Reaching the marginalized: EFA global monitoring report, 2010; 2010

0120CHAPTER 4Education for All Global Monitoring ReportThe evidencedoes notsupport intensepessimism on aideffectivenessAid for educationSince the Dakar World Education Forum in 2000,the global aid environment has undergone aprofound shift. After a steep decline in the 1990s,development assistance budgets have been rising.An important catalyst for change was theMillennium Development Goals (MDGs). Donorsand developing country governments see increasedaid as vital support for policies aimed at reducingpoverty, getting children into school and achievingthe wider goals set out in the MDGs.Donor commitments – and efforts by campaignersto hold donors to those pledges – reflect a positiveview of international aid. Some commentatorsargue, however, that aid undermines economicgrowth, distorts national priorities, fuels corruptionand delivers little for the poor (Easterly, 2003).As one prominent critic puts it: ‘Aid has been, andcontinues to be, an unmitigated political, economicand humanitarian disaster for most parts of thedeveloping world’ (Moyo, 2009, p. xix). Controversiesabout aid effectiveness go back several decadesbut recently have taken on a new lease of life,with some commentators calling for developmentassistance to be curtailed or even eliminated.Yet the evidence does not support this intensepessimism on aid effectiveness.Consider first the argument that more aid meansless economic growth. If it were true, this wouldclearly be bad not just for poverty reduction, butalso for the financing of basic services such ashealth and education. But there is no robustevidence to support the claim that aid weakensgrowth prospects. From 2000 to 2008, as aid tosub-Saharan Africa almost doubled, economicgrowth averaged 5% to 6% a year – double theaverage of the 1990s. Meanwhile, the incidence ofpoverty fell from 58% to 51%, with absolute numbersbelow the poverty line declining for the first timein a generation (Chen and Ravallion, 2008).But aid to productive infrastructure has supportedgrowth. One study finds that each US$1 in aid yieldsUS$1.64 in increased income in the recipientcountry (Radelet et al., 2005).The association between aid and governanceis even more complex. Aid pessimists claim thatan assured and abundant supply of developmentassistance can reduce the incentives forgovernments to raise domestic revenue, creatinga cycle of dependence and weakening accountabilityto citizens. Another claim is that large inflows ofaid can help fuel corruption, especially in countrieswith weak public financial management systems(Brautigam, 2000). Yet, while there is no shortageof corruption among many governments receivingaid, cross-country studies have generally failed toestablish significant, clear or consistent causallinks between aid dependence and standards ofgovernance (Coviello and Islam, 2006; Moss et al.,2006). Moreover, aid has played an important rolein supporting the development of more accountableinstitutions in countries including Mozambique,Nepal and the United Republic of Tanzania.Nevertheless, aid pessimists raise some importantissues. Economic growth in many aid-dependentcountries has been disappointing. That does notmean aid is the underlying reason, but there arestrong grounds for concluding that aid could haveachieved far more. Similarly, aid optimists tendto turn a blind eye to corruption. Too much aidthat could have been used to build classrooms,train teachers or stock health clinics has beenwasted or stolen – sometimes with the collusionof major donors – or otherwise ill-used becauseof poor governance (Wrong, 2008). There is nodoubt that aid is likely to work better in countriesthat are serious about tackling corruption andstrengthening governance.Developments in education underscore thepotential for aid to make a difference. To citesome achievements in countries where aidfinancing is important:Cross-country analysis looking further backsuggests aid has a broadly positive impact ongrowth, though high levels of aid dependenceover long periods can have adverse consequences(Clemens et al., 2004). Part of the problem withthe argument of aid pessimists is that it fails todifferentiate between types of aid. No one wouldexpect aid to basic education or child health todeliver early results for economic productivity.Since the overthrow of the Taliban in 2001,Afghanistan has received sizable amountsof aid to restore its education system. Withsupport from many non-governmentorganizations, donors and United Nationsagencies, the government has respondedto the high demand for education from theAfghan people. Fewer than a million children,most of them boys, were enrolled in primary218