Donors, development and dependence : some lessons from Bangladesh, 1971 to 1986
The thesis uses Bangladesh as a model to test a "dependence paradigm". It posits that the sudden influx of resources that foreign aid brings does not necessarily lead to the social development and equitable economic growth which might have been expected because micro-economic forces tend to predominate over conventional macro-economic development theory. Instead it results in increasing inequity. The government and upper classes divert the largest proportion of the resources being provided and use them for reasons other than that for which they were meant. More inequitable distribution of income in turn justifies the continued need for foreign aid. The aid provided, justified by poverty, becomes a necessary part of the government's resources, discouraging domestic resource mobilisation and self-reliance. The dimensions of poverty and the nature and evidence of the country's dependence are reviewed. As the amount of aid "appropriated" increases, the government is increasingly dependent on its continuation and more constrained by the conditions attached to it by the donors. The paper then goes on to explain that foreign aid donors tolerate this diversion of aid resources because they measure the results of aid in terms of quantity, not quality. Nor are they prepared to provide adequate means by which to plan, administer, monitor and evaluate the use to which aid is put. The quality of aid is not an issue that serves either their domestic needs or foreign policy objectives. The successes in Bangladesh are shown to be attributable either to market forces or to foreign aid which does not lend itself to diversion by the upper classes. Some comparisons show that the phenomenon of a "resource windfall" leading to "appropriation" by the upper classes exists in other countries and is not unique to Bangladesh. The study concludes that unless appropriate aid is provided with sound ad-ministration, which uses, to the fullest, available expertise in the country, then increasing inequity and dependence are bound to result.