AID AND CONDITIONALITY: ENFORCING GOOD GOVERNANCE

IN SUB-SAHARAN AFRICA

BY

EWANE FIDELIS ETAH

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TABLE OF CONTENTS

CHAPTER ONE

1.0 INTRODUCTION 2

CHAPTER TWO

2.0 ORIGIN AND EVOLUTION OF AID CONDITIONALITY 5

2.1 ORIGIN OF AID CONDITIONALITY 5

2.2 FROM CRISIS TO ECONOMIC REFORM 7

CHAPTER THREE

3.0 FROM ECONOMIC TO POLITICALREFORMS 10

BACKGROUND 10

3.1 THE CONCEPT OF GOVERNANCE 11

3.2 GOOD GOVERNANCE 13

3.3GOOD GOVERNANCE, AID EFFECTIVENESS AND DEVELOPMENT 13

CHAPTER FOUR

4.0 ROLE OF THE EUROPEAN UNION IN IMPLEMENTING GOOD GOVERNANCE 18

BACKGROUND 18

4.1 THE EU APPROACH TO GOOD GOVERNANCE 19

4.2 EU ACTIVITIES 20

CHAPTER FIVE

5.0 THE WORLD BANK SUPPORT TO SUB-SAHARAN AFRICA 26

5.1 THE WORLD BANK′S STRATEGY 26

5.2 INSTITUTION AND GOVERNANCE REVIEWS 27

5.3 LENDING APPROACHES ...27

5.4 COUNTRY ASSISTANCE STRATEGY (CAS) 29

5.5 THE WORLD BANK AND NEPAD 30

CHAPTER SIX

6.0 CONCLUSION 32

BIBLIOGRPHY 34

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CHAPTER ONE

1.0 INTRODUCTION

The persistent low state of development in sub-Saharan Africa has become a global challenge.

Academics and think-tanks continue to search for solutions to Africa′s longstanding problems. Studies

have proven that the entire region is essentially confronted with a crisis of social structures and

government and the fragmentation of authority is the hallmark of this crisis (Van Hoyweghen & Smis,

2002:575). Over twenty-four million people are infected with AIDS/HIV, growth of per capita income

is low and civil wars have killed millions in Rwanda, Burundi, Liberia, Sierra Leone and the

Democratic Republic of Congo. African governments owe billions of dollars in debt (Polanyi,

2003:563). This irreversible trend brought the good governance discourse in development cooperation

between the donors and African counterparts.

The purpose of this paper is to examine how the concept of good governance is being implemented in

Africa. For clarity purposes, the work is limited to the analysis of the efforts being made by the

European Union (EU) and the World Bank in assisting African countries to implement good

governance. This choice is based on the fact that the EU and World Bank are the main multilateral aid

donors and development partners of the region.

It argues that good governance enhances transparency in the use of development aid, helps to reduce

poverty and spurs development, and that it is necessary to foster institutional reforms (causative

argument). The paper further argues that implementing good governance will improve the use of

political power by leaders and help in the consolidation of peace (normative argument).

Achieving global governance is a main issue in international politics today. Enforcing good governance

is a must if Africa has to be fully integrated into the process of globalisation. And for globalisation to be

complete and meaningful, poverty in Africa as well as other parts of the world must be eradicated. No

amount of foreign aid can lead to meaningful development without effective governance. The poor state

of development in Africa produces a backlash that has a global reach. Europe for example is facing a

huge influx of migrants from Africa in search for greener pastures. Eradicating poverty is therefore a

global challenge as the world becomes more global. The fight against poverty and underdevelopment

has given rise to a greater inter-state relationship in which powerful institutions play a decisive role.

Good governance is an important normative concept that can push international relations forward.

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This paper addresses the following thematic questions: What is good governance? Where did it

originate? How is it construed? How does it facilitate aid effectiveness and development? How are sub-

Saharan African countries reacting to it? Are there areas where it has failed?

This work is divided into four main chapters and a conclusion. Following this introductory chapter,

chapter two reviews the evolution of the state in Africa and argues that the corrupt leadership,

inefficient management and weak political institutions led to a crisis and consequently to the origin of

aid conditionality. It discusses the failure of economic conditionality to deliver expected goals and

opens the door for chapter three which examines political conditionality with emphasis on good

governance.

The third chapter is divided into three parts and the first examines the concept of governance and

highlights its importance. The second part explains the origin and meaning of the concept of good

governance and the third part using examples shows how it relates to development and aid

effectiveness. It argues that good governance is key to aid effectiveness and development. It

demonstrates that countries with good governance achieve relatively high levels of well-being and it

argues that the state has a responsibility to bring in development by creating a market friendly

environment and draws a divide between the good governance approach and neo-liberalism on the roles

of the state and market. It places the state at the centre in contrast to neo-liberalism which sees the

market as playing a more determinant role towards achieving sustainable development.

Chapter four reviews EU projects to enhance good governance in selected countries and argues that

transparent national institutions and increased accountability are necessary to foster development and

consolidate peace. The first part analyses the EU approach which is maily dialogue and capacity-

building and not by prescribing and dictating to the African countries. The second part examines EU

activities led by the European Initiative for Democracy and Human Rights (EIDHR). It discusses the

Centre for Common Ground project in Angola which deals with capacity-building, liberalisation of

Angolan media and promoting an active civil society. It reviews EU budget support to Rwanda to

reinforce national institutions and the EIDHR activities in establishing the rule of law. This part also

discusses the role of the EIDHR for the consolidation of the rule of law, institutional capacity-building

and budget support to Burkina Faso. And finally, EU support for the creation of the Truth and

Reconciliation Commission and election support to Sierra Leone. It uses the example of Zimbabwe to

argue that dialogue and not sanctions can lead to good governance.

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Chapter five examines World Bank projects which lay emphasis on capacity-building and institutional

reforms to strengthen both the civil society and the central government. It argues that powerful

government institutions and an active and participatory civil society form the basis of sustainable

development. The first part exposes the Bank′s approach which is mainly country leadership and

ownership of the reform process. The second part analyses Institutional and Governance Reviews in a

selected number of countries which provide an overview of a country′s governance-related issues and

suggestions for suitable reforms. The third part discusses the Bank′s adjustment lending approach

which focuses on reforms in public expenditure management, civil service, legal and judicial

decentralisation to enhance accontability. It analyses case studies in some countries which have

received adjustment lendings to fight corruption and carry out reforms in financial management. Part

four explains the Bank′s Country Assistance Strategy approved for some countries to combat poverty

by building public sector capacity, expand service delivery and accountability structures.

Chapter six gives conclusions and makes a comparison of EU and World Bank projects.

Both qualitative and quantitative designs were adopted for this study in order to attain an empirical

research. The qualitative design was geared towards collecting first hand information and it was totally

descriptive. It described the views of the EU and ACP on the concept of good governance. For this, a

questionaire with fifteen open ended questions was prepared and the reason was to get the original

positions of the different bodies. The questionnaire was electronically submitted to the EU while the

ACP was contacted to create a rapport and to explain the purpose of the study. A questionnaire was

later submitted to them. The quantitative design made use of published books, scholarly articles,

relevant internet resources, public sources and expert consultations. The combination of the two designs

was geared towards achieving an empirical research. The purposive sampling technique was used in

selecting the consulted organisations. The EU and the ACP were purposively chosen because they have

the expert knowledge and resources necessary for the successful completion of the work. A frequency

count and a manual statistical computation were used in processing and analysing the collected data.

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CHAPTER TWO

2.0 ORIGIN AND EVOLUTION OF AID CONDITIONALITY

This chapter examines the origin and evolution of conditionality in international development

cooperation between Africa1 and multilateral donors like the World Bank and the EU. It is divided into

two parts and the first part begins with a brief recapitulation of the colonial foundations of the states in

Africa. It discusses their attempts to embark on western development models and how their dismal

failure despite many decades of development cooperation and huge amounts in aid, led to the

emergence of aid conditionality. The second part deals with the donor imposed economic reform

package and discusses its failure to meet the intended goals. The chapter argues that corrupt African

leadership and weak political institutions led to the imposition of conditionality and this ties up with the

argument that good governance enhances transparency in the use of development aid and improvement

in the use of political power by leaders.

2.1 ORIGIN OF AID CONDITIONALITY

In the 1960s, most African countries attained independence and accepted the legal and political

structures they inherited from their colonial masters. These emerging African states viewed

development as a change from their traditional subsistence to a modern economy. And such

development could only be achieved through an elitist top-down approach that was dependent on the

application of modern science, technology and expert knowledge held outside Africa (Thomas,

2000:34). The aim of this western model of development was to reproduce the same technological

advancements and economic prosperity found in the west. The driving force behind this approach to

development was the neo-liberal believe that such development will trickle down from the top to the

bottom of the society for the mutual benefit of all which we are yet to witness.

However, some African countries rejected this capitalist approach to development and instead opted for

the socialist conception of development that was practiced in Eastern Europe. With Julius Nyerere and

his Ujamaa in Tanzania and Kenneth Kaunda′s Humanism in Zambia, some African leaders espoused

their vision of development and adopted socialism as a way of life2. But a common feature of these

Africanised visions of development was their state-centric nature. In order to promote development, the

1 Africa is used throughout this work to refer to sub-Saharan Africa

2 These Leaders believed that socialism was similar to the African way of life of collective ownership and sharing.

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state was recognized as the main actor and played a major role in the ownership and management of

natural resources. And for the state to effectively play this role there emerged a concentration of

management functions at the centre and the economy was managed through parastatals3.

These state-controlled enterprises had complete jurisdiction in a considerable range of policy issues

(Ntambirweki, 1999:2). The lack of supervision on these enterprises led to the abuse of power and

excessive corruption by the controlling bureaucracies who used them for their personal gains. The

situation was further exacerbated by the absence of accountability, democratic values and institutions.

Public interests, local values, concerns and traditions were neglected because of the concentration of

management in the centre. The emergent African states failed to bequeath the institutions necessary to

sustain democratic and effective or good governance.

Most countries failed to implement constitutional rule, as there was a proliferation of military

governments in the entire region. There prevailed in Africa what Michel Foucault termed in the social

warfare model as the "perpetual warfare state" (Danaher et al, 2000)4. Africa′s inability to embark on a

meaningful path to development and achieve a level of well-being deemed satisfactory for a sizeable

portion of its population has been attributed to corrupt policy environments, weak African political

institutions and poor governance (Lancaster, 1999:29). In Africa, over forty percent of the populations

are living below the "poverty line", diseases such as HIV/AIDS, malaria and tuberculosis are

disproportionately rife among the people. The deteriorating situation in Africa forced the EU and other

donor organizations like the World Bank to change their attitudes towards the recipient African

countries. Consequently, there emerged an alternative approach in development thinking and

conditionality became a prerequisite for aid.

Conditionality is therefore the reflection of western donor support for an alternative approach to

development. It is the compelling insistence of donor countries for compliance by the recipient states.

All African countries are recipients of aid and some depend on foreign aid on about twenty four percent

of their national budgets. Donors lost confidence in the national governments because of the deplorable

state of development in the region. The sovereignty of the recipient African countries became

increasingly undermined thus bringing into question the communitarian notion of international

3 These are large-scale, state-controlled enterprises. They operated mainly in the agricultural and Petroleum sectors.

4 A Group or groups seize power, establish themselves as dominant in a society, and set up the state in terms of their own

ideal, values and self-interest.

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