Overseas development assistance on an international level - a network analysis

Research Question

How can overseas development assistance (ODA) be applied more efficiently and effectively on an international level?

Background

While development assistance has been subject to numerous criticisms, a major one is connected to the decision-making process of determining where, when, and how to implement programs. The issue of how much to spend is also critical. Proponents of this view bring forward the following arguments:

Since ODA is distributed by individual countries, the decision-making process on where and how to spend the available resources, as well as how much and how long resources should be spent, is often complicated by domestic politics rather than recipient needs or considerations of efficiency and effectiveness. Resources are often spent on topics that are of direct political interest for a government or an individual constituency. The investment is maintained only as long as such an interest persists.

As a consequence, areas of development assistance that are less “sexy” (e.g. projects improving living conditions for the elderly as opposed to women and children or rehabilitation of former members of violent militias) are often neglected. Governments tend to make short-term commitments that must often be renewed at least after every democratic election. This leads to a major ineffectiveness due to financial insecurity and abandonment of projects before their completion. The lack of a comprehensive coordination mechanism on the international level leads to major redundancies in the development assistance of different states all spending their resources on areas predominantly covered by the media.

Objective

A network analysis concerning the main actors in the field of overseas development assistance examining countries, areas and time frame of commitments can help to better identify neglected areas, redundancies and timing issues on an international level. This analysis could potentially be used as the basis for a more effective coordination and cooperation among state agencies.

For example, such a network analysis might highlight recipient countries receiving the majority of aid or depict structural holes of countries that are left on the fringe. It can also show if different states tend to invest in the same countries and or areas, and if commitments of different states start and end around the same time, therefore suggesting redundancies. Moreover, it could help to illustrate if and how aid flows are connected to specific political or historical events like natural disasters, conflict, humanitarian crises or the emergence of new political awareness or “hot topics” in donor countries. The analysis may also highlight the most central actors (e.g. centrality measures) over time in terms of country-based or subject-based commitments.

Methodology

In order to keep the project in a manageable scope, the national agencies included will be limited to the biggest players in the field. Depending on the availability of data, this might be up to ten or fifteen agencies

Data will be gathered on the countries these agencies were and are active in, the topic areas in which projects were financed and the temporal scope of commitments per country and per project area. As the number of agencies, the time frame considered in the analysis will in large part depend on the availability of data. The amount spent as well as existing cooperation between agencies should also be made note of. Furthermore, attribute data concerning the age of an agency, its structure, the institutional way of decision-making, the political system of the donor state, historical commitments and public values etc. should be included. There should also be a list of historical events that might have had an influence on the flow of development assistance, which can be further expanded during the project.

This data can then be organized as one-mode datasets connecting the agencies with countries, the agencies with topic areas, the agencies with topic areas in a specific country, as well as two-mode datasets displaying country-to-country and area-to-area data. The time frame as well as the amount spent can be included as valued data and/or attribute data, so that it can be displayed differently depending on what other aspects are being considered and what way might be most convenient. It will probably be of use to categorize both time and amount spent into blocks, e.g. under 6 months, 6-12 months, etc.

The data will then be examined according to the questions outlined above by looking at and comparing time, country and area of investments as well as centrality measures and clique analysis of the agencies as well as of countries and topic areas.

Hypothesis

The findings outlined above will prove to be valid. The network analysis will therefore show that ODA has been redundant and driven by domestic politics and that there is major potential for improvement. It will also pinpoint where there is room for such an improvement and will provide a basis for the development of a new international policy determining decision-making processes based on long-term objectives, actual needs, cooperation and coordination in the future. It will also show main players that are best situated in the network to promote such a policy.

Potential limitations

There are a number of concerns regarding the realization as well as the significance of the project. While development agencies of democratic states can be expected to be transparent enough to publicly provide the needed data, this might not be the case for all major players in the field. It might also be a problem to access data on past years. Moreover, the data might not be specific enough, e.g. data might be provided per country, but not per project. Regarding the attribute data, very complex characteristics, e.g. political system or institutional way of decision-making, have to be framed in a clear-cut way, and are therefore vulnerable to subjectivism and over-simplification. 

Concerning the significance of the findings, it must first be noted that the data does not clearly reveal redundancies, but is based on the assumption that if several countries invest in the same projects in the same countries, there tends to be a lack of cooperation. While the validity of that assumption can surely be supported by past studies and numerous examples, this remains a major weakness.

Moreover, it might be impossible to connect historic and political developments to investments because of the different time it takes in the different systems to translate these into financial commitments.  

Finally, the scope of the network might be too limited to show significant findings. For instance, if Western countries tend to invest in the same countries and topic areas at the same time because of the close connection of their media, this might not be clear if only a few of these countries are represented in the project.

Preliminary sources

The individual agencies’ web pages as well as data from the World Bank, the IMF and the OECD will serve as major sources. Additional sources may include:

Lawson, Marian Leonardo: “Foreign Aid: International Donor Coordination of Development Assistance”, Congressional Research Service, 2013. Available at http://www.fas.org/sgp/crs/row/R41185.pdf (10/24/2013).

Dobransky, Steve: “The coming crisis of U.S. foreign aid: policy options for the 21^st century”, American Diplomacy, 2011. Available at http://www.unc.edu/depts/diplomat/item/2011/0104/comm/dobransky_coming.html  (10/24/2013).

Keeley, Brian: “From Aid to Development”, OECD, 2012. Available at http://www.oecd-ilibrary.org/docserver/download/0111101e.pdf?expires=1382632503&id=id&accname=guest&checksum=E8070FDE148A4948BF39C04292BD0AFB (10/24/2013).

Easterly, William: “Are aid agencies improving?”, Economic Policy, Vol. 22 No. 52, 2007. Pp. 633-678.