Hyperbole, Hypocrisy, and Hubris in the Aid-Corruption Dialogue
34 Pages Posted: 21 Oct 2010 Last revised: 12 Nov 2010
Date Written: October 20, 2010
In this article I examine the relationship between corruption and foreign aid – specifically, development aid intended to alleviate poverty by fostering economic growth. More than $2.5 trillion has been expended over the past six decades on aid of all kinds. This total includes military aid, humanitarian and disaster relief assistance as well as development aid designed to enhance economic growth. Despite the proud rhetoric we hear about how generously aid is provided, there is abundant evidence from the World Bank and others that development aid has not succeeded in producing sustainable economic growth. Indeed, we have known for decades that such aid has been counter-productive, leading to reduced GDP per capita in more than half of all cases.
All serious scholars agree that corruption is a pervasive, global phenomenon. But the failure of development aid to reduce corruption has not been linked to corruption. I focus on “grand” or “political” corruption, as it is the most intractable. Following a review of the literature, which leads to the disappointing conclusion that development aid has not been successful, I consider those nations where poverty-alleviating economic growth has been recently established. A look at these successful nations leads to additional awkward truths about our proud assertions regarding the necessary conditions for creating self-sustaining economic growth. I then analyze current instrumentalities available to combat grand corruption and detail their fundamental inadequacies. The article concludes with a description of current global efforts to make development aid more effective by redesigning delivery mechanics.
Corruption is a global behavior which all agree is a major problem. While corruption can and should be suppressed and deterred, it will not be eliminated. I conclude with several policy proposals designed to make development aid more effective and less susceptible to corruption.
Keywords: Corruption, Foreign Aid, Development, International, Foreign Corrupt Practices Act, OECD Convention Against Bribery in International Business Transactions, Bribery, Aid
Suggested Citation: Suggested Citation