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Debate: Bilateral vs multilateral aid

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Should developed countries give aid bilaterally (directly) or multilaterally (through international orgs.)?

Background and context

The giving of international aid has been taking place for decades, but the higher levels of international aid we know today are largely a phenomenon of the post-World War II era. Contrasting models of foreign aid giving are provided by programs like the Marshall Plan, involving bilateral aid arrangements with each of several European countries, and by the multilateral arrangements created by the Bretton Woods process (the International Monetary Fund and the World Bank). Historically, bilateral aid dominates the foreign aid landscape. The major economic powerhouses—mostly former colonial powers and the United States—provide the bulk of foreign aid. Contributions by multilateral organizations such as the IMF and the World Bank have been controversial for their focus on economic development and the sometimes severe austerity measures they impose upon recipients. Because aid in both contexts is often tied to loans, critics have argued that aid has merely led to the dependence of developing countries on the developed world. Recently, countries such as the United States and the United Kingdom have increased their contributions to NGOs or non-governmental organizations that provide help with a variety of different needs in recipient countries. Despite these changes, citizens and politicians in both the United States and Europe seem to be experiencing an increased level of “aid fatigue,” questioning the value of the continued expense.

Contents

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Interests: Does bilateral trade better harness the individual aid of states?

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Yes

  • Bilateral arrangements better uphold the interests of state funders. Providers of aid, for the very reason that they are spending their own money, should have their interests better secured through a bilateral aid arrangement. Significant opposition exists to foreign aid in the United States. For this reason, it is important to demonstrate to the American public that their tax dollars are being spent in a way that benefits the nation and/or is used responsibly by the recipient nation. Sadly, many aid dollars have been wasted on countries with corrupt regimes that have misused the funds, or the recipients have lacked the resources internally to use the funds productively. This misuse is more likely to happen if aid is channelled through, and supervised by unaccountable international bureaucracies instead of given direct to countries in need.


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No

  • Multilateral aid is less tied to the political self-interest of donor countries. One criticism of bilateral aid arrangements is that they are often drawn up based on self interest. Major powers who provide international aid have tended to direct their aid to former colonies or countries with which they have significant strategic ties, economic interests or potential markets. Often, aid money must be spent on goods or services from the donor country. While the United States does not have as developed a colonial history as some other major donor states, it does have a history of providing aid to countries it sees as strategic partners. This was particularly true during the Cold War, but has now emerged as a practice in the war on terror. Aid that is given multilaterally is therefore much more likely to go to developing countries on the basis of need, and of where it has the most potential for good.


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Efficiency: Is it more efficient to channel aid multilaterally?

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Yes

  • Multilateral aid can be equally or more coercive than bilateral aid. The history of World Bank and International Monetary Fund austerity programs and structural adjustment policies in the developing world has amply demonstrated that sometimes multilateral organizations can impose potent and harmful conditions on recipients, interfering with the internal affairs of other nations and doing long-lasting harm. These agencies have also been heavily criticized for their focus on economic concerns at the expense of more basic human needs, such as health, education and the alleviation of poverty.


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No

  • Multilateral aid allows for the efficient pooling of resources. Much as when an individual makes a donation to a major charity, their small contribution goes much further when combined with those of many others. Particularly in the face of pressure to reduce foreign aid, America can still make a significant impact on development in other parts of the world through combining resources with other donors. By contrast, bilateral aid arrangements are often short-term and subject to change at short notice as a result of political or economic shifts in the donor country. Multilateral aid programmes are therefore more stable and can plan more usefully for the long-term.


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Security: Does bilateral aid better uphold international security?

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Yes

  • Bilateral aid is better in advancing international security. The United States has learned that it can help reluctant regimes to cooperate in the war on terror through financial incentives (most notably Pakistan). Moreover, direct aid from the United States can help improve America’s image in societies whose people might currently have negative or mixed attitudes toward the United States.
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No

  • Multilateral aid arrangements create cooperation among nations. Efforts to solve problems, such as poverty, disease and conflict through multilateral efforts suggest that these are “world problems” and not exclusively the problems of a recipient country and an interested donor nation. An increase in multilateral efforts improves the general sense that we are ‘one world” with common difficulties in need of common solutions. Multilateral approaches to solving these problems expand a sense of goodwill.


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Coordination: Is bilateral aid better for coordination?

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Yes

  • Multilateral aid is sometimes hard to justify to constituents. Americans question the value of international aid, and are particularly suspicious of America’s involvement in international institutions. In an age of increased budgetary pressures and increasing suspicion of international institutions, efforts to support multilateral economic aid would likely result in calls for cutbacks in other multilateral commitments, such as support for peacekeeping. Bilateral arrangements are easier to justify as serving specific national interests.


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No

  • Bilateral aid packages sometimes work at cross-purposes; multilateral aid coordinates. Years of development experiences have demonstrated that donors sometimes make mistakes in the arrangements they create. Dependency is sometimes fostered, conditions imposed on contributions are sometimes unreasonable and those administering the aid do not always consider the broader picture. If more than one country is approaching the recipient nation with different goals or conditions in mind, their uncoordinated efforts could cause unintended negative effects.


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Pro/con resources

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Yes

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No

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Aid agencies: Are multilateral aid agencies bad or good?

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Yes

  • Multilateral agencies often create dependencies abroad. This can in some countries amount to a parallel administration, bypassing the proper government which is increasingly denied responsibility for managing anything important. Giving aid government-to-government instead strengthens responsible and accountable government.


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No

  • Multilateral aid agencies are more familiar with the regions or nations they work in. Many UN agencies and NGOs have been working in the communities they direct aid to for years. They are more aware of the unique needs of those societies and where the funds can be directed to do the most good.


Motions:

  • In its relationship with the UN, the USA should favour multilateral rather than bilateral aid
  • The United States should channel its international aid through UN agencies
  • This House favours multilateral aid
  • This House would club together
  • This House would not go it alone

In legislation, policy, and the real world:

See also

External links and resources:

Books:


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