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From Poverty to Power Green, Oxfam 2008 - weman

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5 THE INTERNATIONAL SYSTEM AIDcan strengthen the institutional capacity of governments <strong>to</strong> deliver onreduced poverty and inequality. However, it places particulardemands on donors, who have <strong>to</strong> make credible long-term commitments.Project funding can be switched on and off, with only limitedimpact on overall stability. Not so with GBS, since if aid for salariesand other ‘recurrent costs’ is withdrawn, governments have <strong>to</strong> find themoney themselves, with the risk of running up excessive deficits. 156Debt cancellation under the World Bank’s Heavily Indebted PoorCountries (HIPC) initiative is effectively a massive experiment inbudget support, under which governments must reallocate the moneythat they no longer have <strong>to</strong> pay as debt service <strong>to</strong> poverty reductionplans. Social spending has risen significantly in HIPC countries and,as savings are guaranteed over many years, debt relief has been used <strong>to</strong>finance recurrent costs, as has happened in Burkina Faso, wherethousands of new teachers have been hired.CORRUPT OR FRAGILE STATESConcerns about aid quality can seem U<strong>to</strong>pian when many of theworld’s poorest states are either fragile or bent on pillaging their ownpopulations. For aid donors, corrupt and fragile states constitute anintractable headache (although this does not approach the migrainefaced by their citizens). Such states tend <strong>to</strong> be among the most in needof assistance, yet the mechanisms for effective delivery tend <strong>to</strong> be weakand prone <strong>to</strong> diversion. The gut reaction of politicians <strong>to</strong> deny aid <strong>to</strong>such regimes, unfortunately, often exacerbates the problem.In the final years of Daniel Arap Moi’s three-decade reign in Kenya,for example, donors cut off aid due <strong>to</strong> pervasive corruption. A newgovernment was elected in 2003 on a platform of fighting corruptionand introducing free primary education, and aid was duly reinstated.Soon, 1.6 million children saw the inside of a classroom for the veryfirst time. The government covered most of the cost of free schooling,with substantial support from aid. But it failed <strong>to</strong> follow through on itsinitial steps <strong>to</strong> fight corruption and even reinstated two corruptministers, one of them as minister of education. In such a situationshould donors cut aid, even if doing so would once more excludechildren from school?369

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