It has been noted elsewhere that DfID ‘s dual aims of increasing the effectiveness of aid and a greater focus on fragile states are at odds with each other. It is a tragic but common finding that aid is most effective where it is needed least, something that is even more true in fragile states than it is in badly governed countries.
Andrew Mitchell is quoted as saying that aid is ”not only about saving lives” (bbc) but can also protect the UK. Specifically, he’s talking about Somalia here. What does academia say on this? Collier and Hoeffler suggest that aid may promote arms races in this kind of situation, but it relies heavily on statistical correlations and a good story. Azam and Delacroix argue that aid increases terrorism, but it is a theoretical model of a particular viewpoint, rather than proof. So academia says less than we might want. It is certainly less than ideal to be pumping aid into a volatile situation where you are very unsure of which budget constraints you are loosening. Obviously, the desire to do good and save lives is a very difficult thing to resist.
Let me give you three points. First, aid can either be used as a tool of security or it can be effective as a development tool. They are conflicting goals. Second, aid does some short-term good in this kind of situation, albeit inefficiently. Third, aid in fragile states will make its way into terrorists hands (and help other unsavoury characters), and make their lives easier. So, this looks like a classic problem in aid, where you balance a short-term good and a long-term bad. I also think that this is less new than you might think.
My piece in World Development on aid allocation showed that the major determinants of aid are poverty, population and proximity (e.g. commercial, cultural ties). Policy (i.e. governance) doesn’t come into it. It was very difficult to find a good way of including a terrorism control as a motivator for aid allocation. But my understanding is that it is much less of a determinant than is generally thought. So the use of aid to Somalia can be best understood not as a new doctrine of aid as a part of a counter terrorism strategy but rather another case of poverty and proximity being the major determinants of aid, over and above any efficiency concerns.
