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Evaluating Country Programmes
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growth of about 68% over this period outpaced Latin America’s. Yet these Asian
countries increased their GDP by 168% over the same period. This suggests the
possibility that Costa Rican economic growth might be substantially faster were the
country to adopt more future-oriented policies (e.g. increase public sector savings
and investment). Substantially faster growth would permit Costa Rican citizens to
enjoy a higher standard of living and larger resources for the satisfaction of both
public and private needs.
Lessons learned
This section draws a few lessons from the Costa Rican experience that may be
relevant for foreign assistance programmes in other countries. It asks whether, overall,
USAID assistance to Costa Rica was worth the cost.
– Foreign aid can work. The evidence strongly supports the conclusion that
USAID played a strong positive role in Costa Rican development. The fact
that successive Costa Rican governments were committed to broad-based
growth and to democratic processes made the relationship between the
Costa Rican Government and USAID consistently one of shared purpose.
Indeed, a collaborative style and joint decision-making are perhaps the most
notable characteristics of US aid to Costa Rica.
– “Development science” has progressed. Looking at the prescriptions and
projects undertaken by USAID over time, it seems clear that development
practitioners have made considerable progress in understanding the development
process, though it remains rudimentary in many areas. Many mistaken
approaches of the past have been identified and abandoned. Lack of
knowledge flawed the high-development and basic human needs
approaches. Two cases of this ignorance are worth noting. First, while economists
were well versed in the concept of “market failure”, they had thought
little about the possibility of “government failure”. Second, they failed to
understand the key role of markets, and particularly that from international
trade, in promoting efficiency. When better knowledge showed that existing
concepts were inadequate, the better concepts were gradually embraced. At
the same time, development policy has by no means become an exact science.
Nevertheless, USAID and other development agencies are more effective
now than earlier, because they work from a stronger knowledge base.
– Country experience pays off. The USAID comparative advantage comes in
greater part from the trust that USAID staff members engender in host country
officials. To a substantial degree, this can come only from extensive in-country
experience. In the technical offices, people who spent long periods (five to
seven years) in the country seem to have achieved the most. Of the four Mission
directors who were most successful, three were “recycled”: they had previous
experience in the country.
OECD 1999