Early View Article - A Paradox of New Deal and Foreign Aid for Fragile States in Sub-Saharan Africa

A Paradox of New Deal and Foreign Aid for Fragile States in Sub-Saharan Africa

This article investigates aid delivery channels and their potential contribution to state-capacity-building in sub-Saharan African (SSA) fragile and conflict-affected states (FCSs) by drawing on the New Deal for Engagement in Fragile States. Using the synthetic control method (SCM), the paper examines whether donors have implemented foreign aid following their commitment to the New Deal. It focuses on the period 2005–2019 and 44 SSA countries. Overall, the findings show that less aid is delivered through the public sector in FCSs, where building state capability is more necessary than in non-FCSs in SSA. This shows that donor foreign aid practices do not match their commitment to the New Deal for Engagement in Fragile States, although there are significant differences in donor practices. The tendency in donor aid-giving is to bypass the public sector, which does not necessarily help strengthen capacity in FCSs. It is a paradox of foreign aid to fragile states due to the contradiction between the short-term effectiveness of foreign aid and the long-term necessity of state-building in FCSs. With these findings, the paper calls for international efforts to improve aid-giving to support state capability in FCSs.

Policy Implications

  • In general, donors do not favour or discriminate against Sub-Saharan African countries in terms of total amounts of bilateral aid on the basis of their fragility status. However, donor foreign aid practices do not match their commitment to engage directly with recipient governments and show respect for their programming, systems, and staff. This is a paradox of foreign aid due to the contradiction between the short-term effectiveness of foreign aid and the long-term necessity of state-building in fragile states.
  • Despite the fact that effectiveness may increase in the short term, practices which consist of bypassing will undermine opportunities for fragile states' governments to strengthen their capability. Donors need to combine specific efforts such as supporting public sector reforms and technical capacity-building.
  • On the other hand, fragile states' governments need to show willingness to enhance the transparency and efficiency of their public sector to increase the number of possibilities through which donors can use public sector channels for foreign aid delivery.
  • It is necessary to devise better strategies to combine the short-term effectiveness of foreign aid and the long-term necessity of state-building in fragile states. It is an urgent task since the development situations in the majority of these countries are becoming humanitarian disasters that pose global threats in terms of regional security and stability.

 

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