Essay about How The Aid Industry Works

847 Words Dec 5th, 2014 4 Pages
In a chapter of his book entitled How the Aid Industry Works, Arjan de Haan presents four main challenges facing the aid industry as a whole in the twenty-first century. First, he argues that the number of relevant actors has increased, posing challenges of coordination and increasing the potential for conflicting approaches. He provides the following example to back up this claim: “the focus of China’s aid on infrastructure is generally regarded as very welcome, because this has been an area that the old donors have tended to neglect, but China’s insistence on noninterference can be at odds with the old donors’ emphasis on promoting good governance as a precondition for development.” This challenge is particularly relevant for the Bretton Woods Institutions who are arguably the principal donors referred to in the previous quote. The second challenge presented by de Haan concerns the increased flow of aid and where it should be directed to achieve the greatest impact. He conveys two sides of this debate. The first is attributed to thinkers such as Jeffrey Sachs, who use macro indicators and economic growth to show that aid works, and “reject arguments that increases should be conditional on improved governance.” The second side includes “those who argue that one cannot prove that aid causes growth rather than the other way around, or that macro analyses cannot be relied upon.” This side argues against a grand plan for development. The primary challenge stemming from…

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