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Jump to Chapter 1 Sections:
>> Global trends in democracy >> A strategy for assisting democratic governance >> From conditions to selectivity >> "Tough Love" for development >> Background paper >> References
From conditions to selectivity
To be successful, international engagement must shift from conditionality to selectivity in foreign
assistance. In many cases international lending, for example conditionality has been ex ante,
with governments promising policy reform in exchange for aid. As a result donors, not the governments,
own the reforms. A better approach is to dispense aid selectively to reward and deepen and thus preserve and consolidate reforms that a country has already begun to implement according to its own design. Selectivity focuses aid on good performers countries that have reasonably good policies and institutions and on serious reform efforts, already under way, by governments and societies that have taken responsibility for designing their own policies and institutions.
Helping to generate authentic, homegrown political will for better governance takes patience,
intelligence, coherence, consistency, and dexterity.
Toward this end, the following principles should guide U.S. foreign assistance and the policies of
other international donors:
- Levels of foreign assistance must be more clearly linked to a country’s development
performance and to demonstrations of political will for reform and good governance.
- Good performers must be tangibly rewarded. Reform should be encouraged through predictable and meaningful rewards. When political leaders demonstrate respect for
democratic procedures and freedoms, and willingness to follow through on difficult political and economic reforms, they should receive steady increases in aid from the United States and other donors. In addition, good performers-democracies getting serious about controlling corruption and
strengthening the rule of law should be rewarded in other tangible ways: with debt relief, with incentives for foreign investment (including publicity about their good governance), and with trade liberalization such as the bilateral free trade agreement recently concluded with Jordan.
- Rewards must be granted for performance, not for promises that may be repeatedly made and broken. The only way to exit from the cat and mouse game of international conditionality is to make increases in development assistance and other economic rewards contingent on what governments actually do (and keep doing), not on what they say they
will do. Rewards should be structured to lock into place the institutions and practices of democracy and good governance. For example, the European Union requires that democracy and respect for human rights be institutionalized before a country can be considered for admission, and these conditions
are included in the accession agreements. The United States might adopt a similar standard as a requirement for free trade agreements (whether bilateral or as part of a multilateral arrangement). And there should be clear and credible procedures for suspending countries that depart from this standard. For heavily indebted poor countries, debt relief should be granted only to those that have
demonstrated a basic commitment to good governance by allowing a free press and civil society, ensuring an independent judiciary, and establishing a serious anti-corruption commission. Even in these cases the debt should not be forgiven in one fell swoop, but suspended and retired incrementally (for example, at 10 percent a year), creating incentives for sustaining good governance.
- If there is no political commitment to democratic and governance reforms, the United States should suspend government assistance and work only with nongovernmental actors. The
only exceptions should be humanitarian relief and responses to global public health threats, and even then minimal reliance should be placed on poorly performing states. USAID has often used such selective suspensions, which can have important symbolic and practical effects. The United States typically provides only a small share of the foreign assistance to a government, but a highly visible
one. When the United States ceases development assistance to a government, other donors take notice (and should be lobbied to follow suit), as do political and social actors in the country. To be effective, this approach must have substantial consequences. Political leaders must learn that they will pay a heavy international price for bad governance, forfeiting material resources and becoming more isolated diplomatically.
- The United States should use its voice, vote, and full influence within the World Bank and other multilateral development banks to terminate development assistance to bad governments and to focus on countries with reasonably good governance. The United States
should extend the principles of its foreign policy into international development, persuading the international financial institutions to stop financing grossly corrupt, wasteful, and oppressive governments. Much progress has been made on this front over the past decade, and the United States should continue to press for greater accountability and logic in international lending. Where
there is no demonstrated commitment to reform, development assistance should go to nongovernmental actors. Beyond humanitarian and public health assistance, the aid should be aimed mainly at empowering civil society to change the regime or improve governance in other ways. Otherwise, even if aid
funds are spent directly by aid agencies or through NGOs, they will simply substitute for what corrupt officials are stealing from the national budget and so will do little to reduce poverty.
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