Viktor Jakupec

Development aid: Regulatory Impact Assessment and conditionality

Abstract The purpose of this paper is to examine how Regulatory Impact Assessment (RIA) can contribute to decision-making processes of Official Development Assistance (ODA) loans and grants. The point of departure for the discussion is the phenomenon that RIA, within a context of ODA, is applied by International Finance Institutions mainly in the context of Development Policy Loans, to introduce or strengthen country systems for Regulatory Impact Assessment. However, ODA grants, and loans, particularly when specific policy or regulatory conditions are attached to them, significantly impact economic and social conditions within the beneficiary country. This article examines what role RIA can play in facilitating a coherent decision-making process affecting the ODA allocation within a context of conditionalities requiring the introduction of new, or changes to existing, policies and regulations. The discussion considers the nexus between development aid effectiveness, conditionality and ownership, and RIA. The article argues a justification for applying RIA to ODA loans and grants which carry regulatory and policy conditionalities.

A Critique of the Development Aid Discourse

Despite the fact that development aid has broadened from economic growth theory to include human and social capital, there is a lack of a general agreement as to its benefits. This critical review and analyses of the development aid academic and institutional discourse identifies some major shortcomings. The dominance of economics at the expense of politics, and the imposition of development aid neoliberal conditionalities act as barriers to socio-economic development in aid recipient countries. An inference is offered to recast development aid through reconciliation within critical frameworks of different sides of the political spectrum.

Regulatory impact assessment: the forgotten agenda in ODA

Abstract This chapter argues for the inclusion of Regulatory Impact Assessment (RIA) into the project and policy cycle of ODA design and implementation. The point of departure is that although government agencies and multilateral organizations adhere to the principles of using RIA for any new policy cum regulatory interventions, the same does not apply to ODA projects and programs. Yet the argument presented in this chapter is that ex-ante RIA is an important tool for establishing the acceptability of new regulatory requirement imposed by donors in a form of loan and grant conditionality. The current dominating politico-economic ideologies and doctrines embraced by most, if not all Multilateral Development Banks (MDB) are subjected to an ideological and implementation critique.

The Potential Impact of Trumponomics on Development Aid

The impact of the Trump administration’s potential withdrawal from the values of globalisation that have underpinned the vast majority of foreign aid agencies since WWII is discussed. Two megatrends are offered for discussion, one is the transition from globalisation to de-globalisation the other one is the transition from neoliberal ‘Aid-for-Trade’ to mercantilist ‘Trade-not-Aid’. Subsequent scenarios are offered, specifically how the USA’s retreat from soft power diplomacy to harder military power will affect the social and political principles maintained since WWII. In conclusion, the discussion turns to the impact of USA’s potential retreat as a global development aid leader and afford China dominance within a context of Beijing Consensus as a global player in development aid and the decline of neoliberal ideology as it relates to development aid.

The Rise of Populism

Drawing on the recent political developments in Europe and the USA, and the public discourse since 2016, an analysis of the rise of populism on the left and the right is articulated with the aim to provide an understanding of the contemporary populist political landscape. The Trump phenomenon and his form of populism is analysed within the context of foreign policy and development aid. This is contrasted with the neoliberal view couched in Fukuyama’s ‘End of History’ theorem, and the current popular sentiment towards anti-establishment and anti-globalisation in Western democracies.

Development Aid—An Historic-Political Overview

Development aid has been an important catalyst for economic development and international politics since the end of WWII. A critical analysis of the main political, social and economic advances in development aid, traces the development agenda from the advent of the Bretton Woods agreement, the Truman Doctrine and the Marshall Plan, to the Washington Consensus and its neoliberal manifesto. The failure of the Washington Consensus and the rise of the post-Washington Consensus is analysed providing a backdrop for the critique of economic globalisation as a development aid cornerstone. Trump’s rejection of the neoliberal globalisation agenda and departure from post-WWII ideologies is discussed.

Aid for trade: a critical analysis

Abstract The purpose of this chapter is to introduce the concept of Aid for Trade (AfT) within a context of Official Development Assistance and to submit it to a critical analysis based on its own shortcomings as much as the critique from the “right” and from the “left” of the politico-economic spectrum. The chapter provides a critical analysis of AfT, including notions such as trade not aid and the neoliberal agendas. Following from the critical analysis the discussion turns to paradigm shifts in AfT bringing to the fore AfT as a subset of the Value for Money philosophy in Official Development Assistance.

Impact assessment: from theory to practice

This chapter explores key issues and concepts raised throughout this volume. The authors argue that impact assessment is a vital part of the current development landscape, yet it is an unfinished project. Impact assessment is frequently poorly conceptualized and theorized, and is so many things to different people that it is often poorly understood and poorly implemented. There is potential for competing and highly polarized camps to evolve a much better mutual understanding of the potentials and limitations of different approaches, the relevance of the development and global economic paradigms driving ODA allocations and the need for a better, and more diverse “toolkit” from which to work. Impact Assessment can contribute to more effective human development, if some of the existing misconceptions, and entrenched positions are addressed, a development specific discourse about the theory and practice of impact assessment can be openly established.

Official development assistance and impact assessment – theoretical and practical frameworks

This chapter aims to identify and critically analyze the contemporary context for impact assessment in the Official Development Assistance arena. The chapter explores the context and relevance of foreign aid in poverty alleviation and sustainable development as understood and practiced within current development architecture and modalities. In doing so, the increasing relevance of understanding the impact of foreign aid interventions is highlighted. Specific aid discourse around aid effectiveness and value for money frame issues of designing and managing for results, and the pressing need for more critical engagement with impact assessment within an increasingly complex social, political, and economic environment. Critical issues are identified from a range of perspectives and thus set the scene for the discussions that follow in subsequent chapters, which cover development theories, practices, and problems of foreign aid in the contemporary social, political, and economic environment. With this in mind, this chapter provides a background for critical evaluation of the complexity of Impact Assessment.