Political Regimes and Development Assistance

Author: Wil Hout

Abstract:

This article analyzes the development agenda Western donors have been operating on over the past decade, particularly the agenda's focus on good governance. After analyzing the academic background of this agenda, which is most evident in so-called new institutional economics, the article discusses the change in the discourse on development assistance toward selectivity, and its implementation in the policies of the International Development Association, the United States, and the Netherlands. The analysis of the policies of these three donors, and of recent empirical studies demonstrates that the donors are biased in favor of rewarding certain policies—in particular, pro-market and trade-oriented policies—on the part of aid-receiving countries. The donors have, thus, introduced clearly ideological and political elements about the socioeconomic order into a seemingly technocratic discussion about the prerequisites of governance. Because of the emphasis on market orientation and trade openness as central criteria for the judging of “good governance,” the current development assistance agenda is located explicitly in the domain of the post-Washington consensus, which links the promotion of pro-market policies to the implementation of an agenda of political reform. The article concludes by pointing out several ambiguities in the current focus on good governance. In particular, the author argues that donors tend to emphasize the instrumental value of governance and overlook the underlying structural causes of bad governance in developing countries.

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December 2004
© 2002 ILO/Crozet M.