Tuesday, May 20, 2008

Can Assistance “Save” Poor Countries?

Part I of a 2 Part Series

There is no question globalization has created significant riches for some countries; China and India are the two examples that come to mind. Yes, I recognize these successes are rather imperfect: China’s economic rise comes with frightening environmental costs we are just beginning to recognize, and the meteoric rise in India’s stock exchange cannot seem to eliminate the crushing poverty of millions of its citizens. But those consequences are at least in equal parts driven by a country’s own internal decision making as by globalization. In short, globalization produces wealth, and then we as fallible human beings do what we do best: We muck it up.
In this series, I want to move beyond the debate on globalization. Readers of my posts by now recognize I believe globalization comes with costs and benefits that must be adequately managed. Often they are not. The more complex and interesting question to me is whether we can use technical assistance to assist countries currently shut out of the world economy. Can transferring knowledge and providing aid and technology really lead to economic prosperity for poor countries? In other words, can technical assistance “save” developing countries?
Let me be upfront and say I may be somewhat biased; I have worked in technical assistance for almost half of the twelve years I’ve spent focused on international trade law. My interest has primarily been on Africa because I love a good challenge! Like everyone else, I want to believe my work makes a difference in the world. And I have had some measured and incremental successes to prove it. But have I ever seen a poor country rise to economic prominence because of the technical assistance work of another? Well, I’m an optimist so I’d have to say . . . not yet. In this post, I want to examine some of the problems in technical assistance delivery, and in the next explore some potential solutions.
Some claim trade-related technical assistance is a joke. Amy Chua in her book World on Fire recounts the story of the Americans in Mongolia who were sent out to advise the government on building free markets. The consultants were heartened when officials asked for several hardcopies of the voluminous U.S. securities laws—photocopied on only one side of the page. It turns out the Mongolians were not true converts to the U.S. system; they merely wanted to use the documents for scrap to alleviate the government’s chronic paper shortage. A few years back, Matt Bivens published Aboard the Gravy Train: In Kazakhstan, the Farce That Is U.S. Foreign Aid in Harper’s Magazine. Bivens claimed when a local Kazakhstani bureaucrat fancied a technical assistant provider’s red swim trunks, the advisor was forced to strip down and hand them over because angering the Kazahkstani bureaucrat might jeopardize his chance of returning to the bottomless well of USAID renewal contracts.
So, what can we learn from these and other stories of technical assistance failures? Three key points I’d like to make:

(1) Successful technical assistance requires “buy-in” from local officials and other key players
It sounds obvious, but it’s easier said than done. Remember, the money from these projects is coming from some rich country abroad, so for local officials it’s a “can’t lose” opportunity. That doesn’t necessarily mean the project is well-conceived, or that the recipient country is truly willing to implement it. For years I have thought recipient countries should “invest” in technical assistance. If it is something they really want—if they see a benefit in the project—then they should be willing to “pay” for it, either in cash or sweat equity. Few of us appreciate that which is given to us for free.

(2) Beware of the human emotions
Technical assistance providers arrive in the recipient country under a cloud of suspicion. Even as people are smiling and inviting you over to dinner, you can’t help but notice the question carefully hidden in their eyes: What does she want? It is not an illogical question; after all, technical assistance is not truly “free.” Rich countries provide it because they do want something—implementation of more favorable foreign investment laws, for example. And it isn’t as if the recipient country is blind to that reality: One African official characterized technical assistance provided by the World Trade Organization (and funded by rich countries) as “ideological.” In his view, providers came “to tell us what to think, what our positions should be.
It is impossible to have a successful project unless these emotions are openly acknowledged and handled. The truth is, successful technical assistance is always “win-win.” Rich countries wouldn’t provide the funds if there was nothing in it for them, but recipient countries can work to ensure implementation also serves their interests.

(3) Don’t take your pants off for anyone

Enough said.