Is bilateral aid responding to good governance in Africa?
Shaw, Timothy M.
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This paper investigates whether aid flows from traditional donor countries to African countries have responded to improved governance in African countries, whether aid has been used by donors to improve the quality of governance in the last two decades; it also investigates alternative sources of development financing, especially from the Global South, as well as researchesnewmodalities of aid delivery. Using the insights provided by several alternative approaches, the paper finds that at the aggregate level, aid flows to African countries respond positively to improved governance. However, there are wide variations in country experiences while aid flows to some countries respond positively to improved governance, aid flows to other countries are not in any way related to changes in governance. The paper finds that while all donor countries purport to increase aid flows in response to improved governance, donors generally tend to follow their national interests and focus on aspects of governance that are consistent with their foreign policy interests but not necessarily the governance as more broadly conceived. Although some donors respond positively to improved governance and may withhold aid for egregious violations of human rights, most donors give aid to further their strategic interests even in the face of poor governance records of recipient countries. While some donors provide aid to support activities that improve governance, donors have generally not used increased resources to support activities to improve governance. Africa countrieson the other hand have learnt to take advantage of the ambivalence of donors towards governance reforms by promising to reform governance in exchange for aid without following through with the promises. The paper also finds that there are several sources of alternative development financing, available especially from the Global South. While these sources provide relatively small amounts of financing, they are rapidly increasing in importance and it behooves African countries to seek these sources not only as additional sources of development financing but also as a way of diversifying funding sources. In addition, the delivery mode of development financing from these sources is different from those of the traditional sources and may be more suitable to African needs. Finally, the paper finds that a new mode of aid delivery cash on delivery may not be easily implantable in African countries. Key words: donors, bilateral aid, governance, cash-on-delivery, Africa