Like other developing countries, Nepal began to receive foreign aid shortly after World War II. This was a time when the idea of development was becoming dominant, following US President Harry Truman’s speech in 1947 about the West’s obligation to develop the ‘underdeveloped nations’. In Nepal, aid flows also followed the end of the autocratic Rana regime, which had been generally resistant to external ideas and resources. Worldwide, aid is not only a major political agenda but also an enormous industry: over the past 50 years, the amount of foreign aid disbursed totalled more than USD 2.3 trillion dollars. In Nepal, nearly half of the official budget still comes from foreign aid.
As such, there is today an increasing need for understanding how aid influences everyday social life, as countries throughout Southasia struggle to define standards and strategies for human development and societal transformation. While foreign aid is often believed to bring benefit to the recipient country, it is important to explore the subtle costs it can impose on an aid-receiving society – though more in political and cultural terms than economic. Taking the example of Nepal, one can unravel the reality of aid-induced hegemony.
In Nepal, the Rana regime depoliticised the country’s people by creating networks of loyalties, and denying freedom of expression and political organisation. Aid has had similar effects but in different ways. Through more than a half-century of foreign aid, Nepalis increasingly came to see Eurocentric visions of development as superior, even the natural way to prosperity, thus undervaluing home-grown – and, importantly, self-propelling – political processes of change. In a country where both corporate and public investment has fallen massively, the aid economy has become the main destination for the educated workforce. Thus, thousands of educated Nepalis who could have become teachers, political leaders, social campaigners, activists or entrepreneurs have instead landed up in the Kathmandu-centric aid industry, accepting aid-dominated development ideologies and incentives.
The same is happening in the rural hinterland. As development projects have penetrated the villages, it is not uncommon to find a newly literate person looking for a job as a ‘social mobiliser’, ‘local resource person’ and so on – positions created by NGOs and development projects embodying the aid-sponsored ideology. This trend is particularly evident after 1990, when the development industry adopted a ‘participatory approach’. Engagement in political parties or volunteer civic institutions is no longer a preferred option, and even party leaders increasingly indulge in development as consultants, heads of development NGOs, or recipients of aid money in different ways. Earning money in development has become far less arduous than running a business, and therefore being an entrepreneur is likewise not a preferred option. The private sector is not able to match the price of the development sector for its executives and has seen an exodus.
Guise of philanthropy
Aid has been a crucial factor in supporting civil-society activism and movements, as well as development research. But the power of activism and intellectual practice has been undermined through the common practice of using aid money and ‘developmentalised’ ideas. It is ironic to note that some of the most vibrant civic movements and community networking are actually funded and, hence, driven by foreign aid. For this reason, the development industry has shifted the accountability of civic activism and intellectual practice towards the funders, especially in a context where aid-giving is subject to multiple conditionalities, and always structured by the donor – through country ‘strategy papers’, strategic frameworks and programme ‘log frames’.
Over the past decade, there has been a move to engage citizens of aid-receiving countries as staff and consultants in relatively more strategic and managerial roles. While this looks like a progressive step, such a strategy has allowed further ‘penetration’ of Western views on development into the social and political system. A particularly serious situation arises, for instance, when Nepali staff members are mobilised by donors to use the latter’s civil-society identities. This is evident in the practices of strategically funding, engaging and employing local citizens and groups so as to influence key decision-making processes within the government and political parties.
To better grasp the subtle hegemony and de-politicisation, we need to rethink the aid operation as more than one simply involving a relationship between aid giver and receiver. In fact, there is a dizzying spectrum of actors in between: aid-institution staff, aid-project staff, donor consultants, local consultants, project managers and employees, NGO and private service providers, civil-society networks and advocacy groups, research groups, government focal points, government employees working as informal consultants, retired bureaucrats and senior officials who broker aid deals in the name of technical consultants, and others. These entities, situated between the givers and receivers are the ‘aid entrepreneurs’, who create both the rationales and procedures for the continuous flow of aid money.
Aid is generally considered to have two components, the philanthropic and the strategic. The latter allows for attempts to capitalise on the needs of others, by offering assistance; yet in fact, the strategic component is always framed under the cover of philanthropy. Although taxpayers in the donor country do genuinely want to see philanthropic effects from the aid they fund, the entire chain that propels these monies eventually becomes a network of private, profit-seeking entrepreneurs. Ostensibly they are pursuing a noble agenda, but in fact are focusing on their own incentives. In recent years, we have even seen village-level elites becoming small-scale aid entrepreneurs, while further undermining the access of the intended beneficiaries – the poor and marginalised. Further, major chunks of aid are used up by
Worse, there is rarely a system of independent evaluation to hold aid entrepreneurs accountable. Unlike the corporate logic of consumer sovereignty, the aid industry protects its entrepreneurs from beneficiary evaluation through upward accountability towards donors. This is evident in the fact that everyone and everything is subservient to the source of aid money, which no one questions. On the more practical side of managing funds, procurement-related practices for aid projects are at the discretion of aid-fund managers, and are usually less transparent even than the government system. Despite the increasing number of Nepali aid entrepreneurs being, very few dare to question such unfair distribution outcomes. Rather, everyone involved is incentivised to obey the logic of the aid industry.
In the ways that modern aid is governed, there is very little space to encourage critical reflections on how this process can be improved. Frequently, aid projects invest in creating knowledge that justifies their existing modality of aid governance and service delivery, rather than looking for new options. Periodic reviews and evaluations are a regular practice in the aid industry, but these tend to be little more than tools by which to legitimate the status quo – for instance, offering evaluations to consultants who have a history of friendly association with the project or programme.
The local and critical
So, how can we transform the aid industry and make it more beneficiary-driven? While it is important to plan for the closure of aid in the long run, until that point we need to think of how aid governance can be transformed. Though it is not easy to make such prescriptions, it is clear that the ultimate beneficiaries, such as local communities, need to be given opportunities to enhance their ‘free and sustainable agency’, in Amartya Sen’s words, and should not be treated as ‘passive recipients of cunning development programmes’. A simple solution is to try to eliminate or reduce the aid entrepreneurs as much as possible.
Nepal’s poverty and slow growth are not due to a lack of resources, but rather because there is no culture of democratic accountability and responsible political leadership. This can be addressed not by apolitical and technocratic development – driven primarily by aid – but rather by enabling people to hold their political leaders accountable. And in such political fields, development aid has little space to act. In the Nepal context, few donors have funded the critical, unconstrained production of critical discourse and knowledge about social and political change and economic innovations. On the part of donors, challenges also remain as to how to deliver aid when local institutions are weak and corrupt.
While the importance of fast-impact delivery of services cannot be denied during emergencies, the aid industry could shift its emphasis from technical services to providing resources to local innovators working on their own agendas. In addition, while all aid has to be accounted for in the state treasury, a transitional system of aid governance should include mechanisms of horizontal and vertically accountability, wherein multiple actors from the recipient society together negotiate and devise mechanisms and procedures for mutual accountability.
In recent years, more participatory and multi-stakeholder processes of aid governance have begun to emerge, attempting to address long-standing issues of governance, transparency and accountability. This entails a shift away from, for instance, working exclusively with NGOs or government agencies. In forestry, agriculture and local-governance sectors, there are efforts to create multi-actor committees to govern aid. Yet while such initiatives have opened up possibilities for a more deliberative design for aid projects, they also seem to be further entrenching the ideological hegemony of aid. This is in part due to the aid entrepreneurs seeking to frame such processes to dissipate the demands for the democratic governance of aid, and in part to co-opt the critical voice that exists in certain segments of civil society and intellectual associations.
Particularly worrying is that there remains very limited space within the aid industry for a critical review of aid processes. There is a dangerous tendency to single out those who bring new perspectives that might challenge existing processes. To facilitate locally driven processes of change, the donors need to encourage critical, imaginative review, and actively foster public discussion of drivers and obstacles to change. It does not need saying that, at present, nearly all project reviews tend to favour the donor’s plans and perspectives.
Aid could be contributing unconditionally to the production of knowledge and critical discourse, of the type that gives rise to local visions of governance. For example, instead of aid institutions designing the programme objectives themselves, and then delivering grants within those frameworks, they could support proposals by local actors. Support in the locally designed research and critical review of development policies and practices must therefore be funded without condition. Doing so could promote a culture of reflection, discussion and deliberation among the people, leading to innovations. If funders are really interested in seeing positive change from their aid in, for instance, Nepal, they should not be afraid of critical review of aid processes: aid accountability is linked not so much to the donors themselves, but rather to those who design and implement the aid programs.
—Hemant R Ojha is a researcher and activist in the field of natural resource governance and local democracy. He is the chair of ForestAction Nepal and also teaches environmental sociology.