1. Aid

2. Relevant Questions
Evaluate the view that Transnational Corporations (TNCs) have had a significant part to play in the existence of global inequality. (30)
Evaluate the view that aid cannot solve the problems of the developing world. (30)

3. What do we mean by aid?
Economic, military and technical assistance both given and loaned to a country
It might also include simply writing off previous debt
It can be tied (for a specific purpose) or free (used at the discretion of the country receiving)

4. Who gives aid? One state to another (bilateral aid)
IGOs (Many states working through a central organisation – Multilateral aid)
TNCs (Corporate Responsibility)

5. NGO – Non-Government Organisations
Make a list of as many charities as possible which work to make a difference in the UK
Make a list of as many charities as possible which aim to make a difference across the world
Do any of these charities do both?

6. The up side of NGOs It does not expect repayment Not for profit
Take risks
Small scale projects
Work in areas normally ignored
Often more effective than governments who have hidden objectives
Responsive to donors
Their objectives are continuous

7. Problems with Charities (NGOs)
Limited funds – which often leads to reliance on funding from governments or partners
Spending on publicity and administration
Use of inappropriate equipment/people

8. Aid – good or bad?
Modernisation – development loans can kick-start economies
The North has much that the South could use to develop
Collier (2007) – Aid has improved recipient countries GDP by 1% a year – not much but it does help

9. Aid – good or bad?
Neo-Liberal – aid creates dependency (although it may allow some)
If a country is reliant on aid it will not take on capitalist values
Aid can create laziness, corruption and inefficiency
If capitalist values are fully taken on then a country shouldn’t need aid it should be able to attract companies with the promise of profit
Bauer (1995) – aid implies something good. Northern countries never received aid and managed to develop through capitalist values. In reality aid goes to governments and not the people

10. Aid – good or bad?
Dependency and world systems – aid is often conditional and goes to countries with strategic value for the benefit of the donor
Hayter (1971) – Aid as Imperialism – creates jobs and export markets for the donors – support from the recipient
50 years of aid for what? (but is that because we never give enough?)
Participation – Participatory Poverty Assessment

11. Aid – the middle It can be good when it does not:
Support the corrupt
Get wasted on inefficiency
Get spent on the military
Damage the environment
Employ foreign persons
Get into the wrong hands
Has long term debt burdens
Sachs (2005) – ‘big push’ – If we gave more a real difference could be made
Easterley (2006) – bigger focus on small local initiatives

12. Aid and the legacy of debt
1970s loans came with interest rates
Belief in the ability to pay off the debt through modernisation
Recession in the 80s reduced markets and amount of aid available
Cuts in developing countries – mainly education and healthcare

13. Debt Boomerang – George (1991)
Debt comes back to bite the North (it would be better write it off)
Environmental - exploitation in an unsustainable way to repay debt
Migrants flee to the north to escape poverty
Drugs - grown to repay debt
Under employment - Less money less markets for developed goods
War – to repay debt or because of social unrest
Tax – Developed countries have to pay tax to support banks write off bad debts
Jubilee Debt Campaign – Cancel the debts of the worlds poorest nations

14. Jubilee Debt Campaign Cancel the debts of the worlds poorest nations
It has happened slowly but still involved structural adjustment programmes

15. Moral Hazard
Writing off debts rewards countries which used the money poorly
But this was years ago…
Vulture funds