Foreign aid has disintegrated the relationship between the state and its citizens

Foreign aid has not only failed to spur the growth and development in Africa that it initially promised, but it is causing a deterioration of the relationship between governments and their citizens, write Philip Akrofi Atitianti and Samuel Kofi Asiamah.

Foreign aid has not only failed to spur the growth and development in Africa that it initially promised, but it is causing a deterioration of the relationship between governments and their citizens, write Philip Akrofi Atitianti and Samuel Kofi Asiamah. At the superficial level, providing foreign aid to poor economies should be a reliable way to boost development and improve the living standards of local people. After all, foreign aid can be used to fund the construction of schools, hospitals, and roads that empower citizens economically and socially. Unfortunately, this has not been the case. Sub-Saharan Africa has received significant foreign aid over the years, yet the region remains the poorest in the world.

The prevailing poor living standards in sub-Saharan Africa show that foreign aid hasn’t effectively met its objectives of stimulating growth and development. Researchers have attributed this failure to an array of causes and proposed many different approaches to improve the effectiveness of aid. But critics of foreign aid are concerned not just about aid’s ineffectiveness but also its adverse unintended consequences.

The state-citizen relationship, a critical ingredient for development, is one of the areas where the unintended impact of foreign aid is being felt. Mitigating both the inefficiencies and adverse unintended consequences of aid requires a thorough understanding of how foreign aid can harm the relationship between the state and its citizens.

Foreign aid and state-citizen relations

Governments are primarily responsible for providing public goods and services, and spearheading initiatives to propel growth and development. Any government that successfully provides such amenities is more likely to be judged as competent by its citizens. Contrarily, when these expectations are unmet citizens express their displeasure through, amongst other things, protests, and voting against the government in elections.

Governments fund projects using revenue from taxes and debt. Foreign aid supplements this revenue in the form of loans and grants. Aid can be offered as budget support – a transfer of cash to the recipient country – or project assistance – implementing projects in the recipient country. Since most governments in sub-Saharan Africa find it challenging to self-fund adequate infrastructure projects, foreign aid has become a major source of funding for these programmes.

To obtain recognition for their benevolence, foreign aid donors often openly disclose their aid transfers and brand the projects they fund with flags and logos. But this has implications for how citizens evaluate their own government’s performance.

The relationship between the state and its citizens is a form of ‘fiscal contract’ in which the state, in exchange for the public goods and services it provides, receives a compliant attitude from citizens to tax payments and other civic responsibilities. When the government is not the primary provider of public goods and services, this contract can be broken, and citizens may feel inclined to withhold their side of the bargain. The continuous inflow of aid means actors other than the local government increasingly become the primary providers of what citizens expect from their governments, and this influences how people view the state.

The inflow of aid into Africa has resulted in poor perceptions of governance among the citizenry. People residing close to aid projects rate their governments as poor managers of the economy, express lower levels of trust in the government and consequently vote against the government in elections. These citizens also perceive government officials as involved in corrupt activities, which plays into perceptions of donors using aid to advance their own interests. Since some foreign aid comes with specified conditions, recipient governments are often compelled to prioritise the conditions of the aid over national needs.

These practices help generate negative perceptions about foreign aid and governance, leading to a breakdown of the relationship between governments and their citizens. Consequently, not only is the effectiveness of foreign aid in doubt, but it may be doing more harm than good.

The way forward

The deterioration of the state-citizen relationship as a result of foreign aid is detrimental to development and needs to be mitigated. The poverty levels in sub-Saharan Africa suggest that foreign aid hasn’t been effective as intended in stimulating economic growth. If these same aid flows are contributing to the collapse of trust between the state and its citizens, then the use of foreign aid as a development tool needs to be comprehensively reevaluated.

This article is based on the authors’ article: Aid and Governance: Impact of Chinese Aid on the Evaluation of Government Performance in Sub-Saharan Africa.

This article has also been published in the London School of Economics' Africa at LSE blog.