Reforming Foreign Aid to African Development: A Proposal to Set up Politically Autonomous Development Funds
Author(s)
Hyden, Goran
Abstract
The paper presents the rationale for Autonomous Development Funds and outlines in some detail their main features. The paper makes four assumptions, the first of which is that a critical variable in determining the effectiveness of foreign aid is how it is being dispensed. This becomes particularly critical in situations where public institutions have lost much of their legitimacy and ability to influence the course of events. The second assumption is that a trusting relationship between donor and recipient is a prerequisite f o r good use of foreign aid. Only then will the physical capital (money) that the donors provide begin to be converted into social capital, i.e. institutions that will sustain development efforts based on local commitments. The third assumption is that donors need to be less selfish or nationalistic in their approach to foreign aid and not think that the more control they have over the preparation of a given project the more likely it will be that the project will yield positive results. What is needed is a modification of this process so that donor coordination takes place in response to the expressed needs of recipient institutions. Finally, the fourth assumption is that development funding must be available not only at the central governmental level but also at lower levels.
