Humanitarian action is supposed to improve the wellbeing of others. Unfortunately, in many cases government-channeled aid is relatively ineffective. In fact, it is often harmful, because it can fuel corruption, reinforce the status quo, and lead to political instability. But that is not just the case in foreign countries. It also occurs in the United States.
A major reason for the ineffectiveness of humanitarian aid is lack of transparency and accountability. Hence the question arises: where does this lack stem from? Here is a reading guide to how money is wasted due to the unaccountability of foreign and domestic aid.
What is humanitarianism?
In his book “Doing Bad By Doing Good”, Christopher Coyne not only describes adverse effects of humanitarianism, but he also shows how lack of accountability is one of the major reason why humanitarian aid is so ineffective.
Humanitarianism is the concern for the welfare of other people. Humanitarian action, which uses various efforts to improve the wellbeing of others, is the manifestation of humanitarianism. There are two different kinds of humanitarian aid: non-coercive (e.g. the Haitian government asking countries for help following the 2010 earthquake), and coercive (e.g. enforcing the no-fly-zone and firing cruise missiles at Lybia in 2011).
The Federal Emergency Management Agency (FEMA) helping victims of Hurricane Katrina is an example of domestic non-coercive humanitarian aid.
Today, experts differentiate between traditional peacekeeping, which is usually restricted to negotiating and enforcing peace agreement, and modern peacekeeping, which includes nation-building, i.e. rebuilding legal, political and economic institutions as well as resolving disputes.
Money and personnel have reached all-time high
Since the mid-1940s, money spent on humanitarian action has grown dramatically. The United Nations’ budget increased by 140 percent from 1974 to 2011, and the number of aid projects undertaken by OECD countries more than doubled between 2000 and 2008. (The Organization for Economic Co-operation and Development is basically made up of the developed democracies in the world.) When journalists, economists and policy makers talk about foreign aid, they typically refer to Official Development Assistance (ODA). ODA is an indicator of international aid flow coined by the OECD’s Development Assistance Committee (DAC). From 1998 to 2012, the total ODA from DAC countries doubled from about 60 billion dollars to about 120 billion. In the same time span, the number of United Nations Peacekeeping Operations has pretty much stayed flat while military personnel skyrocketed from about 20,000 to more than 120,000.
With these dramatic changes, aid transparency and accountability has come to the forefront of aid discussions.
“NGOs” have become “GOs”
The original idea of NGOs in the humanitarian aid process was for them to serve as an intermediary between markets and governments. Over time, however, governments started to contract with NGOs and started running their money through them, which made them a subject to a plethora of rules and regulations. More importantly, they are no longer non-governmental.
In his book “Global Problems and the Culture of Capitalism”, Richard Robbins describes the detrimental effects that occur when NOGs become entangled with countries.
“There is plenty of evidence that the growth in size and number of NGOs is fed by increased governmental contributions along with greater contributions from multilateral developmental organizations such as the World Bank. On the one hand, these conditions have created additional monies for […]; on the other hand, they risk becoming so dependent on governments that they have been co-opted and their independence threatened.”
A 2002 study of the relationship between governments and NGOs concluded that “NGOs not dependent on state aid are the exception rather than the rule.”
During the Iraq War after 9/11, NGOs including USAID, the United States Agency for International Development, became part of the military’s efforts to battle insurgents and achieve US ends. In other words: humanitarianism was militarized. NGOs were forced to follow the orders of the military, which is fundamentally at odds with humanitarian goals.
Corruption remains a massive problem
Watchdog Transparency International published one of the most comprehensive reports on fraud in humanitarianism. In the handbook titled “Preventing Corruption In Humanitarian Operations”, TI states that the “most damaging impact of corruption is the diversion of basic resources from poor people.”
The organization claims that “corruption in humanitarian aid deprives the most vulnerable poor people, the victims of natural disasters and civil conflicts, of essential life-saving resources.” In 2005, TI launched a program to diagnose corruption risks specific to humanitarian operations.
Attempts to improve accountability
Numerous initiatives – such as the Humanitarian Accountability Partnership (HAP), the Sphere Project and the Active Learning Network for Accountability and Performance in Humanitarian Action (ALNAP) – are dedicated to improving accountability and transparency standards and practices. Additionally, agencies such as ActionAid have made a public commitment to advance accountability in crisis response, particularly in view of lessons learned after the Haiti earthquake, as well as other humanitarian emergencies.
Markets for Good, an effort of the Bill & Melinda Gates Foundation,states in an article that official humanitarian aid has more than doubled since 2000 (which, as I mentioned earlier, caused aid transparency and accountability to come to the forefront of aid discussions). However, “there is no generalizable evidence yet showing that beneficiary feedback in humanitarian programs translates into improved outcomes.”
In an article on the website of the Program on Humanitarian Policy and Conflict Research at Harvard University, author Anaïde Nahikian discusses the “accountability deficit” in relief interventions.
“Professionals should engage in strategic thinking geared toward developing a consensus on effective accountability and transparency mechanisms. Such initiatives should apply to all organizations and operations, though each situation may require an additional assessment that examines the best methods of applying these standards on a case-by-case basis. Professionals must also clearly determine a shared vision for their relationships with beneficiaries and commit to fostering on-going partnerships and empowerment strategies that directly engage beneficiaries in processes for relief, development, and sustainable recovery.”
Domestic examples of failed humanitarianism
Professor of economics at George Mason University Christopher Coyne says that there is political competition between recipient governments, within the donor government (e.g. Pentagon vs. USAID), between NGOs and among special interest groups. As a result, those in need not only have no say in a given matter, but they often also do not receive assistance.
In 1954, the farm bill was introduced in the US, which subsidized US farmers and led to sending massive amounts of leftover food to developing countries. Renamed by Kennedy to Food For Peace in the 1960s, the program could not keep what it promised: more often than not, the food does not arrive in the countries in time. The people who really benefit are US farmers and US shippers. After the Obama Administration attempted to reform the law, 60 US food organizations sent a letter to the White House:
“Growing, manufacturing, bagging, shipping and transportation of nutritious U.S. food creates jobs and economic activity here at home, provides support for our U.S. Merchant Marine, is essential to our national defense sealift capability, and sustains a robust domestic constituency for these programs not easily replicated in foreign aid programs.”
Calling them special interest groups, Coyne argues that the result is that the very people we intended to help are the ones suffering and that this process gets multiplied when groups and organizations compete over scarce resources for contracts to rebuild infrastructure, the legal system and other projects.
Bureaucracy as a blueprint for wasting money
Imagine a civil servant working for a governmental organization having a budget of ten million dollars per year. What happens if he accomplishes the end with merely spending half of the budget? His budget gets cut. Therefore, people working for governments have a strong incentive to spend everything they have at their disposal, even if it is wasteful. Moreover, if they are judged on the size of their budget, they are incentivized to guarantee more: “You are more likely to promise to end poverty than simply providing people water”, according to Coyne.
The economist lists numerous cases of bureaucracy that showed how unaccountable humanitarian aid can be. In 2006, The US House of Representatives Select Bipartisan Committee made the following statement:
“The failure of local, state, and federal governments to respond […] to Katrina – which had been predicted in theory for many years, and forecast with startling accuracy for five days – demonstrates that whatever improvements have been made to our capacity to respond to natural or man-made disasters […] we are still not fully prepared.”
Keeping in mind that FEMA’s sole purpose is to respond to domestic humanitarian crises, its insufficiency to spend money responsibly and helping people adequately is a grave example of fraud and bureaucratic bungles. One notorious instance of wasted money were the 10,000 unused mobile homes worth about half a billion dollars, a “‘breathtaking’ waste and fraud”.
On the other side of the world, The Special Inspector General For Afghanistan Reconstruction, whose sole job was to audit the reconstruction efforts, said that “nobody keeps track of the money.” A report documenting US aid to Afghanistan showed that it as a “near-total failure”.
A similar picture has emerged in Iraq. According to the Huffington Post, up to 60 billion dollars in war funds for the wars in Iraq and Afghanistan were lost to poor planning and oversight as well as fraud. The Inspector General for Iraq Reconstruction paints a ‘very grim picture’ of America’s “ability to plan and carry out large-scale nation-building operations.”
In Haiti, although at least 7.5 billion dollars were disbursed in official aid, much less was actually spent.