More Conditions and Less Money: Shifts of Aid Policies during the 1990s

Analyses the shifts in European aid policy caused by

• the fear of shifts of aid resources from South to East
• shifts away from proper aid in the strict sense of the OECD's own definition
• a paradigm shift to justify giving less money and financing activities that seem more of interest to "donors" than recipients.

Concludes that Until 1994 increasingly boosted ODA-sums hid both indications of a geographical shift and a decline of ODA/GSP in the strict sense. Doubtlessly, this must have been useful for donors until the plummeting of ODA in 1995 made data "broadening" less relevant in recent years. ODA is not only reduced, but also re-directed to expenditures more of interest to donors, be it ideological or political interests or simply the interest of private business from donor countries. Sometimes state-led development seems to be substituted by state-subsidised private business. An analysis of official OECD sources strongly supports the thesis that aid was one useful tool in the Cold War arsenal, and has now lost importance. An ODA-policy of "granting less and demanding more" has been accompanied by a new paradigm justifying it. The growing importance of non-ODA activities recorded as ODA suggests that these activities should be reported and recorded separately in the same way as ODA. The correct solution would be to book the provision of global public goods as expenditures in their own right, not subsuming them under ODA. This would not change facts, but produce even smaller ODA figures more in line with the OECD's own definition. Thus strong resistance by donors can be predicted. Alternatively the OECD should change its definition of ODA to fit actual disbursements. Independent auditing - ideally by experts from both donor and recipient countries - should replace present peer reviews and donor decisions on what passes as aid to produce more reliable and better data.[author]