S J Masty on how donors are wasting aid

By Penny Hawthorne | 2 July 2005

The Social Affairs Unit Blog has a informative article by S J Masty explaining how donors are directing development aid inappropriately. The article is introduced as follows:

Currently fashionable Western aid policies will ensure that money is wasted. This is the argument of development expert S J Masty. Western donors are again keen on large scale infrastructure policies. The donor community is also reallocating aid money to the very poorest countries. Finally some major donors, including the UK and the Scandinavian countries, are big supporters of "budget support", meaning that more control of how aid is spent is returned to the government ministries of recipient countries. These three policies, argues S J Masty, will mean that much aid is wasted and will not improve the condition of Africa. In some cases these policies may actually make the situation worse.

The Globalisation Institute has argued for aid to be moved away from top-down schemes to bottom-up schemes, for example in the form of small business development loans (microcredit) which enable development where the ability to get capital is otherwise hindered.