t r o v e r s i a l r e p u t a t i o n in c o n t e m p o r a r y w o r l d p o l i t i c s n o t w i t h s t a n d i n g , the f o r e i g n - a i d r e g i m e a s s u m e d an u n p r e c e d e n t e d s t a t u r e in the m i d - 1 9 9 0 s . T h o u g h its d e t r a c t o r s p o i n t e d to d o n o r s t a t e s ' p e r v a s i v e m a n i p u l a t i o n of aid t r a n s f e r s in pursuit of s e l f i s h interests, its d e f e n d e r s e m p h a s i z e d that i m p r o v e m e n t s in T h i r d W o r l d social w e l f a r e in m a n y a r e a s w e r e partly a t t r i b u t a b l e to t h e g r o w i n g c o n c e s s i o n a l f l o w s f r o m N o r t h to S o u t h . T h e aid d e b a t e c o n t i n u e d in t h e m i d - 1 9 9 0 s as new c r i s e s — t h e carn a g e in R w a n d a , r e f u g e e b o a t l i f t s in t h e C a r i b b e a n , p l a g u e in I n d i a — b e c k o n e d f o r o v e r s e a s r e l i e f . A s the s c o p e of p r i v a t i o n a n d h u m a n s u f f e r ing w i d e n e d , a n d as t h e p e r i l s of o v e r p o p u l a t i o n a n d e n v i r o n m e n t a l d e c a y b e c a m e b e t t e r u n d e r s t o o d , t h e p o t e n t i a l f u n c t i o n s of e c o n o m i c aid m u l t i p l i e d as w e l l . T r u e to f o r m , d o n o r s t a t e s g e n e r a l l y r e s p o n d e d w h e n they h a d c o n c l u d e d t h a t t h e e a s i n g of c o n d i t i o n s a b r o a d s e r v e d t h e i r i n t e r e s t , h o w e v e r c o n c r e t e l y or a b s t r a c t l y d e f i n e d .

"Enlightened" National Interest and Foreign Aid I b e g a n this b o o k b y r e v i e w i n g t h e m a n y w a y s in w h i c h t h e c o n c e p t of n a t i o n a l i n t e r e s t , a c o m m o n part o f t h e d i p l o m a t i c l e x i c o n , h a s b e e n

Toward the

Millennium

183

interpreted and applied by nation-states throughout history. I considered the multiple connotations of national interest in the context of the evolving relations a m o n g states, which in turn reflected shifting ties between church and state, state and society, and government and commercial concerns. A cyclical pattern w a s evident in which two general strains of national interest, reflecting the prevailing tenor of interstate relations of each era, were widely adopted by political leaders. T h e first strain drew upon the insights of T h u c y d i d e s , w h o observed that the decentralized political system of antiquity, unrestrained by overarching authority, w a s inherently prone to conflict and narrowly d e f i n e d standards of national interest. His pessimistic conception, refined in modern times by N i c c o l o Machiavelli, T h o m a s Hobbes, and such leaders as Otto von B i s m a r c k and Theodore Roosevelt, provided the basis of realism in contemporary international-relations theory. T h e second strain, drawing on more optimistic assumptions about human nature, e n d e a v o r e d to transcend the limitations of national interest and establish a basis for transnational norms and cooperation. As developed by Immanuel Kant, Woodrow Wilson, and adherents of "world-order politics" in the contemporary age, these more o p t i m i s t i c perspectives have f r a m e d the idealist c h a l l e n g e to political realism (Burton, 1972; Herz, 1951). T h e practice of international relations has reflected both traditions to varying degrees in different historical periods. Prevailing notions of national interest have often influenced the worldviews of political leaders and the course of their foreign policies. When principles of collective security were prominent, such as the period following the Napoleonic wars and, however unsuccessfully, between the world wars, leaders of the most powerful states attempted to coordinate their d e f e n s e policies and establish a basis for broader forms of collaboration. When transnational norms broke down, as in the late nineteenth century and again in the 1930s, leaders more aggressively pursued narrow self-interests, which precipitate systemic warfare. In the current period, between the Cold War and the millennium, both traditions coexist uneasily, competing for the attention of world leaders. In one respect, the prevailing realism of the Cold War period has given way to a revival of universalism based on a growing sense of shared problems and solutions, the declining utility of military power, the expanding role of international organizations, and the d i f f u s i o n of d e m o c r a t i c principles as a basis of societal organization, (see Haas, 1964a, for an early elaboration). In a n o t h e r respect, realist expectations have been met in the resurgence of ethnic and nationalist conflict that has, in many regions, filled the v a c u u m left by the bipolar s u p e r p o w e r c o m p e t i t i o n . A s always, the prospects of positive-sum cooperation are in many areas frustrated by the vagaries of zero-sum competition that result f r o m e c o n o m i c hardship and the more general quest for finite material resources. T h o u g h the Hobbesian struggles may draw on a more distinct legacy, the m o v e m e n t s toward transnational cooperation and integration are

184

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by-products of m o d e r n i t y — a d v a n c e d c o m m u n i c a t i o n , transportation networks, and the means of global c o m m e r c e . This suggests that the line between national and transnational interest has been severed to an unprecedented degree. As states have b e c o m e more interdependent, transnational regimes—such as that which coordinates the flow of O D A — h a v e arisen to advance both the interests of individual states and collective goals. Concerted e f f o r t s in controlling world population growth, s t e m m i n g the A I D S epidemic, restraining w e a p o n s proliferation, c o n s e r v i n g energy, and preserving tropical rainforests are rooted in the p e r c e i v e d self-interests of every participant. "We do not necessarily sacrifice realism when we analyze international relations as the products of voluntary agreements a m o n g independent actors," noted Keohane (1982: 330). In this respect, there is a strong basis f o r transnational cooperation even within "the anarchical society" (Bull, 1977). Egoistic ends may often be achieved by means that benefit larger collectivities, f r o m the c o m m u nity and state levels to the entire global population. This, of course, is not a novel perspective. At the time T h o m a s H o b b e s c o m p o s e d his bleak Leviathan, the Dutch jurist H u g o Grotius e x a m i n e d the relations a m o n g polities and saw within their c o n t e n t i o u s n e s s the s e e d s of cooperation. Grotius f o r e s a w states c o n f o r m i n g to a corpus of international law, anticipating that their a d h e r e n c e to transnational n o r m s of behavior would be based not upon the acceptance of universal moral codes but upon the enlarged definition of states' self-interests. This Grotian variant of the realist view, based on states' apprehension of shared p r o b l e m s and opportunities, may well describe the e m e r g i n g f r a m e w o r k of world politics: T o d i s c o v e r that s o m e a s p e c t s of international p o l i t i c s d o not c o n s t i t u t e a z e r o - s u m g a m e is not to s a c r i f i c e the national interest; to establish a i m s and d e v i s e p o l i c i e s that b e n e f i t other nations as w e l l as o n e ' s o w n is s i m ply to b e c o m e a w a r e o f a n o t h e r d i m e n s i o n o f the n a t i o n a l interest, o n e that m i g h t be o v e r l o o k e d in an o v e r - h a s t y e x a m i n a t i o n o f i m m e d i a t e adv a n t a g e s . That s o m e o f t h e s e unshared a d v a n t a g e s m a y be e s c h e w e d is u n d e n i a b l e . But the state d o e s s o in the e x p e c t a t i o n that the c o m p e n s a t ing b e n e f i t s of c o o p e r a t i o n w i l l at least as great. A p o l i c y that attempts to s e c u r e g o o d s n e e d not b e s u b v e r s i v e o f the national interest, s o l o n g as o n e ' s o w n state c o n t i n u e s to share in the g o o d s and o n e ' s relative p o s i tion is not u n d e r m i n e d . ( C l i n t o n , 1 9 9 4 : 8 9 )

T h e O D A r e g i m e of the p o s t - C o l d War era is located at this crossroads of national and transnational interest. More than ever, leaders of industrialized nations have explicitly a c k n o w l e d g e d the role of e c o n o m i c g r o w t h — a m o n g rich and poor states alike—in e n h a n c i n g their own material w e l f a r e . T h e y have f u r t h e r c o n c l u d e d that social unrest and military conflict in L D C s u n d e r m i n e e c o n o m i c d e v e l o p m e n t , divert scarce resources toward unproductive uses, transform millions of able citizens into

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185

refugees, and e n c o u r a g e the proliferation of w e a p o n s . All of these problems p e r n i c i o u s l y a f f e c t n e i g h b o r i n g s o c i e t i e s and, ultimately, d e m a n d s o m e r e s p o n s e f r o m a b r o a d . Finally, the industrial nations have related the e c o l o g i c a l l y s o u n d d e v e l o p m e n t of L D C s with their o w n long-term qualities of life. T h e e g o i s t i c interests of e a c h i n d u s t r i a l i z e d state c o n tinue to be pursued through v a r y i n g foreign policies, including those inv o l v i n g f o r e i g n aid, but the e q u a t i o n of their l i v e l i h o o d s with those of distant p o p u l a t i o n s has b e c o m e widely a c c e p t e d w i t h i n states both rich and poor. T h e aligment of the U.S. O D A p r o g r a m with transnational efforts to p r o m o t e s u s t a i n a b l e d e v e l o p m e n t o f f e r s s o m e e v i d e n c e — a n d g r o u n d s f o r o p t i m i s m — t h a t this t r a n s f o r m a t i o n of national interest may have b e g u n . " A potentially p o w e r f u l transformation can occur, at the point w h e r e 'my p r o b l e m ' and the problem of ' m y adversary' are recognized by both of us as 'our p r o b l e m . " ' wrote North (1990: 251). T h e s e words, echoing the Grotian logic of the seventeenth century, may still seem quixotic in a world of constant tension. But in their application to the globalized threats and opportunities of the contemporary age, they may be supremely realistic.

Notes 1. In c o n t r a s t i n g the propensity of states to p a r t i c i p a t e in international organ i z a t i o n s in the early 1970s, R u g g i e ( 1 9 7 2 : 8 9 2 ) o b s e r v e d similar p a t t e r n s by w h i c h the b e h a v i o r of states w a s c o n t i n g e n t u p o n their r e s o u r c e s and s y s t e m i c roles. T h e p r o p e n s i t y of states to e n g a g e in t r a n s n a t i o n a l e f f o r t s , i n c l u d i n g e c o n o m i c regimes, a p p e a r s to be an issue-specific and a c t o r - s p e c i f i c p r o c e s s . It is a s y m m e t rical, r e f l e c t i n g d i f f e r e n c e s in national c a p a b i l i t i e s to p e r f o r m d i f f e r e n t t a s k s , as well as d i s c o n t i n u o u s , r e f l e c t i n g the d i f f e r e n t i a l impact of int e r d e p e n d e n c e costs in d i f f e r e n t issue a r e a s and for d i f f e r e n t states. M o r e o v e r , it appears to generate issue-specific and a c t o r - s p e c i f i c collective a r r a n g e m e n t s , existing at different levels in the interstate system and c o m p e n s a t i n g for d i f f e r e n t i m p e r f e c t i o n s in p r o c e s s e s and s t r u c t u r e s of the interstate s y s t e m and of actors in that s y s t e m . 2. T h e varying g r o w t h patterns r e p r e s e n t e d o n e of m a n y reasons for the failure of the G r o u p of 77 and other coalitions of L D C s to e n g a g e in concerted action d u r i n g the 1970s and 1980s and further the c a u s e of Third World solidarity. 3. A m o n g the f o u r d o n o r s reviewed in this study, agriculture w a s a relatively low priority in the d i s t r i b u t i o n of their O D A f l o w s . T h e p e r c e n t a g e of O D A devoted to a g r i c u l t u r e r a n g e d in 1985 f r o m 9.5 p e r c e n t in the c a s e of F r a n c e to 2 8 percent in that of S w e d e n ; f i g u r e s for the United States and Japan w e r e 14 percent and 17.7 percent, respectively. 4. See Huntington ( 1 9 6 8 ) for an early elaboration of this view. 5. T h e United S t a t e s e m e r g e d as the " g r a n d t r a f f i c k e r " of w e a p o n r y in the early 1990s as its primary competitor, the Soviet Union, disintegrated ( C l a i r m o n t e ,

186

Patterns and Prospects

1 9 9 2 : 13). O t h e r m a j o r e x p o r t e r s i n c l u d e C h i n a , F r a n c e , G e r m a n y , G r e a t B r i t a i n , and I t a l y ; t h e i r p r i m a r y r e c i p i e n t s a r e in the M i d d l e E a s t and S o u t h A s i a . 6. L o w b i r t h r a t e s , c o m b i n e d w i t h i n c r e a s e d A f r i c a n i m m i g r a t i o n into F r a n c e , led to e t h n i c t e n s i o n s a n d t h e rise of a n a t i o n a l i s t p o l i t i c a l party d e t e r m i n e d to restrict f u t u r e i m m i g r a t i o n . 7. S e e H o w o r t h ( 1 9 8 6 ) f o r a d e t a i l e d a n a l y s i s of t h e p o t e n t i a l i m p a c t of F r a n c e ' s d o m e s t i c e c o n o m i c p r o b l e m s o n its n a t i o n a l - s e c u r i t y p o l i c y . 8. S e e M a r c u s ( 1 9 9 3 ) f o r t h e i m p l i c a t i o n s of t h e s e d e v e l o p m e n t s f o r o n g o i n g U . S . a s s i s t a n c e to I s r a e l . 9 . T o s o m e C o n g r e s s i o n a l l e a d e r s , i n c l u d i n g R e p . M a t t h e w F. M c H u g h ( q u o t e d in D o h e r t y , 1 9 9 2 : 1 3 5 4 ) , in t h e p o s t - C o l d W a r w o r l d , " t h e i s s u e is not w h a t k i n d of f o r e i g n a i d , b u t w h e t h e r f o r e i g n a i d . " S e e J a n s s e n ( 1 9 9 1 ) a n d S t a n f i e l d ( 1 9 9 0 ) f o r e l a b o r a t i o n s of t h i s v i e w . 10. T h e s e i n c l u d e d t h e A f r i c a n c o u n t r i e s o f B u r k i n a F a s o , B o t s w a n a , C a m e r o o n , C a p e V e r d e , C h a d , C o t e d ' l v o i r e , L e s o t h o , T o g o , and Z a i r e ; the A s i a n s t a t e s of A f g h a n i s t a n , P a k i s t a n , a n d T h a i l a n d ; t h e L a t i n A m e r i c a n s t a t e s of A r g e n t i n a , B e l i z e , C h i l e , C o s t a R i c a , a n d U r u g u a y ; a n d t h e N e a r E a s t e r n s t a t e s of O m a n a n d T u n i s i a . In a d d i t i o n , m i s s i o n s o v e r s e e i n g O D A to s m a l l s t a t e s in t h e C a r i b b e a n a n d S o u t h P a c i f i c w e r e to c l o s e . 11. A s M i k e C r o s s w e l l , a s e n i o r p o l i c y a d v i s o r t o U S A I D , a r g u e d in an i n t e r v i e w , " T h e w o r l d is m o r e i n t e r d e p e n d e n t t o d a y , a n d the U n i t e d S t a t e s is i n c r e a s ingly e n g a g e d in t h e g l o b a l e c o n o m y . W e are i n t e r e s t e d in a g l o b a l c o m m u n i t y that is o p e n , w i t h s h a r e d v a l u e s . M o r e t h a n b e f o r e , t h e U n i t e d S t a t e s h a s to c o u n t on c o o p e r a t i o n f r o m o t h e r c o u n t r i e s , p a r t i c u l a r l y in s u c h a r e a s as t h e e n v i r o n m e n t , n a r c o t i c s , a n d a r m s t r a n s f e r s . C o o p e r a t i o n is t h e n a m e of t h e g a m e " ( U S A I D , 1994). 12. O P E C aid w a s u n u s u a l in that m a n y of t h e d o n o r s t a t e s w e r e t e c h n i c a l l y L D C s t h e m s e l v e s b u t w e r e a b l e to s u p p o r t o v e r s e a s d e v e l o p m e n t w i t h oil revenues.

Appendix 1: Summary of the Research Strategy

As noted in the preface, this study probes the relationship between donor interests and development-assistance f l o w s through a c o m b i n a t i o n of descriptive and statistical analysis. T h e f o r m e r category considers the e v o lutionary and structural context of each state's broader foreign policies and d e v e l o p m e n t - a i d strategies. T h e latter category includes both the use of descriptive statistics, which identify the aggregate volumes, direction, and qualitative dimensions of aid flows, and multivariate regression analysis, which attempts to identify the cumulative and interactive effects of possible determinants of aid allocations. It is this final research effort that will be reviewed below. T h e essential structure of the McKinlay-Little foreign-policy model is adopted, particularly the utilization of multiple indicators of each potential donor interest in the O D A relationship, the repeated testing of the model over an extended period to test for temporal variation, and the use of multiple cases to demonstrate spatial variation. In an effort to construct a more parsimonious model, the range of possible interests is limited to three general categories—humanitarian, economic, and security—and the n u m b e r of indicators is limited to two in each category. Larger n u m b e r s and various combinations of independent variables were previously e m p l o y e d in each category to test the relationship. These indicators often were highly intercorrelated and thus distorted the statistical relationships; in addition, their presence in a larger multivariate model added little to the explained variance in the dependent variable. Bivariate correlations are not included in the analysis, given that other factors are often "hidden" in bivariate coefficients and that the interactive effects of the broad range of possible influences, which are of greatest concern in this study, are not taken into account. In the regression model the O D A c o m m i t m e n t s of each donor between 1980 and 1989, as documented and reported by the D A C , are included as dependent variables—the foreign-policy behavior w e are trying to understand more fully. It is assumed that c o m m i t m e n t s , rather than actual disb u r s e m e n t s , better reflect the b e h a v i o r of d o n o r states. C o m m i t m e n t s of aid are considered as a more adequate expression of donor foreign-policy objectives at a given point in time. Further, the highly variable and o f t e n

187

188

Appendix 1

lengthy lag time b e t w e e n c o m m i t m e n t s and d i s b u r s e m e n t s o b s c u r e s the aid r e l a t i o n s h i p . A o n e - y e a r lag, m o s t o f t e n u t i l i z e d in aid r e s e a r c h , is e m p l o y e d in this a n a l y s i s . S u c h a l a g r e p r e s e n t s the d u r a t i o n b e t w e e n the r e ported recipient c h a r a c t e r i s t i c s and s u b s e q u e n t O D A c o m m i t m e n t s , w h i c h a r e p r e s u m a b l y b a s e d at l e a s t in p a r t u p o n t h o s e d a t a . T h o u g h

different

s t a t e s f o l l o w v a r y i n g p r o c e d u r e s in i d e n t i f y i n g aid r e c i p i e n t s a n d m a k i n g aid c o m m i t m e n t s , the o n e - y e a r lag a s s u m e s that aid c a l c u l a t i o n s a r e b a s e d upon the m o s t r e c e n t r e c i p i e n t data a v a i l a b l e . It is a c k n o w l e d g e d that o f ficials from donor states utilize their own sources o f data, which

are

l a r g e l y u n a v a i l a b l e to r e s e a r c h e r s ; t h u s , d a t a r e p o r t e d b y i n t e r n a t i o n a l o r g a n i z a t i o n s s u c h as the O E C D , the W o r l d B a n k , and the

International

M o n e t a r y F u n d a r e u t i l i z e d and c i t e d . T h e independent variables include widely adopted measures o f recipient s o c i a l w e l f a r e , e c o n o m i c d e v e l o p m e n t , and m i l i t a r i z a t i o n . T h e data set includes these reported characteristics o f ninety-four recipient states for the years 1 9 7 9 through 1 9 8 8 . O f t h e s e r e c i p i e n t s , f o r t y - o n e are A f r i c a n s t a t e s , t w e n t y - o n e are in the Latin A m e r i c a n r e g i o n , e i g h t e e n are in the M i d dle E a s t o r S o u t h A s i a , and f o u r t e e n are in E a s t A s i a . D e v e l o p i n g c o u n t r i e s w i t h p o p u l a t i o n s o f l e s s than 1 m i l l i o n , m a n y o f w h i c h r e c e i v e d d e v e l o p m e n t a s s i s t a n c e d u r i n g t h e 1 9 8 0 s , a r e not i n c l u d e d b e c a u s e o f i n a d e q u a t e data. In the f e w c a s e s in w h i c h data in i n d i v i d u a l c a t e g o r i e s a r e not p r o v i d e d , e s t i m a t e s are utilized b a s e d u p o n l o n g - t e r m a v e r a g e s and patterns. F o r e a c h aid recipient, the annual c o m m i t m e n t s o f O D A by the four d o n o r s a r e i n c l u d e d a s d e p e n d e n t v a r i a b l e s a l o n g w i t h data r e l a t i n g to its social welfare, e c o n o m i c , and security characteristics. T h e s e three c a t e gories are c o n s i d e r e d as p o s s i b l e m o t i v a t i n g f a c t o r s underlying aid strate g y ; t h r o u g h the j u x t a p o s i t i o n o f d o n o r O D A c o m m i t m e n t s a n d r e c i p i e n t a t t r i b u t e s in t h e s e c a t e g o r i e s , an e m p i r i c a l b a s i s f o r i n f e r r i n g t h e o b j e c t i v e s o f a i d p o l i c y is e s t a b l i s h e d . F i r s t , d e v e l o p m e n t a s s i s t a n c e is o f t e n r h e t o r i c a l l y a d v a n c e d a s a h u m a n i t a r i a n e f f o r t f r o m w e l l - e n d o w e d s t a t e s to t h o s e in d i s t r e s s . T w o w i d e l y a d o p t e d m e a s u r e s o f h u m a n i t a r i a n n e e d — l i f e e x p e c t a n c y a n d p e r c a p i t a i n c o m e — a r e i n c l u d e d in t h i s c a t e g o r y .

More

s e l f - i n t e r e s t e d m o t i v a t i o n s f o r t r a n s f e r r i n g d e v e l o p m e n t aid c a n b e d i v i d e d into t w o c a t e g o r i e s . D e v e l o p m e n t a s s i s t a n c e m a y b e u s e d t o i m p r o v e e c o n o m i c c o n d i t i o n s w i t h i n t h e d o n o r a s w e l l a s t h e r e c i p i e n t c o u n t r y . In this respect, the a g g r e g a t e v o l u m e o f r e c i p i e n t gross national product and b i lateral trade b e t w e e n d o n o r a n d r e c i p i e n t a r e c o n s i d e r e d a s p o s s i b l e indic a t o r s o f e c o n o m i c i n t e r e s t in a i d r e l a t i o n s h i p s . F i n a l l y , c a l c u l a t i o n s involving the direction

and volume o f development

assistance

may

be

r e l a t e d to d o n o r s e c u r i t y i n t e r e s t s . T h e a b s o l u t e m e a s u r e o f r e c i p i e n t m i l i tary s p e n d i n g is u t i l i z e d , a l o n g w i t h t h e r e l a t i v e m e a s u r e o f r e c i p i e n t c o n scription rates. T h e statistical relationships b e t w e e n aid f l o w s and t h e s e

recipient

c h a r a c t e r i s t i c s a r e p r e s e n t e d in e a c h o f t h e t a b l e s . T h e r e l a t i o n s h i p s that

Appendix

1

189

are significant at either the .05 or the .01 level are designated as such. Inferences are based upon consistent patterns of statistical significance; the a b s e n c e of significant patterns, however, is also c o n s i d e r e d relevant in positing the relationships between donor interests and O D A c o m m i t m e n t s . Broader conclusions about the relationships a c c o m m o d a t e other empirical patterns included in the analysis. Overall, the research strategy is designed to be readily replicated by other analysts; a p p l i c a t i o n s of the m o d e l to other states and other time periods are e n c o u r a g e d .

Appendix 2: Primary Aid Donors to Recipient LDCs, 1988-1989

Africa

Asia

Latin America

France

Japan

Sweden

USA

Algeria Cameroon Central African Republic Chad Congo Djibouti Gabon Cote d'lvoire Madagascar Mali Mauritania Mauritius Morocco Niger Senegal Togo Tunisia

Kenya Nigeria Rwanda Zambia Zimbabwe

Angola Mozambique

Egypt Liberia Zaire

Lebanon Syria

Bangladesh China India Indonesia Korea Laos Malaysia Nepal Pakistan Philippines Singapore Sri Lanka Turkey

Vietnam

Cyprus Israel Oman

Colombia Mexico

Argentina Bolivia Brazil Chile Paraguay Uruguay

Nicaragua

Costa Rica Dominican Republic El Salvador Guatemala Haiti Honduras Jamaica

Source: O E C D (1991b)

191

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Index

Abelin Report, on foreign assistance, 65 African and Malagasy Common Organization, 56-57 African Development Bank, 31 African National Congress, 115nll Agency for International Assistance, 98 Agenda 21, 170 Aid, 3, 21, 172, 179 aggregate, 81 coordination of, 128-129, 143 debate on, 40, 129, 178 earmarking, 33-34 foreign affairs and, 4-5, 15, 34 future prospects of, 172-180 GNP and, 130 government spending and, 41 long-term, 32 national interest and, 14-16, 41, 143, 163, 180-185 per capita, 162 power and, 34 problems with, 26-27, 129-130 quality of, 29, 144, 151, 159-160 reducing/eliminating, 4 roots of, 35 security and, 125-126, 160 selling, 133 sources of, 26, 31 support for, 159 tests for, 15 understanding, 34—41, 143, 166 See also Bilateral aid; Development aid; Financial transfers; Military aid; Multilateral aid Aid behavior, 152 influences on, 166 Aid fatigue, 175 Aid flows diversification of, 160 donors and, 156 (table) GNP and, 147 quantity/quality issues and, 148 (table), 152, 166, 170 Aid regime, 15, 21-22, 2 4 - 2 5

Aid rivalry, 16, 25, 121 Alliance for Progress, 26, 73, 122, 123 Appropriation bills, earmarking, 129 Arab Fund for Economic and Social Development, 31 ASEAN. See Association of Southeast Asian Nations Asian Development Bank, 31, 73, 86 Association of Southeast Asian Nations (ASEAN), 70 Atlantic Alliance, France and, 49, 51, 67n8 Atwood, J. Brian preventive diplomacy and, 179 sustainable development and, 180 Australia, ODA from, 150 Baker Plan, 27, 132 Bali International Airport, 84 Baltic states, 32 Sweden and, 113 Belarus, aid for, 32 Belgium, ODA from, 150 "Big-stick" policy, 9 Bilateral aid, 29, 60, 101, 129, 148, 159, 181 DAC and, 33 diversity of, 32-33 emphasis on, 39 See also Multilateral aid Bilateral trade, 144, 177, 182 Bildt, Carl, 178 Bismarck, Otto von, 8, 183 BITS. See Swedish Agency for International Technical and Economic Cooperation Black, Eugene, 30 Bodin, Jean, 8 Botero, Giovanni, 8 Brady Plan, 27, 132 Brazzaville Conference, 53 Bretton Woods, 30, 117 Brussels Pact (1948), 24 Bush, George: ODA and, 124-125 CADA. See Concerted Plan of Action for the Development of Africa

211

212

Index

Camp David accords, 123, 130 Cancun Conference, France and, 51 CAP. See Common Agricultural Policy Caribbean Development Bank, 31 Carlsson, lngvar, 177 Carlucci Commission on Security and Economic Assistance, 124 Carr, E. H., 3 Carter, Jimmy foreign policy and, 10 ODA and, 123 Central America. See Latin America Central Bank for Economic Development, loans from, 54 Central Committee for Swedish Assistance to Less-Developed Areas, 97—98 Cheysson, Claude: foreign policy and, 49 Chicago Council on Foreign Relations, 140nl3 Children's Fund (UNICEF), Sweden and, 109 China. See People's Republic of China Chirac, Jacques, 67n3 Christopher, Warren, 179-180 Churchill, Winston, 23 Civil war, 13, 120 Clayton, William, 118 Clinton, Bill foreign policy and, 118, 179 United Nations and, 125, 179 USAID and, 125, 178 Clinton, David: on security, 166-167 CMEA. See Council of Mutual Economic Assistance Cold War, 31-32, 169 aid and, 3, 25, 158 France and, 48, 49, 54, 56, 173 Japan and, 70, 89, 90 LDCs and, 163 national interest and, 10, 12 realism of, 183 regional conflicts and, 14 security programs and, 160 Sweden and, 93, 94, 95, 97, 104, 105, 113, 114, 162 U.S. and, 118, 120, 122-127, 138, 139, 139n4 Collective identity, sharing, 13 Colombo Plan, 25, 73 Colonies France and, 52-54, 55 independence for, 22-23, 53, 157, 167 Commercial banks, lending by, 165 Commission for Refugees, Sweden and, 109 Committed Neutral, The (Sundelius), 95 Common Agricultural Policy (CAP), 52 Commonwealth, British aid for, 181 Commonwealth of Independent States, aid for, 178

Concert diplomacy, introduction of, 8 - 9 Concerted Plan of Action for the Development of Africa (CADA), 56 Conference on Common Security, Palme and, 96 Conference on Environment and Development (Earth Summit), 10, 168, 170 Conference on Population and Development, 168 Conference on Security and Cooperation in Europe (CSCE), 96, 114n5, 177 Containment, 126-127, 138, 160 aid and, 121-125 Council of Mutual Economic Assistance (CMEA), 25, 42n8 Country programming, 99, 101, 105 Crosswell, Mike: on interdependence, 186n 11 CSCE. See Conference on Security and Cooperation in Europe Cultural integrity, preservation of, 70-71 DAC. See Development Assistance Committee Debt aid and, 41 management of, 28 Debt crisis, 27, U.S. and, 132-133 Decolonization, 157, 167 De Gaulle, Charles foreign policy and, 48-49, 51-52, 55, 161 France and, 47, 53, 66, 67nl industrialization and, 52 ODA and, 66 on united Europe, 67n5 Democratic development, 170 Départmenls d'Outre-Mer/Territories d'Outre-Mer (Overseas Departments and Territories, DOM/TOM), 56, 59 transfers for, 63, 64 Dependent development, encouraging, 38-39 Development. See Sustainable development Development aid, 15, 40-41, 144, 146, 165, 188 concessions for, 19 contrasting view of, 35 (table) equity-oriented, 99 foreign policy and, 120 function of, 22, 34 humanitarian basis for, 144 security interests and, 146 strategies of, 38, 43n20, 187 Development Assistance Committee (DAC), 19, 26, 28, 42n3, 6 8 n l 7 , 73, 91 n5, 98, 134, 143, 149, 160, 187 aid from, 20, 33, 150, 169, 176 aid quality and, 90, 147

213

Index

Expert Group on Aid Evaluation of, 168 France and, 61, 62 Japan and, 79, 84, 86-87 members of, 43nll ODA/GNP ratio and, 94, 155 OECD and, 157 Sweden and, 103-104, 108 U.S. and, 131, 132 urban bias of, 169 Development Coordinating Committee, 123 Development Decade (UN), 25, 167, 168 DOM/TOM. See Departments d'OutreMer/Territories d'Outre-Mer Domestic politics, 12, 13 national interest and, 162 ODA and, 127-130, 160 (table) Donors aid flow and, 148, 149 (figure), 153, 156 (table), 158, 187 GNP of, 143 grants from, 42n3 influence on, 163 ODA and, 143-147, 156-159, 189 performance of, 42nl (table), 143 primary, 191 recipients and, 78 self-interests of, 172 urban bias of, 169 Earth Summit. See Conference on Environment and Development East Africa, aid to, 158 East Asia Japan and, 82-85, 89, 175 miracle in, 170 social welfare in, 168 East Asian Economic Miracle, The (World Bank), 29 East Asian model, 39, 170 Eastern Europe, aid for, 178, 182 Eastern Mediterranean, aid to, 158 ECA. See Economic Cooperation Administration Economic assistance, 37, 155, 167, 176 military resources and, 20 multilateral channels and, 156 public transfers of, 19-20 Economic Cooperation Administration (ECA), 24 Economic Cooperation Bureau (MOFA), ODA and, 76 Economic growth, 40, 179, 184 long-term, 31 political repression and, 171 preservation of, 70-71 promoting, 3, 148, 171 Economic interests, 145, 166 political considerations and, 170

security and, 153 Economic Planning Agency (EPA), 91 n7 Economic statecraft, 14, 146 Economic Support Fund (ESF), 131, 135, 140nl6, 171 USA1D and, 136 EFTA. See European Free Trade Association Egypt, ODA for, 43nl5, 123, 125, 131, 134-37, 146, 158, 160, 171, 180 Eisenhower, Dwight, 121, 122 El Salvador, ODA for, 136 Environmental issues, 23, 153 ODA and, 101 resolution of, 28 EPA. See Economic Planning Agency ERP. See Marshall Plan ESF. See Economic Support Fund Ethics issues, 3, 6, 7 Ethnic conflict, 11, 186n6 EU. See European Union Europe, aid from, 29 European Community, 106 Great Britain and, 50 Sweden and, 95, 113 European Economic Area, Sweden and, 96 European Free Trade Association (EFTA), 114n5 Sweden and, 96 European Parliament, France and, 173 European Recovery Program (ERP). See Marshall Plan European Union (EU), 92nl6, 157 Germany and, 182 Sweden and, 113 Expert Group on Aid Evaluation (DAC), 168 Export-Import Bank, 128 Fallows, James, 70 FAO. See World Food and Agricultural Organization FIDES, 53 Financial transfers, 21, 165 Food for Peace, 128 Foreign aid. See Aid Foreign Assistance Act (1961), 122 Foreign Assistance Act (1973), 122 Foreign policy, 7-8, 153, 166, 167 aid and, 4-5, 15, 34, 120 donor approaches to, 159 economic aspects of, 96 egoistic interests in, 185 idealist traditions of, 11, 36-37 national interest and, 16-17n4, 119-20, 162, 165, 183 objectives in, 187 ODA behavior and, 155 promoting, 133 realist traditions of, 11, 34-35

214

Index

"scientific" theory of, 9 "Four Points" program, 24 Framework law, 53 France aid from, 29, 38, 40, 41, 52-54, 59-61, 63, 64, 65, 143, 144, 147, 148, 161, 172-174, 180 colonial exploitation by, 6 7 n l 2 decolonization by, 55 economic interests of, 145 Euro-integration process and, 173 foreign policy of, 48-52, 66, 67n2, 153, 161 GNP of, 59 grants from, 151 historic vocation of, 4 7 ^ 8 , 174 military aid from, 64, 65, 117, 139-140nl0 nuclear forces of, 49, 6 5 - 6 6 ODA from, 47-66, 57 (table), 59 (table), 60 (figure), 61 (table), 62 (table), 64 (table), 68n 19, 145, 150, 158, 163n7, 174 ODA/GNP ratio and, 149 security objectives and, 146, 186n7 trade with, 63 Francophone countries, 5 2 - 5 3 aid for, 48, 59, 60, 66, 73 economic contacts of, 55-56 French relations with, 57-58, 65, 126, 174 Franc Zone, 53, 54, 57, 58, 62, 6 8 n l 5 , 174 French External Relations Ministry, 56 French Ministry of Cooperation and Development, 54, 56 French Ministry of Economy, aid from, 54 French Ministry of Foreign Affairs (MOFA) aid from, 54 mission statement of, 80 recipients and, 76 French National Assembly, colonial representatives at, 53 Fund for Population Activities, Sweden and, 109 GATT. See General Agreement on Tariffs and Trade GAO. See General Accounting Office Gaullist Party, 173 General Accounting Office (GAO) on aid, 129-130 on donors, 165 General Agreement on Tariffs and Trade (GATT), 157, 163n6 Sweden and, 96 U.S. and, 117 Germany EU and, 182 Marshall Plan and, 121 ODA from, 29, 163n8, 182 Giscard d'Estaing, Valéry, 174 foreign policy of, 51

nuclear forces and, 50 Global obligation, rhetoric of, 80 GNP. See Gross national product Grants, 22, 132 loans and, 86, 171 Great Britain aid from, 29, 38, 150, 163-164n8, 181-182 European Community and, 50 Marshall Plan and, 121 Greater East Asian Co-Prosperity Sphere, 39, 70, 175 Greater French Federation, 52 Gross national product (GNP), aid and, 41, 59, 130, 147, 150 (figure) Grotius, Hugo, 184 Group of 77 (G-77), 25, 38, 51, 104, 185n2 NIEO and, 26 Guided capitalism, 70, 176 Haig, Alexander, 134 Haiti, aid for, 178 Hamilton, Alexander, 119 Hamilton, Lee, 130 Hammerskjöld, Dag, 95 Hobbes, Thomas, 8, 183, 184 Holsti, K. J. on bloc leaders, 155 typology of, 153 House Banking Committee, ODA and, 129 House Foreign Affairs Committee, ODA and, 129 Humanitarianism, 35, 36, 107, 115nl5, 122, 143, 144 Human rights, 23, 123, 124 Hungary, aid for, 32 IBRD. See International Bank for Reconstruction and Development ICA. See International Cooperation Administration IDA. See International Development Association IDCA. See International Development Cooperation Agency Idealists, 10, 119, 167 foreign aid and, 40 IFC. See International Finance Corporation IMET. See International Military Education and Training program IMF. See International Monetary Fund Import-substitution strategies, 43n20, 125 India aid for, 43nl5, 136, 181 Sweden and, 107, 111 Inter-American Development Bank, 31, 86 Interest payments, 16n2, 33, 131 International Bank for Reconstruction and Development (IBRD), 30

Index

International Cooperation Administration (ICA), 24-25 International Development Association (IDA), 30 International Development Cooperation Agency (IDCA), 123, 139n7 International Finance Corporation (IFC), 31 International Military Education and Training (IMET) program, 126 International Monetary Fund (IMF), 27, 73, 157, 188 U.S. and, 117 International Trade Policy Bureau, 76 Islamic Development Bank, 31 Islamic fundamentalism, 174 Israel economic data on, 140nl8 ODA for, 43nl5, 123, 125, 131, 134-137, 146, 158, 160, 171, 180 Jabotabek Area Railway Project, 84 Japan aid from, 28, 36-37, 39, 40, 41, 72-76, 78, 84-85, 143, 144, 147, 148, 151, 180 automobile industry and, 75 domestic government spending by, 82 economic development and, 69-70, 71, 75, 80-81, 82, 88-89, 91n9, 145, 157 energy crisis and, 74, 75 foreign policy of, 91, 154 good government and, 170 grants from, 86 militarization and, 73, 146, 154 NICs and, 151 O D A from, 69-91, 72 (table), 82 (table), 83 (figure), 85 (figure), 87 (table), 89 (table), 145, 150, 154, 158, 160, 161, 174-176 ODA/GNP ratio and, 149 political crisis for, 90, 91n8, 175 protectionism by, 75 recession for, 175 reparations from, 80 security and, 76, 146 U.S. aid for, 73 Japanese Diet, ODA and, 71, 77 Japanese International Cooperation Agency (JICA), 74, 76 scandals and, 91 n8 Japanese Ministry of Finance, 76-77 Japanese prime minister, aid policy by, 77 Jeanneney Report, 54, 58, 114n7 JICA. See Japanese International Cooperation Agency Johnson, Lyndon Japan and, 74 ODA and, 122 "Just war" doctrine, 6

215

Kant, Immanuel on democratic societies, 11 world-order politics and, 183 Kennan, George, 10 on U.S. foreign policy, 120 Kennedy, John F. Alliance for Progress and, 26, 73 Japan and, 74 ODA and, 122 Kissinger, Henry, 10 foreign policy and, 120 on French leadership, 66 Latin America aid for, 131, 138, 158 development efforts in, 73 Japan and, 9 2 n l 4 social welfare in, 168 Sweden and, 107 LDCs. See Less developed countries LDP. See Liberal Democratic Party League of Nations, 9, 120 Sweden and, 95, 104 Least less developed countries (LLDCs) aid for, 29, 37, 151, 152 (figure) Japan and, 86-87 Sweden and, 107, 109, 112 U.S. and, 122 World Bank on, 57 Less developed countries (LDCs), 3, 14, 15, 16, 27 agricultural development in, 163nl aid for, 21, 37, 144, 167, 185, 185n2 conditions in, 16nl, 23 economic growth of, 43nn9, 20, 184 France and, 66 Japan and, 71-72, 80, 82, 84-85, 87, 161 OPEC and, 181 primary donors to, 191 private capital for, 31 reshaping of, 163 responsibility from, 171 subordination of, 22 Sweden and, 98, 100, 101, 104, 105, 112, 114, 154, 162 U.S. and, 121, 122, 123, 127, 131, 135, 138 Leviathan (Hobbes), 184 Libdah, Hassan Abu, 178 Liberal Democratic Party (LDP), 71 dislodging of, 175 ODA policy and, 77 Liberal international economic order (LIEO), 157, 158 Lindstrom, Ulla, 98 Linear development model, 39, 43n20 LLDCs. See Least less developed countries Loans, 22, 33 concessional, 15, 19, 86, 171

216

Index

grants and, 86, 132, 171 London Club, 27 Lutheran Church, 97 McHugh, Matthew F., 186n9 McKinlay-Little foreign policy model, 187 Maastricht accords, 173 Machiavelli, Niccolo, 6-7, 183 Madison, James, 119 Malaysia, OECD and, 29 MAP. See Military Assistance Program Marcos, Ferdinand, 158 Marshall Plan, 14, 24, 72, 126 France and, 52, 121 success of, 139n3 Metternich, Prince: on politics, 8 Middle-income countries (MICs), U.S. and, 131 Middle East Sweden and, 107 U.S. interests in, 160 Militarization, 37, 134, 135, 137, 146 Japan and, 88 ODA and, 65 Sweden and, 111 Military aid, 39, 137, 155 bilateral trade and, 144 economic assistance and, 37 France and, 64, 65 idealists and, 37 U.S., 117, 120, 122, 126, 128, 133, 139-140nl0, 148 Military Assistance Program (MAP), 126 Ministry of International Trade and Industry (MITI), 74 foreign aid and, 161 ODA and, 76-81 Mission civilisatrice, 54—58, 161 Mission on Economic and Technical Cooperation, 9 2 n l 4 MITI. See Ministry of International Trade and Industry Mitterand, François, 67nn3, 7, 172, 173, 174 foreign aid and, 54 foreign policy of, 50, 51, 55 North-South issues and, 51, 59 ODA and, 66 Miyazawa, Kiichi, 176 Moderate Party (Sweden), aid and, 102 MOFA. See French Ministry of Foreign Affairs Monnet, Jean, 50 Monroe Doctrine (1823), 119 Morgenthau, Hans on foreign policy, 13, 35, 120 international relations and, 9 - 1 0 pre-theoretical assumptions about, 165-166 MSA. See Mutual Security Agency

Multilateral aid, 20, 29, 101, 148, 181 France and, 62 Japan and, 86, 91n4 national interests and, 134 preference for, 37-38 Sweden and, 108-9 U.S. and, 133, 134, 137 See also Bilateral aid Mutual Development and Security Administration, 124 Mutual Security Act (1951), 121 Mutual Security Act (1954), 24 Japan and, 73 Mutual Security Agency (MSA), 24 Mutual Security Treaty (1952), 71 Myrdal, Gunnar, 97 Napoleon, 48 Nasser, Gamal Abdul, 53 National Front, 173 National interest, 3, 17n7, 121 aid and, 14-16, 41, 119-120, 134, 143, 162, 163, 180-185 domestic politics and, 162 evolution of, 4, 5-11, 11-14, 17n6, 185 international relations and, 16-17n4, 165, 183 state and, 12-13 See also Self-interest Nationalism French, 50, 66 promotion of, 9, 11, 50 Nation-states legal status of, 7 number of, 13-14 NATO. See North Atlantic Treaty Organization Near East, aid for, 121, 138 Netherlands aid quality from, 147 Marshall Plan and, 121 Neutrality, 155, 177 foreign policy and, 95 New Directions, 122 New International Economic Order (NIEO), 26-27, 4 3 n l 2 France and, 50-51 Sweden and, 104 Newly industrialized countries (NICs), 157, 161 aid from, 151 Japan and, 80, 88, 176 New York Public Agenda Foundation, 140nl3 New Zealand, ODA from, 150 NGOs. See Nongovernmental organizations NICs. See Newly industrialized countries NIEO. See New International Economic Order

Index

Nixon, Richard foreign policy and, 120 Vietnamization strategy of, 122 Nonaligned movement, 2 4 Nongovernmental organizations (NGOs), 103 Sweden and, 9 7 - 9 8 , 107 Nordic model, 93, 112, 162 Sweden and, 102, 114 North Atlantic Treaty Organization (NATO), 24, 49, 51, 66, 96, 182 North-South issues, 14, 27, 32, 40, 145, 167, 168, 169, 170, 182 France and, 50, 51, 52, 5 8 impetus for, 3 interdependence and, 16, 22 Japan and, 72 Sweden and, 95, 97, 104, 105, 162 U.S. and, 122, 123, 138 Norway, aid quality from, 147 ODA. See Official Development Assistance entries OECD. See Organization for Economic Cooperation and Development OECF. See Overseas Economic Cooperation Fund O E E C . See Organization for European Economic Cooperation Office of the U.S. Trade Representative, 128 Official Development Assistance (ODA), 41, 42n3, 188 application of, 4, 21 coordination of, 159 domestic politics and, 160 (table) donor interests and, 30 (figure), 1 4 3 - 1 4 7 , 166, 189 effectiveness of, 1 7 8 - 1 7 9 goals of, 19, 184 increases in, 169 LDCs and, 167 L L D C s and, 152 (figure) militarization and, 65 models of, 19, 20, 103 (table) national interest and, 1 4 - 1 6 net transfers by, 149 (figure) O P E C and, 26, 27 per capita, 150, 151 (figure) as percent of GNP, 150 (figure), 180 quality, 73, 99, 1 4 7 - 1 5 2 , 171 recipients of, 2 8 - 3 4 , 33 (figure), 176 security interests and, 166 sustainable development and, 180 Official Development Assistance (ODA) behavior, 154 (table), 187 domestic sources of, 1 5 9 - 1 6 3 foreign policy and, 155 systemic dimensions of, 1 5 2 - 1 5 6

217

Official Development Assistance/Gross National Product (ODA/GNP) ratios, 21, 94, 149, 155, 1 5 9 - 6 0 , 162, 171, 177 Official Development Assistance (ODA) regime challenges to, 1 7 0 - 7 2 development efforts in, 168 donors and, 1 5 6 - 5 9 evolution of, 2 2 - 2 8 , 163 institutionalization of, 3 9 - 4 0 North-South issues and, 172 origins of, 23 (table) OPEC. See Organization of Petroleum Exporting Countries Organization for Economic Cooperation and Development (OECD), 15, 22, 109, 161, 188 C A D A and, 56 D A C and, 73, 143, 157 France and, 63 Japan and, 8 6 members of, 4 3 n l 0 ODA and, 19, 39, 1 4 0 n l 6 , 144, 164n9, 169 OPEC and, 181 organization of, 2 6 Sweden and, 102 Organization for European Economic Cooperation (OEEC), 26 Organization of Petroleum Exporting Countries ( O P E C ) aid from, 20, 26, 27, 163n4, 181, 1 8 6 n l 2 OTCF. See Overseas Technical Cooperation Fund Overseas Economic Cooperation Fund (OECF), 73 Overseas Private Investment Corporation, 128 Overseas Technical Cooperation Fund (OTCF), 7 4 Pacific Rim aid to, 158 Japan and, 7 3 - 7 4 , 80, 81, 84, 90, 151, 154, 161 Pakistan, ODA for, 136 Palestinian Liberation Organization, 178, 181 Palme, Olaf, 95 Conference on Common Security and, 9 6 small-state doctrine and, 1 5 4 - 1 5 5 Swedish autonomy and, 9 4 Third World and, 104 Palmlund, Thord: on development cooperation, 16 Paris Club, 27 Partnership in Democracy and Development, 92nl4 Peace Corps, 122 Pearson Report (1969), 25 People's Republic of China (PRC)

218

index

aid from, 181 good government and, 170 Japan and, 84, 88 Poland, aid for, 32 Policy Affairs Research Council, 77 Pompidou, Georges arms embargo and, 67n6 foreign aid and, 50, 51, 56 Population control, 23, 168 Power politics, 9, 34 PRC. See People's Republic of China Preventive diplomacy, 118, 179 Private investment, 31, 41nl, 78, 165 Program countries, 99, 155 Raison d'état, 7, 34 Rally for the Republic Party, 173 Reagan, Ronald: foreign policy and, 123-124 Realism, 9, 40, 119, 162, 183, 184 Realpolitik, 6, 9, 104, 119 Recipients, 28-34, 33 (figure), 76, 139n9, 176 African, 146 (table) autonomy for, 86 characteristics of, 135 (table), 137 (table) types of, 78, 134 Regional development banks, 31, 109 Japan and, 85 Regional-subsystem collaborators, 154 Reparation payments (baisho), 73 Research strategy, summary of, 187-189 Revolutionary Democratic Front, 51 Richelieu, Cardinal de, 7, 53 Roosevelt, Franklin France and, 48 Third World development and, 22-23 Roosevelt, Theodore, 8 - 9 , 183 Russia aid for, 31, 178, 182 Sweden and, 113 SAREC. See Swedish Agency for Research Cooperation with Developing Countries Scandinavian Defense Alliance, 96 Schultz, George, 123-24 Schuman, Robert, 50 Second World, ODA for, 118 Security, 20, 127, 134-135 aid and, 125-126, 146, 160 bilateral, 120 comprehensive, 75 economic policies and, 153 multilateral, 120 pursuing, 146, 166 Selassie, Haile, 98 Self-determination, 9, 120, 153 Self-interest, 39, 40, 65, 105, 118, 119, 122, 157, 172, 180, 182, 183, 184 Japan and, 79

See also National interest Self-sufficiency, 7, 12, 34, 38, 40, 71, 81, 182 promoting, 43n20 Semi-Permanent Committee for the Evaluation of Swedish Development Cooperation, 103 Senate Foreign Relations Committee, ODA and, 129 SIDA. See Swedish International Development Authority Singapore, OECD and, 29 Small-state doctrine, 154—155 Social Democratic Party (Sweden), 101 Socialist Party (France), 173 Social problems, 13, 30 resolution of, 28 Societal cohesion material affluence and, 171 ODA and, 159 restoration of, 81 Sone, Kenko, 80 South Africa, aid for, 178 South America, aid for, 158 South Asia aid for, 121, 138 social welfare in, 168 Southern Africa Development Coordination Conference, 115nl3 South Korea good government and, 170 OECD and, 29 South West African Peoples' Organization (SWAPO), 115nll Souvenir diplomacy (omiyage gairo), 77 Soviet Union, 3 1 - 3 2 CMEA and, 25 Special Fund for Industrial Cooperation with Developing Countries (SWEDFUND), 99-100 State emergence of, 7 - 8 legitimacy of, 13 national interest and, 12-13 responsibilities of, 6 - 7 Sterling Area, 181 Stockholm Conference on Disarmament in Europe, 96 Strategic aid (senraku), 88 Structural-adjustment programs, 3 - 4 Sub-Saharan Africa aid for, 145 Japan and, 83 social welfare in, 168 Sweden and, 107 Sukarno, Achem, 53, 158 Sustainable development, 4, 167, 170, 176 promoting, 23, 38, 169, 180, 185 UN and, 168

Index

Suzuki, Zenko, 75 on economic cooperation, 80 Svennson, Alf, 93, 105 Sweden aid from, 40, 41, 94, 97, 98, 99, 101, 102, 106-107, 109-110, 109 (figure), 112-114, 114n9, 115nnl3, 18, 143, 144, 147, 148, 161-162, 176-178, 180 economy/society of, 105-106, 145, 177 foreign policy of, 94, 96, 111-112, 154-155 global solidarity and, 103-104 G N P o f , 105, 106 grants from, 94, 151 LDCs and, 177 neutrality of, 95, 95, 154, 162, 177 ODA from, 93-114, 100 (table), 107 (table), 108 (figure), 110 (table), 111 (table), 114n2, 115nl0, 145, 150, 163n8 ODA/GNP ratio and, 149, 177 price shocks and, 101 security and, 96 trade with, 110-111, 115nl6 SWEDFUND. See Special Fund for Industrial Cooperation with Developing Countries Swedish Agency for International Assistance, 99 Swedish Agency for International Technical and Economic Cooperation (BITS), 99, 103 Swedish Agency for Research Cooperation with Developing Countries (SAREC), 100, 103 Swedish International Development Authority (SIDA), 99, 100, 103 Swedish Ministry of Foreign Affairs, 93, 100 Swedish parliament (Riksdag) aid from, 98, 100 ODA and, 97, 101 Systemic roles, 153, 154 (table), 156, 159, 167 Taiwan good government and, 170 OECD and, 29 Takeshita, Noboru, 175 Technical Cooperation Administration (TCA), 24 Technological transfers, importance of, 21, 60 Thailand, OECD and, 29 Thatcher, Margaret, 182 Third World aid for, 145, 147, 149, 158, 185n2 development in, 3, 168, 171 France and, 51, 54-55, 63, 66, 174 Germany and, 182 Japan and, 72, 81, 83, 87 responsibility from, 171

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Sweden and, 93, 95, 97, 104, 105 U.S. and, 118, 123, 125, 179 Thucydides, 5-6, 183 Trade, 165 bilateral, 88, 111, 144, 177, 182 free, 28 See also Bilateral trade Trade Development Program, 128 Transnational welfare, 13, 166, 185nl Treaty of Rome (1957), Sweden and, 95 Treaty of Westphalia (1648), 7 - 8 Truman, Harry S: foreign aid and, 24, 117 Truman Doctrine, 121 Ukraine, aid for, 31, 32 UNCED. See United Nations Conference on Environment and Development UNCTAD. See United Nations Conference on Trade and Development UNDP. See United Nations Development Program UN1CEF. See Children's Fund Union for French Democracy, 173 United Kingdom. See Great Britain United Nations, 98, 125, 169, 171, 179 civil order and, 10 Development Decade and, 25, 167, 168 foreign aid and, 39 Japan and, 73 Reagan and, 124 Sweden and, 96, 104, 106, 109, 177 U.S. and, 132 United Nations Charter of Economic Rights and Duties of States, 27 United Nations Conference on Environment and Development (UNCED), 169 Japan and, 176 United Nations Conference on the Least Developed Countries, France and, 6 0 61 United Nations Conference on Trade and Development (UNCTAD), 25, 149 Japan and, 73 United Nations Development Program (UNDP), Sweden and, 106, 109 United Nations Security Council France and, 48 Japan and, 90 United States aid from, 24, 28, 29, 40, 41, 126-130, 133, 139, 143, 144, 147, 148, 159, 180 economic interests of, 145 foreign policy of, 119, 128, 137, 139 G N P o f , 130, 157 grants from, 151 Japanese relations with, 70, 91n2, 176 military assistance from, 126, 127 (table), 185-186n5

220

Index

ODA from, 117-139, 125 (table), 131 (table), 132 (figure), 133 (figure), 134 (table), 135 (table), 137 (table), 145, 150, 158, 178-180 ODA/GNP ratio and, 149 United States Agency for International Development (USA1D), 26, 37, 118, 122, 124-125, 128, 129, 159 corruption and, 180 ESF and, 136 foreign-policy goals and, 134 reassessment of, 178 streamlining, 180 United States Agriculture Department, 128 United States Commerce Department, aid relationships and, 128 United States Defense Department, 128, 159 United States Information Agency, 128 USA1D. See United States Agency for International Development Vietnam War, 122 foreign policy during, 179 Violence, ethical use of, 6 Vital interests, 16n4, 160 Warsaw Pact, 24, 32 Washington, George, 119 Welfare

economic, 16 social, 16, 144 Wharton, Clifton, 134 WHO. See World Health Organization Why Foreign Aid?, 118 Wilson, Woodrow, 120 world order and, 9, 183 World Bank, 29-30, 31, 64, 68n21, 109, 157, 188 East Asian "miracle" and, 170 on economic development, 20, 42n4 foreign aid and, 39 hard loan window and, 30 Japan and, 85 on LLDCs, 57 oversight by, 27 publications by, 29 on recipient types, 134 U.S. and, 117 World Food and Agricultural Organization (FAO), Sweden and, 109 World Health Organization (WHO), Sweden and, 109 World politics, 9, 10, 103, 183, 184 foreign-policy behavior and, 167 World Trade Organization, 157 World wars national interest and, 9 ODA and, 22 Sweden and, 97

About the Book and the Author

Foreign assistance has taken on a central role as an instrument of foreign policy for rich and poor states alike. The topic remains, however, an enigmatic and controversial one. Seeking to advance the understanding of aid as a foreign-policy tool, National Interest and Foreign Aid provides a comparative, data-based evaluation of the varying roles served by the development assistance programs of four major donors: France, Japan, Sweden, and the United States. Although the focus of the book is on the 1980s, Hook also contrasts the ongoing evolution of the four aid programs and assesses their adaptation to world politics beyond the Cold War. His analysis contributes to an enhanced appreciation not only of foreign aid, but of comparative foreign policy in the contemporary international system. Steven W. Hook is visiting assistant professor of political science at the University of Missouri.

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