|Alternative aid channels|
The Democratic Republic of Congo is in the headlines again. This time it’s not about rape and escalating violence in the eastern provinces but because donors are threatening to withhold aid as fears grow about governance, particularly in the mining and energy sectors where many foreign companies compete for concessions.
For most donors, turning the aid tap on and off is a standard response to what they perceive to be poor performance or bad behavior on the part of recipient governments.
Given the pressures from their stakeholders back home, it’s no surprise. Cutting foreign assistance to errant governments is a blunt instrument but it sends a clear message.
In some places it may work. In fragile states, however, it can set things way back.
The risk of violent conflict correlates closely with poor governance and weak institutions. Tampering with the aid spigot can make matters worse for countries that need external support to restore confidence and create institutions that are better able to manage violence.
Research for the WDR shows that the volatility of aid to fragile states is far greater than flows to countries whose situation is less precarious. For example, aid from the World Bank and other donors to Burundi, Central African Republic, Guinea Bissau and Haiti has seen major swings, with donor allocations reflecting competing priorities and short-term deteriorations or improvements in governance.